DEFINITIONS

Need to understand some key terms in managing risk and uncertainties in exploration.

 

UNCERTAINTY

It is a spectrum, or a range of outcomes. Uncertainty includes successful and unsuccessful outcomes (risk is included as special subclass).

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RISK

Risk is chance of discrete outcome; a failure or unsuccessful event.

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LEVEL OF KNOWLEDGE

Capturing Range of Uncertainty - Level of Knowledge (LOK)

1. What we know

2. What we know we don't know

3. What we don't know we don't know

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Our LOK will impact our ability to quantify risk and uncertainties. We need to differentiate between 'known risk' and 'remaining uncertainty.' This also distinguishes between 'reducible' and 'irreducible' risk.

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MODEL VS PARAMETER UNCERTAINTY

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In early stages of exploration (especially 'frontier' basins) there is a lack of data and knowledge, therefore there is a considerable uncertainty in possible geological models and geological/petrophysical parameter associated with it. Therefore a clear distinction must be made in between 'model uncertainty' and 'parameter uncertainty.'

 

Generally, large Integrated multinational oil companies have their own softwares to mange model uncertainties, on the other hand parameter uncertainty can be handled using Monte-Carlo situation method using commercial software (example: CrystalBall)

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1. Model Uncertainty: 

   • Oil prone vs gas prone

   • Reservoir facies type (Clastic vs carbonate)

   • Fault Capacity (Sealing vs leaking)

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2. Parameter uncertainty

• Expected range in porosity , NtG and saturation

• Spill-point depth

• Oil density

This is especially relevant in risking and volumetric; each 'model' should be run separately with its own set of 'parameter' uncertainty and not be mixed with parameters of a different model.

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