In the last year, the oil and gas industry has continued to recover against a backdrop of steadily rising oil prices. Companies, however, continue to take a cautious approach in their investment decisions as they try to maximize value and minimize risk. The future remains uncertain, with oil-price fluctuations factored into decision-making. Further uncertainty prevails in an environment of increasing societal and investor accountability and a continually evolving energy landscape.
Critically, any entity assessing project viability at any stage of the exploration-to-production life cycle must ensure an evergreen examination of the commercial likelihood on the basis of ongoing data analysis, refining development synergies coupled with strategic reframing as required. A rigorous assessment of both the technical and commercial basis for a project must be maintained at all times. Greater transparency and objectivity are required in the decision-making process to ensure future economic success. We cannot afford to become complacent.
The papers here address various aspects of project evaluation and investment decision-making—evaluating plays on a clustered-development basis (paper OTC 28499), redefining the framework for capital-allocation management (paper OTC 28685), or reframing exploration strategy to maximize project value (paper SPE 187143).
Lastly, in June 2018, the Society of Petroleum Engineers (SPE, and on be-half of the associated sponsor societies) released an update to the Petroleum Resources Management System (PRMS). While the update has been described as “an evolution, not a revolution,” you are encouraged to familiarize yourself with the communication released by SPE, conduct your own review of the new document, critically examine your current processes, test your understanding, ensure that project evaluations and their associated reserves and resources estimates are compliant with PRMS 2018, and use the system to help optimize resource management.
This Month's Technical Papers
New Approach to Capital-Allocation Modeling Improves Performance Assessment
Clustered-Development Approach Leads to Better Evaluation of Multiprospect Plays
Reframing Exploration Strategy Optimizes Project Value
Recommended Additional Reading
SPE 189730 Practical Reservoir-Management Strategy To Optimize Waterflood Pools With Minimum Capital Employed by Alireza Qazvini Firouz, Husky Energy, et al.
OTC 28746 Balanced Maturity Model for Oil and Gas Portfolio Assets by Marcelo Bastos, B-in Partners, et al.
SPE 189815 Predicting Economic Value in Unexplored Regions of an Unconventional Liquids-Rich Play by J. Yip, Repsol, et al.
| Greg Horton, SPE, is retired from Santos after 33 years of reservoir-management responsibilities and maintains an active role in improving the SPE Petroleum Resources Management System (PRMS). He holds an honors degree in civil engineering from Adelaide University. Horton was a member of the SPE Oil and Gas Reserves Committee from 2011 to 2014, is a member of the SPE PRMS Improvements Subcommittee, and serves on the JPT Editorial Committee. He can be reached at ghortonpeteng@gmail.com. |
| Barbara Pribyl, SPE, is reserves and resources manager at Santos. She has more than 20 years of experience as a geologist and in reserves and resources management, based in the Australian oil and gas, coal exploration, and coal-seam-gas industry. Pribyl holds an honors degree in geology from the University of Wollongong. Her focus in recent years has been on Australian and international oil and gas reserves and resources assurance and reporting. Pribyl has been a member of the SPE Oil and Gas Reserves Committee since 2014 and serves on the JPT Editorial Committee. She can be reached at barbara.pribyl@santos.com. |
