Half of oil and gas fields are not producing to expectations when onstream, mainly due to unexpected reservoir issues, according to a new Westwood research report
According to the report, entitled ‘Appraisal efficiency – can it be improved?’, 70 per cent of the fields studied with limited appraisal were found not to perform to the development plan. Most of the subsurface risks identified could have been mitigated before the start of a project with more effective appraisal.
Westwood benchmarked the appraisal programmes of 70 producing fields to understand how production performance is related to the effectiveness of appraisal in reducing subsurface uncertainties. Misunderstanding of the subsurface due to inadequate appraisal can have a catastrophic impact on production performance, reserves and value.
43 of the 70 fields in the dataset demonstrated deviations in reserves and/or production of greater than 10 per cent above or below the plan at project sanction – due to unexpected subsurface issues. 50 per cent of the fields were subject to 2P reserves revisions after production started.
84 per cent of the assets not matching expectations are reported to have suffered from issues related to reservoir production performance, with 51 per cent related to reservoir volume estimates. The most common causes of non-performance were inaccurate prediction of in-place hydrocarbon volumes (49 per cent); inaccurate prediction of pressure support due to misdiagnosed connectivity between producers and the water injectors or water-leg (42 per cent); and different reservoir quality than predicted (35 per cent).
70 per cent of the fields with fewer than five reservoir penetrations were found to not perform as expected. Appraisal well location, the type of data acquired and the timing of the data acquisition were also found to have an impact on the effectiveness of appraisal.
The key lesson learned from the study is how appraisal strategy impacts the field performance outcome, says Westwood. Appraisal efficiency can be improved through an appraisal programme that addresses the key uncertainties that will impact development design and field performance.
Frequency of reservoir production performance and volume estimates issues identified in the 43 non-performing fields (left) and frequency of asset performance type by number of reservoir penetrations (right).