nekhaev eng 3

7/31/2019 Nekhaev Eng 3

1/15

SPE 149916

Capital Costs Estimation Method for Arctic Offshore Oil Projects

M.A. Kuznetsov, K.K. Sevastyanova, P.A. Tarasov, S.A. Nekhaev

LLC RN-SakhakinNIPImorneft


2/15

Challenges: The lack of cost-evaluation methods for

the Arctic region

The lack of input normals

The absence of analogous fields

High risks: Harsh ice conditions Reserves value uncertainty The lack of geological data The lack of coastal infrastructure

Prospective projects in the Russian Arctic

Actuality:

Joint development of licensedareas in the Kara Sea with foreigncompanies


3/15

Current status: Existing software products:

do not support estimates for Arctic conditions

require large amounts of input parameters

use foreign costs structure for materials and equipment

Goal:

Evaluation of capital investments in the early stages of project analysis

Tasks: Identify a minimal set of informative parameters for costs modeling

Development of econometric models for integrated structure of capitalcosts

Research tasks


4/15

Statistically marked out

homogeneous groups offields

Regression models were built for certaingroups

Method is based on real projects


5/15

Topside costs are modeled by 2 parameters: peak oil (Qoil) andpeak gas (Qgas)

Scale effect: topside costs rise slower then facilities capacity

Topside

Real data Model

Mtopside Mtopside

Qoil Qoil

Qgas Qgas


6/15


7/15

hwater

Mtopside

GBS costs are influenced by: Topside weight (Mtopside) and water depth (hwater)at the installation point

GBS

Gravity Based Structure (Subarctic)

hwater

topside

GBS

)( 02

bhhaM waterwatertopsideunitGBSunitGBS


8/15

GBS CAPEX in the Arctic depends on water depth (hwater) atthe installation point

h=30m

h=60m

h=120m0

50

100

150

200

250

300

20 40 60 80 100 120

, .

,..

0h - Min water depth for GBS installation

Gravity Based Structure (Arctic)

0

lnh

ha waterunitGBSunitGBS

GBS

weight,

000t

Water depth, m


9/15

Subsea costs are determined by: the number of wells (Nwells) in cluster andwater depth (hwater)at the installation point:

0

50

100

150

200

250

300

350

0 5 10 15 20 /

,.$

Nwells/Cluster

hwater

Subsea facilities

waterinstwellsunitsubsea haN 7,0

Subseacosts,m

ln.

$

Nwells/Cluster


10/15

Cumulative forecast error does not exceed 30% (permissible error for theconceptual design)

30%

Hibernia

--

-

0

50

100

150

200

250

0 20 40 60 80 100 120 140 160 180

, V , ...

,

V

,...

30%

0

10

20

30

40

50

60

70

80

0 10 20 30 40 50 60

, ..

,..

Forecast accuracy

GBS model error

30% spacing error

Topside model error

30% spacing error

Realvalue,

000t.

Estimated value, 000 t. Estimated value, 000 cub.m.

Realvalue,

000cub.m.


11/15

Tampico

TamaulipasMorgan City

Daewoo

Hyundai

Okpo

Verolme

VlissingenSt.Wandrille

Algeciras

Puerto Real

Keppel

Labor

Matherials Transportation

St. Johns

k2

k3

k

4

k5

k1

CAPEX = kiCAPEXtopside+ kjCAPEXGBS+ klCAPEXSubsea

Regional component


12/15

An example of a typical platform evaluation

Unit capex >15$/bbl (reserves 90 mln.t)

The minimum set of parameters:

Result:

Peak oil, '000t/d 24

Peak gas, mln.cub.m./d 2,88

Water depth, m 60

Topside CAPEX, mln.$ 3477

GBS CAPEX, mln.$ 1348

GBS CAPEX DRILLEX

Topside CAPEX

Other


13/15

-20 000

-10 000

0

10 000

20 000

30 000

40 000

50 000

60 000

70 000

OPEX

CAPEX

.

30% error in estimating capital costs leads to a shift in the NPV assemblyaverage at 28%

100% -4%-77%

-18%-4%

-- CAPEX

-60%

-30%

0%

30%

60%

-30% 0% 30%

NPV

CAPEX

-15%

0%

15%13%

18%

23%

28%

33%38%

43%

+30%-30%

Economics

-52%

-40%

-28%

-16%

-4%

Mln.rub

Revenue

Transportation

costs

Royaltiesand

taxes

conditional permanent CAPEX


14/15

Results

1. Identified a minimal set of informative parameters forcapital costs modeling with an accuracy of 30%

2. Unit capex for the Russian Arctic region is estimated

3. Practical application:

investment committee

preparation of proposals on tax optimization

development of the Declaration of Intent to develop

fields


15/15

Thank you!

Capital Costs Estimation Methodfor Arctic Offshore Oil Projects

nekhaev eng 3

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