The quantification of risk and uncertainty is often discussed in the context of exploration and appraisal, yet most of the upstream E&P business concerns decision-making in producing assets. In the context of many mature hydrocarbon areas, this translates into decision-making in mature fields.
Uncertainty-handling in development and production
Uncertainty-handling in development and production differs from that in Exploration and Appraisal, as it must deal with a growing and often imperfect production database against a backdrop of constantly changing circumstances. As the life cycle progresses, initial uncertainties over volume and productivity narrow but are supplanted by new uncertainties such as sweep efficiency, fine scale architecture and changing responses to new production mechanisms and techniques.
These new issues demand a change in approach for the quantification of uncertainty. Vigilance is required to avoid the subsurface interpretation simply collapsing on to a best guess.
As subsurface experts, we have experienced that often effective risk and uncertainty management can be built on three main aspects: tools, people, and team approach.
Effective risk and uncertainty management
TOOLS
As engineers we are often most comfortable when we are using a piece of software as a tool to try to express reservoir uncertainty and evaluate the associated risks of development. While the software tools are increasingly sophisticated and strive for integration between geoscience and engineering, they represent only part of effective risk management.
PEOPLE
We use a collection of subsurface disciplines to perform reservoir evaluation. We are subject to human biases, for example wanting to establish a bases case (known as “anchoring”) and being influenced by readily accessible data (known as availability”). Such biases, or heuristics, can lead us to quick, but often misleading, conclusions.
Recognising these biases in others, and in ourselves, can help us to compensate for nature and make better evaluations of uncertainty and more reasoned investment decisions.
TEAM APPRAOCH
We are all familiar with the GANTT approach to project planning; it was introduced more than 100 years ago. The linear process is not always fast enough to produce the timely results we need, and uncertainties are often investigated at the end of study build by running sensitivities to a base case.
An alternative approach is to work our disciplines in parallel, consider key uncertainties throughout the evaluation, and set specific times to convene the team to plan the next phase of the reservoir study.
To sum it up, we make better decisions when we:
- elect the appropriate tools
- recognise the influence of human bias
- consider only key uncertainties rather than every possible combination
- provide cycles of thinking time
to evaluate uncertainty and risk before planning the next stage of study.
