Stochastic Event Simulation of Oil Recovery Projects

Abstract

Risk handling of oil recovery projects has become more important as the biggest and least complicated oil fields have been exploited. As exploitation of smaller or more complex oil fields are not as obviously profitable, the need for describing the risk of the recovery projects have become more apparent. In this thesis the uncertainties of the reservoir, expenses, oil prices and more are combined to produce joint risk profiles. The uncertainties may be studied at several levels. Production profile, income profile,expenses profiles.

An application that produces distributions for net present value, internal rate of return, capital efficiency, and profiles for cash flow, oil recovery, oil prices, income and various expenses, has been developed. The input needed for the simulations are stochastic variables that are available at the early stages of an oil recovery project. Defining distributions for each stochastic variable, you are able to study the effect that various variables have on the results. Changing exploitation plan from a semi-submersible rig to a drilling ship, greatly decreases capital expenses and abandonment expenses. In turn, the maximum processing capacity drops and field operation time increases, reducing the net present value.