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Decision Quality Applications for Prospect Ranking and Sequential Exploration: A Case Study in Offshore Brazil

Abstract

Due to recent oil prices, all the main companies are focusing on efficiency improvements, to extract the most of their exploration's lower investments. In this delicate frame, every decision regarding prospect ranking becomes crucial for achieving higher profitability, so most companies are considering approaches and tools that could guide them to delineate an optimal exploration strategy for a concession, play or basin. Not long ago, exploratory decisions were usually made by an action-oriented group of managers who, after judging each prospect's characteristics, decided for a strategy just based on expected monetary value or net present value numbers. Although efficient, this methodology does not consider how first results may affect other alternatives, and failing to evaluate this dependence can leave significant value behind. When analyzing multiple opportunities, one should consider decision strategies and workflows that could take advantage of this relationship and use post drill reviews to provide more informed decisions about following well locations. A detailed post-mortem report represents an incredibly powerful tool for both geoscientists and exploration managers, especially when analyzing prospects from the same play. For instance, if a dry hole report reveals consistent oil shows, seal presence, and a good quality reservoir, we may be encouraged to continue testing similar prospects. In this trap failure example, nearby targets will probably have their chances of charge efficiency, reservoir and seal effectiveness increased, exemplifying the value of learning from past results. Several other forecasts could be affected by previous post-mortem analysis, like biodegradation risks, CO2 presence, and overpressure areas. In summary, this research describes how the decision quality framework developed over the last century and recently outlined by Spetzler (2016) helped to highlight the best exploration strategy in the equatorial margin of Brazil. By applying a reliable methodology and modern decision-making tools, the author offers a different perspective when compared to previous approaches, to avoid most common judgment traps, maximize value creation and manage risks. Additionally, this work details benefits of modeling dependence between prospects and what impact each result would have in the remaining alternatives, based not only on their geological aspects and chances of success but also on expected reserves and net present values.