Why Integrated Asset Modelling is the Best Thing since Sliced Bread

For some of us who would have been drawn to this topic, integrated asset modelling will need no introduction. For the benefit of the rest of us, integrated asset modelling or integrated production modelling as it is also sometimes called is the seamless, simultaneous and interactive modelling of all elements of an oil and gas production system. The idea is to capture the complex interactions between all elements of the entire production system. Such interactions will prove tedious or near impossible to capture if each element is modelled independently and separately. As such, an integrated asset model will typically include the modelling of subsurface elements such as the reservoir, wells and pipelines as well as surface elements such as process plants and gas compression etc. Sometimes, integrated asset models may be extended to include economic elements which reflect product prices as well as CAPEX and OPEX.

Integrated asset modelling is no longer new in the oil and gas industry. However, it tends to be underutilised and underappreciated (for some good reasons and some misconceptions which I hope to address in the future). I am however a firm believer that it is one of the most powerful analysis methodologies available in the industry today. In a sense, it is one of the best kept secrets for effective optimization of oil and gas field development. Unleashing its power could result in significant project cost savings as well as maximizing oil and gas production following field development. This has been my experience as a consultant on several occasions.

From effective use of integrated asset modelling methodologies, you can expect to derive the following benefits:-

  1. Optimize Oil & Gas Field Development: Integrated asset modelling can be a very cost effective method for trying out various field development scenarios. Often times, the difference between field development options cannot be readily analysed without rigorous modelling – this is best done through integrated asset modelling. Integrated asset modelling is therefore ideal for appraising field development options and for developing conceptual designs. The production system model that is constructed using integrated asset models can provide useful answers to key field development planning questions at the early stage of the project. Questions related to the optimization of well drilling schedules, timing for gas compression, sizing of major equipment and future economics of the field can be answered with the help of an integrated asset model. I have been involved in a lot of project situations where the field development plan went in a different, but more cost effective and profitable direction than originally expected due to the recommendations and analyses that came out from integrated asset modelling.

  2. Existing Oil & Gas Asset Optimization: Brownfield oil and gas projects can also benefit immensely from integrated asset modelling. I have found integrated asset modelling approaches particularly powerful in the debottlenecking of oil and gas production facilities. Potential solutions to optimize production can be appraised in a cost-effective manner, while the benefits can be captured and weighed with the help of integrated asset modelling. In my experience, I have been able to use integrated asset modelling to show how operators could increase production significantly (sometimes by 20% or more) with minimal and well thought out modifications to the existing facilities or operational philosophy. Integrated asset modelling can also be extremely beneficial in optimizing the operating strategy of oil and gas facilities.

  3. Aid Economic Planning & Decision Making: Since the results from integrated asset modelling can provide indications as to the impact of various decisions on greenfield projects and existing asset production, it can provide useful input into an economic planning model. As I mentioned previously, in many cases, integrated asset models can be extended to include economic elements with indicative figures of prices of petroleum products, royalties, profit margins, capital expenditure and operational expenditure. These can be used to provide useful economic parameters such as revenue, profits, NPV (Net Present Value) and IRR (Internal Rate of Return) which aid economic decision making.

  4. Production Forecasting: Production forecasting can be extremely beneficial in some oil and gas sectors. Knowing how much you are likely to be producing at a particular time in the future can be very useful in making present decisions. I have seen this to be the case particularly in the gas storage sector where a future knowledge of their potential production or injection capacity can help the trading arm of the operating company maximise the effect of gas price fluctuation. Production forecasting can also help in determining when future capacity enhancing or production plateau extending equipment may be installed. It can also help in planning the timing for the integration of satellite fields into a production hub.

  5. Minimize Project CAPEX & OPEX: This follows on as a secondary benefit from the optimization and economic benefits mentioned above. I have been involved in project situations where hundreds of millions of dollars were saved in CAPEX and OPEX costs via the recommendations that came through analyses using integrated asset modelling.

  6. Maximize Production: Early identification and resolution of production bottlenecks will lead to maximizing the production potential of the asset. As I mentioned earlier, integrated asset modelling helps to identify these bottlenecks and test out proposed solutions.

  7. Maximize Project Economics: Expert deployment of integrated asset modelling can help you optimize key field development project economic indicators such NPV and IRR.

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Engr.    Sodi Toby    MSc       CEng MIMechE

Engr. Sodi Toby MSc CEng MIMechE

Sodi serves as our Managing Director and Projects Director. He has management and technical oversight across our offices. He graduated from the University of Sussex, UK with a first class MSc in Turbomachinery.  

 Sodi is an expert  with extensive experience in gas compression and integrated asset modelling. He has previously held senior roles including Head of Projects and Management Team Leader in a reputable engineering consulting firm from which he left to start up Eta Energy Solutions. He has also in previous roles, led software development teams in developing bespoke integrated asset modelling software.

Sodi is a Chartered Engineer, professionally recognized by the Engineering Council (UK), the Institution of Mechanical Engineers (UK) and the Society of Petroleum Engineers (SPE). He speaks regularly and presents technical papers at international oil and gas conferences across the world.