Establishing Minimum Economic Field Size for Hydrocarbon Discovery Under Contract Effects

Global conventional oil and gas exploration is rebounding from a trough in the post-pandemic era of 2023, with a highest level of exploration investment since 2019. But the finding cost per barrel is rising violently, which seriously affects the new discovery. Due to the complex geological and geopolitical risks, within the constraints of contract duration and exploration areas, it is urgent to develop the evaluation method of minimum economic field size, in order to determine the benefit threshold of drilling targets in different exploration areas. This paper develops an innovative approach to evaluate the minimum economic field size under contract effects. In this model, we make the discounted net present value as objective, and quantify the relationship between production capacity and recoverable reserves, so do the investment, operating costs and revenue. The models are applied in two projects under PSC and service contract, and the influence of the fiscal terms on the minimum economic reserves are analyzed. This method is suitable for rapid calculation of MEFS with limited data in exploration stage.