Its hard enough to get the data together to do an

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Unformatted text preview: ity distribution of recoverable reserves, organisations typically select only one reserve case, usually the p50 or mean value, to run their economic models on. This means that companies are ignoring the economic impact of the high and low reserve cases. Very few of the organisations use Monte Carlo at the prospect economics level. The reason companies choose not to employ Monte Carlo to generate economic estimates is well described by this respondent: “No … we don’t Monte Carlo our economics. And I had a discussion just the other day about whether we should be using Monte Carlo on our economics. But in the amount of work involved in getting the input data for the economics … you know to get all the costings, and this sort of thing. It’s hard enough to get the data together to do an economic run based on the most likely or the mean reserves estimate. That to get enough data and the right data to do it probabilistically - we just couldn’t do it. The system would break down. You 133 know we are over worked as it is. economics]. [We] should be [using probabilistic I suspect that no one’s doing it for the same reason as we’re not, because of the amount of work involved is so much greater than the amount of work involved in just, you know, just single figure input economics. Just getting all the sources together. You know we’re always up against a time pressure. It always has to be now.” (J) Confirming earlier indications by Schuyler (1997), none of the sampled companies routinely use Monte Carlo decision-making at the production phase of field development (figure 5.1 and Section 5.2 of Chapter 5). All the organisations resort to deterministic analysis for production decisions. Nangea and Hunt (1997) argue that companies are justified in discontinuing probabilistic analysis during production decision-making since there is little uncertainty associated with the reservoir parameters or the size of the field at this stage. However, as indicated in Section 5.7 of Chapter 5, there are cases where the relative uncertainty has actually increased with field life. Moreover, whilst typically the absolute uncertainty decreases with field life, the relative uncertainty associated with, for example, well-intervention decisions, is significant. As indicated in Section 5.4 of Chapter 5, there are a number of theoretical limitations of Monte Carlo simulation; the most significant of which are the lack of prescription in the literature concerning the shape of probability distribution to be used to represent the reservoir parameters of reservoir rocks of similar lithology and water depth and the dependency to be used to represent the relationships between the reservoir parameters. Most of the organisations interviewed cope with this gap by leaving the type of distribution and nature of the dependencies used to the discretion of the geologist. Geologists report that they decide the distribution shape and dependencies based on a blend of intuition (Baumard, 1999 p67), tacit knowledge (Polyani, 1966) and judgement. Respondents are divided on whether varying the shapes of these distributions affe...
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This document was uploaded on 03/30/2014.

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