6. Production forecasts: Forecasts and uncertainty

Forecasts and uncertainty

Decisions to develop oil and gas resources are taken under a state of uncertainty. This is linked to both the size of the deposit and the distribution of the production volume over a period of time, as well as the manner of development and the start of production. After production begins, the uncertainty regarding the estimates of reserves gradually declines. Drilling of development wells along with experience from production provide, over a period of time, the knowledge that is required about the distribution and dynamic properties of the deposit. The production period is normally divided into four phases, all of which have their own characteristic uncertainty factors (Fig. 6.1). In the build-up phase, the uncertainty concerning aspects relating to the reservoir, will principally be associated with the productivity of the wells. In addition, there will be uncertainty regarding decisions on the right time to drill and to build installations, and this will have a bearing on the production forecast for the first few years. A survey covering all the fields on the Norwegian continental shelf shows that between 15% and 20% of the reserves are often produced during this phase.

Production in the plateau phase is limited by capacities planned when the development took place. The processing and transport capacities will be decided at a time when knowledge about the production capability of the reservoir is limited. The annual plateau rate is often placed at between 10% and 15% of the reserves for oil fields and 2% and 15% for gas fields. The duration of the plateau phase may be difficult to forecast, and is especially difficult for large fields with a long production period. As knowledge of the reservoir is gradually acquired, a simultaneous development of new technology takes place which means that the plateau can be extended or even raised. The uncertainties relating to the reservoir, that are associated with the duration of the plateau phase, are often linked to the forecasted pressure support, along with the timing of the breakthrough of water and/or gas production in the production wells.

The decline phase begins when a field goes off plateau. The uncertainty during this phase is chiefly associated with when decline starts and the rate at which production will be reduced. The expected decline rate is often set to a reduction of between 15% and 25% relative to that of the previous year.

In the abandonment phase, the details of the reservoir will be well known. The uncertainty in this period is mostly associated with what measures are implemented for improved recovery, along with the actual time abandonment takes place.

The uncertainty in the reservoir estimates will be reduced over time. The uncertainties connected with forecasting, particularly in the short term, will nevertheless depend upon the phase in which the field is situated. A change in the production strategy on a field will again introduce new uncertainties in the production forecasts.

History

Fig. 6.2
Total oil production from the Norwegian shelf.

Figure 6.2 shows the actual oil production from all the fields on the Norwegian continental shelf. Production on the shelf began on the Ekofisk field in June 1971 with a testing period to uncover some of the uncertainties regarding the dynamic behaviour of the reservoir. The first production forecasts, which were prepared in the 1970s, were significantly higher than the actual production (Fig. 6.3). The reasons for the low production level are chiefly the following factors: delay in start production at several installations, a slow buildup of production to the plateau rate owing to late completion of installations, new regulations concerning simultaneous drilling and production, and the production ability of the reservoirs. Four large fields, the Ekofisk, Statfjord, Gullfaks and Oseberg fields, have been responsible for the majority of Norwegian oil production from the beginning up to the present day (Fig. 6.4).

The situation changed in the 1980s and 1990s when the long-term forecasts for the Norwegian continental shelf were too low. There are many reasons for the high production level in this period. Figure 6.5 shows forecasts taken from various plans for development and operation, actual production figures, and forecasts made in autumn 1995 for 22 fields on the Norwegian continental shelf. In the original forecasts, peak production for these fields was estimated to stand at slightly more than 90 mill. Sm³ of oil. The actual production in 1996 was almost 160 mill. Sm³ of oil. The main reason for the substantially higher production is the use on the Statfjord, Gullfaks and Oseberg fields of new technology with respect to reservoir characterisation and drilling.

Figure 6.6 compares three forecasts for 19 of the fields (excluding the Statfjord, Gullfaks and Oseberg fields), the forecasts being from when the decision to develop was taken, from 1990 and from 1995. The differences between the forecasts made in 1990 and 1995 are significantly less for these 19 fields taken together than for the three largest fields.

The estimates of reserves and the related production profile are based on existing techno-logy and production strategy when the decision to develop was taken. Increased recovery as a consequence of new technology and improved knowledge of the reservoirs or changes in the production strategy, were not taken into account in the forecasts. Figure 6.7 shows the changes in the estimates of the reserves in the 11 largest fields whose development was approved prior to 1988. The estimates for the Ekofisk, Oseberg, Valhall and Ula fields are more than doubled in relation to those given when the decision to develop them was taken.

To contents Next: Total oil and gas production