Introduction of petroleum industry tqdung

Faculty of Geology and Petroleum Engineering Ho Chi Minh City University of Technology Petroleum Engineering Disciplines Instructor: Ta Quoc Dung Acknowledgement is given to Prof Peter Behrenbruch for acceptance of using his lectures Introduction to the Petroleum Industry Team Effort Risk Reserves Capital Cost gy hnolo c e T ation m r o f n I IS ME ties Facili ering PE Engine SE DT EGL TA g Drillin DO P ction Produ ons ti Opera DGP DGL ration Explo E GP eering n i g n um E etrole RC V PP Cycle Time DM AP Production Rate PO Operating Cost Introduction to the Petroleum Industry EPM Functions and Disciplines Exploration: EGP EGL TC&DM EPM - Exploration Geophysics - Exploration Geology - Technical Computing & Data Management - Exploration Portfolio Mgmt Information Technology: TA DM IS AP - Technical Applications Data Management Information Systems Architecture & Planning Drilling: DO DT Petroleum Engineering: - Drilling Operations - Drilling Technology RE PT DGP DGL RCV PP TC&DM - Reservoir Engineering Production Technology Development Geophysics Development Geology Reservoir Characterisation & Visualisation - Petrophysics - Technical Computing & Data Management Facilities Engineering & Prod Operations: FE PO ME PE SE - Facilities Engineering Production Operations Marine Engineering Process Engineering Subsea Engineering Introduction to the Petroleum Industry Presentation Outline “Petroleum Engineering” Facilities • Petroleum Engineering Disciplines • Development Geophysics and Geology Wells • Petrophysics • Reservoir Engineering • Drilling Engineering • Production Technology (well completion) Reservoirs • Facilities Engineering and Production Operations Management • Economic Evaluation Introduction to the Petroleum Industry Petroleum Geoscience (development) scie nce Computing Drilling & Production Engineering (Facilities) ring Geo inee Eng Development Geology & Geophysics (seismic) Petroleum Engineering Reservoir Engineering (fluid flow) Management Petrophysics (rocks) Economic Evaluation Introduction to the Petroleum Industry Organisation of Petroleum Engineering Exploration Facilities Eng Petroleum Eng Specialists Operations Drilling Production Economic Evaluation Production Engineering Reservoir Engineering Petrophysics Development Geology Development Geophysics Planning Function Introduction to the Petroleum Industry Offshore Petroleum Development - Major E&P Phases Project Management Resource Teams Exploration Asset Teams Development Asset Teams Production Asset Teams Major Functions Project Phase Exploration Field Discovery Exploration Petroleum Engineering Primary Appraisal Secondary Appraisal Proving Sufficient Volumes Petroleum & Facilities Eng Feasibility Study Optimum Development Plan & Design Facilities Engineering Project Implementation Efficient Project Construction Petroleum Engineering Production Operations Facilities Engineering Field Management Field Operation Engineering Enhancements Introduction to the Petroleum Industry Primary Project Goals Discovery of Substantial Hydrocarbons Maximising Net Present Value (Production & Reserves) Discover Hydrocarbons Evaluate the Discovery for Commercial Development Appraisal Exploration The Search for and Development of Hydrocarbons Chronological Sequence (1) Geology and Geophysics Select a concession Select a location Find new Hydrocarbons Drilling and Operations Engineering Drill and test wells safety and efficiently Petrophysics Evaluate the formation and quantity the amount of HC near the well Production Geology / Seismology Interpret and extrapolate the well data to describe the reservoir Economics Check whether the venture is economically justified Production Technology Design well completions and artificial lift systems Reservoir Engineering Identify development options and predict recovery Introduction to the Petroleum Industry i) Planning Engineering Estimate facilities costs eg platforms, plant, pipelines Economics Select the most profitable development option Engineering Design and construct facilities ii) Execution Drilling and Operations Engineering Drill and complete wells safety and efficiently Production Geology / Petrophysics Plan and evaluate wells Update the reservoir model if required Production Operations Operate and maintain wells and surface facilities Production Technology Optimise production performance Advise on chemical aspects of production Reservoir Engineering Monitor reservoir performance Identify means to improve recovery Produce Hydrocarbons Development Production The Search for and Development of Hydrocarbons Chronological Sequence (2) Some of the disciplines involved in the discovery and exploitation of a hydrocarbon accumulation Introduction to the Petroleum Industry Exploration Introduction to the Petroleum Industry Kingfish A Platform - Bass Strait Introduction to the Petroleum Industry Technology and Innovation in the Petroleum Industry Bream B GBS Introduction to the Petroleum Industry Dai Hung Semi-submersible Transport Introduction to the Petroleum Industry Economic Evaluation Introduction to the Petroleum Industry Economics (Planning & Evaluation) Reservoir Engineering Production Profiles Planning & Evaluation Exploration Prospect Evaluation Project Evaluation Business Planning Recommendations Marketing Crude Differentials Finance Long Range Financial Forecasts eg oil price, inflation exchange rates, etc Introduction to the Petroleum Industry Management Cashflow and Production Profile for FPSO Project A$, million 200 Production Profile 100 Revenue Expenditures Credits -100 Cash Surplus CAPEX Tax RRT OPEX -200 1992 1993 1994 1995 1996 1997 Years Introduction to the Petroleum Industry 1998 1999 2000 Production, million stock tank barrels 300 Dai Hung Project Current PSC Terms - Exhibit E3 - 785 MMB - US$20/bbl COST RECOVERY (@ 85%) FOREIGN PARTY CASH FLOW NET FOREIGN PARTY PROFIT OIL (60%) 17.9 Recoverable Costs = 17.9 Cost Recovery = 17.9 Unrecovered Costs = 0.0 RECOVERABLE COSTS = 17.9 Net Profit Oil Unrecovered Cost Net Cash Flow = = = 7.6 0.0 7.6 = = 7.7 7.7 = = = = = = = = = 0.5 0.2 20.7 18.4 15.4 6.2 0.4 5.0 66.7 7.6 RUSSIAN CASH FLOW 8.7 Net Profit Oil Net Cash Flow 8.3 14.9 17.6 0.7 PV PROFIT OIL (AS VSP) (50%) 43.0 GROSS REVENUE = 100.0 61.4 25.4 VIETSOVPETRO PROFIT OIL (@ 40%, 60%,80%) PV PROFIT OIL (AS JV) (15%) ROYALTY (@ 6%, 10%, 15%, 40%, 45%, 55%) ADDITIONAL PROFITS TAX (@47% OF FOREIGN PARTY PROFIT OIL WHEN 17% RROR EXCEEDED) 5.0 7.7 TRANSFER TAX RUSSIAN (@ 40% OF PROFIT OIL REPATRIATED PROFIT OIL) TRANSFER TAX (FOREIGN PARTY ONLY) 5% OF FOREIGN PARTY REPATRIATED PROFIT OIL 6.2 18.4 INCOME TAX (@ 30%) 0.4 12.7 12.7 20.7 SIGNATURE & TRAINING BONUSES 2.7 * 15.4 NET PV PROFIT OIL * Revised in order to maintain Russian share of Gross Revenue at 7.7% Introduction to the Petroleum Industry VIETNAM CASH FLOW Signature Bonus Training Royalty Income Tax Profit Oil Additional Profits Tax FP Transfer Tax Russian Transfer Tax Net Cash Flow Variable Sensitivities (FPSO) NPV (A$ Millions) 80 Oil Price 60 Reserves 40 Opex 20 Capex - 20 - 25% 0% Sensitivity Introduction to the Petroleum Industry + 25 % Probabilistic Economic Evaluation Reserves and Net Present Value Forecast: Oil Equivalent Reserves Frequency Chart 039 510 029 382.5 020 255 010 127.5 000 million barrels Forecast: Net Present Value Frequency Chart 030 389 291.7 022 015 Production Production 007Gas (mmscfd) Oil NGLs Dry Gas 000 (mbd) mt/d mt/d Pricing Pricing 1998 1999 2000 6.88 6.04 33.13 14.57 2001 25.15 22.08 121.10 53.25 2002 18.26 16.03 87.92 38.66 2003 13.10 11.51 63.09 27.74 2004 9.40 8.26 45.28 19.91 2005 6.75 5.93 32.49 14.29 million dollars Introduction to the Petroleum Industry 194.5 £0.13 Winter Gas, £/therm Summer Gas, £/therm £0.08 $12.00 OIL, $/bbl $54.96 NGL, $/mtn Dry Gas,2007 $/mtn 2008 $54.9697.25 2006 4.84 2.91 4.25 2.83 23.32 15.36 10.25 6.82 Presentation Outline “Petroleum Engineering” Facilities • Petroleum Engineering Disciplines • Development Geophysics and Geology Wells • Petrophysics • Reservoir Engineering • Drilling Engineering • Production Technology (well completion) Reservoirs • Facilities Engineering and Production Operations Management • Economic Evaluation Introduction to the Petroleum Industry Never Under-estimate the Importance of People Management Introduction to the Petroleum Industry Topics for projects • Drilling engineering • Completion engineering • Production engineering Introduction to the Petroleum Industry • Requirements: - History of chosen topic - History of VietNam petroleum industry - Overview current technology - Present one technology which is commonly used in oil company - Discussions - Conclusions - your plan in Petroleum industry in future Introduction to the Petroleum Industry • - References Department Library All VietNamese reports of PetroVietNam scholar.google.com Needed submission - A report - Group presentation Introduction to the Petroleum Industry Introduction to the Petroleum Industry