"Guide to Application for production licence"
Awards in Predefined Areas 2005 GUIDELINES TO APPLICATION FOR PRODUCTION LICENCE APA 2005 10.01.09 GENERAL The technological- and economical evaluation is reduced to include only the description of the anticipated reservoir- and development solutions. Hence, economic calculations need not be documented. The recommended number of pages is limited throughout the documentation in order to ensure that the applicants are given equal opportunities to submit the most important geological information related to the various blocks. Font size corresponding to Times New Roman 12 and single line spacing is recommended. The maximum size of figures is limited. A4-format is recommended provided all information in the figure/map is legible. A reasonable correspondence between the number of figures and text pages is recommended. The application should consist of only one volume containing all documentation. A paper version of all documentation is required, although applicants may also present the document as a CD-(in Microsoft Word or pdf-format). During the period of application there will be no opportunity to submit additional documentation, reports or studies with the intention of referring to these documents in the application. Tables may be found on the NPD’s internet pages along with these guidelines at: http://www.npd.no/Norsk/Emner/Ressursforvaltning/Undersokelse_og_leting/TFO2005.htm (English version). The layout must not be changed. An exception to this is the addition of rows in Tables 1 and 2. Digital files (in pdf, tif or jpg-format) of maps showing the outline of mapped/evaluated prospects should be submitted. The maps shall include coordinates and scale. All volumes and other measurements shall be submitted in metric units. -1- APA 2005 10.01.09 APPLICATION SUMMARY An application summary (maximum 2 pages) shall be submitted. The following information shall be included: - Name of applicant(s), address and nationality. - Name of the person who will serve as liaison in Norway to the Norwegian authorities - Tables 1 and 2 Block(s) applied for List the information regarding block(s) / combination of blocks included in the application, according to Table 1 (below). Blocks applied Participating Participating Area Proposed Proposed for, listed by interest (%)1 role type Proposed work obligation duration of duration of priority (O / P) 2 (A / N) 3 initial period extension period 1 For joint applications (AMI) the participating interest will be 100%. 2 O = operator, P = participant. For group applications (AMI) roles for each company may be suggested. 3 A = Additional acreage comprising an extension to existing production licences (Model I). N = New exploration area / new plays, also in previously relinquished acreage (Model I). . Table 1: Application Summary Block Summary The prospectivity in each block / combination of blocks applied for shall be summarised on a maximum of 1 page per block/ block combination, and 1 sketch map with coordinates and scale showing the outline of identified prospects and leads. Submit the key data for the prospects/ leads in Table 2 (below), one table for each block/ block combination. For seismic areas: describe the area as a whole. Table 2: Block Summary Block(s): Unrisked recoverable resources 3 Reservoir Distance 2 P/L Prob. to infra- Prospect/ Oil (106Sm3) Gas (109Sm3) of dis- Strati- Res. structure lead covery4 graphic depth 6 name1 Low Base High Low Base High level 5 (m MSL) (km) 1 Names of prospects or leads are informal and may be chosen freely. 2 P = prospect, L = Lead 3 Calculation methods shall be documented in the geological and technological evaluation, part 2.2. Low and high values shall preferably correspond to P90 and P10. Resource estimates for leads may be submitted if available. 4 Methods for risking shall be documented in the geological and technological evaluation, part 2.3. 5 Official Norwegian nomenclature shall be used where applicable. 6 State the closest or most relevant existing or planned permanent process- and/or transport facilities. -2- APA 2005 10.01.09 GEOLOGICAL AND TECHNOLOGICAL EVALUATION 1 Geological evaluation For new exploration areas and/or new play models and seismic areas: results/ conclusions from mapping and evaluation of the block(s) applied for shall be documented in part 1.2, leads/ plays in part 1.3 and prospects in part 2 (if present). Part 1.2 can be excluded for acreage with familiar play models and for acreage comprising an extension to existing production licences (type A in Table 1) with established/ confirmed play models. 1.1 Database Seismic and well data on which the application is based shall be listed by name and the location of these data shall be indicated on a base map in A4 format or smaller. 1.2 Petroleum geological Describe briefly the following aspects for each block/ analysis combination of blocks/ seismic areas applied for: stratigraphic and sedimentologic framework including reservoir development and reservoir quality structural framework including trap development and evaluation of seal/ retention characteristics basin development including source rocks, maturity and migration. The analysis should focus on, and be limited to, aspects that are considered critical for the prospectivity in the area. If previously documented and submitted studies have been used in the evaluation of the block(s), these may be referred to, together with a brief summary. It is recommended that the documentation under part 1.2 is limited to a maximum of 10 pages for each block / combination of blocks/ seismic area. In addition a limited number of relevant and legible maps and figures in A3 format or smaller may be submitted. 1.3 Leads and play models In blocks / areas where only leads are identified, or where the application is based on play model(s), a brief description of these shall be given (maximum 5 pages of text for each block / combination of blocks). The text may be illustrated by a limited number of relevant and legible maps/ figures in A3 format or smaller. If resource estimates are submitted, method for the calculation of these shall be documented. Use Table 3 for the relevant data / parameters. -3- APA 2005 10.01.09 2 Prospect evaluation In blocks/ areas where prospects are identified, a geological description and analysis of each individually named prospect shall be submitted (parts 2.1 – 2.3). For the technological (development and reservoir) evaluation (part 2.4 – 2.5), all or several prospects in the block/ area may be combined to represent a joint development scenario. For each prospect / prospect combination, it is recommended to limit the documentation in part 2 to a maximum of 5 pages text, including the technological evaluation. In addition, a limited number of relevant and legible figures/ maps in A3 format or smaller may be submitted. 2.1 Geological description Key data for each prospect shall be presented in Table 3. Address the following aspects briefly in the text: depositional environment / reservoir type(s) trap and seal hydrocarbon type, source, migration and trap fill The following documentation is required for each prospect: key map with coordinates and prospect outline (also in digital form) two crossing seismic and/or geological cross- section(s) seismic line showing well ties reservoir horizon time- and depth maps presented at identical scales seismic attribute maps/cross-sections where relevant Additional figures may be included if they are deemed relevant to the prospect description. 2.2 Resources Resource estimates and their uncertainty ranges shall be presented in Table 3. Include brief comments in the text on the following: description of methods for calculation of volumes choice of GOR and expansion/ shrinkage factors with reasoning choice of reservoir parameters with reasoning estimation of recovery factor 2.3 Risk evaluation The probability factors presented in Table 3 shall be documented briefly in the text. Describe methods for determining the probability. See also the definitions regarding Table 3. -4- APA 2005 10.01.09 Table 3: Prospect information Block Prospect name Disc/Prosp/Lead Prosp ID (or New!) NPD approved? NPD will insert data NPD will insert data Play (name / new) Struct. element Company reported by / Ref. Doc. / Year NPD will insert data O/G. case Resources INPLACE Main phase Ass. phase Low Base High Low Base High 6 3 Oil 10 Sm Gas 109 Sm3 Main phase Resources RECOVERABLE Ass. phase Low Base High Low Base High Oil 106 Sm3 Gas 109 Sm3 Prob. discovery: -Technical -Commercial (o+g case) -Prob for oil/gas case (olje+gasstilfelle) Which fractiles are used as Low & High? Low: High: Type of trap Waterdepth (m) Reservoir Chrono (from - to) Reservoir Litho (from - to) SourceRock, Chrono SourceRock, Litho Seal, Chrono Seal, Litho Seismic database (2D/3D): Prob –Reservoir (P1) ): - Charge (P3) - Trap (P2) - Retention (P4) Parametres: Low Base High Depth to top of prospect (m) Area of closure (km2) Gross rock vol. (109 Sm3) HC column in prospect (m) Reservoir thickness (m) Net / Gross Porosity (fraction) Water Saturation Bg. NB !(fraction) 1/Bo. NB !(fraction) Recovery factor, main phase Recovery factor, ass. phase GOR, free gas (Sm3 /Sm3 ) GOR, oil (Sm3 /Sm3 ) Temperature, top res (deg C) : Pressure, top res (bar) : -5- APA 2005 10.01.09 Definitions: Prospect is a possible petroleum trap with a mappable, delimited rock volume. Lead is a possible petroleum trap with a mappable, but poorly delimited rock volume, or an unmapped, but probable exploration concept. Play is a geographically and stratigraphically restricted area where a set of specific geological factors are present, making it possible to discover petroleum in producible quantities. Such geological factors are reservoir rocks, traps, mature source rocks and migration paths, and timing. All fields, discoveries and prospects within the same play are characterised by the play’s specific set of geological factors. Risk analysis P1 = Probability of reservoir P2 = Probability of trap P3 = Probability of source and migration P4 = Probability of retention after accumulation Pdiscovery, Technical = probability of discovery= P1 x P2 x P3 x P4 Po = component of Pdiscovery for an oil case Pg = component of Pdiscovery for a gas case Pog = component of Pdiscovery for both oil and gas in prospect Pog + Pg + Po = Pdiscovery If company definitions for these components differ from the above, Pdiscovery only may be submitted. Resources originally in place comprise those volumes of petroleum resources in place in a deposit which are mapped using geological methods, and calculated by geological and petroleum technological methods. The estimate shall declare volumes under sales conditions. Resources/reserves originally recoverable Comprise volumes of the total saleable/deliverable resources/reserves, calculated for the period from the start to the end of production, and based on the current understanding of the volumes in place and recovery factor. Low estimates, base estimates and high estimates All resource estimates shall be submitted as a high, a base (mean) and a low estimate. For recoverable gas, production volumes are often determined according to sales contracts. In such cases, only one volume estimate will be relevant, and shall be submitted as the base estimate. The low estimate shall be lower than the base estimate. Probabilities shall be submitted for the successful recovery of the given estimate or more (e.g. P90). With reference to the base estimate, the low estimate should reflect possible downsides with regard to the mapping of the reservoir, reservoir parameters, and/or recovery factor. The base estimate shall reflect the best current understanding of the reservoir’s distribution, its characteristics and recovery factor. The base estimate may be calculated deterministically or stochastically. If the estimate is calculated by means of a stochastic method, the base estimate should correspond to the mean value. The high estimate shall be higher than the base estimate. Probabilities shall be submitted for the successful recovery of the given estimate or more (e.g. P10). With reference to the base estimate, the high estimate should reflect possible upsides with regard to the mapping of the reservoir, reservoir parameters and/or recovery factor. Recovery factor is the proportion of the originally in-place resources which can be recovered from the prospect. -6- APA 2005 10.01.09 2.4 Reservoir technology For mapped prospects, risked production profiles shall be prepared for the most likely main phase (oil or gas), for the combination of prospects that is anticipated to result in the most favourable development scenario. The production profiles shall be based on the expected (mean) resource volumes. Describe briefly the assumptions for preparation of the profiles, such as: number of development wells and flow rates possible production limitations drive mechanisms and reservoir management Production profiles shall be presented in Table 4. 2.5 Technological assumptions For mapped prospects, a brief description of the anticipated development scenario for the most favourable combination of prospects shall be submitted. In new areas where only leads are defined, a brief generic description of possible development scenarios may be submitted. The description may be included in the text or as a sketch diagram. The anticipated cost profiles shall be submitted in Table 4, one table for each block/ block combination. Costs shall be stated in Mill 2005NOK. Table 4: Prospect(s) GIVEN DISCOVERY included: Investments Operation costs Tariffs Production profiles New development Existing Total op. infrastructure costs and tariffs Condensate 106 Sm3 Exploration and planning costs Modifications Installations Installations Gas 109 Sm3 Oil 106 Sm3 Transport Transport Process CO2-tax Wells Year 2005 2006 2007 2008 ……. Total -7- APA 2005 10.01.09 Definitions: Exploration and planning costs: all production licence expenditures from award to final appraisal of discoveries. Investment in installations: costs for new installations required to develop a discovery. Investment in wells: costs for drilling development wells. Investment in transport: costs for possible transport facilities (pipelines and onshore facilities) required for development. Investment in modifications: costs for possible modifications of existing infrastructure. Operation costs: costs for operating a new installation (including well maintenance) and transport facilities. Transport and processing tariffs: costs for transporting produced hydrocarbon volumes and process these on existing infrastructure. Only tariffs reflecting real costs for service (social economic cost) are allowed, exception can be made for development plans which includes services provided by foreign infrastructure owners. Full tariff costs can then be included. 3. Plan for exploration For seismic areas, a plan for the acquisition and interpretation of seismic data shall be presented. In blocks where only leads or play models are identified, describe briefly the strategy to mature these into prospects. For other areas, a description of the plan for exploration and appraisal of the prospects in the block shall be given. This may include: initial G&G screening seismic data acquisition exploration wells time schedule for the different exploration phases anticipated time schedule for phase-in to existing infrastructure possible clarification/ unitisation with respect to adjacent production licences proposed duration of production licence It is recommended to limit part 3 to a maximum of 1 page. 4 References -8-