Page 14 - Hydrocarbon

CHA P T E R 1

The Field Life Cycle

Introduction and Commercial Application: This section provides an overview of the
activities carried out at the various stages of field development. Each activity is driven
by a business need related to that particular phase. The later sections of this book will
focus in more detail on individual elements of the field life cycle (Figure 1.1).

1.1. Gaining Access Phase

The first step an oil company will undertake in hydrocarbon exploration and
production is to decide what regions of the world are of interest. This will involve
evaluating the technical, political, economic, social and environmental aspects of
regions under consideration. Technical aspects will include the potential size of
hydrocarbons to be found and produced in the region, which will involve scouting
studies using publicly available information or commissioning regional reviews, and a
consideration of the technical challenges facing exploration and production, for
example in very deep offshore waters.
Political and economic considerations include political regime and Govern-
ment stability, the potential for nationalisation of the oil and gas industry, current
embargoes, fiscal stability and levels of taxation, constraints on repatriation of
profits, personnel security, local costs, inflation and exchange rate forecasts. Social

500
400
production
300
cumulative cashflow $million -100 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25
200

100

Time (years)

-200
-300 Gaining Access Exploration Appraisal Development Production Decommissioning
-400

-500
Figure 1.1 The ¢eld life cycle and typical cumulative cash £ow.

1