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ENM202 Facilities Coursework

Submission 1300 hours Monday 5th November 2018

Purpose:
This coursework is designed as a self-study programme to further the student’s knowledge of the
subject beyond the directly presented course material through web and publication searches and
development of company contacts.
In the coursework you need to demonstrate;
1. Knowledge and understanding
2. Critical analysis

Project Brief:
• GLO Oil Company has discovered a new offshore oil field (water depth is 350 m), RGUG, in
a relatively undeveloped production area but with very high prospects of future discoveries.
The field information is as follows;

RGUG Field Information:


1. RGUG Petroleum Engineering
Estimated recoverable volume for RGUG is 36 million barrels to be sold at $75 per barrel.
2. Well Development Options
1. Develop with 4 smaller capacity wells. Each well requires a capital investment of $50 million.
The production capacity of each well is 1.0 million barrels per year.
2. Develop with 3 larger capacity wells. Each well requires a capital investment of $80 million.
The production capacity of each well is 2.0 million barrels per year.
3. Production Platform Options
1. Make a capital investment in a Fixed Platform. The cost of this investment is $540 million.
2. Rent a FPSO. The annual rental cost of the vessel is $80 million per year.
4. Oil Transportation Options
1. Rent a shuttle tanker to transport the oil. The rental cost is calculated as 10 US$ per barrel
times the number of barrels transported by the tanker in the year.
2. Make a capital investment in a pipeline. A pipeline costs:
- $340 million, to lay a smaller pipeline that can transport up to 5 million barrels of oil per year, or
- $400 million, to lay a larger pipeline that can transport up to 8 million barrels of oil per year
N.B. only choose the more expensive pipeline if your development option needs the higher
capacity
Project Deliverables:
• Economics - Consider all possible combination of development options, and for each one
calculate:
o The field life (number of years of production)
o Annual production capacity
o Total development cost
o The average development cost per barrel of production
o Total cash flow before tax
o Profit/Investment ratio
N.B. Assume “money of the day” i.e. no inflation and/or discounting requirement
• Critical Options Appraisal - Carry out a detailed critical analysis and recommend the best
development option based not only on development cost, but also any other important factors
that you consider may affect the success of the project.
• Flow Diagram - For your recommended option draw a flow diagram identifying the main
components.
• Gas Handling - Discuss the strategy to handle produced gas.
• Decommissioning Plan - Detailed Decommissioning plan
N.B. flaring not permitted

Report:
The report should be no more than 2000 words with flow diagrams and other relevant drawings to
illustrate any points being raised. All references used must be properly identified.
• General information
Should you require further information to prepare a development plan, you are asked to make
reasonable assumptions on those issues for which you have no or insufficient information. Please
ensure that these assumptions are clearly detailed in your report.
Assessment Criteria:
Criteria Marks Allocation
Economic Calculations 15 marks
Critical Options Appraisal 20 marks
Flow Diagram 5 marks
Gas Handling 10 marks
Decommissioning Plan 10 marks
Presentation (executive summary, conclusion, referencing, word count, etc.) 10 marks
Total 70 marks