Evaluation

In a classic field development project the pre-feasibility phase of a project is usually initiated by the drilling of a discovery well. In some instances initiation can be triggered by the acquisition or farm-in to an already discovered field for which a development and/or appraisal programme does not yet exist. The common factor is that a resource has been discovered or accessed and that it appears to be commercially viable.

The objective of conducting pre-feasibility studies and any appraisal activities is to confirm that at least one commercially attractive development scenario exists. There are usually five fundamental considerations:

  • Is the resource big enough, well enough understood and capable of delivering the required flowrates?
  • Is there a technologically viable solution for extracting the resource or can one be economically developed?
  • Does the preferred scheme provide adequate measures of safety and environmental care?
  • Do markets exist for the products?
  • Are the financial returns adequate and can risk mitigation measures be put in place (suitable partners, insurance, hedging, etc.)?


During the pre-feasibility phase of the project a wide range of studies and activities will be carried out. It is critical that the studies be phased and timed so that funds are not wasted unnecessarily. The engineering and marketing studies should be phased in to match the appraisal programme, becoming progressively more detailed as knowledge of the resource is acquired.

The Feasibility phase of a project is normally initiated once there is an agreed recommendation to proceed, is usually on one of the key deliverables from the Pre-Feasibility phase. The schedule, workscope and budget which were generated during the Pre-Feasibility phase need to be transformed into a terms of reference document for the next phase of the work. Any specific business objectives, additional regulatory requirements and the like, need to be clearly identified.


The objectives of the Feasibility phase are as follows:

  • Confirm, with precision, the size of the resource, especially the P90 and P50 reserve estimates, or a case for a minimum economic development.
  • Refine the subsurface plan to a point where the production profiles are known with a high degree of certainty and the subsurface development plan has been finalised (e.g. the need for and amount of artificial pressure maintenance). There should be extremely close linkage between the subsurface development plan, the facilities development scheme and the operating plan.
  • Confirm that the selected development concept is still sound and optimal in terms of value creation.
  • Confirm that the Safety, Health and Environment risks associated with the chosen development have been subject to an in-depth assessment
  • Develop a project personnel Safety and Environmental plan.
  • Confirm and secure markets for gas.
  • Confirm and secure markets for liquids if they have limited marketability or significant quality problems.
  • Develop a contracting and procurement strategy for the project, complete with a rationale for the selected approach.
  • Confirm that the project will meet or exceed economic threshold criteria.
  • Estimate the resources (financial, technical and human) for the Implementation phase.
  • Make recommendation to proceed or exit.
  • Produce an abandonment plan and cost estimate.