Field Development Plans: A Handbook for Government Officials

Introduction

Developing a petroleum field requires the safe and efficient execution of extremely complex, technical, risky, multi-billion-dollar projects. The Field Development Plan (FDP) is the company’s proposal for how it intends to develop a field and manage the associated risks. It is the outcome of a lengthy multi-disciplinary process and is submitted to the government for approval.

The FDP is a critical moment in the project lifecycle as decisions will impact the field over its entire life. It is therefore of paramount importance that the government is able to review these plans to ensure that strategic, technical, economic, social and environmental issues are effectively addressed.

The objectives of this handbook are:

To improve government officials’ understanding of Field Development Plans
To provide an overview of the critical role government plays in the FDP process and why effective review and oversight is important
To provide practical tools to support government officials

The expected outcome from utilisation of this toolkit is early and ongoing engagement between companies and the government that is focussed on identifying and managing risks to optimise value for both the country and companies.

Download the Field Development Plans Handbook

Structure of the FDP Handbook

This handbook has been prepared by the Commonwealth Secretariat to support government officials in the effective review, approval, and oversight of Field Development Plans.

The FDP handbook is arranged in two parts along with practical tools for implementation of recommendations made.

graphic explaining the phases of the handbook

Understanding FDPs

During the exploration phase, companies drill exploration wells to determine whether the petroleum reservoirs exist. If a discovery is made (i.e. the well encounters a petroleum accumulation or “reservoir”), the company enters an appraisal phase to better understand the size of the field (grouping of multiple reservoirs), subsurface risks and to determine if it can be technically and commercially developed. If the company determines that it is a “commercial discovery”, the next step is to decide how the field will be developed.

A Field Development Plan (FDP), outlines how a company intends to develop a petroleum field, manage the impact on the environment and society, as well as forecasts for production and costs. This involves complex issues such as how to manage the reservoir, how to bring the petroleum to surface (wells), process (facilities), transport to markets (e.g. pipelines, tankers, storage) and sell the various products. It is the outcome of a complex and long process of evaluating multiple development concepts for a field and selecting the best option that successfully manages risks and delivers the greatest value to its shareholders.

Subsections in Chapter 1

1.1 What is an FDP?
1.2 How do companies create an FDP?
1.3 Key challenge - dealing with uncertainty
1.4 Influencing factor

Download Chapter 1

The FDP is submitted to the government for approval and is therefore a critical moment in the project lifecycle where decisions will affect the field value and associated benefits to the country for 20 years or more.

For a developing country, a single FDP can easily be equal to, or double the size of, the entire economy because of the scale of investments and potential government revenues. It is therefore of paramount importance that the government is able to review these plans to ensure that the economic, social and environmental issues are effectively addressed.

Subsections in Chapter 2:

2.1 Governments role in FDP
2.2 Challenges faced by government officials
2.3 Key issues

Download Chapter 2

Recommendations and Guidance

This chapter is intended to provide guidance to government officials on the FDP process and stakeholder interactions to avoid regulatory capture, and ensure the country’s best interests are served in the development of petroleum resources.

Adoption of the recommendations should ensure all aspects of the project – strategic, technical, economic, social and environmental have been identified and that mutually agreeable solutions have been included in the FDP. They should also produce a collaborative and constructive environment (intra-government and government-operator) which should result in timely approval of the FDP and avoid delays for first production.

Download Chapter 3

Download the Recommendation Checklist

This chapter outlines the key elements for a robust regulatory framework for FDPs and considers the policy and legal frameworks among the key regulatory tools used by the government to guide management and development of the sector. It is one the key factors that will influence the company’s choice of how to develop the field

Download Chapter 4

Download the Legal Framework Checklist

Download the Model Legal Provisions

Download the FDP Submission Guidelines

The FDP is a complex undertaking which requires an integrated multi-disciplinary project management process from both the companies and government.

Effective development, review and approval of the FDP requires a structured series of interactions amongst the key stakeholders.

Download Chapter 5

Download the Guidelines on Developing Government FDP Processes

Practical Tools

Checklist of Recommendations

A summary of 10 recommendations for the efficient and effective approval, and regulation, of FDPs to ensure all aspects of the project – strategic, technical, economic, social and environmental have been identified and mutually agreed.

FDP Legal Framework Checklist

A supporting template is included in the toolkit to aid in assessing the robustness of the existing national legal requirements governing FDPs. Depending on the circumstances and the needs, the checklist can serve different purposes. These may include identifying areas for improvements, supporting broader legal reform and improving governance.

Model Legal Provisions for FDP Requirements

It is important for a country to have clear rules for FDPs given the far-reaching impacts on the economy, environment and society. These should be effectively addressed as part of the legal framework.

These model provisions can be used as a guide for ensuring the key aspects related to FDPs are adequately addressed - including the FDP approval process, FDP requirements and associated regulatory oversight.

Model Template for National FDP Submission Guidelines

Countries can adapt for their national context.

To complement legal requirements, many countries provide a supplementary technical document to provide guidance to companies on the contents of FDPs that are to be submitted for government review.

Guidelines on Developing Government FDP Processes

Outlines a structured step-by-step process that governments can use to develop internal FDP process for reviewing and approving FDPs.

The effective review of a submitted FDP requires coordination and communication across several ministries and agencies. Having established processes will enable greater coordination, communication and can also help address several challenges that government officials face.