Best Practices and Methods in Hydrocarbon Resource Estimation, Production and Emissions Forecasting, Uncertainty Evaluation and Decision Making

Abstract

On behalf of a group of sponsors consisting of the Norwegian Petroleum Directorate (NPD) and most E&P companies active in Norway, a workgroup was set up to author a report on the Best Practices and Methods in Hydrocarbon Resource Estimation, Production and Emissions Forecasting, Uncertainty Evaluation and Decision Making. The workgroup is part of Norway's forum for Forecasting and UNcertainty (FUN). Following a detailed data acquisition and interviewing phase to make an inventory of the current practice of all sponsors involved, the workgroup postulated a relationship between a company's practices and its economic performance. A key distinguishing factor between companies is the degree to which probabilistic methods are adopted in integrated multi-disciplinary processes, aimed at supporting the decision making process throughout the asset life cycle and portfolio of assets. Companies have been ranked in terms of this degree of integration and best practices are recommended. In many companies a gap seems to exist between available and applied technology. Data and (aggregated) information exchange between Governments and companies is also discussed. A best practice based on their respective decision making processes is recommended. Introduction Norway's forum for Forecasting and UNcertainty evaluation (FUN, ref. 1) was established in 1997, and has 18 member companies plus the Norwegian Petroleum Directorate (NPD). The forum is a Norwegian Continental Shelf arena to determine best practice and methods for hydrocarbon resource and emissions estimation, forecasting uncertainty evaluation and decision making. It focuses on matters related to forecasting and uncertainty evaluation of future oil and gas production. Its main purpose is to optimize the interplay between the private industry and the national authorities wishing to regulate their national assets. The basic question that kicked off the FUN Best Practices project was whether the accuracy of Norway's historical production forecasts has been disappointing because of erroneous contributions from the companies or because of wrong aggregation by NPD. The question was posed which "Best Practices" could improve this situation. Whereas reserves form the basis for production, capex, opex and emissions forecasting, the decision making process in the various companies and national authorities links the various components together. Using the latest WPC/SPE guidelines for reserves reporting (allowing the use of probabilistic methods), the project concentrated on assessing the potential advantages of probabilistic techniques when used in combination withfully integrated asset management workflow processes. After a discussion of the current practices of the various companies and authorities visited, "Best Practices" are formulated in the fields of estimating reserves, production, costs and emissions forecasting, decision-making, planning and communications. The paper concludes with recommendations on how to move from the "current practices" to the desired "Best Practices".

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