Sidetrack and Recompletion Risks in Oil Fields. VIII. Reviving the Nearly Dead

The decision to undertake rejuvenation of an oilfield that is close to extinction depends on the estimates that one makes of the likely enhanced reserves to be recovered by such a treatment relative to the proven reserves that are still producible. One trades certainty of returns, albeit small, for uncertain returns that could be significant relative to the small residual oil being produced. In addition, there is always the chance that undertaking the rejuvenation of the nearly dead field will be unsuccessful and /or kill the current known production. This paper shows how one can assess the best course of action to take dependent on the range of uncertainty for the estimated rejuvenation production and also dependent on the estimates of both a successful rejuvenation treatment and the chances of killing the known production. Sensitivity charts show which parameter is causing the greatest uncertainty in estimates of total worth both with and without the rejuvenation treatment and, therefore, where one should concentrate in order to narrow the range of uncertainty of likely profit. The decision to revive the nearly dead, or let natural death take its course for an almost exhausted production, can then be made with a greater certainty that a rejuvenation attempt will produce more worthwhile gains. Several numerical illustrations are given to illuminate these points.