Investors in the petroleum industry realize offshore oil projects are much more complicated than onshore projects. The offshore projects are characterized by large investment and high uncertainties. A tiny change of the uncertain factor may cause a large fluctuation of total investment. Production uncertainty is an important uncertain factor, which has a great influence on the investment. In our study of FPSO (Floating Production Storage and Offloading) + Wellhead development concept, firstly we check the composition of total investment. Then we classify them into different items. We research on the possible relations between the items and oil production by using ordinary least square method (OLS), and then we use the relations to set up a model to estimate the offshore investment. Based on the model, we then quantitatively analyze the impact of production uncertainty by using Monte Carlo simulations. Finally, we estimate the possible distribution of the investment.
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Cheng et al. (2015) studied this question.
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