Proceedings of The Twelfth (2002) International Offshore and Polar Engineering Conference Kitakyushu, Japan, May 26 31, 2002

Copyright 2002 by The International Society of Offshore and Polar Engineers ISBN 1-880653-58-3 (Set); ISSN 1098-6189 (Set)

Experience-Based Assessment of Field Development Options and Costs

Hiroaki Hirayama

Japan National Oil Corporation: JNOC

Kunihisa Sao

Ocean Engineering Research Inc.

Cuneyt C. Capanoglu

International Design, Engineering and Analysis Service Inc.

ABSTRACT Japan National Oil Corporation (JNOC) and ten Japanese companies forming a Joint Industry Project (JIP) have successfully developed an experience-based assessment method, a software and the database to The facilitate study of deepwater field development options and costs.

illustrates the rate of increase in deepwater field development. Fixed bottom-supported about 400 m. structures, such as jackets and gravity base compliant structures, such as the

structures (GBS), have been installed in moderate water depths up to Bottom-supported Articulated and Guyed Towers, extend the range of bottom-supported structures another couple of hundred meters. When the water depth is greater, only the floating systems, SPAR/DDCV, or subsea systems feasible. such as FPSO, FPF? TLP and are technically and economically

JIP end product, named DeepTool, relies on user specified input and/or default values to describe site/reservoir characteristics and development scenarios and1 determines capital and operating expenditures (CAPEX and OPEX) which may then be input into economic evaluation of user-defined field development scenarios. only the co,st data on producing information/data fields that can be effectively The database includes not in deepwater but also more used in performing

Some of the more important floating system technologies

affecting the cost effective development of deepwater fields are catenary, taut and tension leg mooring, flexible risers and the control umbilicals. These technologies will also have a prominent role in the development of ultra deepwater fields in water depths greater 2000m. In the late 1980s JNOC had gathered, reviewed and evaluated field developments consisting and the cost of field development This work resulted component systems and the tension leg of a field In the early of jackets, jackups, semisubmersibles

comprehensive field development studies and conceptual design. Such information, namely, worldwide environmental data and the project were incorporated into the experience and resources data on more than 200 engineering companies, fabricators and installation contractors database. This paper discusses the background for initiating the project,

platforms. development

in the development

development method and the program details.

Plans for updating the

cost estimating software named Neptune.

database, upgrading the algorithms and improving the user-friendliness and the applicability of the program are also presented. KEY WORDS Deepwater, Evaluation, Design, Computer Software BACKGROUND Offshore oil and gas field development in deep water has dramatically increased since 1990. Planned and producing tields in water depths greater than 300 m are presented on Figure 1 and the figure clearly

1990s JNOC evaluated commercially available cost estimating software packages and attempted to identify their strengths and weaknesses. were The first conclusion was that the then existing software packages engineering input.

primarily developed from a cost estimation point of view with little The second conclusion was that a new

experience-based oriented

assessment method for field development options and It was also concluded that the new

costs was needed and this system had to be based on engineering methodology. experience-based system should have the following characteristics:

54

Deepwater Ifield development data should be gathered, reviewed and evaluated a component by component basis for similar component configurations by applicable parameters including size, construction area and installation site. (1) Evaluated overruns. (2) Conceptual engineering designs be performed for each of the major bottom-supported (i.e., jacket, CPT, SPS) and floating data is normalized to account for unusual cost

on

PROJECT TASKS The tasks undertaken to achieve project objectives included: I) Review and assessment of field development in deep water

and the companies involved in it, 2) 3) 4) 5) 6) 7) Review of producing field CAPEX and OPEX , Conceptual design of deepwater production systems, Development systems, Development of economical evaluation models, Development of reference sources, and Development of experience-based evaluation system. of design models for deepwater production

(FPSO, FPF, TLP, Spar) field development facilities so that the cost algorithms to be developed are based on engineering logic. (3) Developed system is validated by selecting with actual field data. (4) Develalped system should be user-friendly to facilitate definition of any combination of facilities to describe a field development scenario. (5) Developed system should be flexible enough to allow the user to override default parameters and unit rates and defines her/his own input. (6) The system should incorporate a large database of supporting information so that the system becomes a resource to a more comprehensive conceptual design work. (7) Engineering logic and algorithms are upgraded and the database updated on a regular basis to incorporate on-going changes in the industry and ensure validity of the system. large number of different field developments and comparing the estimated costs

The tasks identified as (I) and (2) above, required gathering, review, evaluation and documentation of technical and cost data on deepwater fields and the component systems making the production possible. by I.D.E.A.S. (International Design, Variables These tasks were performed

Engineering, and Analysis Services, Inc.). Conceptual design work scope addressed two basic and I2 alternative options. considered for each production system included the water depth,

wave environment, number of wells and the production characteristics (i.e., oil, gas and water). are shown on Table 3. DEVELOPMENT Conditions incorporated into conceptual design are summarized on Table 2. The participants in these tasks

In 1995, when JNOC and its JIP partners (see Table 1) initiated the work to develop an experience-based applicable development to water depths reaching field development program field 2,000 m, deepwater

Development Basis: Field development scenarios vary depending on many parameters. However. many of these parameters can be placed in the following three groups and evaluated as to their effect on what kind of a field development scenario is to be submitted for management approval: * Site Characteristics: environmental conditions Site water depth, distance from shore,

was considered feasible for a water depth range of

1000-1500 lm. The project goals were stated in terms of the project the end product as a system intended to facilitate execution of field development studies by providing: 1) 2) 3) CAPEX, OPEX and economic index for various deepwater production systems, technical and cost data on producing deepwater fields, information on companies involved in engineering construction, 4) transportation and installation of faciliities and the drilling contractors, and wind and wave data worldwide. design, offshore

that influence loading (i.e., wind, wave,

current, ice and seismic event) and the national law. * Reservoir Characteristics: Reservoir configuration, permeability and crude characteristics, etc. that define production condition. * Export Characteristics: Crude characteristics such as the pour point and cloud point, distance from shore and the regulations on flaring determine the export mode.

All of the parameters The project objectives were achieved and a comprehensive independent scenario. determination variables Reservoir experience-based field development evaluation system was developed. The basic building blocks for this system are shown on Figure 2.

included directly

in these three categories the studies

are

affecting

field development facilitate number of

modeling deck

and analytical

of required

size and payload,

production and injection wells and the selection of either a pipeline or a shuttle tanker export alternative. Site water depth and the

55

environmenl.al conditions facilitate elimination of field development concepts nol. compatible with production condition. Field development concepts compatible with environmental production design characteristics can be conceptually with each designed such and

and the database on weight-to-volume

ratios.

Fabrication costs are

calculated based on the steel weight using the cost-to-weight factors. These ratios and factors are defined as unit rates in the system. About 300 unit rates in total were developed to define the topside equipment, structures, mooring systems, flowline/pipeline/ riser and

and the as the

parameters

associated

design,

drilling/completion

and the normalized

default unit rates for the

single-column

versus the four-column

TLP or a unitized circular are identified as dependent for each development Structural

material and fabrication of structural systems ranging from FPSO to SPAR are shown on Table 4. The default unit rates can be easily modified based on the latest available cost data to ensure the accuracy of cost estimates. Validation: Cost calculation algorithms were validated by generating the cost data for more than 40 fields worldwide and comparing the generated against actual field data. Typically four or more fields were selected

versus pontoon hull semisubmersible, variables. Parametric studies

conducted

concept allow definition of most suitable configuration compatible with environmental, estimated. production and export conditions. steel requirements can then be determined and the constructed cost The study of transportation and installation alternatives permits estimation of their cost. The dependent 3. and independent variables affecting the field version of

to validate the cost algorithms for each field development concept, namely the floating compliant FPSO, FPS, Spar and TLP and the bottom-supported SPS, CPT and the jacket. Fields selected for the validation effort are identified by field development concept, operator, field name, water depth and the location on Table 5. The cost data

development scenario are presented as flow diagram blocks on Figure This figure provides the user with a simplified important items affecting CAPEX. A similar approach was taken to develop the algorithms estimating (operating expenditures (OPEX). Direct expenditures for at

generated for each field development concept is plotted against actual capital expenditure (CAPEX) and presented on Figure 4. As illustrated on this figure the estimated data compare quite well with the actual expenditures and the level of accuracy is substantially better than the plus or minus 30 percent, a typical requirement for estimating cost during initial field development studies. Validation of OPEX data was somewhat expenditures more difficult as the

the facility were identified in terms of the number of personnel and their cost (i.e., salaries, burden, taxes, insurance, transportation to and from field), inspection and maintenance, applicable. intervention, workover, chemicals and other items such as the standby vessel, whenever Indirect costs associated with the supply base and the and management) were company head office support (engineering

documented and appropriate cost algorithms developed. Following discussions illustrate application of cost algorithms and their validation with cost data from many producing fields developed through the use of both bottom-supported structures Illustration: Although it is not possible to discuss the specifics of each developed ,algorithm, several illustrations are provided to indicate their application. The size and the weight of the process equipment either from normalized equations utilizing can be determined and floating compliant

not only vary as a function of the region and the

applicable rules and regulations on peisonnel and safety issues but also on many other parameters including the activity on the facility (i.e., frequency of intervention, production profile) and the operators management philosophy. However, adequate number of operators Developed cost cooperated by providing very useful OPEX data. the Gulf of Mexico.

algorithms were compared against field data from the North Sea and The estimated OPEX for the overall field lives Further refinement of algorithms will be necessary to better compare quite well with field data on hand. operating cost expenditure define the OPEX on a year-by-year basis.

reservoir data or based on overall production and irijection capacities and the database on process equipment. The size of the production facility and the overall deck area requirements are also determined based on the normalized equations in the design model or from the database on production facilities. The structure steel weight is determined based on the structure size

Estimated

CAPEX

and OPEX data facilitate development

of

economic models to determine the return on investment.

Economic

indexes such as IOR, NPV and POT are calculated based on the production profile and the lifecycle costs based on CAPEX and OPEX. The basic architecture for the economic analysis is illustrated on Figure 5. As shown on this figure, CAPEX parameters are input to define the site, reservoir and export characteristics to

56

allow development of cost data based on both design and the database. The key OPEX parameters shown on Figure 5 are determined based on both cost algorithms and the unit rates in the database. Some of these vafue:s could not be refined to a desirable level and thus expressed as a percentage of CAPEX applicable to the field development. CAPEX and OPEX data together with economic input parameters are incorporated economic consideration. CHARACTERLSTICS Developed developmem. evaluation system is effective. user-friendly and provides the user with comprehensive information on deepwater tiefd Information generated for capital and operating costs can be directly used to perform economic evaluation of alternative field development scenarios. Other readily available information includes the status of technology. contractor company information and environmental data worldwide. The system has the following features: 1) 2) Evaluation system and the database are on a CD for use on a personal computer. Field development plan can be readily defined with the use of a small number of pre-defined tools in the Tool Box on the input screen (see Figure 6). 3) 4) 5) 6) Complex field development scenarios can be detined. Unit rates can be readily revised by the user (i.e., the user can override the unit rates and default values). Cafc:ulation results processing. Wimf and wave data including long-term distributions, are stored for 65 areas in the world. APPLICATION EXAMPLES Work initiated in 1995 were completed in March 2001. system was used by JNOC recently to perform Developed field several can be filed and used for further into economic of the evaluation model to determine concept under

studies

and

estimating

the

cost

of structure

fabrication

and

installation. FUTURE PLANS The database for deepwater field development and the company Cost algorithms will be

data will be updated annually or bi-annually. New concepts

revised/upgraded and the new aIgorithms added, as necessary such as Mini TLPs, BLS, FPDSO, DME-FPSO,

GTL-FPSO and LNG-FPSO will be incorporated into the evaluation system as soon as adequate number of ffeld data becomes available on such units. GBS applicable to ice environment witI be also added to system in a few years following Sakhafin and in water

feasibility

field

development

the evaluation depths greater future. CONCLUSION

Kamchatka developments.

Data from field developments

than 2000m will be added to the database in near

Experienced-based provides reliable

initial field development data and can be effectively

evaluation used

system

for ffefd

development concepts in various areas. The database in the system will be updated and the algorithms upgraded to reflect on-going changes in the offshore industry. be easily maintained. The The default values on unit rates can developed experience-based field

development evaluation system is beneficial to the industry in three speciffc areas: (I) It provides a reliable system to evaluate CAPEX, OPEX and economic options, (2) (3) It facilitates execution of parametric studies, and It offers a comprehensive database on deepwater fields, environmental data for 65 areas around the world and the indices for a wide range of field development

project experience and resources data on companies involved in developing those fields. It is acknowledged that a conference paper cannot present all of the details of a comprehensive experience-based assessment method for field development options and costs. date. The primary objective of this

development evaluations (see Table 6). The gravity base structures (GBS) are not suitable to develop deepwater fields and, therefore, GBS was not incorporated into present evaluation system. However,

paper is to present general characteristics of the work accomplished to The secondary objective is to solicit input for future upgrading of the developed system.

GBS costs can be estimated by substituting GBS for the jacket and replacing the unit rates for the Jacket by the unit rates applicable to GBS. The developed system is useful not only for field development evaluations, but also for performing a wide range of parametric ACKNOWLEDGEMENTS The authors express their appreciation to their respective company managements and thank all of the joint industry project participants for their support in the preparation of this paper.

57

Table I

JIP Sponsor 1 INPEX Corporation I

Table 3

Conceptual Design Companies Conccpl Designer NICK t

[Ocean Engineerfng Research Inc.

FPS. FPSO. FSO -._. Jacket

. ._---..

Japan Energy Development Co., Ltd.

Tcikoku Oil Co., Ltd.

JNOC. Ocean Engineering Research . . WI (Compliant Piled Tower) NKK _--. --.After Engineering SPAR --. --MODEC TLP SPS (Subsea Tie-Back system) Japan Drilfing Co.

Table 5

List of Cost Comparison htfomw%!ds Operator BP-Amoco EEX Norsk Hydra Norsk Hydro PccmblaS Norsk Hydra NIUSE (PIatfomVField) NanHaiTiaoZhut COOpcr Visund FPS Njwd A PB-18 Troll-C Naa Hai Shcapli Foinavcn WD (ml 310 chios GOM NS NS Bmil NS cllim NA i NA

TabYe 2

Conceptual Design Conditions

Type
FPS

FPSO

BP-Amoco BP

British Gas
Pctrobras

khiehalliin
PB-34 Norm ~C8:rpraiO MOrpah Jolliet Same A NW 1 509 536 310 a74

Table 4
1 Bern

Unit Rate Examples for Structures

1 System 1 Material Cost 1 Fabrication Cost 1 TLP

Statoil TCXPCO British-Borneo conow SW

SPAR Towide Steel . All Svstems 800 S/ton SO0 S/ton 24,000 2.000
2,200

_..
$/ton $/ton

!&II Shell

1.900

Accommodatio All Systems Outfitting Steel All Systems

S/person 24,000 S/ton

2,000

S/person Won

ShCH

RMVPO
Mars 893 980

a&et
Table 6 Examples of Field Development Study by DeepTool Water Distaoce to Depth ShoreorH~st trn) South America North Sea SakJteIin Kmeharska l200 95 500 loo0 30 , too Pfafon 20 20 90 30 (km) Production Rate Gil (bpd) 120,000 30,000 270,000 40,000

BP ChWKOll

Ambajaek AlbaNorlhcm H-w Heritage Gseberg Bsst mP= Buffwfnfde )ulrgnuo

ITem 134 366 328 180 313 412 186

*I

ikea

(Mhlscfd) 45 40 0 400

GSS
We,, Nos 23 5 36 16

Exxon Exxon Norsk Hydm Shell Shell BP-Amoco

concept

SPAR + FPSO + Pipeline SPS + Additional Topside SPS or FPSO GBS + SPS + Pipeline

lShell

:IT

~AmsmdaHess1Baldpate

Note: SPS = Subsea Production (Tie-Back) System

Note: WD = Water Depth GC = Offshore California

NS = North See and Shetland GGM = Gulf of Mexico

--FEneerch Shell SPS 441 Malsa Shell Exxon Shell zirie T&C Statoil TOGI

TcMUt

Pctmnills

#PAR IChevron

1~

58

_-...-. -. . _-___-_--..-.--2,500 -*
I j -

..---.-Fig. 1 Deepwater Devclopmenl

1
.- - -.
x . ox f t: .&S...-,.-,, I : -0 . ,

2,000

.- __....+FiS
_ ._... : . ipso . OSPAR

;..

8 . 8

--/

1,

l [.# x
;;

,
i I

o!
1,975 __.__

:
1,980

:
1,985

!
2,005
J

.-.-.-

1,990 1,995 2,000 Year -- ..___..._ - ---.... ---.--.___----- ____..

i 1
Economic Revaluation
lij i OPEX :,. rn&.

i . I

i I i
i . I i i . I i i i I

~...~ ...._..
I i

-.

-.

-.

,Y-.

-.-.

I . I i i . I i .

Reference I) Company Capability 2) Development Status 3) Wind and Wave 4) Technical level

20

40

60 bn/sec)

80

I. .-.-.-.-.-.-.-.-.-.-.-.-.-.-.-.-*-.-.-.-.-.-.-.-.-

I...

4 [IL I/ 1

,
Company_Datab= v ~
.-.-.-,-.-.-.-.-.-.-.-.-.-,

Max Wind Velocity

I . I i

Fig. 2 Program Scheme

59

Prmnetric Case Study DB - DaIsbare tzJ+ PM - Proircl ..,.......,................,............................... ....... . ..... .......-, ..............*................._.......................................................... I[

Now:

88

Production
B&c

II

ljcction Itab?

II

Well Amogemcnt

Fig.3

CAPEX

Calculation Algorithm

3,000

2,000 f Q z -0 -z iiz 1,000 Fig. 4 Program Validation

0 0 I.000 2,000

Rogram(MMS)

60

(Prmnncl+Vwiables) a Pcrccntcr~c CAPEX x Pereenrage Site Opemtionx Prrcrntagc

Fig.5 Economic Evaluation

Fig. 6 Input Screen for Concept Study

61