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The key instrument of Field Development Planning is Nodal Analysis and Investment Planning.
Th ultimate goal of Field Development Planning is to maximize the Financial Investment Metrics.
These are quite complicated metrics and need a fine-tuned digital petroleum asset twins to accurately simulate the economic response to various FDP scenarios before selecting the winner.
The alternative approach is follow some key principles of Field Development Planning are:
| 1 | Maximize free cash flow balance |
|---|---|
| 2 | Speed up the free cash flow |
| 3 | Maximize the reserves utilization hydrocarbon recovery |
Principle 1 – Maximize free cash flow balance
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Principle 2 – Speed up the free cash flow
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This principle suggests that early cash inflow is worth more than late one.
This effect stems from the cash discount and often viewed as the "cash aging".
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The usual discount rate ("aging") in petroleum industry is around 10 – 15 % which consider as quite aggressive comparing to other industries.
Principle 3 – Maximize the
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hydrocarbon recovery
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This principle states that the long-term economic effect is correlated with the reserves utilization and the hydrocarbon recovery and hence one should explore and engage maximum reserves into production.
See Also
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Petroleum Industry / Upstream / Production
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