You must log in to edit PetroWiki. Help with editing
Content of PetroWiki is intended for personal use only and to supplement, not replace, engineering judgment. SPE disclaims any and all liability for your use of such content. More information
Production forecasting purpose: Difference between revisions
No edit summary |
No edit summary |
||
(17 intermediate revisions by the same user not shown) | |||
Line 5: | Line 5: | ||
== Production forcasting approach == | == Production forcasting approach == | ||
The approach to | The approach to product forecasting is likely to differ depending on: | ||
*The specific objectives of that particular forecast | *The specific objectives of that particular forecast | ||
Line 25: | Line 25: | ||
{| border="1" cellspacing="0" cellpadding="0" width="566" style="width:566px;" align="center" | {| border="1" cellspacing="0" cellpadding="0" width="566" style="width:566px;" align="center" | ||
|- | |- | ||
! style="width: 228px; text-align: center;" scope="col" colspan="2" | Table 1 | ! style="width: 228px; text-align: center;" scope="col" colspan="2" | Table 1 – Differences between tactical and strategic objectives<br/> | ||
|- | |- | ||
! style="width: 228px; text-align: center;" scope="col" | | ! style="width: 228px; text-align: center;" scope="col" | | ||
Line 82: | Line 82: | ||
{| border="1" cellspacing="0" cellpadding="0" width="606" align="center" style="width: 725px;" | {| border="1" cellspacing="0" cellpadding="0" width="606" align="center" style="width: 725px;" | ||
|- | |- | ||
! style="width: 721px; text-align: center; vertical-align: middle;" scope="col" colspan="3" | Table | ! style="width: 721px; text-align: center; vertical-align: middle;" scope="col" colspan="3" | Table 2 – Production forecasting customer needs<br/> | ||
|- | |- | ||
! style="width: 300px; text-align: center; vertical-align: middle;" scope="col" | | ! style="width: 300px; text-align: center; vertical-align: middle;" scope="col" | | ||
Line 248: | Line 248: | ||
== References == | == References == | ||
<references /> | |||
== Noteworthy papers in OnePetro == | == Noteworthy papers in OnePetro == | ||
== Noteworthy books == | == Noteworthy books == | ||
Line 260: | Line 258: | ||
== External links == | == External links == | ||
Production forecasts and reserves estimates in unconventional resources. Society of Petroleum Engineers. [http://www.spe.org/training/courses/FPE.php http://www.spe.org/training/courses/FPE.php] | |||
Production Forecasts and Reserves Estimates in Unconventional Resources. Society of Petroleum Engineers. [http://www.spe.org/training/courses/FPE1.php http://www.spe.org/training/courses/FPE1.php] | |||
== See also == | == See also == | ||
Line 266: | Line 266: | ||
[http://petrowiki.org/Production_forecasting_glossary Production forecasting glossary] | [http://petrowiki.org/Production_forecasting_glossary Production forecasting glossary] | ||
[http://petrowiki.org/Aggregation_of_forecasts Aggregation of forecasts] | |||
[http://petrowiki.org/Challenging_the_current_barriers_to_forecast_improvement Challenging the current barriers to forecast improvement] | |||
[http://petrowiki.org/Commercial_and_economic_assumptions_in_production_forecasting Commercial and economic assumptions in production forecasting] | |||
[http://petrowiki.org/Controllable_verses_non_controllable_forecast_factors Controllable verses non controllable forecast factors] | |||
[http://petrowiki.org/Discounting_and_risking_in_production_forecasting Discounting and risking in production forecasting] | |||
[http://petrowiki.org/Documentation_and_reporting_in_production_forecasting Documentation and reporting in production forecasting] | |||
[http://petrowiki.org/Empirical_methods_in_production_forecasting Empirical methods in production forecasting] | |||
[http://petrowiki.org/Establishing_input_for_production_forecasting Establishing input for production forecasting] | |||
[http://petrowiki.org/Integrated_asset_modelling_in_production_forecasting Integrated asset modelling in production forecasting] | |||
[http://petrowiki.org/Long_term_verses_short_term_production_forecast Long term verses short term production forecast] | |||
[http://petrowiki.org/Look_backs_and_forecast_verification Look backs and forecast verification] | |||
[http://petrowiki.org/Material_balance_models_in_production_forecasting Material balance models in production forecasting] | |||
[http://petrowiki.org/Probabilistic_verses_deterministic_in_production_forecasting Probabilistic verses deterministic in production forecasting] | |||
[http://petrowiki.org/Production_forecasting_activity_scheduling Production forecasting activity scheduling] | |||
[http://petrowiki.org/Production_forecasting_analog_methods Production forecasting analog methods] | |||
[http://petrowiki.org/Production_forecasting_building_blocks Production forecasting building blocks] | |||
[http://petrowiki.org/Production_forecasting_decline_curve_analysis Production forecasting decline curve analysis] | |||
[http://petrowiki.org/Production_forecasting_expectations Production forecasting expectations] | |||
[http://petrowiki.org/Production_forecasting_flowchart Production forecasting flowchart] | |||
[http://petrowiki.org/Production_forecasting_frequently_asked_questions_and_examples Production forecasting frequently asked questions and examples] | |||
[http://petrowiki.org/Production_forecasting_in_the_financial_markets Production forecasting in the financial markets] | |||
[http://petrowiki.org/Production_forecasting_principles_and_definition Production forecasting principles and definition] | |||
[http://petrowiki.org/Production_forecasting_purpose Production forecasting purpose] | |||
[http://petrowiki.org/Production_forecasting_system_constraints Production forecasting system constraints] | |||
[http://petrowiki.org/Quality_assurance_in_forecast Quality assurance in forecast] | |||
[http://petrowiki.org/Reservoir_simulation_models_in_production_forecasting Reservoir simulation models in production forecasting] | |||
[http://petrowiki.org/Types_of_decline_analysis_in_production_forecasting Types of decline analysis in production forecasting] | |||
[http://petrowiki.org/Uncertainty_analysis_in_creating_production_forecast Uncertainty analysis in creating production forecast] | |||
[http://petrowiki.org/Uncertainty_range_in_production_forecasting Uncertainty range in production forecasting] | |||
[http://petrowiki.org/Using_multiple_methodologies_in_production_forecasting Using multiple methodologies in production forecasting] | |||
[[Category:5.6 Formation evaluation and management]][[Category:5.6.9 Production forecasting]][[Category:Category: | == Category == | ||
[[Category:5.6 Formation evaluation and management]] [[Category:5.6.9 Production forecasting]] [[Category:GIWS-PF]] [[Category:Chapter 1]] [[Category:DW]] [[Category:DW Complete]] [[Category:DW All Pages]] |
Latest revision as of 12:31, 31 May 2016
Production Forecasting is an important input into the decision-making process and investment scenario evaluation, which are crucial for an upstream organization. The production forecast flows through the central nervous system of an organization and helps to identify opportunities and decide on the best way forward.
There are many reasons for making production forecasts, and to make it even more complex, the different purposes quite often have several aspects. Often the overall integrating factor is that forecasts are made to see how the maximum value of an asset can be achieved.
Production forcasting approach
The approach to product forecasting is likely to differ depending on:
- The specific objectives of that particular forecast
- The customer of that forecast and their particular needs
- The phase/stage of a field's life
All of these categories were widely discussed in the SPE Production Forecasting Global Integrated Workshop Series (LinkedIn).
Production forecasting objective
It is important to have the objective of the production forecast in the decision-making process in mind while forecasting. It is important to go through a process to identify and address the requirements in generating a production forecast. This could be a three step process:
- Identify what decisions will be made using the information from the forecast
- Identify what uncertainties matter for these decisions
- Design of the forecast
It should be noted that there are differences between tactical or operational objectives vs. strategic objectives.
Table 1 – Differences between tactical and strategic objectives | |
---|---|
Tactical (Operational) |
Strategic |
Short-term feedback loop |
Long time before you find out the outcome |
Low upfront investment |
High upfront commitment |
Uncertainties are well understood |
High degree of “unknown” unknowns |
Subset of the organization involved |
Typically requires buy-in/input across the organization |
Very granular |
Less detail required |
Some examples of tactical objectives could be multiple detailed short-term forecasts for testing models, deciding on facility changes/optimizations, assessing whether contract obligations or company targets will be met, forecasting hydrocarbon sales, etc.
Errors typically made are lack of integration between subsurface and facilities leading to misinterpretation of information, not updating a forecast regularly enough to account for ongoing changes, not taking account of all activities, and their interactions, in field uptime calculations and underestimating activity durations.
Many of the forecasts made for strategic objectives will be life of field forecasts for objectives such as green field development planning, major brown field redevelopment, and company portfolio analysis for reviewing asset acquisition or disposal decisions.
Errors typically made are insufficient appraisal to optimize development planning, not considering uncertainties effectively enough in alternative concepts testing or only considering them when it is too late to change the concept and not considering “unknown unknowns” in the contingency planning and risking.
Production forecasting customer
Table 2 – Production forecasting customer needs | ||
---|---|---|
Customer |
Main Decisions |
Differentiating Factors |
Subsurface Manager/Reserves Auditor |
|
|
Asset/Operations Manager |
|
|
Company portfolio/strategy manager |
|
|
Development team (facilities, pipeline, drilling) |
|
|
Commercial (joint venture, gas sales, third-party processing) |
|
|
Investors/Financial Institutions |
|
|
Government (tax revenues, import, elections, HSE) |
|
|
Field Life Phase
Not only do the production forecasts depend on objectives and customers, but the basic purposes and their connections to objectives and customers often depend on the phase of a field’s life. Therefore, forecasting is an ongoing process rather than a one-time event.
At different phases of a field’s life the amount and quality of available data varies, and the level of reliability of this data has to be considered. It may be important to adjust the forecasting approach to the quantity and quality of data available, rather than trying to obtain a level of detail that is beyond that which can be supported by the database. The following provides the basic ideas of production forecasting purposes at different phases of a project’s life and attempts to provide some hints on limitations and errors that are often made at each stage.
It is important to view the purposes and according constraints depending on the following principle phases:
Production Forecasting at an Exploration Stage
- Purpose
- To find out which concept can be selected for a new discovery to make it a profitable development and which concepts to discard.
- Limitations
- Very early and only limited information available.
- Errors
- Looking at too narrow a set of development options, wrong concepts, too low capital costs and expenses. Not reviewing analogues or using inappropriate analogues. Over reliance on a limited dataset to determine the range of potential forecasts.
Production Forecasting During Appraisal Phase
- Purpose
- Better definition of potential resources; firming up of development concepts and their feasibility; planning of timing and logistics; getting approvals from authorities, JV partners and investors.
- Limitations
- Still very limited data available, no production data.
Production Forecasting During Early Field Life
- Purpose
- To further confirm and establish resources - repetitive short-term forecasts in detail to assess confirm/adjust geo model; to assess/confirm near-term production and ramp up; to adjust development concepts, facilities and recovery methods; to get production allowances from governmental bodies.
- Limitations
- Still limited production data available, short history to simulate longer and reliable predictions. Stakeholders likely to be looking for reliable early performance indications before you have enough data to give it to them. Likely to see some surprises which will take time to understand.
- Errors
- Underestimating timing and cost, ramp up of production, total resources. Over confidence and over reliance on early data could mean reaching the wrong conclusions.
Production Forecasting During Established Field Life
- Purpose
- To re-asses resource potential; to re-evaluate geo-model definition of blocks/production units; to ascertain whether previous and current forecasts reflect communication within the field; to optimize recovery methods and facilities for maximization of economic recoveries; to evaluate possibilities with changes in recovery mechanisms, addition of facilities (e.g., compression, WAG, CO2 injection etc.) and steps to improve flow (e.g., infill drilling, fracturing, etc.). To estimate when a field may go off plateau production.
- Limitations
- Interpretation of production data available, correct predictions, cost estimates. Without water breakthrough there is still significant uncertainty. Some fields may not have reliable well test data or pressure surveillance.
- Errors
- Underestimating timing and cost of changes in production concept, total resources, viewing and analyzing options too narrow or too late. Incorrectly predicting water breakthrough, GOR changes and well declines.
Production Forecasting During Mature/Late Field Life
- Purpose
- To determine whether geo model is still correct and impact on remaining resources; to define economic cut-off and likely cessation of production.To re-evaluate geo model definition of blocks/production units; to evaluate whether previous and current forecasts reflect communication within the field; to plan for late life measures to optimize recoveries; to plan potential gas blow-down of oil fields; to evaluate the potential to inject inert gasses (CO2, N2, ..) in gas or gas condensate fields; to plan early for shut down and removal of wells, facilities, etc.; to prepare for authority and investor approvals for late-life measures and shut-downs; to potentially plan for necessary approval from environmental bodies.
- Limitations
- Interpretation of production data available, correct predictions. Often too much data to handle and interpret. An expectation that you will now understand the field inside out but there will remain residual uncertainty.
- Errors
- Underestimating timing and cost of changes in production regime, underestimating the impact of water and gas production on the oil forecast and total resources, viewing and analyzing options too late. Underestimating the integrity work required in later life and therefore overestimating up time and economic value.
- It is important at all times to assess the field- and company-specific parameters that affect the definition of the purpose of the production forecast. Forecasts also have to take the following into account:
- the individual type of HC that is produced (heavy oil/black oil/light oil/gas condensate/gas)
- the individual development concept that is selected
- on-shore vs of-shore issues (including differences in timing, cost, etc)
- are primary/secondary/tertiary mechanisms planned
- the forecast has to be economically feasible/optimized
- the various economic and other assumptions of all (operating and non-operating) companies involved in joint ventures
The approach for each production forcast will vary depending on these basic parameters. It will always be important to ensure that the purpose is defined correctly and that the definition, as well as the limitations and uncertainties, are clearly communicated to the relevant customers.
References
Noteworthy papers in OnePetro
Noteworthy books
Society of Petroleum Engineers (U.S.). 2011. Production forecasting. Richardson, Tex: Society of Petroleum Engineers. WorldCat or SPE Bookstore
External links
Production forecasts and reserves estimates in unconventional resources. Society of Petroleum Engineers. http://www.spe.org/training/courses/FPE.php
Production Forecasts and Reserves Estimates in Unconventional Resources. Society of Petroleum Engineers. http://www.spe.org/training/courses/FPE1.php
See also
Production forecasting glossary
Challenging the current barriers to forecast improvement
Commercial and economic assumptions in production forecasting
Controllable verses non controllable forecast factors
Discounting and risking in production forecasting
Documentation and reporting in production forecasting
Empirical methods in production forecasting
Establishing input for production forecasting
Integrated asset modelling in production forecasting
Long term verses short term production forecast
Look backs and forecast verification
Material balance models in production forecasting
Probabilistic verses deterministic in production forecasting
Production forecasting activity scheduling
Production forecasting analog methods
Production forecasting building blocks
Production forecasting decline curve analysis
Production forecasting expectations
Production forecasting flowchart
Production forecasting frequently asked questions and examples
Production forecasting in the financial markets
Production forecasting principles and definition
Production forecasting purpose
Production forecasting system constraints
Reservoir simulation models in production forecasting
Types of decline analysis in production forecasting
Uncertainty analysis in creating production forecast
Uncertainty range in production forecasting
Using multiple methodologies in production forecasting