
Engineering Economy in Upstream Oil & Gas Field Development
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Menglan Duan (College of Safety and Ocean Engineering, China University of Petroleum (Beijing), China)Menglan Duan is the Dean of the College of Safety and Ocean Engineering, China University of Petroleum, Beijing, and a Professor of solid mechanics and ocean engineering. Professor Duan is an astute scholar with international reputation and has published over 400 technical papers including 104 SCI-indexed journal papers. He has covered a wide range of research areas and has conducted over 170 projects related to fixed and mobile platforms, subsea pipelines and risers, subsea production systems in Artic Mechanics and Offshore Engineering, Subsea Engineering, Fatigue and Failures of Materials and Structures, Dynamics of Offshore Engineering Structures, Mechanical Behaviour of Materials, and Risk and Reliability in Offshore and Ocean Engineering. His other areas of interest include management and economic analysis of oil/gas projects.ONUOHA Mac Darlington Uche:
Mac Darlington Uche Onuoha (College of Safety and Ocean Engineering, China University of Petroleum (Beijing, China)Mac Darlington Uche Onuoha is an Assistant Professor of Solid/Fluid Mechanics and Offshore Oil & Gas Engineering at the College of Safety and Ocean Engineering, China University of Petroleum, Beijing. Dr. Onuoha is a young scholar with strong academic and research accomplishments.
He has authored 7 publications in top international journals and conferences covering research areas such as, Flow Assurance in Deepwater Pipelines and Risers, Dynamics of Deepwater Riser Structures induced by Internal Severe Slug Loads, Multiphase Flow Simulation in Pipeline-Riser System, Finite Element Modeling and Analysis (FEM/FEA) of Offshore Structures, and Petroleum Economics and Feasibility Analysis of Upstream Investment. His research interest focuses on Fluid-Structure Interactions (FSI) of Subsea Production Systems, Dynamic Behaviour of Rigid & Flexible Risers, and Computational Fluid Dynamics of Multiphase Flows in Flowlines-Riser Pipe Systems.
Content
- Intro
- Engineering Economy in Upstream Oil & Gas Field Development
- About the Authors
- Preface
- Acknowledgement
- Bidding and Petroleum Fiscal Instruments
- The Invitation to Bid
- Procedural Form of Bidding
- Contractors' Participation to Bid
- Block Award
- Concessionary License Agreement
- Contractual Agreement
- Production Sharing Contract
- Service Contract
- Joint Venture Agreement
- Exploration & Reserve Estimation
- Discovered Resources
- Basics of a Petroleum System
- Geophysical Methods for Oil & Gas Exploration
- Magnetic Surveys
- CSEM Seabed Surveys
- Gravity Surveys
- Seismic Surveys
- Volumetric Estimation of Hydrocarbons in Place
- Recoverable Resources (Reserves)
- Proved Reserves
- Unproved Reserves
- Appraisal and Field Development Planning
- Field Appraisal
- Comprehensive Field Development Data
- Geological and Reserve Data
- Geographical Location of Inspira Field
- Cross-Sectional Maps of Inspira Reservoirs
- Net to Gross Thickness of Inspira Reservoirs
- Bulk Volume of Inspira Reservoir Rocks
- Gas Initially In Place (GIIP) of Inspira Field
- Reservoir Data
- Reservoir Structure
- Reservoir Temperature
- Reservoir Pressure
- Fluid Contact
- Gas specific gravity (?_g)
- Gas density (?_g)
- Gas isothermal compressibility (C_g)
- Gas solubility in water (R_SW)
- Water isothermal compressibility (C_W)
- Water viscosity (µ_W)
- Water Saturation (S_W)
- Permeability (K)
- Relative Permeability (K_r)
- Formation compressibility (C_f)
- Reservoir Drive Mechanism
- Recovery Factor (RF)
- Estimated Ultimate Recovery (EUR)
- Reservoir Performance Prediction
- Reservoir Simulation and Production Forecast
- Optimal Well Location
- No. of Wells
- Drainage Radius
- Optimum Flow Rate
- RF
- Drilling Program and Well Completion Design Plan
- Pressure and Fracture Gradient of the Field
- Reservoir Pore Pressure
- Fracture Pressure
- Casing Depth Selection
- Drilling Fluid Selection
- Cement Design
- Casing Selection
- Bit Size and Selection
- Drill String
- Wellhead Selection
- Blowout Preventer (BOP)
- BOP Design Calculation
- Drill Time and Cost Estimation
- Tangible Cost
- Intangible Cost
- Production Period and Abandonment
- Production Period
- Abandonment Planningplanning
- Technological Requirement & Challenges
- Safety and Environmental Policy
- Production Operations, Workover and Maintenance Plan
- Production Operations
- Productivity Index (PI)
- Inflow Performance Relationship (IPR)
- Vertical Lift Performance (VLP)
- Choke Performance (CP)
- Workover Activity
- Maintenance Plan
- Economic Analysis of a Typical Upstream Development Project
- Basic Concepts in Economic and Financial Analysis
- Economic Evaluation Indicators
- Net Present ValueNet Present Value (NPV)
- Payback PeriodPayback Period (PP)
- Profit-to-Investment RatioProfit-to-Investment Ratio (PIR)
- Annual Equivalent (AE) Value Analysis
- Internal Rate of ReturnInternal Rate of Return (IRR)
- Incremental IRR Analysis
- Mutually Exclusive Investment IRR Analysis
- Drawbacks of Internal Rate of Return Internal Rate of Return (IRR)
- Minimum Rate of ReturnMinimum Rate of Return (MROR)
- Multivariate Sensitivity AnalysisSensitivity Analysis (SA)
- Cash Flow Diagram (CFD)
- Patterns of Cash Flows
- Common Types of Cash Flows in Engineering Investment Project
- Classification of Cash Flow Elements
- Dynamics of Cash Flow Diagram on IRR Calculations
- When There Are No Sign Changes
- When There Is Only One Sign Change
- When There Are Two or More Sign Changes
- Practice Problems for Cash Flow Analysis
- Discounting
- Time Value of Money and Economic Equivalence
- Return to Capital
- Notations
- Interest Calculation
- Simple Interest
- Compound Interest
- Nominal and Effective Interest Rate
- Continuous Interest
- Interest Rates That Vary With Time
- Economic Equivalence
- Interest Factors
- Single Payment Compound Amount Factor (F/P, i%,N)
- Single Payment Present Worth Factor (P/F,i%,N)
- Uniform Series Compound Amount Factor(F/A,i%,N)
- Uniform Series Present Worth Factor (P/A,i%,N)
- Uniform Series Sinking Fund Factor (A/F,i%,N)
- Uniform Series Capital Recovery Factor (A/P,i%,N)
- Depreciation and Salvage Value
- Some Factors in Asset Depreciation
- Depreciable Property
- Cost Base
- Salvage Value
- Depreciable Life
- Methods of Depreciation
- Straight-line Depreciation (SLD)
- Declining Balance Depreciation (DBD)
- Sum of Years Digits Depreciation (SOYD)
- Declining Balance and Straight Line Depreciation (DBD & SLD)
- Unit of Production Depreciation (UOPD)
- Taxable Income
- Case Study: Application of Economic Tools for Upstream Oil & Gas Project Evaluation
- The Case Study (Data Presented Here Are not Real but Used for Exercise)
- Geological Data
- Reservoir Simulation Data
- Drilling and Well Completion Data
- Production Data
- Quality, Health, Safety, and Environment (QHSE) Data
- Economic Data
- Analytical and Computational Procedures
- Government and Contractor's Petroleum Fiscal Agreement
- Determination of Discount Rate for the Future Earnings of this Project
- CAPEX, OPEX, and Depreciation Calculations
- Gross Revenue Determination
- Net Present ValueNet Present Value (NPV) Calculation
- Economic Results of the Case's Feasibility Analyses
- Executive Meeting of CNPC Governing Board
- Investment Decision and Project Selection
- Capital Budgeting and Rationing
- Project Ranking
- Comparison of Project Alternatives
- Classification of Alternatives
- Methods of Comparing Alternative Investments
- Discount Rate
- Present Worth
- Rate of Return
- Benefit--Cost Analysis
- Identification of Relevant Benefits and Costs
- Quantification of Benefits and Costs
- Selection of Best Alternative
- Uncertainty Evaluation
- Inflation
- Market Interest Rate (i)
- Real Interest Rate (d) (Inflation-free)
- Inflation Rate (j)
- Actual Dollars
- Constant Dollars
- Approaches to Economic Analysis under Inflation
- Cash Flows
- Discount Rate for Time
- Project Management in Upstream Oil & Gas Field Development
- An Overview of Project Management
- Process Groups in Project Management
- Project Initiating
- Project Planning
- Project Executing
- Project Monitoring and Controlling
- Project Closing
- Work Breakdown Structure (WBS)
- Design Proposals
- Project Budgeting
- Project Risk Plan, Assessment, and Management
- Step 1: Itemize the Risk Factors
- Step 2: Determine the Probability of Risk Occurrence
- Step 3: Evaluate the Damage Impact of the Risk
- Step 4: Mitigation or Prevention of the Risk
- Step 5: Institute Contingency Plans
- Step 6: Institute the Trigger Point
- Role of Project Manager and Team Management
- Project Quality Management
- Bibliography
- Index
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