MAXIMUM EFFICIENT RATE (MER) IN TERMS OF DIFFERENT OIL PRICES

The low oil price period is defined as a condition that profitability of projects in oil industry is faced with several and serious problems. Offshore reservoirs for their high development capital cost are more risky in this regard. In this study, Optimistic, most likely and pessimistic oil price conditions are predicted until 2050. We assume the oil prices follow the pessimistic condition for an initial five years and then jump to the most likely prediction. A first five years period is considered as a low oil price period and attempted to specify optimal production rate during this time for one of the Iranian offshore reservoirs and compare the condition to the most likely one. A simulation study has been conducted and several scenarios are designed. Due to evaluations, the water injection in water zone and also production with Electrical Submersible Pump (ESP) is introduced as the best production scenario. We ranged the production rate in selected scenario from far above too far below normal quantity in order to specify optimal production rate. The optimal production rate is defined as Maximum Efficient Rate (MER) which is considered as the production rate that leads to the maximum net present value. As a conclusion the MER during low oil price period has a lower quantity than MER during most likely condition because the larger of oil volume should be produced at higher oil price period. During low oil price period, production rate should be decreased and not to be increased.

Keywords:

Oil price , MER , NPV , Production rate