The oil & gas upstream cycle: Development and production

This note focuses on the development and production phases of the oil & gas upstream cycle. The first one includes all activities and processes required to optimally develop a field. The second one is related to all activities performed to extract hydrocarbons from a reservoir and their treating at surface. The development phase is very complex and plays a very important role in a company's strategy. In order to govern the process in each step and to obtain the best results in terms of profitability, risk reduction and safety, the oil companies have defined precise guidelines and try to adopt the most innovative technological solutions in the performed studies. According to these guidelines each project is based on a phase/gate approach and each phase has a set of clear objectives that, once achieved, allow the project to proceed into the next phase. During the development phase a set of studies are executed to ensure that asset development and project execution will be done at the best minimizing uncertainties and associated risks. The activity of reservoir characterization is the most important of these studies as its results have a strong impact on the final decisions. The objective of a reservoir evaluation study is the construction of a 3D model of the reservoir through a multi-step process that uses dedicated software. The purposes of this activity include improving the estimation of oil in place and reserves, predict future production, evaluating different development scenarios. While the development phase is optimized to be as short as possible, the production phase can last several years depending on the size of the field and the costs the company has to bear to maintain the system working. During its production life the field is continuously monitored through an activity called Reservoir Management. The objectives of the Reservoir Management activity include the continuous update and validation of the reservoir dynamic model and the definition and assessment of the technical and economical feasibility of well interventions aimed at field production optimization. Many studies in this phase are focused on the selection of the best oil recovery technique. Among them Enhanced Oil Recovery (EOR) techniques, although more expensive, are gaining high popularity as they provide a way to recycling CO₂ created by industrial processes. The last part of this note is dedicated to an overview of what the oil companies and Eni in particular are doing or planning in order to meet the targets defined in the Paris agreements in terms of reduction of greenhouse gases emissions while still satisfying the world's energy needs. Since renewables still have economic and technological limits when deployed on a large scale, Eni is promoting gas as an ideal partner for the development of renewables and is increasing the share of natural gas in its portfolio. The use of the gas-renewables mix also enables coal consumption to be reduced. New technologies are expected to play a key role on this journey towards a more sustainable model thus Eni is continuously increasing its budget in research and development projects for carbon neutrality.