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Cost Study for Offshore Exploratory Drilling Operation
An economic feasibility decision needs to be made immediately after a hydrocarbon prospect has been found. The decisions are made on the basis of reservoir capacity and total cost needed for development. Facts have shown that offshore drilling activities, particularly in the exploratory stage, are very risky and expensive, so that the decision has to be made very carefully with a reasonable accuracy.
This paper show a quick and simple model to estimate costs for offshore exploratory drilling operations. The model will be used to estimate cost for straight hole or directional drilling operations until the dry hole stage has been reached. The modeling process consists of applying linear and multi variable regression from previously gathered data in various actual drilling programs.
The costs are classified into several categories, i.e. tangible, preparation, drilling, formation evaluation and general expenses. Some categories are separated into smaller components based on economic and engineering practices. An empirical formula is constructed for each component and all the formulae are united to become a general cost estimation model.
Validation on original data shows that the model results in very good accuracy with deviation within 6%, which is much better than the generally acceptable 15% deviation.
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