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Critical comparison of "Swanson's mean rule" and "fully probabilistic" approaches to economic evaluation of exploration prospects
Ariq, Dzulfaqar
Ariq, Dzulfaqar
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2022
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2023-09-30
Abstract
The economics of petroleum exploration prospects has traditionally been estimated using Swanson's mean rule approach. However, this approach may be inadequate due to new assessment tools and workflows, and it does not account for all possible exploration outcomes. A fully probabilistic economic prospect evaluation may be a better approach, and it has now gained popularity in the petroleum industry. Nevertheless, there are no in-depth detailed studies and comparisons of these two approaches. The purpose of this study is to compare prospect economics obtained from traditional Swanson's mean rule approach and from the fully probabilistic evaluation (facilitated by SLB GeoX software). The sensitivity analysis is carried out by changing the prospect's input parameters and variables that affect the key economic outcomes (net present value, expected monetary value).
The economics methodologies are tested on a fictitious prospect that is generated based on prospects and fields analogs in the North Sumatra Basin offshore Indonesia. Preliminary results suggest that the outcomes from Swanson's mean approach and a fully probabilistic economic evaluation are different. The significant factors that changed the economic outcomes are discussed. The research compares these methodologies to a fictitious prospect with different volume distributions.
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