Risk Assessment and Risk Modelling in Geothermal Drilling
Author: Lilian Aketch Okwiri
Year: 2016
Supervisors: María Sigríður Guðjónsdóttir & Sverrir Þórhallsson
Abstract
Development of geothermal energy has advanced in the last few years and will continue to do so in the coming years. But this development is slowed down by the high risks and high cost associated with the drilling phase of geothermal development. This goal of this study was to find out the risk factors that can interrupt or delay the delivery, or compromise the quality of a geothermal well and how these risks are perceived by drilling professional in Iceland and in Kenya. 64 risks were identified, an online questionnaire developed, and the survey tool QuestionPro used to sed out the survey. The results showed that drilling risk analysis is subjective and risks are ranked, or perceived to be high or low, depending on the project environment such as physical, economic and political environments. For instant risk of drilling into magma was ranked high by the Icelandic respondents, while it was ranked among the lowest by the Kenyan respondent. Generally, toxic gas release was ranked the highest risk for drilling operations, followed by high cost of drilling and lost circulation.
The second part of the study looked at the value of integrated cost and schedule risk in execution of drilling projects, by quantify the impacts of the identified risk and allowing for the accurate budget and schedule estimation. The project risk management software, RiskyProjects was used for this purpose, to simulate a sample drilling project. The results show that cost and schedule risk management can play an important role in geothermal drilling projects. The deterministic method of costs and schedule estimation commonly in use, could easily result in cost and schedule overruns or underruns due to the influence of risks and uncertainties encountered within and outside the project. Monte Carlo simulation run on the sample drilling project, showed that the P50 values giving the most likely value was found to be higher than the base value determined for the project. P1/P99 range was 1,115,369 USD for cost, and 342.97 hrs for schedule. The simulation showed that drilling the 8½” section has the largest influence on the well completion time and therefor greater effect on the cost and schedule of the drilling project.
For further studies, the cost effects of the risks events should be studied as this was not possible in this project. The reports conclude that risk management process has the potential to create value for all aspects of drilling projects. It also recommends that the geothermal drilling industry need to embrace risk management especially integrated cost and schedule risk management as a tool for controlling of budget and schedule overruns.