Economic Risk and Decision Analysis for Oil and Gas Industry CE81.9008 School of Engineering and Technology Asian Institute of Technology January Semester Presented by Dr. Thitisak Boonpramote Department of Mining and Petroleum Engineering, Chulalongkorn University Risk Analysis Methods 1
Risk Analysis Methods Technical/Geological Risk Analysis (Probability of Success) 2
Petroleum Resource Assessment Petroleum Resource Assessment 3
The Origin of Petroleum Organic-rich rich Source Rock Thermally Matured Organic Matter Oil Types of Petroleum Oil and gas are formed by the thermal cracking of organic compounds buried in fine-grained rocks. Algae = Wood = Hydrogen rich = Oil-prone Hydrogen poor = Gas-prone 4
Thermal Maturation History Diagenesis R o = 0.5% Less Hydrogen K K More Hydrogen Kerogen Onset of Oil Generation Burial to Greater and Hotter Depths Catagenesis R o = 2.0% K 4 K 3 K 1 K 2 Oil Phase- Out Oil Oil Oil Gas Gas Gas Con Gas d Metagenesis Gas Horsfield and Rullkotter,, 1994 Petroleum System Definition The essential elements and processes and all geneticallyrelated hydrocarbons that occur in petroleum shows, and accumulations whose provenance is a single pod of active source rock. Elements Source Rock Migration Route Reservoir Rock Seal Rock Trap Processes Generation Migration Accumulation Preservation 5
Petroleum System Elements Anticlinal Trap Top Seal Rock (Impermeable) Reservoir Rock (Porous/Permeable Potential Migration Route Source Rock (Organic Rich 24803 Petroleum System Elements Source Rock - A rock with abundant hydrocarbon-prone organic matter Reservoir Rock - A rock in which oil and gas accumulates: -Porosity - space between rock grains in which oil accumulates -Permeability - passage-ways between pores through which oil and gas moves Seal Rock - A rock through which oil and gas cannot move effectively (such as mudstone and claystone) Migration Route - Avenues in rock through which oil and gas moves from source rock to trap Trap - The structural and stratigraphic configuration that focuses oil and gas into an accumulation 6
Petroleum System Processes Accumulation Entrapment Gas Cap Oil Water Seal Rock Reservoir Rock Migration Generation Source Rock 120 F 350 F 2480 Petroleum System Processes Generation - Burial of source rock to temperature and pressure regime sufficient to convert organic matter into hydrocarbon Migration - Movement of hydrocarbon out of the source rock toward and into a trap Accumulation - A volume of hydrocarbon migrating into a trap faster than the trap leaks resulting in an accumulation Preservation - Hydrocarbon remains in reservoir and is not altered by biodegradation or water-washing Timing - Trap forms before and during hydrocarbon migrating 7
Hydrocarbon Trap Types Anticline Fault Salt Dome Pinchout Unconformit y American Petroleum Institute, 1986 Petroleum System: Timing is Critical Trap Must Be Available Before/During Migration Trap Processes: Generation Migration Accumulation and Preservation Elements: Source Rock Migration Avenue Reservoir and Seal 8
Petroleum System Play Definition (Duff&Hall( Duff&Hall,, 1995) 9
Play Attributes Petroleum System 10
Risk Levels Play and Prospect Risk 11
Probability of Discovery Conceptual of thet Probability of Geologic Success Suppose we look at four major factors Hydrocarbon Source: Hydrocarbons in correct phase and quality were generated. Reservoir Quality: Reservoir rock of appropriate permeability and porosity is present. Geometry: Geometry of structure is as represented by seismic and slight changes would not jeopardize the accumulation of hydrocarbons. Seal: Seal exists with sufficient permeability to retain hydrocarbons. 12
Probability of Discovery Probability of Regionally Distributed Reservoir Facies 13
Probability of Sufficient Mature Source Rock Probability of Timing of Structuring 14
Probability of Effective Porosity Probability of Structure/Geometric Body 15
Probability of Effective Seal Probability of Migration 16
Probability of Retention after Accumulation Play Probability 17
Play Probability Prospect Probability 18
Probability of Success Application of POS to Expected Monetary Value (EMV) 19
Expected Monetary Value (EMV) Probability of Success (POS): Geological Risk only 20
Total Probability of Success (POS) EMV Example 21
Success Capacity Table Form for EMV Calculation 22
Probability of One Success Combined Probability of Success 23