27 - Field Life Cycle - The 5 Stages

The Oil and Gas industry is considered as one of the largest industries in the world, if not the largest. It is divided into three major sectors: upstream, midstream, and downstream.

The upstream deals with activities related to the Exploration & Production of crude oil and natural gas. Also, the upstream sector represent the complete field lifecycle, which includes five stages:

• Exploration

• Appraisal

• Development

• Production

• Abandoning

This article will take you through a brief description of each phase of the field lifecycle, and will identify some of the most common activities performed within each phase.

All information and data are a better representation to conventional oil reservoir. Shale oil reservoir have usually a shorter lifecycle

Exploration - Prospecting Deposits

This stage aims to identify subsurface pools of hydrocarbons. It starts by the acquisition of land (or offshore blocks) through:

• land leasing/purchase

• bidding

Once land rights are secured, a company starts with exploration activities, which include:

• Aerial and/or Seismic surveys to identify prospects

• Exploratory drilling into prospects

• Coring to capture samples of earth’s subsurface rocks

• G&G studies

• Testing to determine the type of hydrocarbons and reservoir characteristics

• Extensive logging, which is usually wireline open hole logging

• Estimate Original Oil In Place (OOIP) and Original Gas In Place (OGIP)

• Estimate Ultimate Recovery (EUR)

As a rough estimate, 70% of exploration wells are dry holes

Appraisal / Delineation - Boundaries Identification

After proving the existence of what is potentially a significant pool of hydrocarbons, the appraisal, also known as delineation, phase takes place to determine the boundaries to which the field extends to. The following activities are some of what takes place during the appraisal or delineation phase:

• additional seismic surveys

• Drilling of appraisal wells

• Logging, usually wireline open hole logging

• Reservoir simulation studies

• Refine OOIP, OGIP, and EUR

• Perform initial Field Development Plan (FDP)

Development - Full Scale Operations

Once the field boundaries are known, and a more accurate reservoir potential is drawn, the development stage takes place to exploit the hydrocarbons resources. some of the activities include:

• Detailed Field Development Plan (FDP)

• Drilling of Development Wells

• Building infield infrastructure (infield production facilities, gas treatment, and pipelines)

• Community consultations and Environmental assessments

• Acquisition of additional lands for infrastructure installations

Midstream and downstream industry sectors are build in concurrence with the Development Phase

Production - Cost Recovery

Field size, type of hydrocarbon, and required infrastructure defines the complexity and the duration of the production phase. In this phase, extracted hydrocarbons are being sold to market and cost recovery mode kicks off. activities included in this phase are:

• Additional Development wells

• Re-entries, which includes sidetracking and deepening

• Artificial lifting

• Workover and well maintenance

• Injector wells for secondary oil recovery

• Enhanced Oil Recovery (EOR) for tertiary oil recovery

Abandonment / Decommissioning -

All Oil & Gas field typically go throw three production phases: buildup, plateau, and decline in production. When production reach a point where it is no more cost-effective, the field enters a final stage called abandonment, also known as decommissioning. some of the activities are:

• P&A of producing and injector wells

• Decommissioning and dismantlement of production facilities

• Site restoration

During the complete lifecycle of the field, Oil & Gas companies must allocate funds for Abandonment called Asset Retirement Obligation, which is a liability item on the balance sheet

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