Abstract

This presentation will discuss the design aspects which drive value of an Early Production System (EPS) and introduces a stepwise approach for teams to follow to frame and evaluate dynamic tests and EPS design options using a generic deepwater case example. Alternatives ranging from a drill stem test (DST) to an EPS to a tie-back are compared and sensitized to understand under which conditions each option might be worthwhile, ultimately providing information for an informed decision.

Many teams believe an Early Production Systems (EPS) will be valuable for their offshore projects, but struggle when asked to make the business case for an EPS. Typically, if there is value in an EPS it is derived either from (1) early resource sales and/or (2) providing information on key dynamic uncertainties in order to decide whether and/or how to optimize development. The latter often is the driver of value.

As the industry moves to deeper and deeper waters, getting quality information on dynamic uncertainties gets more expensive and for some situations, becomes cost prohibitive. As a result, companies either need to be willing to sanction expensive developments with sizable risk (potentially bearing a higher risk tolerance) or find ways to make extended tests or EPS compelling financially, in addition to technically.

The key dynamic uncertainties teams often want to reduce before sanctioning development are (1) reservoir compartmentalization, (2) natural or enhanced drive mechanism and/or (3) initial production rate. Each is linked to different decisions which can be optimized if uncertainty in the situation is reduced. Compartmentalization directly affects the number of development wells, drive mechanism affects the need for injection, and associated well count and initial rate directly affect facility size.

Ultimately, the key to deriving value from an EPS resides in its design, which includes the type of EPS vessel, the associated fiscal terms and the quality of the information gathered from the early production system prior to finalizing development. This includes the tests and data to be collected, as well as the duration of the production period prior to making the important development decisions. 

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