Date of Original Version

2011

Type

Working Paper

Abstract or Description

The objective of this paper is to present a unified modeling framework to address the issues of uncertainty and complex fiscal rules in the development planning of offshore oil and gas fields which involve critical investment and operational decisions. In particular, the paper emphasizes the need to have as a basis an efficient deterministic model that can account for various alternatives in the decision making process for a multi-field site incorporating sufficient level of details in the model, while being computationally tractable for the large instances. Consequently, such a model can effectively be extended to include other complexities, for instance endogenous uncertainties and a production sharing agreements. Therefore, we present a new deterministic MINLP model followed by discussion on its extensions to incorporate generic fiscal rules, and uncertainties based on recent work on multistage stochastic programming. Numerical results on the development planning problem for deterministic as well as stochastic instances are discussed. A detailed literature review on the modeling and solution methods that are proposed for each class of the problems in this context is also presented.

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