Cover: Oilfield Review Winter 2000
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Editorial: Linking Petrophysical and Geologic Information: A Task for Petrophysics
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Advanced technology is available to analyze and direct both technical and economic decisions in the petroleum industry. One new solution, decision-tree analysis, is helping decision-makers prioritize problems, understand the impact of factors that influence the decision, evaluate uncertainty, quantify the value of new information and build confidence in the final decision. Decision trees help build a framework for difficult, multidisciplinary problems and test the effect of each step in the decision process. Case studies show how these tools help combine technical and economic information to promote sound decisions in field development programs and economic analysis.
Risk looms large at almost every stage of the oil business, from exploration and production to marketing. Assessing risk and uncertainty aids decision-making and can help improve exploration and production performance. The tools that are used to cope with physical risk and uncertainty can also be used to understand economic risk and uncertainty, but they seldom are. This article discusses the latest tools for economic evaluation and risk assessment of proposed investments in oilfield projects, including discounted cash flow, Monte Carlo analysis, and portfolio, options and preference theories.
The petroleum industry is now able to take advantage of asset-management techniques-developed for the financial-investment industry-that view projects and investments as an interdependent ensemble, or portfolio, rather than as independent entities. New software and consulting services help decision-makers select and analyze portfolios of projects that achieve a value-risk balance in line with company strategy. Case studies show how oil companies are using portfolio optimization and other opportunity-management techniques to meet targeted levels of production, revenues, reserves and other key objectives.
Large investments associated with well completion call for an approach that integrates reservoir characterization with production engineering. Case his-tories illustrate how distributed teams of experts use field- or basin-specific modeling to make stimulation and completion recommendations, focusing on productivity throughout the life a well, irrespective of boundaries between technical disciplines. Utilizing Web-based tools to build comprehensive data sets and improved models, this methodology takes advantage of the latest formation evaluation and fracturing technologies.
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