Upload
puneet-mahajan
View
217
Download
0
Embed Size (px)
Citation preview
8/3/2019 Acknow, Index,
1/25
xxv
ACKNOWLEDGEMENTACKNOWLEDGEMENT
I would like to express deep sense of gratitude to Mr. K.V. Mohan Rao (Centre Director-UPES), Mr.G.M. Rao (Dean-COMES) for providing me the opportunity to do the project work in O.N.G.C.
Rajahmundry.
I would like express my gratitude to Mr. J.A. Kumar (General Manager-HR), S.K. Panigrhy (Head-
STI) for allowing me to pursue my project work at the O.N.G.C. (Rajahmundry Assets).
It is a matter of great pleasure for me to express my sincere gratitude to Mr. M.S. Gauma (GGM-
Reservoir, Subsurface Manager Rajahmundry Assets)for allowing me to pursue my project work in
his department.
I would also like to take the opportunity to thank my mentor Mr. P. Bharadwaj-CG (External Guide)
as he has spared his time and imparted his valuable knowledge to me along with Mr. M. Karthik
(Internal Guide) for his valuable guidance throughout the course of my project.
Last but not the least, I would also like to thankMr. P.S. Goswami & Mr. ShashiShekhar for their
valuable support during the training period. I convey my heartiest gratitude to them for sharing their
vast knowledge and expertise acquired through long years of experience in O.N.G.C. which has helped
me in gaining insight into the subject.
In the end thanks to all that directly or indirectly helped in the course of this project.
(PUNEET MAHAJAN)
8/3/2019 Acknow, Index,
2/25
xxv
INDEX
8/3/2019 Acknow, Index,
3/25
xxv
INDEX
S.No. Page No.
Acknowledgement (i)List of Tables (vii viii)
List of Figures (ix)
Company Profile (x xvi)
Abstract (xvii xviii)
Objectives of the Project (xix xx)
Research Methodology used in the Project (xxi xxii)
Limitations of the Project (xxiii-xxiv)
Chapter 1 INTRODUCTION (1 3)
1.0 Introduction (2 3)
Chapter 2 RESERVES ESTIMATION METHODS (4 13)
2.0Introduction 5
2.1 Data Used in making Reserve Estimates 6
2.2 Reserve Estimation Techniques (6 11)
2.2.1 Analogy Method 8
2.2.2 Volumetric Method (8 11)
2.2.2.1 Benefits of Using Volumetric Method 9
2.2.2.2 Calculation of the Reserves by
Using the Volumetric Method (9 11)
2.2.3 Decline Curve Analysis 11
2.2.4 Material Balance Method (11 12)
2.2.5 Reservoir Simulation (12 13)
Chapter 3 FACTORS EFFECTING RESERVES ESTIMATION (14 17)
3.0 Judgmental Factors in Reserve Estimation 15
3.1 Economic Considerations (15 16)
8/3/2019 Acknow, Index,
4/25
xxv
S.No. Page No.
3.1.1 Developed Gas Fields 15
3.1.2 Developed Oil Fields (15 16)
3.1.3 Successful Exploration Efforts 16
3.2 Effect of Operating Conditions 16
3.3 Reservoir Limits (16 17)
Chapter 4 ERRORS IN DECLINE CURVE TECHNIQUE
OF RESERVES ESTIMATION (18 26)
4.0 Errors in Decline Curve Technique of Reserves Estimation 19
4.1 Data Readings used for the Econometric Model 19
Case 1 (20 22)
4.2 Using six Initial Production and Pressure Data for Developing of the
Econometric Model for Decline Curve Estimation Method (20 22)
Case 2 (23 25)
4.3 Using Eight Initial Production and Pressure Data for Developing of the
Econometric Model for Decline Curve Estimation Method (23 25)
4.4 Comparison of % Error in Prediction for the Two Cases (25 -26)
Chapter 5 ECONOMIC BENEFIT OF EARLY OGIP ESTIMATION (27 41)
5.0 Economic Benefit of Early OGIP Estimation 28
8/3/2019 Acknow, Index,
5/25
xxv
S.No. Page No.
Case 1
5.1 General Assumptions 29
5.2 Capital Expenses Assumptions 29
5.3 Operational Expenses Assumptions 29
5.4 Tax Law Assumptions 29
5.5 Scenario 1 - The Appraisal Well Is Drilled 6 Months after
the Exploration Well 30
5.6 Cash Flow after Taxes & Net Present Value of the Scenario 1 (31 32)
5.7 Scenario 2 The Appraisal Well Is Drilled 1 Year afterthe Exploration Well 32
5.8 Cash Flow after Taxes & Net Present Value of the Scenario 2 33
5.9 Comparison of the NPV of the Scenario 1 & 2 34
Case 2
5.10 General Assumptions 35
5.11 Capital Expenses Assumptions 35
5.12 Operational Expenses Assumptions (35 36)
5.13 Tax Law Assumptions 36
5.14 Scenario 1 - The Appraisal Well Is Drilled 6 Months after
the Exploration Well 36
5.15 Cash Flow after Taxes & Net Present Value of the Scenario 1 37
5.16 Scenario 2 The Appraisal Well Is Drilled 1 Year after
the Exploration Well 38
5.17 Cash Flow after Taxes & Net Present Value of the Scenario 2 39
5.18 Comparison of the NPV of the Scenario 1 & 2 40
8/3/2019 Acknow, Index,
6/25
xxv
S.No. Page No.
Chapter 6 CONCLUSIONS & RECOMMENDATIONS (42 44)
6.0 Conclusions and Recommendations (43 44)
Chapter 7 REFERENCES (45 46)
7.0 References 46
Annexure 1 (47 53)
Annexure 2 (54 65)
Annexure 3 (66 82)
8/3/2019 Acknow, Index,
7/25
xxv
LIST OF TABLES
S.No. Page No.
Table 1:- Comments on Estimation Methods 7
Table 2:- Formulas for the Estimation of Reserves by Volumetric Method 9
Table 3:- Model Parameters for Reserves Calculation by Volumetric
Method of Estimation 10
Table 4:- Calculation of the Reserves by Volumetric Method of Estimation 10
Table 5:- DataReadings Used for the Econometric Model 19
Table 6:- Econometric Model for Six Production and Pressure Readings 20
Table 7:- Predicted Production and Error in the Predicted Production 20
Table 8:- Econometric Model for Eight Production and Pressure Readings 23
Table 9:- Predicted Production and Error in the Predicted Production 23
for Eight Readings 23
Table 10:- Comparisonof % Error in Prediction for the Two Cases 25
Table 11:- CFAT & NPV of the Scenario 1 31
Table 12:- CFAT & NPV of the Scenario 2 33
Table 13:- CFAT & NPV of the Scenario 1 37
Table 14:- CFAT & NPV of the Scenario 2 39
Table (A-1.1):- Decline Curve Data of well number (XXX) of
K.G Basin (O.N.G.C) (48 53)
Table (A-2.1):- Capital Expenditure for the scenario 1 & 2 55
8/3/2019 Acknow, Index,
8/25
xxv
GGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGGS.No.
Page No.
Table (A-2.2):- Depreciation on the Capital Expenditure for the Scenario 1 & 2 (55 59)
Table (A-2.3):- Revenues & Revenues after the Royalty and Payment of
Profit Oil for Scenario 1 60
Table (A-2.4):- Operational Expenses for Scenario 1 61
Table (A-2.5):- Operating Profits for Scenario 1 62
Table (A-2.6):- Revenues & Revenues after the Royalty and Payment of
Profit Oil for Scenario 2 63
Table (A-2.7):- Operational Expenses for Scenario 2 64
Table (A-2.8):- Operating Profits for Scenario 2 65
Table (A-3.1):- Capital Expenditure for the scenario 1 & 2 67
Table (A-3.2):- Depreciation on the Capital Expenditure for the Scenario 1 (67 - 71)
Table (A-3.3):- Revenues & Revenues after the Royalty and Payment of 72
Profit Oil for Scenario 1
Table (A-3.4):- Operational Expenses for Scenario 1 73
Table (A-3.5):- Operating Profits for Scenario 1 74
Table (A-3.6):- Depreciation on the Capital Expenditure for the Scenario 2 (75 79)
Table (A-3.7):- Revenues & Revenues after the Royalty and Payment of
Profit Oil for Scenario 2 80
Table (A-3.8):- Operational Expenses for Scenario 2 81
8/3/2019 Acknow, Index,
9/25
xxv
Table (A-3.9):- Operating Profits for Scenario 2 82
LIST OF FIGURES
S.No. Page No.
Figure 1: Magnitude of uncertainty in reserves estimates 5
Figure 2: Measures of central tendency 12
Figure 3: Percentiles 13
Figure 4 Actual v/s Predicted Production 21
Figure 5 Percentage Error in Prediction 22
Figure 6 Actual v/s Predicted Production 24
Figure 7 Percentage Error in Prediction 24
Figure 8 Comparison of Percentage Error in Prediction Case 1 v/s Case2 25
Figure 9 Comparison of NPV of Scenario 1 & 2 34
Figure 10 Comparison of NPV of Scenario 1 & 2 40
8/3/2019 Acknow, Index,
10/25
xxv
COMPANY PROFILECOMPANY PROFILE
8/3/2019 Acknow, Index,
11/25
xxv
COMPANY PROFILECOMPANY PROFILE
8/3/2019 Acknow, Index,
12/25
xxv
VISION
8/3/2019 Acknow, Index,
13/25
xxv
To be a world class Oil & Gas Company integrated in Energy Business with dominant Indian
Leadership and Global Presence.
MISSION
WORLD CLASS
1. Dedicated to excellence by leveraging competitive advantages in R&D and technology with
invovled people.
2. Imbibe high standards in business ethics and organizational values.
3. Abiding commitment to health, safety and environment to enrich quality of community life.
4. Foster a culture of trust openness and mutual concern to make working a stimulating and
challenging experience for our people.
5. Strive for customer delight through quality products and services.
INTEGRATED IN ENERGY BUSINESS
1. Focus on domestic and international oil and gas exploration and production business
opportunities.
2. Provide value linkage in other sectors of energy business.
3. Create growth opportunities and maximise share holders value.
DOMINANT INDIAN LEADERSHIP
1. Retain dominant position in Indian Petroleum sector and enhance Indias energy availability.
8/3/2019 Acknow, Index,
14/25
xxv
BOARD OF DIRECTORS
CHAIRMAN & MANAGING DIRECTOR
R S Sharma
Chairman & Managing Director
FUNCTIONAL DIRECTORS
Dr. A K Balyan
Director (HR)
A K Hazarika
Director (Onshore)
D K Pande
Director (Exploration)
U N BoseDirector (Technology & Field
Services)
D K SarrafDirector (Finance)
Sudhir VasudevaDirector (Offshore)
SPECIAL INVITEE GOVERNMENT NOMINEES
R S Butola
Managing Director, OVL
S Sundareshan
Addl.Secy. MOP&NG
Govt. of India
L M VasAddl. Secy. DEA
Ministry of Finance,
Govt. of India
8/3/2019 Acknow, Index,
15/25
xxv
ORGANIZATIONAL STRUCTURE OF ONGC
8/3/2019 Acknow, Index,
16/25
xxv
OIL AND NATURAL GAS CORPORATION LIMITED
The story of oil exploration in India is the history of ONGC itself. India is endowed with 26
sedimentary basins, spread over a geography of 3.13 million square kilometres; offshore basins
comprise of 0.39 million square kilometres, Onshore 1.39 & Deepwater 1.35.
ONGC has discovered all the producing basins in independent India. Only one old basin discovered
before independence existed when ONGC was formed in 1956.
Commissioned on 14th august 1956, as a statutory body, ONGC was converted into a public limited
company from 1st February 1994, reinventing the potential of the Company in a progressive economic
regime.
Today, ONGC is Indias most valuable company, leading all Indian companies in terms of market
capitalization (over 41 billion US Dollars), Net Worth (11 billion US Dollars) and Net Profit (3 billion
US Dollars). Currently recognized as Asias Best Oil & Gas Company, ONGC also leads to all Indian
companies in Forbes 2000 list of global mega-corporations. ONGC is a Fortune-Global-500 corporate,
and ranks 15th among global integrated oil and gas companies.
To achieve organizational growth with stability, ONGC is pursuing business growth options by
entering into Joint Ventures and partnerships with companies having niche strength.
ACHIEVEMENTS OF ONGC
ONGC is in the select league of Global Oil Majors, producing over 1 million barrels
of Oil Equivalent per day contributes around 80% of domestic production.
ONGC also produces 3.2 million tonnes of Value Added Products (VAP) including
LPG, C2, C3, Naphtha, HSD, Jet fuel and SKO.
8/3/2019 Acknow, Index,
17/25
xxv
100% QHSE (quality, Health, Safety and Environmental Management) certifications
of operational installations, considered unique in world.
10 world-class institutes, as knowledge centre for innovation and technology.
CORPORATE RECOGNITIONS AND AWARDS
GLOBAL
Ranked no.1 E&P company in Asia (3rd in the world) as per Platts 250 Global Energy
Companies list for 2007.
The only Indian company to feature in the Worlds Most Admired Companies 2007
list by Fortune Magazine(May 2007), securing 9th position in the Mining, Crude Oil
Production industry.
Received Golden Peacock Award for Excellence in Corporate Governance in 2007, a
3rd time.
NATIONAL
Biggest Wealth Creator for the period 2001-2006, instituted by M/s Motilal Oswal
Securities Ltd., 3
rd
time in a row.
Ranked as the Most Respected PSU in 2007 Business World IMRB Survey (October
2007) for the 2nd consecutive time.
Received Amity Excellence Award, instituted by Amity International Business
School, for excellence in Corporate Governance.
8/3/2019 Acknow, Index,
18/25
xxv
ABSTRACT
8/3/2019 Acknow, Index,
19/25
xxv
ABSTRACT
Tight gas reservoirs present unique challenges to a reservoir engineer. Due to the low permeability,
these reservoirs require a significant amount of time to reach pseudo-steady state flow, making it
difficult for the reservoir engineer to predict the original amount of reserves present. If the amount of
reserves is unknown, the real viability of projects cannot be assessed or, in the best case, will be
evaluated pessimistically. This may result in the assignment of capital to projects other than tight gas
projects, or in the development of projects that might not be as lucrative. For several years, engineers
around the world have tried to predict the original gas in place (OGIP) for tight gas reservoirs. Decline
curves and material balance methods were found to have serious drawbacks when applied to scenarios
where permeability is low.
In the project work, the data used for the analysis of the declining curve was procured from the
O.N.G.C. and is the data of the wells of gas in the K.G. Basin. Regression method was used for the
analysis of the errors in the prediction of the reserves by the decline curve technique. The data of the
K.G Basin was also used for the analysis of the economic benefits of the early OGIP estimation. Two
cases are taken for the analysis of the economic benefits of the early OGIP, in both of the cases two
scenarios were built and NPV of both of the scenarios were calculated and compared.
This work also shows the impact that an incorrect estimation of initial reservoir characteristics may
have on the estimation of OGIP and on the estimation of the NPV of the projects. The results show the
drainage area estimation; permeability and porosity are key factors for better estimates.
8/3/2019 Acknow, Index,
20/25
xxv
OBJECTIVES OF THE PROJECT
8/3/2019 Acknow, Index,
21/25
xxv
OBJECTIVES OF THE PROJECT
Objectives of the project at hand can be divided into:-
1. Primary Objectives
2. Secondary Objectives.
PRIMARY OBJECTIVE
To study the Early Prediction of Reserves in Tight Gas Reservoirs
SECONDARY OBJECTIVES
Along with the primary objective, the project also achieved several other {secondary} objectives.
1. Reserves Estimation Techniques for Gas Reservoirs.
2. Identification of the Errors in the Reserves Estimation Techniques.
3. Economic Benefits of the Early Estimation of OGIP.
8/3/2019 Acknow, Index,
22/25
xxv
RESEARCH METHODOLOGY USED IN
THE PROJECT
8/3/2019 Acknow, Index,
23/25
xxv
RESEARCH METHODOLOGY USED IN THE PROJECT
RESEARCH DESIGN
It is the plan, structure and strategy of investigation conceived so as to obtain answers to research
questions. It is the overall scheme or program of research that guides the investigator in the process of
data collection, analysis and interpretation. It helps the researcher to understand the whole picture
before he embarks on the actual study. It gives the chance to the researcher to revise and improve on
his intended procedure before he actually undertakes the study.
DATA
Primary data was collected through face-to-face interaction while the secondary data was collected
through various sources viz. internet, literature, reports, etc
Primary data: - Primary data is one which is collected by the researcher him/herself for the purpose
of a specific inquiry or study. Such data is original in character and is generated by surveys conducted
by individual or research institutions. In this particular survey the Primary data collected is by the use
of the Interviews technique / interaction sessions with the executives of the geology department from
Oil and Natural Gas Corporation, Rajahmundry. Printouts of the necessary data for the project were
provided by the O.N.G.C personnels.
Secondary Data: - Secondary data can be defined as data that has been collected earlier for some
purpose other than the purpose of the present study. Any data available to the researcher prior to the
commencement of the research project is secondary data. For this project secondary data was procured
from O.N.G.C Limited, Rajahmundry and from the internet.
Importance of data: - Data constitutes the subject matter for analysis. One cannot draw inferences
without analyzing the data. The relevance, adequacy and reliability of the data determine the quality of
the study. In the above case the primary data has been taken from the Oil and Natural Gas Corporation
8/3/2019 Acknow, Index,
24/25
xxv
Limited executives. The secondary data been taken from the Oil and Natural Gas Corporation Limited
and from the internet which ensures adequacy and reliability of the data used in the project.
LIMITATIONS OF THE PROJECT
8/3/2019 Acknow, Index,
25/25
LIMITATIONS OF THE PROJECT
1. Several assumptions were taken into consideration to calculate the economic benefits of
Early Prediction of Reserves in Tight Gas Reservoirs. Such as the assumed market price
of the gas; if the price of the gas changes then it will affect the NPV of the project.