Publications

Unlike the development of oil fields, natural gas fields tend to present more capital risks and business uncertainties as operators should first secure a buyer or multiple buyers prior to providing field design and planning for capital expenditure. Therefore, it is imperative that gas field operators are aware of the development timing as well as prioritization of developing certain fields, most notably in the case of multiple gas producing fields that are present in a single work area. This publication is based on a case study of XY Block located in Indonesia, where there are several potential sites to be developed with differing properties and production potential. The operator would like to optimize the field development by ensuring constant production up to 15 years of production from these sites. Technical and economic risks from developing each site are acknowledged by using the Expected Monetary Value (EMV) Calculation instead the widely accepted NPV calculation. (You need to spell out NPV as you did for EMV). Based on the technical data and economic data presented, it is then processed to provide a rank system which highlights the priority sites to be developed by the contractor first, as the capital and operational expenditure will be compensated by the sites with the most potential and less risks. Therefore, development timing can be adjusted to reduce risks especially at the beginning of the development when capital expenditure is very high, therefore reducing the contractor’s financial risk. This publication presents a new, simplified model that is able to provide an insight for gas field operators with multiple sites to prioritize a certain field development. The method is particularly useful for operators with financial constraints that have to be prudent when developing fields with known risks and reducing exposure to prolonged operational constraint.