Publication Date:
2008-10-01
Description:
Prospect interdependencies, if present and positively correlated, result in a higher standard deviation of the portfolio volumetric expectation curve, compared to a portfolio with independent prospects. This wider uncertainty range offers options for companies to increase the expected cumulative net present value (NPV) of the exploration portfolio. To investigate these effects on exploration portfolios, a methodology has been developed for modeling these dependencies spatially and updating them in time as new information is acquired. The methodology integrates Bayesian belief network techniques into a stochastic exploration business process simulator. Applying this methodology to the Netherlands gas portfolio clearly demonstrates an increase in both the range and expected value of NPV of the expected recoverable volume from the exploration portfolio. Proper tuning of the exploration strategy, using an efficient frontier approach, and regular updating of portfolio economic forecasts increase the probability of realizing the upside at minimum risk when compared to independent prospect portfolios. The staged decision strategy and the value of information underlying the gradual increase of expected NPV can also be calculated and visualized through decision tree analysis techniques. Manuscript reviewed by special issue editor Jan-Diederik van Wees holds an M.Sc. degree in geology (1989) and a Ph.D. in tectonics from the Vrije Universiteit, Amsterdam (1994). After various research assignments at Shell and the university, he joined TNO in 1999 and holds a part-time professorship at the Vrije Universiteit. His research interests include tectonic modeling of lithosphere and basins, and technoeconomic and coupled modeling for geoenergy applications. Harmen Mijnlieff holds an M.Sc. in geology (1989) from the University of Utrecht, the Netherlands. He worked as a sedimentologist, petrographer, and geological consultant for an E&P consultancy company. In 1994, he joined the Geological Survey of the Netherlands, which was incorporated in TNO in 1997. He presently works as geologist and advisor on hydrocarbon exploration and production issues to the Dutch Ministry of Economic Affairs. Jan Lutgert holds an M.Sc. degree in geology (1986) from the University of Utrecht. He joined TNO in 1987 and has worked as a geologist and petrophysicist, both in geoenergy research projects, and as a geological consultant for various clients in the oil industry (Lukoil, Shell, Maersk, Petroleum Development Oman a.o.). He currently works as an advisor on hydrocarbon production and licensing issues to the Dutch Ministry of Economic Affairs. Jaap Breunese holds a Ph.D. in physics and mathematics from the University of Leiden (1982). He has been an advisor to the Dutch government in the areas of energy and mining and E&P policy for 25 years now. His research and advisory work at TNO covers all topics that relate to the use of the subsurface to technical, legal, economic, environmental, and societal issues, including resource assessment and production forecasting. Christian Bos holds an M.Sc. degree in petroleum engineering from Delft University of Technology and joined TNO in 1991 to engage in consultancy and R&D on reservoir simulation, probabilistic reserves estimation, production forecast uncertainty quantification, and decision making under uncertainty. From 2000–2004, he was a best practice lecturer of the Norwegian E&P forum for forecasting and uncertainty evaluation (FUN). For the TU Delft executive Master of Petroleum Business Engineering course, he teaches the decision and risk analysis module. Before joining TNO, he was with various Shell E&P operating companies for 11 years, where he held positions in drilling operations and in reservoir engineering. Peter Rosenkranz holds an M.Sc. degree in geophysics (1974) from the Utrecht University. After several assignments at Shell and DSM Energy, he joined EBN in 1992 where he is responsible for EBN's exploration activities. He has a special interest in Monte Carlo exploration models, including economics. Filip Neele holds a Ph.D. in seismology from the Utrecht University (1993). After a position as an assistant professor in seismology in Utrecht, he joined TNO in 1996 to conduct electro-optical research. His current research interests include CO2 storage capacity, storage monitoring, and CO2 transport system analysis
Print ISSN:
0149-1423
Electronic ISSN:
1943-2674
Topics:
Geosciences
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