The selection of production strategy under uncertainties is a complicated task due to the high number of variables and uncertainties. While new information aims to reduce the uncertainty of one or more variables, consequently reducing the risk, flexibility may be used to change field operation in the future. The objective of this work is to estimate the value of flexibility through a risk-return analysis in which a company profile is taken into account represented by the iso-utility curve.

The methodology is an extension from Value of Information (VoI) assessment under uncertainties. It comprises a complete uncertainty analysis, use of representative models, generation of risk curves, optimization steps to define the strategy without flexibility which is then simulated in several scenarios verifying the bottlenecks of the strategy that may be assessed through flexibility. Finally, the benefit of each selected flexibility is estimated through risk-return analysis. The work includes a Latin Hypercube technique to combine uncertain scenarios and the use of an assisted optimization procedure to select the production strategy. It is then applied to a 28° API, low viscosity offshore oil field including production history.

Results indicate that this methodology is able to identify flexibility, in this case, the expansion of production capacity, which is then added to the production strategy with two objectives: to mitigate risk and to increase value. The tested flexibility changes the project risk and return in both objectives and allows the company to produce more efficiently in different scenarios, by producing with a higher use of installed capacity. The main conclusions are that the flexibility of production capacity expansion can be used not only to mitigate risk, but also for value creation, allowing the company to adapt its production strategy as new information is revealed.

The main contribution of this work is a new perspective in risk assessment from a probabilistic point of view, combining production strategy selection and optimization, numeric reservoir simulation and risk-return analysis. The flexibility is an alternative to information for risk mitigation, with the advantage of not holding the project back to collect new data. Furthermore, flexibilities can also be used to exploit the upside of the uncertainty if, during the production phase, such scenarios occur.

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