DuexDate 28/03/2013

DatexSubmitted 28/03/2013

Forxofficialxusexonly LATE DATE

Mr Ibiye Iyalla

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Contents

1.0 2.0 3.0

Introduction An Outline of Possible Field Development Options Proposed Options Calculations 3.1 3.2 3.3 Combination [a] Combination [b] Combination [c]

2 3 4 4 5 6 7 8 9

4.0 5.0 6.0

Best Development Option Process and Transportation scheme Conclusion

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.

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.

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

8 smaller
capacity wells

Capital investment in a fixed steel jacket platform

Renting a shuttle tanker

Laying a smaller pipeline Renting a floating production vessel (converted semisubmersible)

4 larger
capacity wells

Laying a larger pipeline

Well Development Feasible option

Oil Processing

Oil Transportation Unfeasible option

Figure 1: Alba oil field development options

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:

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

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

Total Development Cost

Sonatrach DWE 8 ENM202 Facilities Engineering Coursework

Average Development Cost per Barrel of Production

Total Net Revenue before Tax

3.2 Combination [b]: This option involves 4 large wells, converted semisubmersible production vessel, and shuttle tanker. Annual Oil Production

Total Development Cost

Average Development Cost per Barrel of Production

Sonatrach DWE 8 ENM202 Facilities Engineering Coursework Total Net Revenue before Tax

3.3 Combination [c]: This option involves 4 large wells, fixed steel jacket platform and large pipeline. Annual Oil Production

Total Development Cost

Average Development Cost per Barrel of Production

Total Net Revenue before Tax

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] Annual oil production Total development cost Average development cost/bl Total net revenue before tax 8 2000 10 million bls million $ $ 8 2420 12.1 Combination [c] million bls million $ $

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] Well development
Better development with 8 larger wells by the late age of the reservoir by using some of them as injection wells. Possibility of moving in case of problems. Preferable for deep waters. Same option is provided.
no decommissioning is required

Combination [c]
Faster development option.

Oil processing

Better for shallow water depth. Better for long field life. Less maintenance is required. Same option is provided. Might be reused for other purposes with newly developed field.

Transportation Decommissioning

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].

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 reinjected 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:

From Well heads

Production manifold Reinjection Multistage separation Testing separation Flaring

Oil

Water

Gas

Oil treatment

Water treatment Reinjection

Gas sweetening Gas Dehydration Gas compressing Metering

Metering

Transportation

Fuel

Transportation

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.

Sonatrach DWE 8 ENM202 Facilities Engineering Coursework

Bibliography

MATHER, A., 2000. Offshore Engineering: An introduction, 2nd ed. London: Witherby & Co Ltd.

ARNOLD, K.E., ed. 2007. Petroleum Engineering Handbook, Vol III, Facilities and Construction Engineering. Richardson, TX:SPE

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