Strategies of assessing multiple exploration traps by means of Monte Carlo method

doi:10.3969/j.issn.1672-7703.2019.03.006

Abstract

Abstract: The risk of overseas oil and gas exploration projects is quite high, so it is crucial for exploration decision making to develop a set of scientific and complete risk assessment method. In this paper, a set of risk assessment method was innovatively constructed by using the Monte Carlo probability method, and its reliability and practicability were verified by means of specific examples. When there are multiple exploration opportunities, it is recommended to firstly estimate the success probability, resource extent with risk probability and expected moneytary value of multiple traps by using this newly established method, then analyze the effects of three key factors (i.e., success probability dependency, drilling sequence and well quantity) on resource extent with risk probability, success probability, economical success probability and expected moneytary value, and finally discuss deeply the strategies for the final bidding decision making. It is indicated that rational assessment on the project's expected moneytary value is the key to win the bid in the link of exploration bidding, and expected moneytary value is the comprehensive embodiment of success value and failure value. To select the final decision making point, it is necessary to consider the success probability and the effect of the affordability to failure value comprehensively, instead of blindly seeking to maximize the expected moneytary value.

Key words: Monte Carlo, geological success probability, economical success probability, dependency, expected moneytary value, bidding strategy

CLC Number:

Zhao Hua, Wang Bin, Chen Jiajie, Huang Fuxuan, Zhang Wei, Lu Yunying. Strategies of assessing multiple exploration traps by means of Monte Carlo method[J]. China Petroleum Exploration, 2019, 24(3): 331-340.

References

[1] David A. Selecting and assessing plays[J]. AAPG Bulletin, 1992,12(8):87-94.
[2] Keefer D L. Resource allocation models with risk aversion and probabilistic dependence:offshore oil and gas bidding[J].Management Science, 1991,17(4):33-56.
[3] 梁海云,丁建可.海外风险勘探项目经济评价[J].当代石油石化,2006,14(8):26-29. Liang Haiyun, Ding Jianke. Economic evaluation of overseas risk exploration projects[J]. Petroleum & Petrochemical Today, 2006,14(8):26-29.
[4] 马宏伟. 海外油气勘探项目经济评价方法差异分析[J].当代石油石化,2008,16(3):30-33. Ma Hongwei. Difference analysis of economic evaluation methods for overseas oil and gas exploration project[J].Petroleum & Petrochemical Today, 2008,16(3):30-33.
[5] 王俊玲,史丹妮,刘志强,霍红.海外在实施油气勘探项目地质风险评价方法探讨[J].中国石油勘探,2010,15(3):67-72. Wang Junling, Shi Danning. Discussion on geological risk assessment method for overseas oil and gas exploration projects[J]. China Petroleum Exploration,2010,15(3):67-72.
[6] Robert Mo, Nahums. A process for evaluating exploration prospects[J]. AAPG Bulletin, 1997,81(7):1087-1109.
[7] Mudford B S. Valuing and comparing oil and gas opportunities:a comparison of decision tree and stimulation methodologies[C]. SPE 63201, 2000.
[8] Newendorp PD, Schuyler JR. Decision analysis for petroleum exploration, second edition[M].Colorado:Planning Press, 2000.
[9] Erdogan M, Mudford B, Chenoweth G. Optimization of decision tree and simulation portfolios:a comparison[C]. SPE 68575, 2001.
[10] Murtha J A. Estimating reserves and success probability for a prospect with geologically dependent layers[C]. SPE 30040, 1995.
[11] Rose P R. Risk analysis and management of petroleum exploration ventures[J].AAPG Bulletin, 2001,85(3):49-53.
[12] 文环明,肖慈珣,李薇.蒙特卡洛法在油气储量估算中的应用[J].成都理工大学学报:自然科学版,2002,29(5):487-492. Wen Huanming, Xiao Cixun, Li Wei. Applications of the Monte Carlo method to the petroleum reserves estimation[J].Journal of Chengdu University of Technology:Natural Science Edition, 2002,29(5):487-492.
[13] 杨双,闫相宾,蔡利学.圈闭资源量计算参数确定方法——以断块型圈闭为例[J].石油实验地质,2015,37(4):530-534. Yang Shuang, Yan Xiangbin, Cai Lixue. Parameter definition in resource calculation of a trap:a fault block example[J].Petroleum Geology & Experiment, 2015,37(4):530-534.
[14] 吕睿.不确定分析法快速估算资源量实现步骤及关键[J].西安石油大学学报:自然科学版,2018,33(1):47-53. Lyu Rui.Key steps of rapid estimation of resource quantity by uncertainty analysis[J].Journal of Xi'an Shiyou University:Natural Science Edition,2018,33(1):47-53.
[15] Zsolt P K. Application of Monte Carlo simulation in calculating HC-Reserves[C].SPE 121256, 2009.
[16] Ben Wang, Kokolis G P, Rapp W J, Litvak B L. Dependent risk calculations in multiple-prospect exploration evaluations[C]. SPE 63198, 2000.
[17] Newendorp P D. A method for treating dependencies between variables in simulation risk-analysis models[J]. Journal of Petroleum Technology, 1976,28(10):1145-1150.
[18] Moskowitz H, Sarin R. Improving the consistency of conditional probability assessents for forecasting and decision making[J].Management Science, 1983,29(6):115-136.
[19] Jonkman RM,Bos CFM,Breunese JN. Best practices and methods in hydrocarbon resource estimation,production and emissions forecasting,uncertainty evaluation and decision making[C]. SPE 77280, 2002.
[20] Kokolis G P, Boris L L, Rapp W J, Ben Wang. Scenario selection for valuation of multiple prospect opportunities:a Monte Carlo play simulation approach[C]. SPE 52977, 1999.