2015 ARKH-P1-Intro
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PARTIES INVOLVED IN E&P OPERATIONS
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Exploration |
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OIL COMPANY |
Production |
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Contract |
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« The Operator » |
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Joint |
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Operating |
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Agreement |
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Oil Companies |
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« The Partners » |
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Development |
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Exploration |
Project |
Production |
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M a n a g e d b y t h e O p e r a t o r |
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Seismic |
C o n t r a c t o r s |
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Drilling |
Engineering |
Maintenance |
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Logistics |
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Procurement |
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Construction |
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Drilling |
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Installation |
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STATE
or
NATIONAL OIL
COMPANY
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Host government contracts: main common principles
Host Government
Grants or delegates rights to carry out petroleum operations
Owner of the facilities at the latest at contract term
Revenues through royalties, taxes and/or production sharing
Contractor/Oil & Gas Cy
Takes exploration and development risks
Finances all petroleum operations
Recovers costs incurred (if production)
Is entitled to some profit
International HSE standards and professional best practice to be applied
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Objectives of the major players in the upstream sector
STATE
To promote exploration activity and development of discoveries to valorize its natural resources.
To maximize its incomes while allowing the investors to draw a profitability in line with the incurred
risk. |
HOST |
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GOVERNMENT |
To ensure operations supervisionCONTRACT and control while avoiding
administrative slowness.
To acquire expertise by know-how and technology transfer to develop its human resources and its industrial network.
OIL COMPANY
To have access to reserves and productions and to ensure its reserves renewal.
To make profit, to recover its investments and to remunerate a risky setting of funds.
To take part in the decisions reached in the various operations.
To develop its industrial operations and know how, its research programs and to propose advanced techniques.
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DIFFERENT TYPES of CONTRACTS
State or
National Oil Company
CONCESSION
Delegation of mining rights in exchange of royalties and taxes
PRODUCTION SHARING CONTRACT
Delegation of operations in exchange of access to oil
SERVICE CONTRACT
Delegation of operations in exchange of cash
BUY BACK
Delegation of operations in exchange of cash
International Oil Companies
or
Joint Venture
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SHARING THE RISKS: THE ASSOCIATIONS
In order to share the risks associated to the petroleum industry, oil companies rarely enter alone into a petroleum contract
Most of time, they enter/create an association, each of them with a given share percentage of the business
Among the associates, ONE is responsible to conduct all activities under the contract terms, on behalf of the association: it is the OPERATOR
The costs and revenues are split according to the percentage of each partner in the association.
The rights & obligations of Partners & Operator are defined in the JOA (Joint Operating Agreement)
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MAIN PHASES OF E&P ACTIVITIES
Exploration |
Field |
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Development |
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Appraisal |
Development Studies
Preliminary
Conceptual
Pre-project
Project
INVESTMENT
DECISION
1-3 y |
2-4 y |
3-4 y |
Discovery |
“First Oil” |
Any additional development follows
the initial development process
>20 y |
3 y |
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Production profile |
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Field |
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Field operations |
abandonment |
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Time |
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End of |
Restored |
production |
Site |
Technical evaluation - preliminary / conceptual |
15 days – 9 months |
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Ex : Exploration blocs - Fields
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6°00’ |
7°00’ |
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8°00’ |
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4 |
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Belladona/Victoria |
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Exxon Mobil 30.0% |
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SDFI |
30.0% |
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Agip |
20.0% |
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TFE |
20.0% |
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Heidrun |
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SDFI |
64.2% |
Mer de Barents |
PL134 |
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Conoco |
18.3% |
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Agip |
30.0% |
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Statoil |
12.4% |
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Statoil |
28.0% |
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Fortum |
5.1% |
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SDFI |
25.0% |
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TFE |
10.0% |
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Åsgard Unit |
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Hydro |
7.0% |
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SDFI |
46.95% |
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PL199 |
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4 |
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1 |
Statoil |
13.55% |
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SDFI |
45.0% |
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Hydro |
9.60% |
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Statoil |
28.0% |
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MIDGARD3 |
Agip |
7.90% |
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Esso Mobil |
15.0% |
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TFE |
7.65% |
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3 |
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Hydro |
12.0% |
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11a2 |
5S |
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Exxon Mobil |
7.35% |
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2b |
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2a |
3 |
Fortum65°00’ |
7.00% |
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Explo |
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PL199 |
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3 |
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16ème Round |
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Tyrihans PL073 |
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Haltenbanken |
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TFE |
33.3% |
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West |
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SDFI |
30.0% |
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Haltenbanken |
Statoil |
24.7% |
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Mer de Norvège |
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East |
Hydro |
12.0% |
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PL091 |
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Mikkel Unit |
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Esso Mobil |
33.0% |
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SDFI |
30.0% |
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SDFI |
35.0% |
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Statoil |
25.0% |
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Statoil |
25.0% |
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Hydro |
12.0% |
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Hydro |
10.0% |
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Exxon Mobil |
30.0% |
Tampen |
Fram/Gjøa |
President Block |
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SDFI |
30.0% |
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Troll |
Statoil |
20.0% |
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Oseberg |
Shell |
30.0% |
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TFE |
20.0% |
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Frigg/Grane |
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Njord |
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SDFI |
30.0% |
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Sleipner |
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Hydro |
22.5% |
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Draugen |
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Exxon Mobil |
20.0% |
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SDFI |
57.9% |
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GdF |
12.0% |
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BP |
18.4% |
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Statoil |
8.0% |
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Shell |
16.2% |
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Pelican |
7.5% |
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Chevron |
7.5% |
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Mer du Nord Sud |
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17 |
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PHASES DEFINITIONS (1)
Exploration phase
Upstream part of the overall process
Mainly involves seismic data acquisition and drilling wells
Statistically, only 1 to 3 wells out of 10 are successful
The exploration phase ends after a discovery has been made
After a discovery, studies are performed to evaluate its commercial potential
Appraisal phase
Once hydrocarbons have been discovered, appraisal works are often necessary before the decision to develop can be made :
To reduce uncertainties
To provide sufficient data for development studies
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PHASES DEFINITIONS (2)
Development phase
Includes all activities following exploration and initial appraisal phases until production start-up. It covers mainly :
Development studies & Preparation for the decision to develop
Engineering, fabrication and installation of facilities
Commissioning (=Tests before production start-up)
Production phase
Includes all activities to ensure safe and reliable oil/gas production It covers mainly:
Start-up of wells, plant and facilities
Operating, control and monitoring of facilities
Inspection, maintenance and repairs
Commercial & fiscal metering and reporting
Reservoir management during the whole field life
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ONSHORE ≠ OFFSHORE
Distance to base |
Water depth |
Waves |
and difficult access |
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High costs ( x 4)
Space constraints (special designs) Higher risks and safety constraints
More technology (petroleum, heavy construction, naval architecture, etc…)
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