Continental shelf
Professor Yihan Xing & Professor Muk Chen Ong
OFF515 Offshore field development
Learning objectives
• This course gives an overview of the offshore industry and an introduction
to methods and technologies relating to the development of offshore oil
and gas fields
After the courses the student shall:
• Understand the business drivers in the offshore oil and gas industry
• Understand the importance of a “value chain” perspective
• Understand the importance of multidiscipline work
• Be aware of the variety of technical solutions that can be used
• Be aware of limitations and feasibility issues of specific solutions
• Understand that the suitability of specific solutions depends on the
circumstances and actual cases
A broad range of job positions
Management Operating
contractors company
Engineering Procurement
contractors contractors
Fabrication Construction Installation
Equipment
contractors contractors contractors
Materials
Hook-up Commissioning
Services
contractors contractors
Oil price goes up and down!
The oil market is huge
This is just the crude oil
market, we have not
considered natural gas,
suppliers, distribution, refinery
industry yet.
Source: https://oilprice.com/Energy/Crude-Oil/The-
17-Trillion-Oil-Industry-Isnt-Going-Anywhere.html
Multidiscipline competence required in
offshore field development
OFF515 Multidiscipline skills are necessary to work
effectively in a field development team –
ensure that all disciplines work close together
Good skills to master a discipline is the
fundament for an engineer working with field
development – ensure quality in the project
Documentation and exercises
OFF515 consists of 20 modules
One text document and one presentation will be made available for each module via
CANVAS:
• Text document already available (Developed by Jonas Odland)
• Presentation will normally be published three days before the lecture
Lecturers: Professor Yihan Xing
Professor Muk Chen Ong (Lectures 13 to 18)
Prerequisites: Knowledge within mathematics and mechanics (theory of elasticity,
static and dynamic analysis) corresponding to requirements for master students
Compulsory work: 4 written exercises to be submitted and approved
Supplementary literature:
❑ http://www.norskpetroleum.no - published by Norwegian Ministry of Petroleum and Energy giving facts for the Norwegian
petroleum sector
❑ O.T. Gudmestad, A.B. Zolotukhin, E.T. Jarlsby; “Petroleum Resources with Emphasis on Offshore Fields”
OFF515 Plan 2020
• The modules 2 – 12 cover the main issues of the course
• Modules 13 – 20 cover selected elements in more depth
W34 (18.08) 1. Introduction to OFF515 2. Historic overview with examples
W35 (25.08) 3. Management of Petroleum activities 4. Petroleum resources and production
W36 (01.09) 5. Exploration and reservoir description 6. Production and improved recovery
W37 (08.09) 7. Drilling and wells 8. Production facilities and concept selection
W38 (15.09) 9. Subsea production systems 10. Platform functions and general arrangement
W39 (22.09) 11. Transportation and marketing of oil and gas 12. Economic analyses and decision making
W40 (29.09) 13. Elements of marine technology 14. Construction and weight estimating
W41 (06.10) Autumn break Autumn break
W42 (13.10) 15. Platform design issues 16. Fixed platforms
W43 (20.10) 17. Tension leg platforms and deep draft floaters 18. Floating production systems
W44 (27.10) 19. Cost estimating 20. Project management
W45 (03.11) Reserve if changes in plan Reserve if changes in plan
W46 (10.11) Reserve if changes in plan Reserve if changes in plan
OFF515 Offshore field development
Allocated time and room for lectures:
• Tuesday 10:15 – 12:00 in room KE E-102
• Wednesday 10:15 - 12:00 in room KE A-101
Any possible changes will be announced on CANVAS
Exercises
We have an oil discovery offshore Mid Norway – how can we develop this
discovery in an most cost efficient way?
Exercise 1 Exercise 2 Exercise 3 Exercise 4
Production Estimation of Economic
Concept
profiles and costs Analysis
development
design basis and selection
• Reservoir and fluid • Business case • Equipment list • Fiscal Model
• Drainage strategy • Facility data and weight • Contract
• Recovery factor • Value chain • CAPEX Modelling
• Volume & risk • Met ocean • OPEX • Market (pricing)
• Type & No. of • Design basis • NPV &
wells • Development sensitivities
• Production profiles Concept • Expected Value
• Key Risk list
OFF515 Offshore field development
Schedule and deadlines for exercises
W34 (18.08)
W35 (25.08)
W36 (01.09)
W37 (08.09)
W38 (15.09)
W39 (22.09) Exercises 1 – Production profiles Friday 25 September
W40 (29.09)
W41 (06.10) Exercises 2 – Concept development Friday 9 October
W42 (13.10)
W43 (20.10) Exercises 3 – Cost of development Friday 23 October
W44 (27.10)
W45 (03.11) Exercises 4 – Economic analysis Friday 6 November
W46 (10.11)
OFF515 Offshore field development
Examination
Time and duration: 15.12.2020 - duration 3 hours (Needs to be confirmed)
Aid: Writing tools and simple calculator
The written exam comprises 3 tasks based on the documents made
available on it’s learning during the course
Each of the three tasks A, B and C has the same weight:
Task A: comprises 20 short questions
Task B: comprises 2 to 4 discussion/evaluation issues
Task C: comprises 2 to 4 calculation tasks
OFF515 Offshore field development
Questions?
Continental shelf
Overview of main learning objectives
OFF515 Plan 2020
• The modules 2 – 12 cover the main issues of the course
• Modules 13 – 20 cover selected elements in more depth
W34 (18.08) 1. Introduction to OFF515 2. Historic overview with examples
W35 (25.08) 3. Management of Petroleum activities 4. Petroleum resources and production
W36 (01.09) 5. Exploration and reservoir description 6. Production and improved recovery
W37 (08.09) 7. Drilling and wells 8. Production facilities and concept selection
W38 (15.09) 9. Subsea production systems 10. Platform functions and general arrangement
W39 (22.09) 11. Transportation and marketing of oil and gas 12. Economic analyses and decision making
W40 (29.09) 13. Elements of marine technology 14. Construction and weight estimating
W41 (06.10) Autumn break Autumn break
W42 (13.10) 15. Platform design issues 16. Fixed platforms
W43 (20.10) 17. Tension leg platforms and deep draft floaters 18. Floating production systems
W44 (27.10) 19. Cost estimating 20. Project management
W45 (03.11) Reserve if changes in plan Reserve if changes in plan
W46 (10.11) Reserve if changes in plan Reserve if changes in plan
Production facilities and
Platform technology
Management of
large project
Riser systems
Pipeline systems
Flow assurance
Subsea facilities
Finding and Drilling and wells
producing oil and gas
16
Multidiscipline work processes
Commercial
Legislation, agreements, financing
Prices, tariffs
Production sharing, taxes
Subsurface Facilities
Image of reservoir Design basis, systems engineering
Well characteristics, recovery mechanism Concept screening and development
Simulations Operations, HES, Project Execution Plan
Drilling schedule, production forecasts Capex, Opex, phasing
Economic Analysis and Decision Making
Economic analyses, sensitivities, risk assessment
Evaluation, prioritizing, sanction
Module 2: Historic overview with
examples
• Look at the history of the offshore oil and gas
industry
– Regional differences
– Historic technology development
• Learn about the Norwegian Continental shelf
– Old field developments
– New field developments
– Different technical solutions
• Be aware of future trends and challenges
– Deep water
– Arctic field developments
– Subsea developments
– Unmanned installations and digitalisation
Snorre B
Tampen area
Snorre TLP
Snorre UPA
Statfjord Nord
Murchison
Visund
Vigdis
Statfjord Øst
Field Production start
Borg
Tordis Øst
Statfjord 1979
Tordis Murchison 1980
Gullfaks 1986
Gullfaks Snorre 1992
Statfjord
Tordis 1994
Statfjord Øst 1994
Statfjord Nord 1995
Vigdis 1997
Borg 1999
Visund 1999
Kårstø
Kollsnes
A Technology
history of in technology
StatoilHydro
implementation
A 25-year history of technology implementation
Subsea to beach
New Ormen
Subsea & floating Lange
technology
Åsgard Glitne
Norne 2007
Troll
Statfjord
satellites 2001
Platform based 1999
Sleipner 1997
Gullfaks 1996
Statpipe
1994 Significant
1993 step changes
1986
1985 Time
A business driven step-by-step development
Module 3: Management of
Petroleum activities
• Understand the importance of good organisation
and management of oil and gas projects:
– Large values and costs
– Large and complex projects
– Long term activities
– Safety risk
– Environmental risk
– Social impact
– Political security of supply
• Learn about governments and oil companies
organization and responsibilities
Pre -
concession
work
Concession
round
Licence
Exploration
award
Exploration
Discovery
Appraisal
and
Project
planning
sanction
20-50 years
Project
execution
Project development
Start
production
Operation
and
End maintenance
Work processes and phases
production
Operation
E&P (Exploration and Production)
Abandonment
and removal
Risk matrix – balloon diagram
Manageability
Non-acceptable
Low
Probability
Partly
ALARP Well
ALARP: As low as
reasonably practical
Acceptable
Consequence
Emissions to atmosphere and discharges to sea
Turbines and Diesel
engines
diesel engines
Diffuse
Diffuse
emissions
emissions
CH 4,VOC
Diesel VOC
engines
Waste to
land
Acute
emissions
Drill Produced
cuttings water
Modules 4-6: Finding and
producing oil and gas
• Learn main definitions related to hydrocarbons and
petroleum resources:
– Classification of resources
• Learn about exploration for oil and gas:
– Finding hydrocarbons
– Reservoir description and characterisation
• Learn about production of oil and gas:
– Production from different type of reservoir
– Production phases and profiles
• Understand the value chain concept “from
wellstream to sales products”
Some definitions:
• Hydrocarbons: A naturally occurring organic compound
comprising hydrogen and carbon (can be as simple as
methane [CH4], but also highly complex molecules, and
can occur as gases, liquids or solids)
• Petroleum: A complex mixture of naturally occurring
hydrocarbon compounds found in rock (impurities such
as sulphur, oxygen and nitrogen are common in
petroleum)
• Crude oil: Liquid petroleum from the reservoir (most
of the water and dissolved natural gas have been
removed)
• Natural gas: A naturally occurring mixture of
hydrocarbon gases that is highly compressible and
expansible
Hydrocarbon “Products”
C1 C2 C3 C4 C5 C6 C7 C8 C9 C10+
Oil stable
Oil unstable
stable Condensate
unstable Condensate
LPG
NGL
Rich gas
Sales gas and LNG
C1 C2 C3 C4 C5 C6 C7 C8 C9 C10+
HYDROCARBONS AND SALES PRODUCTS
The relation between basin, play,
prospect and discovery
Basin
Play
Prospect
Discovery/field
Reservoir engineering
seen from the project perspective
• After successful exploration we have discovered hydrocarbons (petroleum)
• After appraisal we know the volume of hydrocarbons initially in-place
Exploration well
Appraisal wells
Sea bottom
Gas
Oil
Water
The next questions are:
• How can the hydrocarbons be produced (drive mechanism)?
• How much can we expect to produce (expected recoverable volume)?
• How much can we expect to produce each year (production profile)?
• What can we do in order to improve production beyond the expected (IOR)?
• What is the ultimate recovery (ultimate recovery factor)?
Under-saturated Saturated oil
oil reservoir reservoir
Gas/condensate Dry gas
reservoir reservoir
Module 7: Drilling and wells
• Get an understand of different types of wells, well
functions and well design
• Learn about the different elements in a drilling rig
• Learn about different drilling platforms concepts
• Be aware of the high cost, complexity and risk
related to drilling
Well construction and completion design
X-mas tree
and tubing
Casing head Wellhead head
Down hole safety valve
Casing strings
Production tubing
Production packer
Perforations
Well examples
Vertical well Horizontal well Multilateral well
Extended reach drilling (ERD) well
Jack-up Drill-ship
Fixed platform Semisubmersible
Modules 8-11: Production
facilities and transportation
• Get an understanding of methods and principles
applied in field development:
– Business case
– Value chain
– Facility concept and building blocks
– Concept selection criteria
• Learn about different development concepts
– Platform functions and production systems
– Subsea technology
– Transportation systems for oil and gas
A facilities concept - example
Platform
Oil export system
Well system Well system
wet trees dry trees
Gas export system
Well system
wet trees
The choice of the optimum field architecture must address and balance the competing requirements of reservoir
engineering, drilling programme and schedule, early production (if applicable) acceptable well trajectories, flowline and
pigging requirements, subsea well control, installation strategies and intervention plans.
The field architecture must address the sites for drill centres and the number of wells at each centre, with the
objective of adequately draining the field. These drilling centres will also serve as the principal nodes in the architecture
of the field.
Platform concepts or building blocks
Main issues in the
selection process:
➢ Dry trees versus wet
Jacket TLP Spar
trees
➢ Drilling/workover facilities
➢ Oil storage and offloading
versus pipeline
➢ Contractor capabilities
and previous experience
Semi Buoy FPSO
Elements of a subsea production system
Process facilities Elements of a simple single-well subsea production system
Risers
Protection structure
Control umbilical X-mas tree
Riser base Flow lines
Template
Separation of oil, gas and water at the field
Rich gas:
pipeline Sales gas: pipeline or LNG chain
Heating, power
Terminal
a) Platform Separation Petrochemical, heating
a) LPG: pipeline or tankers
Refinery
Stable oil: pipeline or tankers
b) Separation
Refinery
c) Platform Separation
Stable oil: pipeline or tankers
Gas re-injection
From reservoir to market
Options
✓Piped gas
✓LNG
✓CNG
✓GTL
✓Methanol
Dry gas (sales gas)
Products
NGL NGL
extraction NGL fractionation
✓Ethane
✓Propane
Pipeline transport ✓Butane
Offshore Rich gas Water ✓Condensate
Processing
CO2, H2S
separation Offshore
loading
Products
Crude oil
Water Tanker transport refining ✓Gasoline
Crude Oil ✓Jet fuel
Well-stream ✓Diesel
✓Oil ✓Fuel oil
✓Gas/condensate ✓Asphalt
✓Gas
Module 12: Economic analyses
and decision making
• Get an understand of what engineers must know
related to economic analysis:
– Cash flow analysis
– Inflations and deflation
– Income and commercial framework
• Understand different decision criteria:
– Net present value
– Internal Rate of Return
– Break Even Price
• Be aware of the uncertainties and risk
– Risk and sensitivity analysis
– Stochastic analysis and decision trees
Cash flow analyses
Revenue – Opex – Capex – Tax = Cash flow after tax
Cash flow analysis
3000
2500
2000
1500
1000
500
-500
-1000
-1500
-2000
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22
Revenue CAPEX OPEX TAX
Internal rate of return (IRR)
Real Rate of Return (RRoR)
p = 16USD/bbl
RRoR
NPV
Break even price B-E-P
i = 8%
B-E-P
NPV
Module 13-18: Platform
technology
• Understand design parameters for marine structures:
– Wind, wave and current
– Dynamic behaviour of marine structures
– Stability of floating units
– Mooring of floating units
• Learn about construction and installation of platforms
• Learn about different fixed and floating platform
concepts
– Design basis and functional requirements
– Design principles
– Dynamic behaviour
– Platform selection
Environmental loads
Wind
Iceberg
Tide
Air gap
Current Waves
Earthquake
Different types of stability
Tension leg
Gravity based Geometry based Geometry based based stability
stability stability stability
Gravity based stability: Centre of buoyancy above centre of gravity
Geometry based stability: Centre of buoyancy below centre of gravity
Surge and sway motion of tension leg platform
Surge and sway The natural period for surge/sway is: To = 2
m
k
Model ✓m is the total mass, including hydrodynamic
(added) mass
✓k is the “stiffness” corresponding to surge/sway
By definition k = F/x, where F is the restoring force
corresponding to the displacement x. Then:
k = Po/d, where:
✓Po is the total pre-tension of all tension legs
✓d is the length of the tension legs
md
To = 2
Po
Module 19-20: Cost estimation
and project management
• Learn about investment cost (CAPEX) and operation
cost (OPEX)
• Understand cost estimation:
– Cost estimation methods
– Base estimate
– Allowance
– Contingency
– Reserve
• Learn about project planning and execution
– Project strategies and principles
– Contract philosophy and procurement
• Be aware of uncertainties and risk related to cost
and project execution
From design basis to cost&schedule
Systems design
Historical data
Design basis
General arrangement Technical basis Cost & schedule
Lay-out Physical quantities
Framework
Project execution plan Market analysis
Cost estimating techniques
similar to weight estimating
Top-down
• Top-down estimates can be obtained
quickly and can give good indications,
but the range of uncertainty is large
and the risk high
Hybrid methods
• Methods based on conceptual
design and empirical factors can be
quite accurate, transparent and easy
to use
Bottom-up
• Bottom-up estimates can be very
accurate, provided the engineering
is complete. But then it is too late
for many purposes
Organization of a project within the
operating company
External
Corporate Management
management Authorities
committee
Service functions
• Finance
• Legal Asset owner
• HR
Project Project team
manager
Project
Operations PM subsurface PM drilling PM facilities managers/leaders
Contractors Suppliers
OFF515 Offshore field development
Questions?
