Revised Project Development Proposal for Yogi Field

Objective: Provide revised production facilities development plan for the Yogi
Field with improved financial meeting stake holder expectation and propose cost
effective decommissioning plan which is at par with local as well as international
norms set in for decommissioning offshore structures.

Introduction: RGU E&P announces commerciality of Yogi Field after successful

well testing and appraisal programme identifying: 1) Estimated Yogi reservoir
(STOIIP) is 750mmbbls with 50% recovery factor. 2) GOR of the produced oil is
750 scf/bbls
Earlier Base case PDP was rejected by the Stakeholders due to poor economics
and also Government is reluctant to approve decommissioning plan where
derogation will be required.
The base case PDP was studied thoroughly to find out lagging areas and look for
better options which in turn boost the field development economics. Also the
exercise was made to come up with the revise PDP that ensures the
decommissioning restores the field area back to its natural habitat effectively
with minimum expenditures and also eliminates requirement of derogation in the
law.
The study report is divided into four sections as below
A) Economics
B) Process
C) Critical assessment
D) Decommissioning

3
 A) Economics:
Drilling Plan:
The revise plan proposes to use 20 horizontal wells with subsea completions.
This will improve fraction of reserves produced in plateau period to 0.4 which
improves initial well production rate by 43% (maximum production rate of
100 Mstb/day for oil and 75 MMscf/day for 5 consecutive years from 2023 to
2027) and expedite revenue generation.
Since Drilling plan comprises of subsea wells independent of production
facilities readiness, drilling campaign can initiated as early as 2018 which
makes 20 wells available for production when actual production starts in the
years 2023. Altogether 20 horizontal wells drilled in 5 years plan cost $mm
1400. 20 Horizontal wells with higher initial gross rate available for
production during plateau period will have detrimental effect on initial cash
flow and huge economic benefits. Thus provides project sustainability in
event of uneventful delay.
Fraction of
Technical reserves Initial Well Capacity
STOIIP First year of
recovery produced in gross rate constraint GOR (scf/bbl)
(mmbbl) capital spend
factor plateau (mblpd) (mblpd)
period
750 0.5 0.4 5.0 120.0 750 2018

Oil & Gas production profiles

120

100

80

60

40

20

0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33

Sales gas rate (MMscf/d) Oil rate (Mstb/d)

4
Production Facilities:
Assuming produced crude from Yogi Field is sweet crude with minimal treatment
require post separator to meet export specification criteria. Also no boosting
phase is planned to maintain plateau production level at the end of production
cycle by artificial lift methods. Hence no drilling facility is considered on-board of
floating production platform. The facilities consider topside of floating vessel
anticipated to have basic production facilities with minimum weight, so
considering an economic perspective the Production facilities suggested for the
Yogi Field is floating production platform (FPS 2) from category 2.
This construction of FPP can be independent of drilling plan and can be planned
3 years prior to commencement of production in year 2023. Similarly storage
tanker can be constructed year before production commencement year. This will
efficiently distribute CAPEX spending from year 2020 to 2022 equally. Total
CAPEX require for construction of Floating Production platform and storage
tanker is expected to be $mm 1700 plus the cost of gas pipeline (of 100
mmscf/d capacity since maximum gas produce per day is 90 mmscf/day) from
storage tanker to offshore tie in point 50 km north.
Storage Tanker cost ($mm) 400
FPS2 cost ($mm) 1300
Pipeline gas ($mm) 150
Total facility cost ($mm) 1850

Shuttle tanker will be rented to transport oil from storage tanker to shore base
at tariff of 5 $/bbl.
2018 2019 2020 2021 2022
Total well costs ($mm) 280 280 280 280 280
FPSO cost ($mm) 0 0 0 0 0
Jacket ($mm) 0 0 0 0 0
Topsides ($mm) 0 0 0 0 0
FPP ($mm) 0 0 433 433 433
Storage tanker ($mm) 0 0 0 0 400
Pipeline oil ($mm) 0 0 0 0 0
Pipeline gas ($mm) 0 0 0 0 150

5
Decommissioning Phase:
Since Floating production platform is selected option decommissioning will be
comparatively less expensive to that of the fixed structure facilities.
Decommissioning of 20 subsea wells will total cost of $mm 200
Decommissioning of Floating production platform and storage tanker will cost
$mm 50 each. Hence total would account for $mm 100
Decommissioning of gas pipeline from storage tanker to offshore tie in points will
require $mm 25.
Hence total decommissioning cost of overall installation would be $mm 365.

Decommissioning of Floating platform and

100
storage tanker ($mm)
Decomm wells ($mm) 200

Decomm pipelines ($mm) 25

TOTAL decommissiong ($mm) 325

Same assumptions used as that of base case for oil and gas price, inflation rate,
exchange rate and UK Corporation tax rate in order to have the same criteria for
evaluation. Following table is updated as per Category-2 Fixed OPEX and Oil
transportation tariff for oil tankers rental.
Economics Calculator INPUT
Gas price (p/therm) 43.0
Exchange Rate ($/£) 1.50
Gas price (US$/Mscf) 2.84
Oil price (US$/bbl) 64
UK Corporation Tax rate (%) 19
Fixed opex (% cum. capex) 7
Variable opex ($/bbl) 5
Gas transportation tariff ($/mmscf) 3
Oil transportation tariff ($/bbl) 5
Capex inflation (%p.a) 4
General Inflation (% p.a.) 3
Sales price escalation (%p.a.) 0

6
The revise PDP can achieve the NPV of US $mm 1974 and IRR of 25% with
reduce payback time of 7.3 years. The CAPEX postulated as US $mm 3695.
The Economics calculator output for the Base case vs. revise PDP is tabulated as
follows.
Base Case PDP Revised PDP
NPV 469 1974 US$mm
IRR 14% 25%
Payback 9.8 7.3 years
Economic Reserves 365 379 mmboe
Capex 4382 3695 US$mm
Capex/boe 12 10 $/boe
Lifting Cost/boe 20 18 $/boe
Transportation Cost/boe 13 9 $/boe

As compare to base case the economics can be improve by opting for different
option for drilling activity and production facilities which gives significant boost
to NPV and IRR values along with reduce CAPEX and payback time. Thus revised
PDP delivers favourable alternative for stakeholder to consider.

7
 Project Year 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27.00 28
Calendar Year 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038 2039 2040 2041 2042 2043 2044.00 2045
CAPEX ($mm) 280 280 713 713 1263 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0.00 0
DECOMMISSIONIN G ($mm) 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 325 0 0 0 0 0 0 0.00 0
Production we lls drille d 4 4 4 4 4 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0.00 0
Production we lls 0 0 0 0 0 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20 20.00 20
OUTPUT from Economics Calulator she et
Note these figures are in today's money ie
NPV 1974 US$mm real terms, and are not inflated. Make sure
you put it in the right year. These cells are
IRR 25% linked to the economics calculator sheet. Enter the decommissioning cost in
Payback 7.3 ye ars the year after economic production
Economic Reserves 379 mmboe ceases, which is the year that STOP
first appears on row 43 of the
Capex 3695 US$mm Economics Calculator.
Capex/boe 10 $/boe
Lifting Cost/boe 18 $/boe
Transportation Cost/boe 9 $/boe

Total we ll costs ($mm) 280 280 280 280 280 0 0 0 0 0 0 0 0 0 0 0 0 0 0

FPSO cost ($mm) 0 0 0 0 0 0
Jacke t ($mm) 0 0 0 0 0 0
Topside s ($mm) 0 0 0 0 0 0
FPP ($mm) 0 0 433 433 433 0
Storage tanke r ($mm) 0 0 0 0 400 0
Oil & Gas production profiles
Pipeline oil ($mm) 0 0 0 0 0 0
120
Pipeline gas ($mm) 0 0 0 0 150 0

Cre w 50 Concre te base we ight (te) 0 Decomm ($mm) 0 100

8
Oil process cap (mbbl/d) 130 Jacket we ight (te ) 0
Gas proce ss cap (mmscf/d) 95 Storage Tanke r cost ($mm) 400 80
FPS2 cost ($mm) 1300 Decomm ($mm) 100
Oil topsides (te ) 2000 Pipe line gas ($mm) 150
60
Gas topside s (te ) 1400 Total facility cost ($mm) 1850 De comm we lls ($mm) 200
Utilitie s topsides (te ) 1500
Accomodation (te) 2000 De comm pipe line s 25 40
TOTAL topsides (te ) 6900
TOTAL de comm 325
20

0
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33
Fraction of
Technical Initial Well gross Capacity constraint First year of capital
STOIIP (mmbbl) reserves produced GOR (scf/bbl)
recovery factor rate (mblpd) (mblpd) spend
in plateau period

Economics Calculator Sales gas rate (MMscf/d) Oil rate (Mstb/d)

INPUT 750 0.5 0.4 5.0 120.0 750 2018
Gas price (p/therm) 43.0
Exchange Rate ($/£) 1.50 This is dependant on the
This is dependant on the This is dependant on the
Gas price (US$/Mscf) 2.84 type of well (horizontal or
type of well (horizontal production facilities.
vertical).
Oil price (US$/bbl) 64 or vertical).
UK Corporation Tax rate (%) 19

Fixed ope x (% cum. capex) 7

Variable ope x ($/bbl) 5
Gas transportation tariff ($/mmscf) 3
Oil transportation tariff ($/bbl) 5
Capex inflation (%p.a) 4
B) Process:
Floating production platform allow development of short-lived, marginal fields in
spread to thinly and widely to justify cost of fixed platform.
Subsea manifold combines produced fluid from multiple wellheads at seabed.
The dynamic flexible riser provides the conduit for the production fluids from
subsea manifold to Separator on Floating Production Platform. Risers also
provides path for control umbilical to the manifold for control and
communication. Sub-sea metering is also possible at manifold for metering flow
from the individual wells.
Floating Production platform (FPP) mainly includes following areas: power
generation, Separation, compression, utilities

Well Oil To storage

Fluids Oil Treatment tanker Control
System
Water
3 stage Water Produced Water Mineral
Disposal
separator Treatment management
unit
Water
Gas
Gas NGL
Dehydration
Sweetening extraction

Gas out to
pipe line
Acid Gases Nitrogen,
Removal Sulphur
Removal unit
H2S,
Co2

The produced crude from wellheads is separated in gas, oil, water. Although
produce fluids from Yogi Field is sweet crude, Oil treatment plant is planned to
ensure the export quality requirement with RVP upper limits of 12 psia and lower
value of BS& W of < 2 -3 % and salt content < 125 ptb.
Oil contrived from 3 stage separator will be further treated for removal of water
(dehydration) and desalted. The treated oil can be transfer to storage tanker for
export to the shore. Produced water from separator will be further treated to
clean carefully prior to dumping to the sea.

9
 Gas separator out from the Separator stage will be treated for removal of acid
gases, dehydration, dew point control and lastly NGL extraction Separated gas
will be compressed further as per the requirement of gas export pipeline.
Three stage separator system is selected to achieve higher volume of oil by
protecting heavier hydrocarbon in the fluid. Produced crude from the wellheads
flows through every stage of separator in series with steps decrease in pressure.

Well
fluids Temperature
To Gas Sweetening

1st stage 2nd stage

separator P1 compressor
1st stage
P1 > P2 Gas compressor

2nd stage
Oil separator P2
Water Gas
P2 > P3
Water

3rd stage
Oil separator P3
To Oil Treatment

To produce Water
Treatment

As pressure reduce in steps dissolved gas releases from the oil thus increases
yield of stock tank oil volume and reduces Bo (oil shrinkage factor).
Gravitational settling type 3 phase horizontal separator (Ks – 0.12 to 0.15 m/s,
length to diameter ratio of 5:1, retention time of 3-5 mins) is plan to use to
efficiently drain out foam and break the emulsion. Minimal Sand production is
expected to produce from the Yogi Field hence no separate design modification is
not consider for the phase separator. To compensate for disturbance due to the
motion at the floating platform the split flow design is incorporated where well
fluids enters at centre of the separator avoiding liquid surging. Also sufficient
stabilisation period is given to the gas stream to separate out liquid droplets
before flowing out gas through mist extractor.

10
Courtesy: DrillingFormulas.com [link: http://www.drillingformulas.com/] [3]

Oil treating: At later stage of production cycle there may be change in the API
gravity of produce fluid with variation in water and other impurities content.
Hence to maintain export quality of oil, it is plan to divert Oil coming out of the
separator stage to pass through a horizontal electrostatic treater which will be
used for breaking up emulsion and ensure coalescence and sedimentation of
water droplet (if any) to separate them from oil with the help of electrostatic
field generated by electrodes fix in heating chamber.

Courtesy: RGU Oil Treating notes

11
Gas Sweetening: to meet specification of gas transport pipeline for the
limitation on water content (to avoid hydrate formation), acid gases impurities
level (to avoid corrosion) and hydrocarbon dew point (removal of heavy
hydrocarbon – NGL extraction) acceptability.
Hybrid process plant is used for gas sweetening which uses physical and
chemical solvent for the absorption process to their respective advantages in a
cost effective way. The solvent mixture mainly consists of sulfolane as physical
solvent, MDEA (methyl di-ethanol amine) as chemical solvent along with water.
The main advantage of this process plant is smaller size of equipment which in
turns lowers the cost of plant, lower utility costs, lower corrosion rates. Effective
removal of acid gases in combinations.

Courtesy: NETL; US Department of Energy [link:

https://www.netl.doe.gov/research/coal/energy-
systems/gasification/gasifipedia/sulfinol] [4]
Gas Dehydration: Dehydration process eliminates gas hydrates formation in the
gas pipe lines. Tri-ethylene glycol dehydration treatment is proposed as hydrate
inhibitor before forwarding it to gas pipeline so that its water dew point is below
the lowest expected temperature. Cold finger modification is used to eliminate
hydrocarbon discharge to environment with the steam boiled off in the
regenerator.

12
Courtesy: Wikipedia [Link: https://en.wikipedia.org/wiki/Glycol_dehydration][5]

Produce Water treatment: Oil content is a major contaminant (need to be

removed while disposing off produce water) amongst organic and inorganic
contaminant. Maximum of oil content of produced water discharged is limited to
30 mg/L. Hydrocyclone module (with bypass valves provision to match the
changes in incoming flow rate) is used as primary produce water treatment
method followed by skim tank for complete removal of oil droplets. Heaving
motion of floating platform has no impact on functioning of Hydrocyclones as
compare to its counterparts with gravity separation principle.
In addition to these main treatment areas on the facilities centralised control
system is also part of the installation where all the sequential process can be
monitor and control via state of art distributed control system remotely.
Also provision for separate nitrogen removal unit is made available in case
reservoir fluids N2% increase than anticipated at any stage in production life.

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 C) Critical assessment- Flow assurance from reservoir to custody
transfer:
Floating production platform with advancement in technology possess
good option to that of base case with conventional CGB platform with 30 vertical
wells presented earlier. The floating production platform (with just 20 horizontal
wells) improves the production efficiency by multiple times and flexibility in
operation compare to that of Base case.
The subsea completion wells of horizontal well type drilling start in the
first year of the project independent of the readiness of production platform
which provides double the wells available for production (compare to that of the
base case) when actual production phase starts in year 2023. Hence boost the
flow rate in plateau period and decrease maintenance load due to number of
wells reduced for the production to 20 wells.
Subsea completed wells provides flexibility for workover/re-entry
operation without disturbing floating production facility operation using
independent rig. Also as compare to base case, the selection of horizontal type
for well completion reduces number of well require for production from 30 to 20
wells.
Subsea manifold used for to commingled flow from multiple wells have provision
to measure the fluids flowing out of each well sequentially.

Well head

Manifold
Choke Slug
catcher

Flow line

The multiphase flow exiting the manifold on the header line may have potential
of severe slugging downstream in riser pipeline due to the density difference in
multi-phase fluid flow. This uneven flow regime will further overload the

14
separator. Slug catcher in synchronous with is used as buffer and can transfer
production fluid at slug free rate ensure the separator receives uninterrupted
fluid input at the same time do not get overloaded. The flexibility of floating
platform over the fixed jacket type as discussed in base case is that production
fluid can be transfer to production riser selectively from different clusters of
manifold while performing maintenance on slug catcher on one manifold.
Flexible riser pipelines are used as conduit for production fluids between
the subsea modules and floating production facilities which helps to absorb
heaving motion in floating platform.
Distributed control system monitors the variation in flow-line (riser
pipeline) pressure and temperature and alarm the operator in control room to
take timely action to maintain input to the separator at the respective set points.
IN addition to slugging solids deposition over the time in the flow system
reduces effective area in production fluid flow system. It may be form of
hydrates, wax, asphalene or scale formation. The hydrates formation is
addressed by injecting glycol periodically at the same time applied electrical
heating of the flowline to maintain the temperature.
To avoid Wax formation intermittent pigging flow line is plane. Also
heating the flow line for hydrates prevention also helps formation of wax
particles. If any stage of production phase if heavy Oil flows out of reservoir then
solvent like Toluene is planned to use.
Scale formation due to precipitation of inorganic component can be
nullified by adjusting pH of flowing fluids
Oil supplied to the onshore terminal via shuttle tanker hence limitation on
oil pipeline length due to corrosion is not expected. Also maximum stogage
capacity of storage tanker is synchronous with max production rate in plateau
period. This will not load extra burden on shuttle tanker as well as production
may not require to be halted for in adequate storage space for oil.
For Gas pipeline transportation from offshore production facilities to tie in
point is 50 km which is within the limit of gas flow line length to avoid slugging,
corrosion. Removal of acidizing gases at processing stage also help to maintain
good quality of gas which prohibits the corrosion due to sour gases.

15
 D) Decommissioning:
Base case was rejected by the management spotting that the decommissioning
planned requires derogation from the government for the concrete gravity
structure which unlikely in political scenario and asked for complete removal of
facilities at the end of production life the facilities. This heavily burdens the
economics of the base case results in poor NPV & IRR.
All feasible decommissioning options were studied with respect to revised PDP
plan and comparative assessment made. The decommissioning objectives
defined were mainly clearance for navigation for other sea transportation and
prevention of environmental pollution. The revised production development plan
suggested floating production facilities as option for the concrete gravity
structure with top side production facilities. The revise planning of PDP was
developed so that decommissioning of facilities will left minimal impact on the
environment and will be in line with the international norms of decommissioning
offshore structure in most economical way.
At the end of production life of the Yogi Field, since subsea completed wells are
independent of the floating production facilities decommissioning of subsea
manifold and Plug and Abandon (P&A) of 20 wells can start immediately.
Plug and abandon of wells – With the help of workover rigs, 3 cement plugs are
planned plug 1 across the reservoir (squeeze), Plug 2 in the middle of the well,
Plug 3 250 ft below mud line. Also conductors are removed 10 ft below mudline.
Seabed clear- all subsea manifolds with related equipment and piping, flexible
risers will be removed and transported to shore for disposal after inerted with
the nitrogen gas. With the help of ROV sea bed will be cleared of any cuttings
debris, removal of cables, hydraulic lines, valves, etc.
The 50 km gas transportation pipeline from the floating production platform to
the offshore tie point will be cleaned for hydrocarbon free and then inerted with
nitrogen gas. The sterilized gas pipeline can be then be recovered, refurbish in
shore base and kept ready for future potential reuse.
The cuttings debris (if any) found at sea bed are planned to dump into deep-
water after treatment for bioremediation.
Once the Floating production Modules along with storage tanker De-coupled from
subsea connection & Facilities made hydrocarbon free the FPP and storage
tanker can be moved away from the location to the shorebase. Depending upon

16
future requirement of the floating production facilities, it will be cold stacked till
future job for reused for the company or leased on rental.
Financial for decommissioning
Decommissioning of 20 wells will require 10 $mm each so total decommissioning
cost for subsea wells will be 200$mm.
Decommissioning for floating production platform and storage tanker would cost
50$mm each.
Decommissioning cost of 50km gas pipe line from floating production facilities to
offshore tie in point will be 25 $mm.
Hence total decommissioning cost for the Yogi field facility is 365 $mm which is
1/3rd of base case scenario and the Yogi field location will be restore to its
natural habitat following the Government norms and international standards for
decommissioning of offshore structure. The revise plan for decommissioning
does not require any derogation from government authority hence it likely to get
government nod.

Word Count Total: 3300

17
References and Bibliography
Kenneth
1. Kenneth E Arnold, Larry W. Lake, Facilities and construction engineering
Vol III, Petroleum Engineering Handbook, 2007
2. Mainal Md. R, Simplified approach towards obtaining functional criteria of
topside facilities for offshore jacket platform, UTM JURNAL TEKNOLOGI,
Dec 1988.
3. Split flow design separator, DrillingFormulas.com
[Link: http://www.drillingformulas.com/]
4. Sulfolane, MEDA Hybrid process gas sweetening plant, NETL; US
Department of Energy
[link: https://www.netl.doe.gov/research/coal/energy-
systems/gasification/gasifipedia/sulfinol]
5. Glycol Dehydration unit, Wikipedia
[Link: https://en.wikipedia.org/wiki/Glycol_dehydration].
6. Håvard Devold, Oil and gas production handbook- An introduction to oil
and gas production, transport, refining and petrochemical industry, ISBN
978-82-997886-3-2, Edition 3.0 Oslo, August 2013
7. Adnan, Petroleum Economic Decision Tools, Petrosol
[Link: http://www.petrosol.co]
8. Magnus Nordsveen, Example of a field development Ormen Lange
Statoil module – Field development, MEK 4450 – 2011
9. Jacket Platform technology, Science and technology management
department, CNPC -2015.
10. RGU Facilities module study material.

18