Petroleum Development Oman L.L.C.
UNRESTRICTED
13th June 2001
Document ID : CP-145
Optimisation Management
Code of Practice
Author:
Reviewed:
I. Blair
K. Al Harthy
A.T. Jones
W. van Zandvoord
F.M. Clayton
UPR, UOP, OIL/3, OTW
UPT
OBP/57G
UPT/1
OYP/53
UPT/1
Keywords: Optimisation, Management Code of Practice
This document is the property of Petroleum Development Oman, LLC. Neither the whole nor any part of
this document may be disclosed to others or reproduced, stored in a retrieval system, or transmitted in any
form by any means (electronic, mechanical, reprographic recording or otherwise) without prior written
consent of the owner.
Optimisation Management Code of Practice
Version 1
Authorised For Issue 13/06/2001
Signed :
Amran Marhubi, UPD
Director Petroleum Engineering
Revision History
Version No.
Revision - 0
Revision - 1
13/6/2001
Date
12/10/00
13/6/2001
Author
Francis Clayton, UPT/1
I. Blair, UPT
K. Al Harthy, OBP/55
A.T. Jones, UPT/1
W. van Zandvoord, OYP/53
Page 2
Scope / Remarks
Initial version
Updated after review by assets
CP-145
Optimisation Management Code of Practice
Version 1
Contents
1. INTRODUCTION ............................................................................................................... 4
1.1 Background ...................................................................................................................... 4
1.2 Purpose ............................................................................................................................. 4
1.3 Target Audience ............................................................................................................... 4
1.4 Structure of This Document ............................................................................................. 4
2. SCOPE & OBJECTIVES.................................................................................................... 5
2.1 Scope ................................................................................................................................ 5
2.2 Fundamentals for this Code of Practice ............................................................................ 5
2.3 Related Business Control Documents .............................................................................. 5
2.4 Review and Improvement................................................................................................. 5
3. ROLES & RESPONSIBILITIES ....................................................................................... 6
3.1 Roles & Responsibility Matrix ......................................................................................... 6
4. PRACTICES TO BE FOLLOWED ................................................................................... 7
4.1 PDO Optimisation Management Process ......................................................................... 7
4.2 Generic Model for Optimisation Management ................................................................. 8
4.3 Sequential Activities ........................................................................................................ 9
4.4 Specifications and Data Management ............................................................................ 10
5. APPLICATION & STEP-OUT APPROVAL ................................................................. 11
5.1 Application ..................................................................................................................... 11
5.2 Step-out and Approval ................................................................................................... 11
APPENDICES ......................................................................................................................... 12
A1
Glossary of Terms, Definitions and Abbreviations................................................... 12
A2
References ................................................................................................................ 12
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Optimisation Management Code of Practice
1.
INTRODUCTION
1.1
Background
Version 1
Maximising the production from the existing assets is an important part of the business. Prior to
2000, management of optimisation was only within the Asset Teams, with the result that
different systems have evolved, relatively independently of each other.
A Production Management Process was developed in 2000, under the custodianship of UOD
(Operations Functional Director) which divides production management into the categories Rig
sequence management, Well addition/optimisation, MOL optimisation, Financial issues, Surface
production optimisation and Subsurface optimisation. A structure of meetings and review has
been created to manage the overall process. The latter two areas, Surface and Subsurface
optimisation, have been combined under UPD (Petroleum Engineering Functional Director). The
sub-process under UPD involves a team of optimisation focal points from all the assets.
Members of the team meet on a monthly basis to address issues around the corporate
optimisation portfolio and to present asset production and optimisation PIs. This team is
responsible for identifying and implementing best practices in the area of production
optimisation and is tasked with developing and maintaining this Optimisation Management Code
of Practice (OMCoP) and Specifications (OMS).
The first issue of the OMCoP and OMS (Version 0, October 2000) was developed using the
analysis of benchmarking questionnaires sent to the Oil Asset Teams (Refs.1 and 2) and the
results of Produce the Limit peer assists in Nimr (March 2000) (Ref.3) and Yibal (July 2000).
The current version is the result of significant review with the assets to agree a simpler, more
coherent Optimisation process.
1.2
Purpose
The OMCoP provides a structured and auditable framework for management of optimisation of
PDO’s production. The overall objective of optimisation in PDO is to maximise economic
production from PDO's existing wells and facilities.
The purpose of this Code of Practice and the Management Specifications is to define
optimisation, to document the process, roles and responsibilities, to list the key processes and
procedures to be adhered to, and to provide a source of references to policies, codes of practice,
procedures, guidelines, documents and forms that play a role in optimisation.
1.3
Target Audience
The target audience is all parties involved with the optimisation of wells and facilities in PDO
and in particular Production Programmers, Production Technologists, Reservoir Engineers, Well
Analysts, Petrophysicists and Engineers. The document is available via the EDMS system.
1.4
Structure of This Document
The document discusses the following aspects of optimisation management in sequence:




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he PDOOptimisation Management process (Section 4.1)
A generic model for optimisation management (Section 4.2)
Sequential activities (Section 4.3)
 Specifications and data management (Section 4.4)
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Optimisation Management Code of Practice
2.
SCOPE & OBJECTIVES
2.1
Scope
Version 1
The scope of optimisation covers two general areas, Wells and Facilities
2.2

Wells: Optimisation of a well can be considered over the period of its life from when it is
initially fully beaned up (usually within three months of first production) until the point
near to the end of its life where optimisation activities are no longer economically viable.
Both inflow and outflow optimisation are included.

Facilities: Production optimisation of facilities concerns the removal of bottlenecks that
cause oil and gas production to be constrained. These can be direct bottlenecks such as
flowlines/pipelines that are too small or indirect bottlenecks such as inadequate water
handling facilities. Also included is product process optimisation by reducing system
losses, improving oil recovery and reducing overall system backpressures.
Fundamentals for this Code of Practice
This Code of Practice, including the Management Specifications, describes the detailed
management procedures, activities and responsibilities involved in the management of
optimisation in PDO in support of the PDO Business Policy on product flow asset development.
2.3
Related Business Control Documents
The following documents which specifically relate to this Code of Practice in the standards
hierarchy:
Policy
Product flow asset development
Product flow asset integrity
PL-34
PL-35
Code of Practice
Operate Wells & Facilities
Optimisation Management Code of Practice
CP-115
CP-145
Specification
Optimisation Management Specifications
SP-1191
Existing Well Management
GU-372
Procedure
Guideline
2.4
Review and Improvement
This OMCoP will be reviewed annually to guarantee that it reflects current thinking and
practices.
The OMCoP is the responsibility of the CFDH for Production Technology, who will carry out
this review and update the document. New revisions will be reviewed by the CFDH Well
Services, CFDH Reservoir Engineering and CFDH Production Operations as co-owners of this
OMCoP, before authorisation by the CFDH for Production Technology.
This version of the OMCoP and OMS focuses on well optimisation. Future versions will include
more rigorous definition of the facilities optimisation process. This is the responsibility of
CFDHs of Operations (UOP) and Programming (OIL/3).
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Optimisation Management Code of Practice
3.
ROLES & RESPONSIBILITIES
3.1
Roles & Responsibility Matrix
Version 1
The following summarises the roles and related responsibilities required to both manage and
implement the Code of Practice in the following matrix:
Role
CFDH Production
Technology, OYP (UPT)
Discipline Engineer
Production Technology,
UPT/1
CFDH Operations, OFO
(UOP)
Senior PT Asset/ PFAT
PT and Programmers
Asset/PFATS
CFDH Reservoir
Engineering, OQP (UPR)
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Related Responsibilities
Responsible for technical standards relating to subsurface
optimisation management and for the overall optimisation
process in PDO.
Responsible for content and update of the document.
Responsible for managing the original document, issuing
and recording the update.
Responsible for technical standards relating to surface
optimisation management
Ensure standards and requirements of the Optimisation
Code of Practice and Management Specifications are
adhered to and actively managed in the asset.
Establish & ensure day-to-day activities identification &
tracking is updated/maintained in accordance with the
roles defined in the Optimisation Code of Practice and
Management Specifications.
Jointly responsible (with UPT) for technical standards
relating to forecasting
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Optimisation Management Code of Practice
4.
Version 1
PRACTICES TO BE FOLLOWED
The following section describes the overall optimisation management process and the underlying
activities and specifications relating to optimisation management in PDO. As such it is intended
as a single source reference to all activities, roles & responsibilities, specifications, procedures
and guidelines relating to optimisation.
All activities herein are recommended practices that will be subject to audit. Step-outs to these
guidelines should be justified on a case-by-case basis to UPT by the assets involved.
4.1
PDO Optimisation Management Process
Overall optimisation management in PDO is depicted below. It is aimed at managing a portfolio
of candidates to maximise production gains from optimisation, by making optimal use of
existing resources or indicate the need for increased resources. This Code of Practice considers
surface and subsurface optimisation. Most optimisation effort is devoted to well optimisation
because this is where short-term gains are most readily realised. Facilities optimisation is also
included. It is also possible that some of the largest and most sustainable gains can be made
through simple changes to the surface facilities, e.g. removal of chokes, changing out restrictive
valves etc.
Inter - Asset Optimisation
(Role of the Short Term Optimisation Teams)
Within Asset
Optimisation
UOD
Review
Optimisation Code of Practice
Produce the Limit Best Practices
Proposal for
mobile staff
resources for
optimisation
Monthly
reports
Monthly
reporting
template
Production
Management
Process Teams
Corporate advice
& Best Practice
UPD
Short Term Production Optimisation
UPT, UPT/1, OTW, 1 representative from each PFAT
OTM
Surface Optimisation & Deferments
OTW OxO/2/4
OCM
Financial Support Issues
OCF, OCF/x
OIM
Main oil line and Scheduled Deferment Optimisation
OIL, OxL
TWM
Rig Sequence Finalisation
TWE/11, OxL
CEM
Additional Rig Resources Finalisation
CEM/2, OxL
It is the role of the Short Term Optimisation Team, under UPD, to ensure that resources
available at a corporate level are allocated in support of the company's optimisation and
production targets.
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Optimisation Management Code of Practice
4.2
Version 1
Generic Model for Optimisation Management
The full well and facilities lifecycle is shown below. Optimisation occurs during the ‘Operate
and Maintain’ phase (EPBM A.71/2). As with all parts of the lifecycle a continuous feedback
process is in place. The elements of this loop are:


Monitoring: This consists of ongoing data capture and storage and initial analysis on a
short term (daily basis) to highlight failures or significant losses of production.
Candidate Identification and Tracking: Candidates are identified using automated
exception reporting or more detailed analysis by individuals and by multi-disciplinary
teams. A portfolio of candidates, classified according to corporate standards, is ranked to
maximise overall production gains.
Well and Facilities Lifecycle
Operate / Maintain
& Optimise
Design /
Construct
Monitor
Candidate ID
& Tracking
Abandon
Implementation
Results
Tracking
Sequential Activities And Feedback
Loops

Data capture
& management

Classification

Identification

Initial
analysis
 Fault

Quantification
 Tracking

Ranking
prioritisation



Planning,
programming
Quantification standards
Review
 Execution
reporting
 Portfolio
mgt
 Forecasting
Procedures, Tools, Techniques & Data Management

Implementation: Potential optimisation candidates are developed into proposals,
programmed into the short-term (90-day) plan and then implemented in the field.

Results Tracking: optimisation performance and gains are determined according to
corporate standards. Reviews of performance are used to improve future activity planning
and implementation.
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Optimisation Management Code of Practice
4.3
Version 1
Sequential Activities
The following sections represent the activities involved in Optimisation Management.
Matrices defining detailed responsibilities and suggested processes for these activities are
contained in the Optimisation Management Specifications.
Best in class methods will be used to reduce cycle time in Production Optimisation processes. In
all cases, the involvement of an integrated team is recommended.
4.3.1
Monitoring
All wells and facilities will be monitored in accordance with the Optimisation Management
Specifications. Where possible use will be made of automated systems such as CAO. Integrated
teams will ensure that the different requirements of day-to-day, medium term and long term
monitoring are addressed.
4.3.2
Candidate Identification and Tracking
All assets will have systems in place to rapidly identify and rank optimisation candidates in
accordance with the Optimisation Management Specifications, which includes
-
Integrated teams, including interior staff, will ensure that all potentials and constraints are
quantified and considered when selecting candidates.
All optimisation activities will be classified according to standard categories.
Potential gains and economics will be estimated according to corporate standards.
Each team will maintain and regularly review and rank an optimisation portfolio.
Deliberate de-optimisations to reduce loads (e.g. wear) will be included in the portfolio.
An UTC hurdle will be used. Optimisation candidates have UTCs less than the current
corporately specified development UTC.
Incremental activity, which is funded through corporate or offsets, will be prioritised based
on YACI.
All optimisation candidates will be tracked.
All assets should progress towards the next generation of candidate identification methods: using
the hydrocarbon availability model combined with calibrated production system models.
4.3.3
Implementation
Once identified, optimisation candidates will be implemented as rapidly as possible and so the
following will be performed in accordance with the Optimisation Management Specifications
- Optimisations should be approved at the minimum level commensurate with the Manual of
Authorities using the minimum documentation specified.
- Action tracking systems will be used for optimisations that do not require any formal
proposals.
- PIs related to the speed of implementation will be used and continuous improvement targets
will be set and monitored.
Targets, Forecasting and Reporting
Targets. Annual targets will be set for optimisation at both a team and corporate level, as defined
in the Optimisation Management Specifications. The targets will be based on the Asset team’s
Optimisation Forecast, as per corporate target-setting norms.
Forecasting of optimisation gains will ensure that the short-term gain can be identified, whilst
maintaining consistency with the long-term forecast. Optimisation should be forecast as a
separate item within NFA. Forecasting will be according to the latest corporate specifications.
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Version 1
Reporting. Corporate reporting will be against the set targets. At a team level data should be
gathered that will allow reporting of costs, UTCs and gains by optimisation type and well or
facility category.
4.3.4
Results Tracking
The data, as specified in the Optimisation Management Specifications, will be recorded for all
optimisation activities and will be updated on a monthly basis.
An end of year forecast will be reported on a monthly basis.
Reported gains will be based on
-
the total current optimisation, known as the ‘cumulative declined gain’, which is the sum of
individual current declined gains.
validated well tests both before and after the optimisation activity.
comparison with a ‘no optimisation forecast’.
an accelerated decline compared to the historical NFA.
Optimisations that show a loss, including deliberate de-optimisations, will be tracked and
reported.
Results will be stored so that they are accessible to all departments in PDO, so that a corporate
database can be developed.
4.4
Specifications and Data Management
The Optimisation Management Specifications define the requirements for the following;







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Responsibilities
Definitions of activity categories
Optimisation management activities
Documentation
IT Tools
Targets and forecasting
Performance Indicators
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Optimisation Management Code of Practice
5.
APPLICATION & STEP-OUT APPROVAL
5.1
Application
Version 1
This OMCoP must be applied throughout the producing life of all wells and facilities in PDO.
5.2
Step-out and Approval
All activities herein are recommended practices that will be subject to audit. Variance from this
Code of Practice must be approved by the Corporate Functional Discipline Head for Production
Technology, OYP (UPT) on a case-by-case basis by the assets involved
Control of this Code of Practice (ensuring that activities are carried out in accordance with the
OMCoP) lies with the persons responsible for the activities, as specified in Section 3.1 of this
document, and in the Optimisation Management Specifications.
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Version 1
APPENDICES
A1
Glossary of Terms, Definitions and Abbreviations
CAO
CEM
CFDH
EDMS
EPBM
NFA
OMCoP
OMS
PI
UTC
UPT (OYP)
YACI
A2
Computer-aided operations
Corporate Planning Department
Corporate Functional Discipline Head. In charge of staff planning and development
for the discipline within PDO.
Electronic Data Management System
Shell E&P: EP Business Model
No Further Activity
Optimisation Management Code of Practice
Optimisation Management Specifications
Performance Indicator
Unit Technical Cost
CFDH for Production Technology
Year-Average Capital Intensity
References
1. Optimisation Questionnaire, F. Clayton, UPT/1, 13/6/00,
http://sww.pdo.shell.om/edms_rec_get/003675305
2. Optimisation Questionnaire Analysis, F. Clayton, UPT/1, 13/6/00,
http://sww.pdo.shell.om/edms_rec_get/003675484
3. Nimr PtL Way Forward, Husam Al-Jahadmy, ONE/2, 8/5/00,
http://sww.pdo.shell.om/edms_rec_get/003675656
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