Facility planning and value of information using a tank reservoir model : a case study in reserve uncertainty

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Facility planning and value of information using a tank reservoir model : a case study in reserve uncertainty

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Title: Facility planning and value of information using a tank reservoir model : a case study in reserve uncertainty
Author: Singh, Ashutosh
Abstract: This thesis presents a methodology to incorporate reservoir uncertainties and estimate the loss in project value when facility planning decisions are based on erroneous estimates of input variables. We propose a tank model along with integrated asset development model to simulate the concept selection process. The model endogenizes drilling decisions and includes an option to expand. Key decision variables included in the model are number of pre-drill wells, initial facility capacity and number of well slots. Comparison is made between project value derived under erroneous estimates for reserve size and under an alternate hypothesis. The results suggest loss in project value of up to 40% when reservoir estimates are erroneous. Moreover, both optimistic and pessimistic reserve estimates results in a loss in project value. However, loss in project value is bigger when reserve size is underestimated than when it is overestimated.
Department: Energy and Earth Resources
Subject: Tank reservoir models Estimates Estimation Reservoir estimates Project value Facility planning Mathematical models Value of information Optimal decision making Uncertainty Monte Carlo simulations
URI: http://hdl.handle.net/2152/ETD-UT-2010-05-1230
Date: 2010-05

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