Applications Towards Long Range Planning and Development of Kuwait Oil Company's Reserves
Authors: Al-Fulaij A.N. , Taeger J.P. , Dougherty E.L. , Chang J. 
Published: December 2007

Abstract
Kuwait Oil Company's (KOC) new direction in long range planning focuses on the exploitation of all its established and projected reserves. To cope effectively with the complexity of the physical, economic and logistical system that spawns, a new mathematical programming-based planning system [Strategic Planning Model (SPM)] has been specifically tailored and recently adopted by KOC. The approach taken by, SPM to determine the optimal offtake from multiple reservoirs was presented in a previous paper.
This paper will focus on the application and analysis of complex planning situations. We site examples currently faced by KOC, and illustrate how plans are adjusted to move towards a balanced long term strategy.
Solutions to seemingly imponderable problems, previously resolved with coarse estimates after many man months of efforts, are obtained in hours, days or weeks. The rapid response capability allows alternative development plans of near economic equivalence to be explored. As a result planners can quickly provide optimal guidelines to assist management in their strategic evaluations.

Introduction
KOC has been undergoing a transformation over the last few years, from a company predominantly relying on a giant field such as the Greater Burgan, to a company where production allocation will be sourced from a multitude of reservoirs varying considerably in reserves, fluid characteristics, production performance, crude quality, capital and unit production costs. Deriving long-range plans from a portfolio of reserves to satisfy a nominated crude and gas liquid market is a complex endeavour; ensuring that the physical constraints (reservoir production capacity, surface facility handling capacity, crude quality specifications) and strategic objectives (management overrides) are satisfied whilst achieving an economic optima is rarely contemplated without the support of advanced mathematical programming tools.
Initial pioneering efforts to apply mathematical programming to KOC's planning problems some 30 odd years ago produced useful results, but failed to have a major impact on KOC's investment strategies. Technological limitations caused this stunted benefit - the available mathematical programming software yielded an unwieldy and inflexible model whose solution on the most advanced computers of that day required extended calculation times on computers located far offshore Kuwait. These complications prevented KOC's planning staff from gaining full understanding of the planning tool's capabilities and from establishing a responsive dialogue with the decision makers for whom the tool was intended. The present model overcomes these drawbacks via use of new advanced mathematical programming software and a modern computer platform. As a result, solutions are obtained in-house quickly by KOC's planners.

Current Evaluation Process
At present, multidisciplinary teams promote long-range production forecasts and development plans for their geographical areas of responsibility. These areas encompass several fields (consisting of one or more overlying reservoirs) producing to surface facilities consisting of Gathering Centers (GC) and gas Booster Stations (BS). Some teams take an integrated reservoir management approach, whilst others prefer a functional approach, relying on prior studies conducted by external consulting groups. In some instances the surface handling facilities are integrated with the reservoir studies, in other instances the problem is analysed in a segmented manner according to functional responsibility; one group handling oil, the other gas, another evaluating water treatment facilities requirements; the economic analyses are conducted by yet another group. Area plans are promoted, consisting of several preferred alternatives designed to satisfy each area's specific objectives. P. 445^