An Economic Benchmark for Arctic Petroleum Resources

Red White¹ and Don Gautier^2
1Energy Team, US Geological Survey, Houston, TX.
²US Geological Survey, Menlo Park, CA.

The Circum-Arctic Resource Appraisal (CARA) comprises three components: (1) a geological map of Arctic sedimentary basins published by Grantz and others in 2009; (2) a geologically based assessment of undiscovered technically recoverable resources published by Gautier and others in 2009; and (3) a technology based appraisal of undiscovered technically deliverable resources. This third component - not yet officially published - is presented here with results for the seven 3P Arctic Regional Themes.

The U.S. Geological Survey mission includes the responsibility for developing “new technologies for the collection, coordination, and interpretation of earth-science data.” The objective of the research discussed here is to improve the interpretation and usefulness of our resource assessments (technically recoverable at the wellhead) by adding a technology benchmark (unit cost of delivery). The result is the next level on the resource interpretation scale: a resource appraisal of technical deliverability to a major market.

Our resource appraisal methodology integrates six separate modeling efforts: the geological assessment, a statistical analysis of well rates, an experimental design, a field development planning model, an arctic transportation network model, and a statistical cost model. Key uncertainties included in the simulation are the parameter estimates for numbers of fields, field sizes, well productivities, water depths, drilling depths, and distances from shore. These estimates are integrated in a Monte Carlo simulation model to produce probability distributions of delivered volumes of oil, gas, and associated unit costs. For the 3P Conference we have assigned the results for each of 48 CARA Assessment Units to the geologically appropriate 3P Regional Theme to provide regional comparisons of volumes, unit costs, and associated uncertainties.

The unit cost of delivery (UCD) includes only capital and operating costs to provide a benchmark for cross-regional economic comparisons. No fiscal or financial costs are included so that the economic benchmark is independent of differing public and private policies - the UCD measures only the requisite technology and its deployment. A resource appraisal is a two-parameter benchmark, combining delivered volume and unit cost of delivery to add additional information important to the interpretation of resource value and economic viability.

 

AAPG Search and Discovery Article #90130©2011 3P Arctic, The Polar Petroleum Potential Conference & Exhibition, Halifax, Nova Scotia, Canada, 30 August-2 September, 2011.

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