Economic Analysis of Oil Rim Reservoir Development in the Niger Delta

Onwukwe SI

Onwukwe SI Center of Excellence in Geosciences and Petroleum Engineering, University of Benin, Benin City, Nigeria. http://orcid.org/0000-0002-0924-5608

Abstract

A generic oil rim simulation was carried out to deepen the understanding of the oil rim recovery mechanism under two development options: natural depletion and water injection. A horizontal well of 1800 ft. length was used as the producer for both cases, and a vertical injector well was used for the water injection case. The economics of the two development scenarios were analyzed using a deterministic model of the net present value (NPV), Profit per dollar invested, Pay-out techniques based on an Excel cash flow model. This analysis was done from the point of view of revenue and investment cost as well as operating expenditure to ascertain the profitability of the project. The natural drive development case produced 5.65537 MMSTB cumulative oil and 4.82664E+007 Mscf of gas while the water injection for pressure maintenance counterpart produced cumulative oil of 5.23447 MMSTB and cumulative gas of 4.83032E+007 Mscf. Using the decision rule for the economic indicators of NPV, DCF-ROR, and NCR which states that the project with the higher NPV, DCF-ROR and NCR is the more economically viable project, the natural drive development strategy where a horizontal well placed at mid-point between the GOC and the WOC is the best method for developing this reservoir because the water injection case with its additional incurred expenses yielded little marginal increment in the reservoir fluids recovery

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