One of the Subsurface Production Disciplines related to building Field Development Plan (FDP).
The key instrument of Field Development Planning is Nodal Analysis and Investment Planning.
The 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 |
Principle 1 – Maximize free cash flow balance
The key principle of Field Development Planning is based on maximizing the free cash flow balance :
| (1) | \Delta {\rm FCF} = R_{HC} \cdot J_{HC} \cdot \left( p_e - p_{wf} \right) - { \rm Cost } |
where
R_{HC} | Market price of hydrocarbons |
J_{HC} | Total field productivity index |
p_e | Formation pressure in producers |
p_{wf} | Bottomhole pressure in producers |
\rm Cost | Cost of production |
The total field productivity index can be approximated by:
| (2) | J_{HC} = N \cdot k \cdot h \cdot K |
where
N | number of producers |
k | formation permeability |
h | effective formation thickness |
T | productivity multiplier based on well-reservoir contact |
The actual economics of petroleum production is more complicated than equations
(1)-
(2) but it shows the fundamental ideas behind the Field Development Planning process.
The digital petroleum asset twins are capable to accurately simulate the holistic process of discounted cash flow generation from production activities and associated Financial Investment Metrics but it takes many more parameters than equations (1)- (2).
Principle 2 – Speed up the free cash flow
TDoscount cash flow.
Principle 3 – Maximize the reserves utilization
This principle states that the long-term economic effect is correlated with the reserves utilization and hence one should explore and engage maximum reserves into production.
See Also
Petroleum Industry / Upstream / Production
[ Subsurface E&P Disciplines ]
[ Nodal Analysis ] [ Investment Planning ]
[ Field Development Plan ] [ Field Summary ]