Enhancing Marginal Field Development Economics: Leasing Operated Production Facility Approach
AbstractInnovative technical advances are now enabling operators to consider development of fields previously identified as uneconomic or marginal. However such projects can still fail to progress since development using a traditional engineering, procurement and construction (EPC) approach does not always meet the required targets for economics, risk and timescale necessary for approval to proceed. This paper will detail how the use of fit-for-purpose production facilities mobilized on a leased, operated and maintained basis now offers an alternative approach to the provision of a field production solution. This approach enables operators to limit their initial set up and infrastructure cost at the front end of a project, to gather additional information on the performance and productivity of their wells and to make a more informed decision on the future of the fields. As a result, operators can keep both their project and capital risk exposure to a minimum. By achieving this production on a fast track basis, revenue from the sale of produced well fluids is generated early. Combined with the low initial cost and lower capital risk of this approach, the economic viability of progressing an asset to full scale production is further enhanced. Based on this sequential investment model, a real option analysis of the overall field development plan can therefore make a project viable, even if the overall net present value (NPV) appears marginal using more traditional methods. In conclusion the research will present technical solutions for the various fields evaluation and production stages of a full field development utilizing the leased facility approach, associated commercial models and case studies for recently completed projects
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Research Centre for Social Sciences,Mumbai, India in its journal Journal of Global Economy.
Volume (Year): 8 (2012)
Issue (Month): 1 (March)
Contact details of provider:
Web page: http://www.rcssindia.org
Find related papers by JEL classification:
- Q4 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy
- L9 - Industrial Organization - - Industry Studies: Transportation and Utilities
You can help add them by filling out this form.
reading list or among the top items on IDEAS.Access and download statisticsgeneral information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Dr J K Sachdeva).
If references are entirely missing, you can add them using this form.