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DuexDate DatexSubmitted Forxofficialxusexonly
28/03/2013 28/03/2013 LATE DATE
Mr Ibiye Iyalla
Marker’s Comments
Marker Grade
Contents
1.0 Introduction 2
2.0 An Outline of Possible Field Development Options 3
3.0 Proposed Options Calculations 4
3.1 Combination [a] 4
3.2 Combination [b] 5
3.3 Combination [c] 6
4.0 Best Development Option 7
5.0 Process and Transportation scheme 8
6.0 Conclusion 9
List of tables
Table 1: Economical evaluation of combinations (a) and (c)
Table 2: Technical evaluation of combinations (a) and (c)
List of Figures
Figure 1: Alba oil field development options
Figure 2: Alba oil field processing unit flowsheet
Sonatrach DWE 8 ENM202 Facilities Engineering Coursework
Executive summary
The present report is the result of a coursework in ENM 202, Facilities Engineering
Module prepared by a Drilling and Well Engineering student at Robert Gordon
University. The purpose of it is to provide a general scheme of an offshore oil field
development.
An outline of the all the possible options for development of the field form a
proposed range of well development, oil processing, and transportation options is
prepared based on technical feasibility.
For three proposed combinations, using provided information about the field, annual
oil production, the total development cost, the average development cost per barrel
of production, and total net revenue are calculated in details.
Based on development cost, technical feasibility, and other factors that affect the
success of the project a combination from those three proposed, is recommended.
Finally most important components of the recommended scheme for processing and
transporting fluids are illustrated in details.
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Sonatrach DWE 8 ENM202 Facilities Engineering Coursework
1.0 Introduction
After a new offshore oil field, Alba, has been discovered in a moderately
undeveloped area, a development project is planned and executed.
To achieve a successful project the development plan should be carefully prepared
based on the field conditions such as water depth, environmental conditions
reservoir properties, regulation and legislation, distance to point of sale, and
available options.
Alba field is recently discovered with relatively enormous oil volume in relatively
shallow water and near the sea shore with limited options to be analysed and
recommend the appropriate development plan.
In addition to cost-effective choice from available options, other important factors are
taken in consideration for the success of the project.
2
Sonatrach DWE 8 ENM202 Facilities Engineering Coursework
2.0 An Outline of Possible Field Development Options
In order to get all the possible options for Alba field development with the provided
well development, oil processing, and transportation options, the need to know the
total number of options is vital. Then, the possible options are obtained by
subtracting those technically unfeasible options from the total number as shown in
figure 1
Renting a shuttle tanker is not feasible because it needs a storage capability which
is not provided by both fixed steel jacket and semisubmersible production units.
Laying a smaller pipeline that transports up to 5 million barrels per year is not
possible because the rate of production is greater (up to 8 million barrels per year)
for both well development options.
As a result the number of possible options is:
Possibleoptions=Well options× processing options×trasporting options=2×2× (3−1 )=4options
3
Figure 1: Alba oil field development options
Unfeasible optionFeasible option
Well Development Oil Processing Oil Transportation
Laying a larger
pipeline
Laying a smaller pipeline
Renting a shuttle tanker
Renting a floating production vessel
(converted semisubmersible)
Capital investment in a fixed steel
jacket platform
4 larger capacity
wells
8 smaller capacity
wells
Sonatrach DWE 8 ENM202 Facilities Engineering Coursework
3.0 Proposed Options Calculations
The following calculations are based on some assumption which are:
Constant production rate along the field life
Constant oil price per barrel along the field life
All the volumes involved are considered after processing including the total
recoverable volume
As a result the field life is Field life=Estimated recoverable volumeAnual productioncapacity
Field life= 200millionbarrel8millionbarrel per year
¿=25 years ¿
Maintenance and decommissioning costs are initially included and are the
same for all the options
3.1 Combination [a]:
This option involves 8 small wells, converted semisubmersible production vessel,
and large capacity pipeline.
Annual Oil Production
Anualoil production=Number of wells× Annual production capacity per well
AnualOil Production=8×1×106=8million barrels / year
Total Development Cost
Total Development Cost=Well Devlopment Cost+Oil ProcessingCost+Oil Traspor tationCost
Well Devlopment Cost=Number of wells×WellCost=8×50×106=400million$
Oil ProcessingCost=Annual RentalCost × Field life=40×106×25 years=Onebillion $
Oil TrasportationCost=600million $
Total Development Cost=400×106+1000×106+600×106=2billion $
Average Development Cost per Barrel of Production
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Sonatrach DWE 8 ENM202 Facilities Engineering Coursework
Averagedevelopment cost per barrel= Total development costTotal recoverable volume
Averagedevelopment cost per barrel=2000×106
200×106=10$ per barrel
Total Net Revenue before Tax
Total Net Revenue BeforeTax=Total Revenue−Total Development Cost
Total Revenue=Oil Price per barrel ×RecoverableVolume
Total Net Revenue BeforeTax=85×200×106−2000=15billion $
3.2 Combination [b]:
This option involves 4 large wells, converted semisubmersible production vessel,
and shuttle tanker.
Annual Oil Production
Anualoil production=Number of wells× Annual production capacity per well
AnualOil Production=4×2×106=8millionbarrels / year
Total Development Cost
Total Development Cost=Well Devlopment Cost+Oil ProcessingCost+Oil Traspor tationCost
Well Devlopment Cost=Number of wells×WellCost=4×80×106=320million $
Oil ProcessingCost=Annual RentalCost × Field life=40×106×25 years=Onebillion $
Oil TrasportationCost=Number of barrels×transporting cost per parrel
Oil TrasportationCost=200×106×5=one billion $
Total Development Cost=320×106+1000×106+1000×106=2320million $
Average Development Cost per Barrel of Production
Averagedevelopment cost per barrel= Total development costTotal recoverable volume
Averagedevelopment cost per barrel=2320×106
200×106=11.6 $ per barrel
Total Net Revenue before Tax
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Sonatrach DWE 8 ENM202 Facilities Engineering Coursework
Total Net Revenue BeforeTax=Total Revenue−Total Development Cost
Total Revenue=Oil Price per barrel ×RecoverableVolume
Total Net Revenue BeforeTax=85×200×106−2320=14.68billion $
3.3 Combination [c]:
This option involves 4 large wells, fixed steel jacket platform and large pipeline.
Annual Oil Production
Anualoil production=Number of wells× Annual production capacity per well
AnualOil Production=4×2×106=8millionbarrels / year
Total Development Cost
Total Development Cost=Well Devlopment Cost+Oil ProcessingCost+Oil TrasportationCost
Well Devlopment Cost=Number of wells×WellCost=4×80×106=320million $
Oil ProcessingCost=Investment Cost=1500million $
Oil TrasportationCost=600million $
Total Development Cost=320×106+1500×106+600×106=2420million $
Average Development Cost per Barrel of Production
Averagedevelopment cost per barrel= Total development costTotal recoverable volume
Averagedevelopment cost per barrel=2420×106
200×106=12.1$ per barrel
Total Net Revenue before Tax
Total Net Revenue BeforeTax=Total Revenue−Total Development Cost
Total Revenue=Oil Price per barrel ×RecoverableVolume
Total Net Revenue BeforeTax=85×200×106−2420=14.58billion $
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Sonatrach DWE 8 ENM202 Facilities Engineering Coursework
4.0 Best Development Option
After eliminating the combination [b] (4 large wells, converted semisubmersible
production vessel and shuttle tanker) because it is not feasible with a shuttle tanker,
two combinations are remaining for the best development option.
4.1 Economical evaluation
Combination [a] Combination [c]
Annual oil production 8 million bls 8 million bls
Total development cost 2000 million $ 2420 million $
Average development cost/bl 10 $ 12.1 $
Total net revenue before tax 15000 million $ 14580 million $
Table 1: Economical evaluation of combinations (a) and (c)
It is obvious that Combination [a] has the economic advantage. With the same
annual oil production, less total development cost and average development cost,
therefore best total net revenue before tax.
4.2 Technical evaluation
Combination [a] Combination [c]
Well development Better development with 8 larger wells by the late age of the reservoir by using some of them as injection wells.
Faster development option.
Oil processing Possibility of moving in case of problems.Preferable for deep waters.
Better for shallow water depth.
Better for long field life.
Less maintenance is required.
Transportation Same option is provided. Same option is provided.
Decommissioning no decommissioning is required Might be reused for other purposes with newly developed field.
Table 1: Technical evaluation of combinations (a) and (c)
Although combination [c] is not the economical option, its technical features provide the best option. For a newly discovered field in shallow water for a long field life (25 years), the best option to be recommended is combination [c].
7
Sonatrach DWE 8 ENM202 Facilities Engineering Coursework
5.0 Processing and Transportation scheme
First, the produced oil coming from several well heads goes through a production
manifold. A well stream is composed of three main components (oil, gas, and water)
which are called “phases”. The hydrocarbons are separated to meet storage and/or
transportation requirements. The rest part must be eliminated as much as possible
that can be transported, re-injected, or disposed properly for solids.
There are two principal types that are used for separation horizontal and vertical.
Usually, the stream goes through a testing separator and multistage separators.
After separation, the three components must be treated. Then, measurements are
performed to estimate the revenue of profitable oil. Water and gas are finally re-
injected or disposed properly. Sometimes, gas is used as a fuel for the processing
unit and sometimes it is measured and commercialised.
The following diagram illustrates a flow sheet of an oil processing unit:
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From Well heads
Production manifold
Testing separationMultistage separation
Oil treatment Gas sweetening
Gas Dehydration
Gas compressing
Reinjection
Flaring
Transportation
Storage Metering
Water treatment
Transportation
Storage
Oil GasWater
Metering
Reinjection
Fuel
Figure 2: Alba oil field processing unit flowsheet
Sonatrach DWE 8 ENM202 Facilities Engineering Coursework
6.0 Conclusion
Preparation of an offshore oil field development is a complex operation that involves
many factors that should be carefully treated to achieve the project success based
not only on development cost factor.
Quite brief calculations have been done to have general overview about the field
such as annual production, development cost, average development cost per barrel,
and total net revenue before tax to help in choosing a combination based on
economical factor. In addition, the three proposed combinations are analysed based
on technical factors to make the right decision and recommend the best option.
However, in real projects these issues are treated with more serious information and
data which are not provided for us, therefore some assumptions are mentioned to
simplify and manage the calculations.
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