Value of flexibility in offshore oil field development projects

摘要

Offshore oil field development projects often face substantial uncertainties and the operator's ability to take corrective actions is very important. The main objective of this thesis was to identify the value of flexibility in such projects. Estimates obtained from exploratory wells can be dependent through common information. The effect of stochastic dependence was illustrated by an analytical model, where the dependence was expressed in terms of correlation between estimate errors. It was found that a high degree of correlation might distort the benefit of additional exploration. A prototype that covered the major phases of the project was developed to study the value of flexibility. The prototype was a Markov decision process, solved by stochastic dynamic programming. Based on discussions with Norwegian oil companies, three uncertain variables were addressed: the reservoir volume, the well rate, and the oil price. Simple descriptions were used to mimic the uncertainty. The reservoir was thus depicted as a tank model, and the well rate and oil prices were assumed to follow Markov processes. Flexibility was restricted to managerial as opposed to financial flexibility. Application of the prototype to a case study, based on an ongoing field development, showed that flexibility might be of considerable value to the project. In particular, capacity flexibility and initiation flexibility were identified as important aspects of the development. The results also emphasized the importance of a joint assessment, as the values of different flexibility types are not additive. In conclusion, the proposed model motivates further development of the decision support system presently available. Future decision making should therefore be made within a framework that gives consideration to flexibility. 129 refs., 46 figs., 23 tabs.