Proposal to Develop an Economic Assessment Tool for PWRI Options

At the request of the PWRI executive committee Advantek is pleased to provide a proposal to develop an economics assessment model for the evaluation and prioritization of PW management options with special emphasis on improving the effectiveness of the selection and ranking decision making process. The economic tool will be integrated within the PWRI toolbox.

Technical Approach

The proposed effort is intended to build on the currently available software provided by Shell and progress it to include pertinent and high level details of most of the recommended best practice approaches included in the JIP results. The options included in the tool base will cover the proposed technological, operational and procedural recommendation of the JIP.

Strategy

• Start from Shell’s economic model and build several new modules to address some of the high level details of the PW management options.


• Separate Capex per year, Opex per year but include overhear, direct and indirect costs into Opex.


• Build an engineering option generation/comparison tool and an economics analysis tool.


• Include risk and benchmarking into the economic evaluation (including P10, P50 and P10 performance metrics).


• Allow risked revenue stream and expense schedules via factors or intervention/operation.


• Apply economic tool with each engineering option generated.


• Compile regional cost standards and range of Opex scenarios to reflect participants’ input.

Tool Objectives

• Define cost of water management (injection, treatment, handling).


• Accommodate input from Production Forecast/year.


• Must reflect and couple with best practices, including initial completions/facility as well as intervention frequency and performance metrics for workover operations.

Contents (All SPECIFICALLY Related to PW Management)

• Well completions options.


• Water treatment options.


• Facility infrastructure options.


• Well workover, intervention, and stimulation options.


• Compiled cost basis for regional and geographic locations.


• Compiled performance metrics related to identified equipment and techniques.


• Environmental and HSE cost options.

Usage Process

• Interact with R/E for production increment stream.


• Utilize facility cost basis and regional differentials.


• Use risk management from historical data and benchmarking cases.

Tool Structure

1. Calculation Module (Standard Excel/Visual Basic based)


2. MS Access Data Base for Cost information related to:


1. all work components with direct allocations,


2. overhead and indirect cost structure, and


3. regional and asset cost factors input.


3. Pull down menus for editing and modifying input lists.


4. Ability to read production and injection streams directly.


5. Option selection menus linked to other toolbox and best practice items.


6. Ability to provide detailed and summary output.


7. Options comparison charts and summary tables.

Deliverables

1. Economic Calculator and its modules (PW EconoCal).


2. Data Base with essential items already loaded, and


3. Data Base modification/loading routines.


4. Input data conditioning and QA tool.


5. Links to Best Practice performance metrics inventory.


6. Internet Executables on participant’s Intranet is an added option.

Schedule

The proposed work will start in October, 2000 and will finish by end of 2Q 2001. An interim work sheet will be available by mid February 2001.

Cost

The total effort will be 3.5 man months and will cost a total budget not to exceed $67,800 -(cost share per participant is $6,780).
Cost of Intranet executables would depend on number of participants.