One oil or gas field in the North Sea is of a similar scale and complexity to many mid-size companies on the FTSE 250 – so it’s not surprising that field development plans are extensive, complex and in need of review. Companies often ask advisors like those at Rockflow to perform such reviews, and while it’s obviously our duty to check that the plan meets a standard set of requirements, we prefer to go a little further.
If you were building a bridge, you could settle for a design simply capable of helping people cross a river. But if you need that bridge to be beautiful, to bear the weight of heavy traffic for hundreds of years, to weather uncertainty and potential natural disaster – then you need to work through plans with a different level of scrutiny.
It’s the same with field development planning (FDP). It’s one thing to meet requirements, it’s another to bring the best value from the field over the long term while managing risk.
You need more than a technical study
A field development plan review is more than a technical study – it’s a business and commercial review as much as anything else. You’re not only designing a facility and a set of wells, you’re building a business. For this reason, we prefer to check more than the feasibility, we want to ensure a plan will create the best outcome.
The technical study is important – we perform the checks, we ensure that a company has undertaken the necessary reviews, and so on. But the extra value we bring comes through asking: how can we make this plan more valuable? Can we bring costs down? What alternative concepts could make it more efficient? Are there novel ways to make development quicker?
For instance, last year we were asked to review a field plan and give the client feedback so the plan could progress. We did this, of course. But then we also gave recommendations for how they could make the entire project better. We suggested how they could structure the plan, what critical areas to get data on, and how they could explore the opportunity in a different way.
So in all of this, we’re not only checking that everything is present and correct. We’re sifting through the vast information contained in the plan to determine: what’s important? What needs attention?
You’ll want to review the larger concepts
It’s vital to ask these questions at the review stage of field development, since at this point you have the greatest opportunity to affect the outcomes. The last thing you want is to wish you asked these questions later, when you have far less ability to influence the downside risk – an issue one of our clients faced in a case of sticky oil.
In our experience, oil and gas companies are good at asking these questions when they have a new offshore project, since the scale immediately places it in the “can’t afford to fail” category.
However, we’ve noticed that this same scrutiny is often absent with onshore developments that grow organically, or on offshore fields after the initial development is complete. It’s the danger of managing a project year to year rather than with a 10-15 year horizon.
Asking the right questions
Asking these questions doesn’t necessarily mean going slower. It does mean finding clarity – which we can rarely afford not to have. Countless are the times when clients have come to us with a symptom, and rather than presenting an instant solution, like upstream doctors, we first diagnose the real root issue. Likewise, in field development planning, you might come to us with a checklist of requirements but you will also likely want us to go further.
You ultimately want to a field plan which will maximise your ability to:
- Capture value
- Deal with the unexpected
So we might present alternative concepts to you: these could range from how fast you choose to develop a project, to whether you change the delivery point, the specs of what you’re delivering, the levels of manning you need, whether you can afford to use less equipment, a different well design, and so on.
For instance, we recently asked one client to show us their well designs. When they did so, we noticed a clear opportunity: a different sized tubing could get twice as much out of their wells. This changed the concept behind their field plan quite dramatically but there’s no doubt it made a critical difference to the outcome.
You want experts with interdisciplinary experience to review plans
So why can’t you do all of this before you ask us to get involved? Well, you certainly can – though we usually find clients have only optimised a part of the project.
They might have a very good understanding of the reservoir but little idea of their well designs, or they might have a robust wells and facilities plan but only a very partial understanding of what risks they’re taking in the subsurface. And if it’s a commercial-led project, they might understandably have neither – we’ve known companies to have a thorough understanding of the numbers they need but a limited plan to achieve them.
That’s par for the course for most oil and gas projects, simply because we’re still a relatively siloed industry. The wider concepts of a field development plan are rarely reviewed as a whole before our eyes are on them.
Our multidisciplinary expertise gives us an ability to integrate all elements – reservoirs, wells, facilities, finances, stakeholders, politics, economic viability, commercial drivers, the phrasing of joint venture agreements – and we also have enough global experience to know what is most essential. We’ve seen enough field plans implemented to spot early signs that a field development will be effective, ineffective, robust or risky – and we know how you can best influence the outcome.
Field design is complex
As we’ve said, designing a field can be as complex as designing several businesses at once. There are countless ways you can explore a project, and there’s always another way to get more data before you proceed. And you don’t want the opportunity to get stuck.
The benefit of our experience is that we’re fast and focused. Once we’ve reviewed a field plan, we can come to the table and say, “Here are all the areas you don’t need to worry about – and here are the top three issues you’ll want to explore.” You’ll end up with a more robust plan capable of delivering better value over the long term.
To learn how we can support you, take a look at our technical assurance services.