A Feasibility Study is the first step in development. In some cases it precedes exploration. In many instances, OPES has carried out detailed feasibility studies ranging from frontier exploration to enhanced oil recoveries. In all cases, the methodology is similar in the context of:
a. Scoping studies
b. Preferred development
Invariably, scoping studies are the critical aspect in all evaluations. If the project does not pass this first hurdle, more detailed analysis is seldom required and the projected should be rejected. A typical analysis involves analogous developments and the economics associated with unit cost ($/barrel or $/MCF) assuming plateau rate, annual CAPEX (amortised annually) and operating costs per annum. This is, in fact, another example of the OPES way of offering 90% of the value for 10% of the cost.
More detailed analysis of the preferred case is carried out utilising different methodology which reflects the Final Investment Decision (FID). In most cases, this involves some degree of reservoir and facility (Field) simulation. In all cases, however, further analytical studies are carried out as a sanity check of the forecast. This, of course, involves additional economic analysis primarily to determine critical parameters.
The third phase in the process is sensitivity analysis which tests the economics in more detail, quantifies the risk and, in many cases, sets out the Basis of Design (BOD).