Page 48 - Intelligent Digital Oil And Gas Fields

28 Intelligent Digital Oil and Gas Fields

$5 mm
Workflows & software
$10 mm
Revamp data
center and CWE
$50 mm

DOF
$35 mm

Upgrade
wellheads

Fig. 1.12 Initial capital investment for a DOF system for an onshore oil field of 100 wells.
All currency amounts in US dollars.

software and applications would cost an additional of $5 million. The total
$50 million investment, divided by 100 wells is a well cost of $500,000 to
build a comprehensive DOF system.
1.7.3 Economic Parameters

The economic parameters for this example include a 20-year timeframe,
with fixed prices of oil at $40 per barrel and gas $2.75 per MSCF, a fixed
interest rate of 5%, and depreciation of 10% annually. The operating
expenses are estimated at $15 per barrel (including salary and wages). The
revenue obtained from DOF implementation is estimated by calculating
the difference between the annual oil production profiles using a DOF
system compared with the production profiles without a DOF system,
which is shown in Fig. 1.13.
It is assumed that using a DOF system, ESP downtime has decreased by
70% and also using reservoir analysis, the early water breakthrough has been
delayed for more than several months by controlling the water injection.
Therefore, it could increase the oil rate by 12%, compared with an oil profile
without a DOF implementation.
The initial 50-million dollar CAPEX investment is spent in the first
year (red bar). Given this analysis and an oil price of $40.0, the producer
can anticipate a total benefit of $88.6 million over 20years. The NPV is
estimated at $64 million and the internal rate of return (IRR) is 22%, when