Decision Making Processes to Select the Optimum Field Development Plan

Alireza Sabkdoost

The operational context and the competitive environment in which companies do business nowadays impose a level of certainty in decisions as never before. Objectives and performance targets supported and implemented through stringent management systems are continuously set up with the intention to reduce the downside risk and maximize the upside risk. More and deeper technical and economic analyses are considered in enterprises; however, not always deciders can reach the performance and financial results expected and end up facing undesirable outcomes that diminish the financial integrity of companies. 

In most of the unsuccessful cases, a retrospective analysis reveals a pitfall in one or more of the decision making processes (DMP) involved in the enterprise considered. In some cases, the analysis reveals a poor problem framing; or the fact that important aspects were not considered, or they were addressed without covering the complete spectrum of feasible possibilities; in some other cases, the framework used was not robust enough to ensure the consistency of the results or to measure the compliance of these results to the predefined risk acceptance criteria or decision makers risk preferences. From here, the importance of implementing an integrated DMP that systematically and consistently addresses the different key drivers that affect the outcome in terms of upside and downside risk.

This text describes a general DMP used for field development concept selection, which is based on a value risk trade-off approach. The proposed DMP consists of assessing the certainty of decisions based on the ‘value’ proposition and the ‘risk’ of the options identified to accomplish enterprise. 

Value is normally evaluated by identifying and measuring key value attributes, also referred to as value selection criteria (e.g., constructability, cost, schedule, operability, reliability, future expandability, etc).

On the other side, ‘risk’ is a measure of the overall enterprise uncertainty and the effect of unexpected events on the enterprise life cycle that can affect the achievement of the value proposition positively or negatively. When the impact is expected to be positive, it is called “opportunity”, while an event with negative impact is called “risk”.

Field Development Concept Selection

The first steps involve collecting, documenting and validating all assumptions, premises, requirements and objectives of the proposed development; identifying and clearly defining the different concepts to be evaluated; and in some cases, depending on the number of evaluated concepts or “family concepts”, performing a pre-screening process before applying a more systematic DMP. At this point it is important to reject those concepts that do not fulfill the mandatory requirements, sometime referred to as prerequisites.

Figure 1.  Field Development Concept Selection Process Overview

After having a limited number of validated concepts/”family concepts” a more formal DMP is conducted where the value and risk for each concept is assessed and characterized and the value-risk trade-off is performed. Once the best value-risk option is selected, additional tasks are conducted to define and improve the execution plan, capture the project risks (in a more comprehensive way) and identify the preventive/mitigation measures that should be implemented to assure the success of the project execution and asset operation. 

During this first stage, it is important to have a clear picture of the objective and potential value proposition of the enterprise considered and align these objectives to the DMP objectives. The nature of the decision to be made, its importance and level of effort required to deliver the process should be assessed.

The decision criteria and sub-criteria form the basis for the value assessment (VA). They assess the characteristics and features that would make a concept more or less attractive to the decision makers. The criteria should address how and to what extend the concept under evaluation will fulfill the enterprise objectives. These are some of the most common value criteria used:

  1. a) Schedule
  • Time to 1st production
  • Time to full potential
  1. b) Life-cycle cost
  • OPEX
  1. c) Operability
  • Ease of start-up/shutdown
  • Data gathering and control
  • Operational flexibility
  • Turndown
  1. d) Constructability/Installability
  • Standard design
  • Modularity/Phasing
  • Drilling/Installation overlap
  • Complexity
  1. e) Availability
  • Reliability

Similar to the VA, the risk metrics, matrix and scaling factors form the basis for the risk assessment (RA).  The RA is divided in two parts. The first addresses risk exposure from the appraise/select phase to the start of operations, referred to as Project Risk. The second addresses in-service exposure, from start of operations to abandonment, and is referred to as In-Service Risk. The distinction is made to capture the difference in nature of the exposure. Project Risks address HSE (during project execution phases), CAPEX, and schedule to start of operations, while In-Service Risks address HSE (during asset operational phase), OPEX and downtime. The most common risk metrics (risk attributes) used are:

  1. Financial impact
  2. Schedule/Downtime
  3. HSE

The proposed approach has been applied to different decision making problems, including the selection of the most appropriate contracting strategy for a project. In this particular case, the objective was to select the most appropriate contracting strategy based on a predefined set of criteria oriented to maximize project’s objectives.



Table 1. Contracting Strategy DMP – Value Criteria


Table 2. PMT Organization DMP – Value Criteria


Given the dynamic and complex operational context and the competitive environment in which companies do business nowadays, it is vital to implement a coherent DMP that systematically and consistently addresses the different key drivers that could affect the outcome in terms of upside and downside risk.

Other importance characteristic of the approach is the feasibility to perform sensitivity analysis to evaluate the robustness of the results. On the other hand, the early identification of potential risk events and major uncertainties allows development of preventive/mitigation measures and their inclusion in further concept development/definition work, which contributes to venture/enterprise success.