SPE-174932-MS

Uncertainty and Risk Management Plans are Critical for Team Alignment
and Better Decision Quality
R. Sawiris, C. S. Howes, J. A. Rodriguez, and W. L. Foley Chevron

Copyright 2015, Society of Petroleum Engineers

This paper was prepared for presentation at the SPE Annual Technical Conference and Exhibition held in Houston, Texas, USA, 28 30 September 2015.
This paper was selected for presentation by an SPE program committee following review of information contained in an abstract submitted by the author(s). Contents
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Abstract
The Uncertainty Management Plan (UMP) and Risk Management Plan (RMP) processes are an integral
component of Reservoir Management and Project Management at Chevron. The UMP and RMP are key
to safely deliver and improve the movement of Resources to Reserves to Production (R2R2P) and the
maturation of Organic Resource Opportunities (ORO) in a timely and economical manner.
The UMP helps project teams identify key uncertainties and develop robust work plans to resolve these
uncertainties in order to improve decision quality and maximize value to the company. The RMP helps
project teams identify key technical, mechanical and commercial risks, and develop appropriate mitigation
and contingency plans for these risks. The RMP will also help the team identify and address process safety
risks related to subsurface integrity issues. The UMP and RMP drive development plans, technology
plans, surveillance plans, operating plans and resource loaded work plans. This is even more critical at the
current low oil prices where many projects become economically challenged; we need to focus our efforts
and resources to be decision driven and value driven.
We will compare and contrast the concepts of uncertainty and risk and present case studies of how the
UMP and RMP were successfully used on a variety of assets. We will also discuss some of the pitfalls,
lessons learned and best practices.

Introduction
The Chevron Reservoir Management community has established the UMP and RMP processes as part of
the Company subsurface project management toolkit. Project teams use UMP and RMP to identify key
subsurface, well construction, operational, subsurface integrity issues and commercial uncertainties and
risks. These may cause the project to fall short of expectations, throughout a project or asset lifecycle as
mentioned in several papers (Sarma et al 2015, Wu et al 2014, Oreilly et al 2014, Amudo et al 2014,
Ekweribe et al 2014, McKay et al 2013, Odusote 2013, Adeyemi 2013, Meddaugh et al 2013, Shook et
al 2009, and Rivera et al 2007).
The UMP supports different processes including the Asset Development Plan (ADP), Appraisal Plan,
Surveillance, Analysis and Optimization Plans (SA&O), Technology Plans, Project Execution Plans
(PEPs), and Operating Plans. The RMP process is actively applied to identify and address risks using

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appropriate mitigation and contingency plans. The applications of the UMP and RMP processes have been
expanded and a scalable version of the process is currently used in brownfield and small capital projects.
UMPs and RMPs support improved decision quality and effective reservoir management practices.
Project teams keep UMPs and RMPs evergreen and review them periodically. Project teams use the UMP
process to prioritize uncertainties, articulate them to stakeholders, and develop plans to resolve key
uncertainties. (McKay et al 2013)

Materials and Methods

History and Background
Chevron created the Capital Stewardship Subsurface Evaluation Process (CSSEP) team to improve
project performance in 2000 (see Appendix A: History). The CSSEP team cited that the root cause for the
majority of projects that were underperforming was related to subsurface uncertainties, which provided
the business case for the UMP tool development.1 In 2001, the CSSEP team developed the UMP as one
of several tools to improve performance.
Halfway through the second decade of use, the UMP process has become well established as an integral
component of Chevron Reservoir and Project Management. The approach has expanded past subsurface
uncertainties to include operational, facilities, and other uncertainties relevant to project execution.
Improved predictability in forecasting and improved ability to develop contingency planning demonstrates
the value that the UMP process has provided. The structured process also improved dialogue and
alignment with partners in Non-operated Joint Venture (NOJV) assets.
How does uncertainty differ from risk?
Uncertainty and risk both result from a lack of certainty; they include downside risks and upside
opportunity outcomes and are subjective. (See Table 1)
Table 1Uncertainty versus Risk
Definition
Uncertainty

Risk

Lack of information about

range of potential
outcomes and factors
that influence them
Probability of success or
failure relative to
defined objectives or
targets

Ranking

Handling

Impact on Key
Decisions

Resolution Planning

Impact on
Project and
Business
Objectives

Contingency and
Mitigation Plans

Measure
Expressed as a range of
values for a variable
resulting in a range
of outcomes
Probability of occurrence
and magnitude of
loss

In any sort of task we undertake, whether personal or professional, we deal with uncertainties and risks.
For example, there is uncertainty and risk in the simple task of traveling to the airport to catch a flight.
We must estimate how long it takes to get there and prepare ourselves for the commute. So we begin with
a clear objective: Arrive at the airport safely and in time to catch our flight. And the key decisions we need
to make are:

What time to leave?

What mode of travel to use?
What clothes to take?

Uncertainty refers to what we dont knowa lack of information about the range of potential outcomes
and the factors that influence them. These uncertainties will impact our decisions. In our example, we
1

Personal communications with W.F. Smith and S.C. Smith.

SPE-174932-MS

know the scheduled time of departure for our flight, but we dont know what the weather and traffic
conditions will be like. Will it be cool and clear, icy and slick, or rainy and congested? Risk, on the other
hand, can be described as the probability that a hazard or discrete event will result in a specified level of
loss, or failure. In our example, there is a risk that our car may break down or there is an accident on the
road blocking traffic and preventing us from achieving our goals and objectives.
So as a part of our planning and preparation, we need to consider and make plans to address both
uncertainties and risks. For example, to deal with the weather uncertainties, we might plan to have a
variety of gear available so we are prepared for a reasonable range of conditions. And for timing issues,
we may check traffic and road conditions and allow ourselves enough time. On the other hand, we
evaluate the risks and prepare mitigation and contingency plans to minimize impact or manage better in
case risk occurs. And to mitigate our car breakdown risks, we may schedule an appointment with a
mechanic to check the car and for other road risks; we may prepare a list of contacts and fallback options.
We apply this same approach to planning for uncertainties and risks in our business.
In the early years of the process, teams focused on uncertainty analysis, but the differences between
uncertainty and risk need to be fully understood to prepare Uncertainty and Risk Management Plans. The
PRMS (2011) defines Uncertainty as The range of possible outcomes in a series of estimates. For
recoverable resource assessments, the range of uncertainty reflects a reasonable range of estimated
potentially recoverable quantities for an individual accumulation or a project. In general, the wider the
range of values for a variable, the greater is the uncertainty that exists.
The PRMS (2011) defines Risk as The probability of loss or failure. As risk is generally associated
with the negative outcome, the term chance is preferred for general usage to describe the probability of
a discrete event occurring. Additionally, risk can be defined as a measure of potential loss in terms of
both the incident likelihood and the magnitude of the loss. Risk can be described as the probability that
a hazard or discrete event will result in a specified level of loss, injury, or failure. Risk focuses on events
or conditions that will have a negative outcome on our business or project objectives. Risk can be
technical, mechanical or commercial. (See Table 2)
Table 2Risk Type and Examples
Risk Type
Subsurface Integrity

Technical

Commercial

Mechanical
Other

Examples
Shallow hazards, Shallow faults, Reactivation of faults,
Breaching seal, Wellbore integrity, H2S and CO2
contaminants
Production, Estimated Ultimate Recovery, Quality and
connectivity, Oil/water contact, Gas water contact,
Aquifer
Contracts, Concession extensions, Joint Venture Partner
alignment, Government approvals, Public relations
and support, Rig Availability, Costs
Drilling problems, Completion Problems
Weather, Trade Unions, Security and Unrest

In the oil and gas industry, to understand and acknowledge the current range of uncertainties, one must
assess their impact on key decisions, and implement options to resolve uncertainties (e.g., drilling an
appraisal well or starting a pilot project). Conversely, to understand and acknowledge the risks, one must
determine their associated probability of occurrence and their impact on project and business objectives.
It is necessary to develop options to mitigate risks (e.g., sidetracking a well if the oil/water contact is
higher). Additionally, project teams develop contingency plans for both downside outcome and upside
outcome capture.

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Updated Process
On the basis of feedback from reservoir management practitioners, the corporate Upstream Capability
Reservoir Management (UC-RM) group updated the UMP process in 2013 to include new workflows,
guidelines, and tools. The updated process aims to change the culture and the behavior of reservoir
management practitioners (see Figure 1). The process enables project and asset teams to be more decision
driven and to focus on key uncertainties that will make or change our decisions.

Figure 1Updated UMP and RMP Processes

The UMP and RMP processes are all about value creation. This can only be achieved with the
appropriate level of planning. As illustrated in Figure 2, too little effort could likely result in a wide range
of uncertainty and increase the risk of falling short of achieving project goals or also failing to capture
available upside and, therefore, erode value. Equally, if teams spend too much effort, time, and budget to
eliminate all uncertainties and risks, they would erode value by missing a market opportunity and over
insuring the project beyond what is required to make a quality decision. Also by over insuring, project
teams consume resources that might have added more value if applied to a different project.

Figure 2UMP / RMP All About Value Creation

The UMP is a fundamental component of the decision making process and relates to all aspects of
reservoir management. The intention of the updated UMP process is to help the project and asset team to

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determine key uncertainties (i.e., what is not known). It also helps teams to identify the range of potential
outcomes and factors that influence them, and to identify the uncertainties with the highest impact on key
decisions, and therefore improve decision quality. The resolution options such as specific technical studies
or appraisal drilling identified in the UMP drives the subsurface workplans, surveillance activities, and
data acquisition programs. Figure 3 shows graphically how the UMP relates to project management.
Without a proper appreciationof the UMP process, we see teams being activity driven and focusing on
resolving uncertainties that have little or no impact on project decisions, leading to paralysis by analysis.

Figure 3Uncertainty Management and Project Management Integration

Similarly, by use of the updated RMP process, project teams will ensure that key risks (see Table 2)
are identified and appropriate mitigation and contingency plans are put in place to maximize value for the
stakeholders. Cost estimates for contingency plans can also be developed as a reality check to ensure they
are economically feasible, however protecting people and the environment remains our first priority. The
objectives of RMP include both the prevention of risk events from occurring and the minimization of the
impact if any of the risk events occurred. The RMP not only focuses on project execution risks, but also
on risks related to the full-field development plan, such as those related to adding infill drilling campaigns
or water/gas injection later in field life. The opposite of risk is opportunity, and it captures the potential
upside of the impact of an uncertain event on project and business objectives.
In addition, the UMP and RMP processes focus on process safety, flow assurance and Subsurface
Integrity (SSI) issues. Some examples of SSI issues are reservoir seal integrity, shallow faulting, injection
above fracture gradients, subsidence caused by depletion, fault reactivation resulting from over injection,
or possible contamination of shallow aquifers. We encourage teams to address these issues by modifying
the operating guidelines, conducting surveillance and performing technical studies.
Figure 4 summarizes the workflows for uncertainty and risk management planning. For each workflow,
the UC-RM group built a tool to help project and asset teams through the entire UMP and RMP processes.
Each of these workflows and tools apply to Major Capital Projects (MCP), Small Capital Projects (SCP)
and mature assets.

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Figure 4 Uncertainty and Risk Management Plan Workflow

Data and Results

Since the UC-RM group launched the updated UMP and RMP processes in mid-2013, UC-RM has
facilitated numerous UMP/RMP workshops on assets across several business units, covering a variety of
projects and asset types:

Exploration prospects
Both green field and brownfield development
Onshore and offshore, including deepwater development
Operated and non-operated assets, with and without NOJV partner participation
Conventional and unconventional developments
Oil and gas/condensate fields, both clastic and carbonate
Light and heavy oil, including primary, secondary and enhanced recovery projects.

Key learnings are:

Focusing on prerequisites (see Figure 4) before a workshop, particularly updating the project frame
and achieving alignment on key decisions
Encouraging cross-functional participation and involvement of appropriate personnel
Scaling each UMP/RMP session to fulfill the asset or project teams requirements
Focusing on resolving key uncertainties that if resolved would help the project team either make
or change decisions rather than just narrowing the uncertainty range
Selecting resolution options that will resolve key uncertainties to help teams make quality
decisions to be value driven and decision driven rather than being activity driven
Updating and aligning workplans based on the UMP and RMP results to avoid conducting UMP
and RMP only to check the box before technical or peer reviews

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Keeping UMP and RMP evergreen and updating them as new information becomes available or
when progressing through project management
Reinforcing the concept that the UMP and RMP are not the end products; they are interim products
that should drive or influence derivative products (see Figure 4).
Additionally, the UMP/RMP workflows have been used to enhance decision making in other areas
outside of subsurface uncertainties and risk, such as in employee development projects.

Case Study #1 Prioritization of Key Uncertainties based on Impact on

Key Decisions
The following example illustrates how using the UMP process helped a project team became more quality
decision driven rather than activity driven, and alleviated their need to perform activities that did not
impact the key project decisions. This case study is a deep water gas development project, where the
Company was a non-operating partner. The subsurface assessment carried out by the Company project
team identified several uncertainties, quantified the ranges and assessed the expected range of outcomes.
This illustrated a misalignment with the Operators recovery values and ranges. Company estimates were
more conservative and carried a wider range between the low and high estimates. However, the project
was still economic with the lower Company estimates (See Figure 5).

Figure 5Operator and Company EUR Ranges

To understand the differences and achieve alignment, the Company team initially planned to carry out
separate studies and build detailed reservoir models. The UMP workshop helped the Company project
team identify several uncertainties and assess their impact on the key project decisions. Through the UMP
process and discussions, the team realized that the identified uncertainties would not have had a significant
impact on the projects key decisions related to the project development plan (e.g., subsea development,
the subsea manifold location, size of flowline or the number, location and type of wells). As a result, the
Company project team became comfortable to support the operators plan to move the project forward.
They did, however, re-run economic sensitivities with Company estimates, thereby, not delaying the
project further with more time consuming shadow work such as duplicating the operators reservoir
modelling effort. The UMP process enabled Company personnel to be decision driven instead of activity
driven.

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Case Study #2 Partner Alignment and Effective Communication of

Uncertainties
In this NOJV property, the Operator planned a flood expansion, which required the Company endorsement and financial commitment. The Companys internal governance process required a more robust
analysis of the opportunity. However the operator provided a limited amount of data to Company, and
made it difficult to carry out the analysis.
The Company NOJV team held an initial UMP session, and during the session the team identified the
key decisions and key uncertainties for the project (see Table 3). This initial workshop helped to obtain
internal team alignment. Company and Operator personnel held a second joint UMP workshop. Company
personnel provided a high level overview of the UMP process to the Operator personnel, so they could
become familiar with the process. Results from the initial UMP session were shared.
Table 3Case Study # 3 Uncertainty Impact and Level of Resolution Required

The operator confirmed the key decisions identified by the Company asset team, and provided some
insights about the range and impact of key uncertainties on the key decisions. By communicating
uncertainties to the Operator, the asset team effectively conveyed the reasoning for the request of
additional field information, which the Operator had available, and as a result of the workshop, the
Company received all information and data needed to finalize internal analysis and complete project
approval. In this case the Company used the UMP process as a structured approach to request data from
the Operator. If the data had not already been acquired by the Operator, the UMP and RMP should drive
data acquisition programs to resolve key uncertainties prior to proceeding with the project.

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Case Study #3 Integration of UMP and RMP Processes into Asset

Development Plans
This case study illustrates how the UMP and RMP processes can be integrated into Integrated Production
Models (IPM) and Asset Development Plans (ADP) for producing assets. IPM can enable teams to
optimally and economically maximize hydrocarbon recovery by integrating all subsurface and surface.
Asset teams generated reliable forecasts where key uncertainties and risks were fully understood and
addressed. Asset teams use IPM to integrate and evaluate system wide impacts of uncertainties and risks.
The UMP provides a good pathway to help create cross functional alignment over key uncertainties. Quite
often, the team focuses on quantifying reservoir static and dynamic uncertainties without integrating all
other issues that may have larger impact on our decisions, such as facilities uncertainties. Liquefied
Natural Gas (LNG) projects are complex, expensive and take a long time to plan and implement. We have
to balance timely decision making with a good UMP and RMP to plan ahead for future projects to
maintain reliable supply and meet contractual obligations. The team can integrate the learnings from UMP
and RMP into the IPM models to generate reliable ranges of forecasts.
There are many uncertainties and risks that could impact the team decisions to execute the next project
to maintain reliable supply. Some issues are related to subsurface; others relate to facilities, others are
operational, while still other issues correspond to the commercial issues such as market supply and
demand. If the question is Will we have sufficient capacity to meet current and future demand?, the
answer may be needed at a portfolio level, at a field level, at a production level, or at a real-time reservoir
management level.
The asset team developed risked production profiles evaluating the production impact for a range of
probability of well failure (e.g., 1, 2, or 3 wells lost), facilities reliabilities and downtime and reservoir
performance. The asset team developed the workflow to support the drilling campaign timing decisions,
facilities debottlenecking and depletion compression projects. To effectively manage a portfolio of
multiple fields, an asset team can assess demand, well deliverability, system potential, and schedule
remaining opportunities to close any supply shortfall gaps. Automated calculation of production system
capability is analyzed and compared to short- and long-term production forecasts to identify production
opportunities and threats. Understanding bottlenecks throughout the production system is critical to assist
in supply planning and to provide validation of long-term forecasting models.

Case Study #4 - Identify Key Risks and Capture Upside Potential

Project teams discussed and identified all types of risks that apply to their project (Table 2), through a
facilitated RMP workshop. In addition, the team identified other risks that could apply to their asset, using
the pre-populated questions in the tool to stimulate the discussions. The team then assessed the likelihood
(or probability) of the risks and their impact (or consequences) on the project objectives. During the
discussions, the team acknowledged they succeeded in developing a comprehensive risk register and were
able to evaluate the dependencies of these risks that when combined could result in catastrophic events.
This helped the team develop thorough risk mitigation and contingency plans for the key risks, in case risk
occurs, modify the operating plan and identify additional technical studies that will be required to address
subsurface integrity issues. In addition, the team updated their surveillance and monitoring program, to
collect critical data which will help them in risk mitigation.
In addition, the team identified several issues related to upside potential. This helped the team to
modify the project development plan to capture the upside. For example, the team recognized there could
be an upside potential with deliverability and recovery which may require additional wells and facilities.
This helped the team to justify adding additional well slots on the platform and to allow for a facilities
upgrade in the future.
The team incorporated the following key procedures:

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Maintaining injection below fracturing pressure

Monitoring reservoir and wellhead pressures on regular basis
Involving company Subject Matter Expert to complete rock mechanics studies and better understand the seal integrity
Building a dashboard to have real time monitoring of production and injection data, wellhead and
downhole pressures and temperatures, voidage replacement rations and Hall Plots
Using state-of-the-art techniques for remote monitoring and surveillance
The above procedures helped the project team to address the SSI issues.

Analysis and Implications

While the UMP and RMP cannot change the state of nature, such as a highly compartmentalized reservoir
or reservoir quality, they provide a mechanism to help project teams convey the potential uncertainties and
risks to decision makers before moving ahead with detailed work plans or a selected development plan.
It helps subsurface teams challenge themselves by asking questions like Why is my field different from
the other ones that had reservoir connectivity issues? or What could I do differently to mitigate the
downside if turns out to be similar? The RMP can help teams to develop mitigation and contingency
plans for key risks that could impact the project and business objectives.
Our goal is to share lessons learned from the past experiences that will be assimilated into future UMP
and RMPs to continuously improve decision quality. In the future, it is likely that the industry will be
developing more complex and challenging reservoirs, and proper assessment of key uncertainties and risks
will be critical to ensure success. UMP can help us understand the logic behind past decisions and when
combined with lookback data can help us improve future decisions for similar projects. The UMP helps
teams identify and evaluate alternatives such as less aggressive staged development plans, initiating a
pilot, or modifying the appraisal strategy to gather connectivity data. High performing asset teams
generate a full field asset development plan for the entire field life with regular updates of the UMP and
the RMP as uncertainties and risks change over time.

Conclusions
There are similarities between uncertainty and risk as both result from a lack of certainty, both include
downside and upside outcomes, and both are subjective based on our background and experience.
However, the workflows used to define, rank, and manage the uncertainties and the risks differ
significantly. The UMP and RMP workflows have evolved within the Chevron Reservoir Management
community and have led to the following key principles for effective Uncertainty and Risk Management
Planning:

While we strive to resolve uncertainties, we mitigate risk

Asset/Project Teams use the UMP to enable quality decisions in the presence of uncertainty, not
to eliminate uncertainty
The UMP enables the project team to identify key uncertainties by prioritizing their impact on key
decisions and to develop appropriate resolution plans for these uncertainties
The UMP process provides a vehicle for the team to quantify the uncertainty range, reach
consensus on the expected range of outcomes and achieve stakeholder alignment on resolution
plans
Asset/Project Teams use the RMP to identify and focus on the key risks which are identified by
prioritizing their impact on project objectives. The team also evaluates the dependencies between
risks that when combined could result in catastrophic events. Teams develop appropriate mitiga-

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11

tion and contingency plans for these key risks. The RMP improved process safety and subsurface
integrity awareness and management
With risk comes opportunity the RMP should capture both the upside and downside potential.
The UMP and RMP are not the end products; they are interim products that should drive or
influence derivative products (i.e., SA&O plans, appraisal plans and data acquisition programs,
technology plans, pilots, workplans, and operating plans).
Data should be gathered, analyzed, and integrated in a timely manner to enable quality decisions
and maximize value
The components of the UMP and RMP evolve as a project matures through the project management phases, and should be kept evergreen throughout the life of the asset or project
Cross-functional participation and involvement of the appropriate personnel are crucial for
developing a successful UMP and RMP.

Acknowledgements
The authors of this article would like to thank Chevron for giving permission to publish this manuscript.
We would like to thank current and former members of the Chevron Upstream Capability Reservoir
Management group who have contributed at various phases of the updating of the UMP and RMP
processes including Jeb Blackwell, Jerry Hardouin, Tom Specht, Jay Byers, John Cochrane, Sharon
Rector, Chidi Amudo, Will Da Sie, and Mike Pillow. In addition, we would like to thank Bob McElrath,
Wayne F. Smith, Stephen C. Smith, Andrew Latham, and Paul Maslanka for their efforts in developing
and championing the UMP process within Chevron in the early years.

References
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Odusote, F. (2013, August 5). Deepwater Nigeria Field Development: Challenges, Best Practices and
Lessons Learned from the Agbami Field. Society of Petroleum Engineers. doi: 10.2118/167534-MS
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Adeyemi, O. S. (2013, October 28). Upstream Workflow Transformation in a Mature Joint Venture
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Guidelines for Application of the Petroleum Resources Management System. (2011): n. pag. Society
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AUTHOR BIOGRAPHIES

Ramzy Sawiris is Reservoir Management Consultant at Chevron. Sawiris is the leader of the Uncertainty and Risk Management Community of Practice at Chevron. Sawiris has authored/co-authored
several technical papers in reservoir management, reservoir simulation, and reserves. Sawiris holds a BS
degree in Petroleum Engineering from Cairo University. Sawiris was Treasurer and Chair of the SPE
Western Australia Section.
C. Susan Howes is Reservoir Management Consultant at Chevron. Howes was formerly Learning and
Organizational Development Manager at Anadarko. Howes is a core team member of the Uncertainty and
Risk Management Community of Practice at Chevron. She has co-authored several articles on Talent and
Technology in the Journal of Petroleum Technology and The Way Ahead. Howes holds a BS degree in
Petroleum Engineering from the University of Texas. She is Chair of the SPE Soft Skills committee, served
as SPE Regional Director for Gulf Coast North America, and is an SPE Distinguished Member.
Javier A. Rodriguez is Reservoir Management Consultant at Chevron. Rodriguez is a core team
member of the Uncertainty and Risk Management Community of Practice at Chevron. Rodriguez has
published a technical paper in the area of artificial lift. Rodriguez holds a BS degree in Petroleum
Engineering from Zulia University in Venezuela.
W. L. Bill Foley is Reservoir Asset Management Consultant at Chevron. Foley is a core team member
of the Uncertainty and Risk Management Community of Practice at Chevron. Foley has published
technical papers in the area of artificial lift. Foley holds BS and MS degrees in Petroleum Engineering from
University of Pittsburgh.,

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13

Appendices

History
Chevron created the Capital Stewardship Subsurface Evaluation Process (CSSEP) team to improve project performance in
2000. The CSSEP team identified an opportunity to develop and deploy an efficient, multi-functional subsurface process for
timely data collection, interpretation, analysis and integration to improve evaluation of reservoir risk, production forecasting
and decision quality in an optimal cycle time. CSSEP enhanced capital stewardship through use of a common process for better
understanding of subsurface evaluation risks/uncertainties and communicating these to management, thereby resulting in
pursuit of higher quality subsurface opportunities and delivery of projected investment outcomes. Critical success factors in
CSSEP included:

Uncertainty assessment and decision analysis integrated into the overall process
Technical employees trained in uncertainty assessment
Distribution of uncertainty as part of the corporate culture.

The CSSEP team cited that the root cause for the majority of projects that were underperforming was related to subsurface
uncertainties, which provided the business case for the UMP tool development. In 2001, the CSSEP team developed the UMP
as one of several tools to improve performance.
The CSSEP team established the UMP as a document to be prepared by the subsurface team that:

Identifies key uncertainties and their relevant ranges

Summarizes impact of each uncertainty on production and ultimate recovery
Details specific resolution plans (e.g., cost, timing)
Discusses opportunities to:
X
X

mitigate downside outcomes (risk mitigation)

capitalize on upside outcomes (options planning)

Identifies signposts and details specific action plans; and

The uncertainty resolutions included in the UMP will typically result from a structured Decision Analysis (DA) approach,
including Value of Information (VoI) analysis, when appropriate.
The UMP addressed the reasons for unreliable forecasts such as insufficient data, reservoir complexity, as well as gaps in
DA modeling. Understanding uncertainty is the first step towards building reliable forecasts. The CSSEP team originally
designed the UMP to provide the project team with a structured approach to identifying and assessing the criticality of a
projects uncertainties. It also forms the basis for the delineation/appraisal program, and as part of the technical review process,
it serves as a key document identifying reservoir management uncertainties following production start-up. The CSSEP team
designed the UMP to be scalable for all sizes and types of projects.
The CSSEP team documented the first successful use of UMP in a business unit in 2002. The UMP process enabled project
teams to articulate key uncertainties and to communicate them to review teams, partners, and Decision Review Boards (DRBs).
The consistent application of UMP process created a shared understanding of the key subsurface uncertainties between asset
teams and their respective DRBs, and provided effective documentation for project continuity.
Halfway through the second decade of use, the UMP process has become well established as an integral component of
Chevron Reservoir and Project Management. The approach has expanded past subsurface uncertainties to include operational,
facilities, and other uncertainties relevant to project execution. Improved predictability in forecasting and improved ability to
develop contingency planning demonstrates the value that the UMP process has provided. The structured process also improved
dialogue and alignment with partners in Non-operated Joint Venture (NOJV) assets

Nomenclature and Acronyms

(CAPEX) Capital Expenditure
(CSSEP) Capital Stewardship Subsurface Evaluation Process
(DA)
Decision Analysis
(DST)
Drill Stem Test
(EUR)
Estimated Ultimate Recovery
(FPSO) Floating, Production, Storage and Offloading
(IPM)
Integrated Production Modeling

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(MCP)
(NOJV)
(OOIP)
(OPEX)
(ORO)
(OOIP)
(PRMS)
(PEP)
(R2R2P)
(RMP)
(SCP)
(SSI)
(SA&O)
(UMP)
(UC RM)
(VoI)

SPE-174932-MS

Major Capital Projects

Non-operated Joint Venture
Original Oil in Place
Operating Expenditure
Organic Resource Opportunities
Original Oil in Place
Petroleum Resources Management System
Project Execution Plan
Resources to Reserves to Production
Risk Management Plan
Small Capital Projects
Subsurface Integrity
Surveillance, Analysis and Optimization Plans
Uncertainty Management Plan
Upstream Capability Reservoir Management
Value of Information