Linking Risk and Uncertainties to

Field Development Planning In

Challenging Environments
Stephen S. Kuo
BP plc
Society of Petroleum Engineers
Distinguished Lecturer Program
www.spe.org/dl

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and a contribution from Offshore Europe
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Linking Risk and Uncertainties to

Field Development Planning In
Challenging Environments
Stephen S. Kuo
BP plc
Society of Petroleum Engineers
Distinguished Lecturer Program
www.spe.org/dl

Outline
Context
A Systematic Approach for Risk and
Uncertainties Assessment
Activity Plan for Uncertainty Reduction and
Contingency
Field Development Planning Examples
Summary
5

Complex Geology Coupled with Complex

Development Scheme Means
Commingled Producers

Subsea System
DC2

DC3

DC1

Flowline
FlowlineLoop
Loop &
Export
Pipeline
Export Pipeline

H
Host

Stacked Pay Reservoirs

Floating Facilities

hundreds million barrels of

reserve is required to justify the
development
6

Too Optimistic or Too Pessimistic ?

System Capacity
Actual

Sanctioned

Year

Underestimate Reservoir Capacity

Lose early revenues (time $ value)

Oil or Gas Rate

Oil or Gas Rate

Worse Than Expected Reservoir Performance

Need additional capital to access resources

Actual
System Capacity

Year

Key to Resource Estimate:

Hydrocarbon Initial In-Place (HIIP) Volume
Recovery Factor/Recovery Mechanism
Well Productivity

Needs to articulate risk and uncertainties to enable

an informed decision by the key stake holders

Terminology
Risk: An event (or set of circumstances) that,
should it occur, would have a material effect on
the final value of a project
Characterized by description of the event,
probability of occurrence and impact if it
occurs
Impact can be positive as well as negative
Uncertainty: a range of possible values or
outcomes, resulting from imperfect knowledge
8

A Systematic Approach

Identify risks with a subsurface root

Risk ranking matrix
Link risk to key subsurface uncertainties
Assess impact of uncertainties
Develop an activity plan
Communicate
9

Risk Descriptions and Ranking

4
5
6
7
8
9
10
11
12

Poor reservoir quality in FB1

FB2 has been severely depleted
Southern Block has been depleted
Perched water in FB3
Exploration success
Higher than expected drainage
Sand production
Wax and scale formation
Water production

Very High

RE

RE

Low

Medium

High

3
6

Mitigation

High

Contingency

RE

(and Contingency)
7

8
4

Medium

Highly compartmentalized
reservoir leads to rapid rate
2
decline resulting in field plateau
not delivered
Weak aquifer support leads to
rapid pressure decline resulting
3
in reserve promise not
delivered

Very Low

11

10

Accept
12

Low

Hydrocarbon In-Place - Fluid

contact shallower than
1
expected resulting in less than
expected in-place volume

Probability of Occurrence

Owner

Impact

Risk

Key to Risk Description: Cause & Impact

10

Linking Risk to Uncertainties

(Hydrocarbon In-Place)

Risk

Driver

Uncertainties

Well
Decline
Rate

Rate/
Profile

Hydrocarbon
In-Place

Drainage
Efficiency

Drawdow
n
Well initial
Rate
Productivi
ty Index

Resource
Recovery
Factor

Vertical
Sweep
Efficiency

Risk
Driver
Uncertainty (cannot be controlled)
Decisions (can be controlled)

Net Rock
volume

Well H

Formation
Thickness

Net Sand
Distributio
n

Net Pay

Vertical
Continuity

Fluid
Contact

NTG

Reservoir
Top
Surface

GRV

Pore
Volume

Reservoir
Base
Surface

Porosity

Linking Risk to Uncertainties

(Compartmentalized Reservoir)
Risk

Uncertainties

Driver
Opex
Well

Cost

Capex
Well

Step Out
Drilling
Time

Drilling
Schedule

Compartmentalized
Reservoir

Well
Trajectories

Rig
Availability

Drainage
Efficiency

Resource

Compart
mentalizat
ion

Recovery
Factor

Well
Decline
Rate

Well Initial
Rate

Displace
ment
Efficiency

Cut-off
Efficiency
Energy

Fault
Transmis
sibility

Multi
Lateral
Wells

Fault
Location
Fractures

Production
Well Count

Heteroge
neity

Risk

Well Type

Complex
Wells

Faulting

Efficiency

Rate/
Profile

Target
Location

Well
Placement

Area
Sweep

Drilling
Site
Location

Fault
Presence

Fracture
Connectiv
ity

Driver
Drawdown
Uncertainty (cannot be controlled)
Decisions (can be controlled)

Pressure

Fracture
Pore
Volume

12

Impact on HIIP
In-Place Volume =(area)x(thickness)x(ntg)x(struc. uncert.)x(por)x(1-Sw)/FVF
NRV (Net Rock Volume)

Deterministic
0

Probabilistic

OHIP, mmboe - Deterministic

200
300
400
500

100

600

OHIP, mmboe - Probabilistic

700

Uncertainty Parameters

200

250

300

350

400

NRV, acres-ft

Structure0.84

Struct. Closure

Structure Closure,
Frac.
MAX of Maximum's

Max = 423

Form. Vol. Fac.,

rbbl/stb

Min = 228

Porosity

MIN of minimum's

NRV, acres-ft

Porosity

Water Sat.

Water Saturation

Form. Vol. Fac.,

rbbl/stb

GOR, scf/stb

GOR, scf/stb

1.15

271015.52
NRV

Porosity
Wat. Sat.
FVF
GOR

366679.42

0.2

0.21

0.17

0.14

1.84

1.77

2026.54 2110.68

Identify key parameters that have material impact 13

450

Impact on Dynamic Performance

RF, % (Primary Depletion)

Run a set of
simulation
cases using
one-at-atime change
(parametric)
or
experimental
design for
reduced
number of
cases
(statistical)

Faults

10

Severe Faulting

0.0001x

Kz Multiplier

Aquifer/HCPV Ratio

1x
2.7E-6

15,000

8,000
1.5x

Oil viscosity (rel. to base)

Relative Permeabilities

2x

1.4E-6

PV compressibility

25

Lt. Baffles
0.75x

Kx and Ky Multiplier

20

Faults Open

Heavy Baffles

Sand continuity

BHP Constraint, psia

15

Low Rate
2x

0.75x
High Rate
12x
14

Impact on Well Productivity

PI, or
stb/d/psi
PI (stb/d/psi)
Well Rate (mbd)

0
0

s - pretest
Skin

k (md) md
- pretest
Perm,

h (ft) - pretest
Thickness,
ft

u (cP) - pretest
Viscosity,
cp

Bo Bo,
(rb/stb)
- pretest
rb/stb

10
5

20
10

30
15

40
20

-0.08

18.11

55.10

141.40

85.16

146.98

0.33

1.86

0.26

1.76

15

Deterministic Case Description

Deterministic Model Description
Downside
Base Case
Upside
Static Parameters
Net Rock Volume

Downside NRV
map with LKO

Structure

ML NRV with ML
OWC
Tied to Wells

Max NRV with ML

OWC

Average from all wells

Porosity, Swi, Boi and GOR

Dynamic Parameters
Aquifer volume
Faulting
Sand connectivity
Horizontal Permeabilities
Kz/Kx multiplier
Relative permeability
BHP, psia
Oil Viscosity, cp

2x HCPV
Worst Case
Heavy Baffles
0.75x
0.001x
Low Rate
High
MAX

4x HCPV
Base Case
Medium Baffles
1x upscaled Kx
0.1x
Base
ML
ML

12x HCPV
Open
Light Baffles
1.5x
0.5x
High Rate
Low
MIN

32.5

64.5

Water Injection Scheme

Water Injection target, mbd

16

Deterministic case so that its outcome can be related to actual performance

Deterministic cases vs. probabilistic outcome

Mapping deterministic cases to probabilistic outcome
16
15

Un-risked Recoverable Resource (Probabilistic)

Risked Recoverable Resource (Probabilistic)

14

Plateau Length, Year

Reference Case
13

Deterministic Sen. Cases

12
11
10
9
8
7
6
600

700

800

900

1,000

1,100

1,200

1,300

Recoverable Resources, bcf

1,400

1,500

1,600

17

Data Acquisition:
key for reducing uncertainties
Success
Well #4

Well #1

Res. Access
UMA5-10 (Sec.)
MMH10
LMH10/20/30
Data Acquisition
Core (LM)
Static P
Fluid Samples
Logs+OBMI
Flow Test
Test after
Completion
Interference test
Issues
Depo Model
Res. Conn.
Fluid Prop
Is Ref case is a
downside?
If so, reevaluate Well
#3 location

Well #2

Res. Access
UMA5-10 (Sec.)
MMH10
LMH10/20/30
Data Acquisition
Core (MM)
Static P
Fluid Samples
Logs+OBMI
Flow Test
Test after
Completion
Interference test
Issues
Depo Model
Res. Conn.
Fluid Prop
Is Ref case is a
downside?
If so, reevaluate Well #3
location

Well #3

Well #5

Late Time
Side Tracks
f/Dev. Wells

HC in
Deep Sand?

Failure
Well #4

Deep Sand
Evaluation
Res. Access
UMA5-10 (Sec.)
LMH30/40
LMH20, if possible
Data Acquisition
Static P
Fluid Samples
Logs+OBMI
Flow Test
Test after
Completion
If Successful
Complete in
LMH30/40
If Failed
Compete in
LMH30 & LMH20

2nd Well
for Deep Sand
Res. Access
UMA5-10 (Sec.)
MMH10
LMH10/20/30
Data Acquisition
Static P
Fluid Samples
Logs+OBMI
Key driver for this
well
MMH10 reserves
LMH20 reserves
Timing
Risk of drilling
into depleted
zone

Res. Access
UMA5-10 (Sec.)
LMH30/40
LMH20, if possible
Data Acquisition
Core (LMH40)
Static P
Fluid Samples
Logs+OBMI

Resources
with no risk

Un-drained
resources
separated by
faults in
MMH10
LMH10/20/30

Resources
with Risk

Linking Uncertainties to Surveillance

(Activity Plan)
Key Risks/
Uncertainties

Impact

Surveillance Activities

Oil-in-Place (Static)
Sand thickness High Logs evaluation and
Fluid Contact
Medium pressure/fluid sampling
Recovery Factor (Dynamic)
1) Interference test and/or
Aquifer strength
High pressure buildup after start-up
Faults/
Compartmentali
zation
Sand continuity/
Facies
Description

High

2) Surface and downhole P/T

monitoring after start-up
3) Logs evaluation

High

When
will
know

Contingency

Pre- 1) Openhole sidetrack from

drilling development wells
6m
after 1st
oil
6m
after 1st
oil
Pre-d &
6m
after 1st
oil

1) Pre-invest water injecting system,

but drill water injector later
1) Drill additional well or sidetrack,
including high-angle or horizontal well
across faults
1) Alternate geological model
2) Inter-well connectivity test
3) Plan for infill drilling

Well Productivity and Injectivity (Dynamic)

After 1st 1) Routine well test
Skin factor
Medium 1) Well test
oil
2) Well performance evaluation
2) Plan for well intervention program

Allow sufficient time for reservoir surveillance

19

Compartmentalized Reservoir
Risk: Small compartment leads to rapid rate decline
resulting in field plateau not delivered
Uncertainties: Reservoir Connected Volume and Faults

Mitigation: Reservoir Surveillance, Interference test, etc.

Contingency: Plan for additional well
20
Risk Exposure in $$$

Aquifer Strength
Risk: Weak aquifer support leads to rapid pressure
decline resulting in reserve promise not delivered
Uncertainties: Aquifer size and connectivity
Area
Sweep Eff
Resource

Recovery
Factor

Vertical
Sweep Eff
Pressure
Support

Aquifer
Connectivity
Aquifer
Effectiveness

Aquifer
Perm
Aquifer
Volume

Mitigation: Reservoir surveillance before injection starts

Contingency: Pre-invest water injection system (space,
weight allowance & slots), but install plant & drill wells
only if surveillance shows lack of aquifer support
Risk Exposure in $$$
21

Fluid Presence
Risk: Fluid contact shallower than expected resulting in
less than expected in-place volume
Uncertainties: Hydrocarbon in-place volume
Seismic
X-section

Discovery
Well

Development
Well

Base Case ML GWC =

Shallow Amplitude Peak

MMF
30

Base Case Max GWC =

Amplitude vs Depth Cutoff

Max GWC =
Structural Spill Point

Base Case Min GWC

Mitigation: Plan development well to penetrate shallower

known reservoir on the trajectory
Contingency: Side-track updip for production
Risk Exposure in $$$
22

Summary
A systematic approach to rank risks and
assess uncertainties is discussed
Linking risks to uncertainty parameters so
that their impacts are assessed and
understood
It is important to communicate risk and
uncertainties to key stake holders so that an
informed decision can be made
Several examples on risk mitigation and
contingency planning are presented
23

Key Take-away
Keep it simple, only focus on key
uncertainties that have material impact
Evaluate and understand their impacts
Link uncertainties to surveillance
Define a few deterministic cases so that
actual performance can be related to
predicted outcome

24

Acknowledgements
SPE Foundation for support of the Distinguished
Lecturer program
BP management for professional recognition and
permission to participate in the SPE DL program
BP colleagues who provided support to part of the
work presented
Local SPE chapters worldwide for hosting the
presentations

25

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