Page 17 - Hydrocarbon Exploration and Production Second Edition

4 Development Planning

data acquired so far does not yet provide a precise picture of the size, shape and
producibility of the accumulation.
Four possible options have to be considered at this point

To proceed with development and thereby generate income within a relatively
short period of time. The risk is that the field turns out to be larger or smaller
than envisaged, the facilities will be over or undersized and the profitability of the
project may suffer.
To carry out an appraisal programme with the objective of optimising the
technical development. This will delay ‘first oil’ to be produced from the field by
several years and may add to the initial investment required. However, the overall
profitability of the project may be improved.
To sell the discovery, in which case a valuation will be required. Some companies
specialise in applying their exploration skills, with no intention of investing in the
development phase. They create value for their company by selling the discovery
on, and then move on with exploration of a new opportunity.
To do nothing. This is always an option, although a weak one, and may lead to
frustration on behalf of the host nation’s Government, who may force a relin-
quishment if the oil company continues to delay action.

In the second case, the purpose of appraisal is therefore to reduce the uncertainties,
in particular those related to the producible volumes contained within the structure.
Consequently, the purpose of appraisal in the context of field development is not to
find additional volumes of oil or gas! A more detailed description of field appraisal is
provided in Chapter 8.
Having defined and gathered data adequate for an initial reserves estimation, the
next step is to look at the various options to develop the field. The objective of the
feasibility study is to document various technical options, of which at least one should
be economically viable. The study will contain the subsurface development options,
the process design, equipment sizes, the proposed locations (e.g. offshore platforms)
and the crude evacuation and export system. The cases considered will be accom-
panied by a cost estimate and planning schedule. Such a document gives a complete
overview of all the requirements, opportunities, risks and constraints.

1.4. Development Planning

Based on the results of the feasibility study, and assuming that at least one option
is economically viable, a field development plan (FDP) can now be formulated and
subsequently executed. The plan is a key document used for achieving proper
communication, discussion and agreement on the activities required for the
development of a new field, or extension to an existing development.
The FDP’s prime purpose is to serve as a conceptual project specification for
subsurface and surface facilities, and the operational and maintenance philosophy
required to support a proposal for the required investments. It should give management