Creating Value From Brown Fields Through High-Quality Decision Making

Abstract

Whether facing pandemics, negative oil prices or other crises, the key to value creation is to make good decisions. Decisions are always about the future and the one thing we know for sure about the future is that it is uncertain. The focus of this thesis is on the challenge of making good decisions in the context of re-developments of challenging brown fields. We develop a robust decision-making framework that embraces uncertainty and discuss and illustrates its practical implementation using the Tambar East field as an example.

The Tambar East field is situated in a complex geological structure, highly compartmentalized and containing challenging reservoir fluids which causes deposition of solids in the reservoir and wellbore. Due to these difficulties, the field is temporarily plugged, and a compelling re-development program is required to revitalize a potential Tambar East development. Moreover, the recent, largely pandemic driven, dramatic drop in oil prices has not increased the likelihood that a re-development of the field will result in value creation.

The focus of the thesis is on the front-end-analysis (framing, objective setting and alternative generation) of the re-development decision; i.e., for the purpose of determining the key value drivers as well as the underlying cause of poor performance. The front-end-analysis is especially important in a brown field development, where the framing of the problem and identifying the value drivers is a complex process that could vary a lot from field to field. The potential scope of such a brown field development could be massive and it needs to be managed properly, ensuring that the answers we get are answering the right questions and problems at hand.

The key contribution of this thesis is to provide a robust, high-quality decision-oriented methodology for (brown) field development. Moreover, the thesis provides an in-depth discussion of the importance of embracing uncertainty to maximize value creation from brown fields through robust decision-making. Finally, the thesis presents a framework applicable for any decision making- and field development process, with the purpose of achieving clarity and insight through decision-oriented analysis which ultimately will result in making better decisions. The main idea is that: “The only way to purposefully create (or destroy) value is through our decision