![]() ![]() Organisations of varying size from fully integrated super majors which operate across the entire supply chain, smaller IOCs working in Upstream, independent exploration companies who focus on higher risk areas to then farm-out parts of their equity in return for drilling and project development support. State-owned organisations which engage in exploration and production activities, either independently or as part of a joint-venture consortium. Will regulate the industry, providing fiscal and legal infrastructure, collect and distribute any revenues. For offshore fields this is a hugely complex operation, and wherever possible companies will look to bring as much as possible back onshore for dismantling and to reclaim as much material as they can. This involves the removal of the rigs, production facilities and any infrastructure which was in place. Once a field is at the end of its production cycle and no longer profitable to maintain, the site will be decommissioned. The Oil and Gas Revenue Life Cycle Decommissioning Reservoir Engineers will monitor the performance of the field to plan any additional wells or improvements to boost production and maximise the amount of hydrocarbons which can be recovered. Operations and maintenance costs run to several million dollars each year, and safety is a paramount concern at all times. Production may last anything from several years up to several decades depending on the size of the field and how expensive it is to maintain the wells and facilities. Some fluctuations will occur over time as the level of production reduces towards the end of the field's life. Once a field is producing, this is the major source of revenue where a company can begin to recover their financial outlay and eventually turn a profit. Once the best estimate of all costs is in place, a company will be able to decide if the project will be profitable and grant FID to proceed with construction and ultimately move to production. Many factors are involved including the number of wells to be drilled, the recovery method, the type of installation to be used, the separation systems for the gas & fluids, and how the oil and gas will be transported to a processing facility. The field development plan will be created to estimate the CAPEX and OPEX of the project. If an appraisal is successful, then the project will move on to the development phase.įollowing a successful appraisal, the development phase is where the operating company will determine the best methods to extract and transport the hydrocarbons and overall financial viability of moving to full-scale production. The appraisal stage of a project may take years, and cost vast sums of money as more wells are drilled and further seismic surveys done to better understand the reservoir. It was found in an area previously thought to be exhausted from over 4 decades of relatively disappointing exploration, and now stands to provide jobs and generate revenue for several decades.Īfter a company has found oil and gas reserves, it needs to assess how much there is and, more importantly, how much can be extracted. ![]() Take the recent case of the Johan Sverdrup field, one of the largest discoveries ever made in the North Sea off the coast of Norway. The potential rewards can be enormous however. Exploration projects can be expensive, time-consuming and risky, drilling a well may cost tens of millions of dollars and not find any hydrocarbons, this is known as a dry-hole or a duster. The search for hydrocarbon deposits beneath the surface of the earth, primarily using a combination of seismic surveys and drilling wells. ![]()
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