A Study On Descending Period Oil Field Economic Evaluation System

As an important source of energy, oil is an important strategic material which protects a country’s political and economic security. With the rapid development of China’s economy, domestic crude production can no longer meet the growing demand. As a result, the gap between demand and production can only rely on crude import. After decades of exploration and development, most easily found oil and gas reserve in China has already been discovered. There are major problems for future exploration in terms of geological conditions and geographical conditions. Therefore, resources remain long-term marginal economic status. At the same time, the majority of China’s oil field has entered their late development period in which its production is declining. Various factors, such as the significant oil price fluctuations, price rise of raw material and labor, decline of oil production, have created huge problems to the operation management and decision-making of oil field enterprises. Hence, how to attain maximum economic benefits out of minimum investment under the premise of scale production has become an issue which oil field enterprises must take into consideration.This paper summarizes twenty three oil field development indicators using large quantity of actual production statistics. The summary is also based on previous research as well as the actual situation and production rule of descending period oil fields. Various research methods are used such as integrated research, quantitative analysis, logic induction as well as empirical research. By combining Delphi method with analytic hierarchy process (AHP) and eigenvector method, this paper calculates the weight each factor plays and determines the impact of economic indicator during oil field descending period. Then, it establish economical ultimate production model through descending curve method, growing curve method and injection-production equilibrium formulation with the guidance of acquired descending period oil field economic evaluation system. In addition, oil filed economic recoverable reserves is calculated utilizing extended ARPS trial and error method. The paper then determines the appropriate ratio of recoverable reserves to annual production (Economic Marginal Reserve-Production Ratio) on the basis of economic maximum production and economic recoverable reserves. This ratio provides operational management and production decision-making reference to oil field enterprises. It also solves the problem of overloaded production for the sake of seeking ultimate production. Eventually, by the optimization of oil field production capability, production output and investment cost, the goal of sustainable development of oil field enterprises could be realized.