IPTC-19598-MS

An Integrated Model to Optimize Artificial Islands Developments in Shallow

Water Fields

Faisal H. Alnaseef, Mohammed K. Almedallah, and Stuart R. Clark, UNSW; Stuart D. C. Walsh, Monash University

Copyright 2020, International Petroleum Technology Conference

This paper was prepared for presentation at the International Petroleum Technology Conference held in Dhahran, Saudi Arabia, 13 – 15 January 2020.

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Abstract
Artificial Islands are often an effective strategy to develop shallow-water fields. However, their layout
and design are affected by numerous drilling and surface facility constraints, such as water depth, number
of wells, proximity to shore, and well spacing. When these constraints cannot be honored, conventional
offshore wellhead platforms must be installed instead. This paper reviews previous artificial island projects
to identify their key constraints, and then proposes a numerical model that accounts for these constraints
when determining whether artificial islands or offshore platforms would generate the highest Net Present
Value (NPV) configuration.
The model uses a combination of discrete and continuous mathematical algorithms to find the optimum
development plan in shallow-water fields. Specifically, the model analyses the water depth, drilling and
surface facilities of the field to suggest the optimum facility type to drill the wells using a k-means algorithm
and Mixed-Integer Linear Programming (MILP). Then, a local optimization routine is used to connect
islands to well targets. The model accounts for limitations on well spacing and the well paths to ensure
that wells conform to the available drilling-rig capabilities and well-pad design requirements. The overall
field configuration is optimized using a stochastic-perturbation method that adjusts the field network to
maximize the NPV of the development.
The model explores the numerous possible scenarios that exist when planning shallow-water offshore
field developments, especially when a high number of wells is required. The coupling of continuous and
discrete optimization techniques provides a quick and effective method to analyze these possible scenarios
and select an optimal strategy. Results from the model indicate that offshore wellhead platforms are not
always favored over artificial islands in offshore field developments, particularly when extended reach
wells are present. This is illustrated with a case study that demonstrates each stage in the integrated model
starting from the analysis of the reservoir simulation model, through to well planning, and design of
the facility network. The study highlights how such integrated analysis can aid in the selection of the
highest development NPV plan in shallow-water fields by not only minimizing the cost associated with the
development but also reducing the time required to generate the optimum plan.
2 IPTC-19598-MS

Introduction
Use of artificial islands can be traced back to the early days of the offshore oil and gas industry in the 1930s
(Geography, 1959; Pratt et al., 1997). In the years since, numerous projects have employed artificial islands
to support drilling and production operations as opposed to using conventional offshore platforms. Despite
this long history, artificial islands for oil and gas developments were not always favored against platforms.
When selected, they have also exhibited a wide variety of different design configurations and sizes. In part,
this variability can be attributed to the niche nature of these field developments, but it is also a consequence
of the unique circumstances of each field: their age and size; the available drilling technology; and the
physical and environmental conditions affecting the development. The objective of this paper is to outline
an approach to select the optimum field development strategy (i.e. offshore platforms or artificial island).
The selection is based on a numerical model that can explore different possible subsurface and surface plans
and suggest the optimum development type with the highest NPV. In doing so, the paper provides a review
of different types of island installations for offshore oil and gas fields to categorize and include the most
common constraints in the numerical model. Results and discussion of case studies based on real-world
conditions are provided to validate the model.
To date, artificial island mathematical optimization has not received extensive consideration in the
literature, especially compared to the optimization of offshore platforms. Although this could be attributed
to the lower number of artificial-islands, the magnitude of expenditure and the complexity of island
development necessitates a computer-based approach to maximize the profitability of the project. Offshore
platform optimization modeling dates back to Devine and Lesso (1972), who developed one of the earliest
trial and error optimization model to choose a platform position. Since then, numerous models have been
proposed (e.g. (Grimmett & Startzman, 1988), (Rosa & Ferreira Filho, 2012), (Walesca et al., 2016)) to
tackle the offshore development optimization, but in many cases they have overlooked the shallow-water
fields where artificial islands could also be installed.
To consider artificial islands in an integrated development plan, we outline a mathematical model which
suggests the highest NPV field plan by accounting for the water depth, the number of wells required for
the development and the presence of real-world constraints such as well spacing and well path design.
An exhaustive search to find the optimum plan leads to a computationally expensive solution that may
not complete in time. Therefore, in this paper, we suggest a combination of algorithms to improve the
convergence time and the chances of finding an acceptable approximation to the global optimum for the field
development. The methods used include a k-means clustering to estimate the initial position, Constrained
Optimization by Linear Approximation (COBYLA) to generate well path design, optimize drilling and field
cost by Mixed Integer Linear Programming (MILP) to allocate wells, pipelines, and processing facilities
to artificial islands.
Artificial islands used in the oil and gas industry exhibit a wide variety of forms and functions. Beyond
housing oil and gas wellheads, they also include equipment to support drilling and production, oil and
gas separation equipment, water injection facilities, and accommodation (El-gharbawy, Seddik, Khaled, &
Sarhan, 2011; Wu, Zhao, & Gao, 1992). The form of the islands varies based on their specific drilling,
construction, and design requirements. To identify the primary design constraints, we studied and reviewed
distinctive examples from six different regions: the California Coast Islands in USA; the Beaufort Sea
Islands in the United States and Canada; the Caspian Sea Islands in Kazakhstan; the Bohai Sea Islands
in China; the Arabian Gulf Islands in Saudi Arabia; and the Abu Dhabi Islands in United Arab Emirates.
While this list is by no means exhaustive, it nevertheless illustrates the scope of these developments and
some of the design changes that have occurred over the years. Each region has been chosen due to their
variation in design, objective, challenges, construction year, and geographic locations. The aim of studying
and reviewing these islands is to identify the main design constraints that distinguish artificial islands from
other offshore structures.
IPTC-19598-MS 3

Review of Key Drilling and Facility Design Constraints

In Table 1, we summarize the main features and attributes of the islands from these six different regions. The
table summarizes the location, island size, number of wells, water depth and construction period for some
of these islands, what is particularly striking is the significant variation in several wells, islands layout, and
size employed across these different projects. This data helps to identify the main constraints and design
considerations that should be accounted for when optimizing field developments. These constraints are used
later in the optimization model to find the highest NPV field development configuration that honors these
constraints.

Table 1—Background Data for Worldwide Examples of Artificial Islands Constructed for Oil and Gas

Based on our review, the area and the water depth of each island vary greatly, as does the resulting size
of the island. The wide variation in sizes is shown in ascending order in Figure 1.

Figure 1—The relative sizes and layouts of artificial islands in oil and gas operations

The following key design points were found to be significant contributors to the total size: water depth;
island layout; number of wells and islands; the well path design; and the pipeline network. We provide a
detailed illustration of each of these items below, and outline how they are accounted for in the numerical
model.
4 IPTC-19598-MS

Water depth
The water depth at the location of artificial islands installation varies from as low as one to two meters
as in the Kashagan islands in Kazakhstan (Sarybekova, 2004) to up to 20m for the Issungnak island in
Canada (Boone, 1980). However, Modavi (2011) noted that water depth is not the sole determinant of island
placement as other factors such as the presence of existing infrastructure must also be factored in the final
decision. Technological advancements are enabling the construction of artificial islands in deeper waters.
For example, the 18 islands built in the Beaufort Sea started in low water depths (i.e. 1-2 meters). Following
the initial construction of exploration islands in this area, the industry moved into water depths of 14 to
15 meters (Gadd, Leidersdorf, & Hearon, 2012). However, there is no consistent trend over time to deeper
waters as shown in Figure 2. This limit suggests that alternative development strategies (i.e. platforms)
become economically competitive at these depths.

Figure 2—Water depths of artificial oil and gas islands

In our suggested model, we have the flexibility to vary the maximum water depth for artificial islands
and offshore platforms, but we set the default maximum to 10 meters, whereas the minimum water depth is
1 meter. Below this minimum water depth, the model assumes that the surface facilities can be placed in the
mainland, hence, there is no need for reclamation work. Beyond the maximum water depth, the artificial
island is deemed infeasible from construction aspects, and thus, offshore platforms should be installed.

Artificial Islands layout or shape

Based on reviewed islands, there is no standard layout or geometry that were commonly observed across all
islands. Island shape impacts the overall costs, Modavi (2011) illustrated this by studying various forms for
the islands constructed in Abu Dhabi. They concluded that circular-shaped islands provided the most cost-
effective option because it has the maximum gross land area for the minimum perimeter of shore protection.
While a rectangular shape is more suited for the layout of facilities, it results in higher construction costs
due to the larger perimeter. In the model, we consider two common shapes namely circular and rectangular
design. Both have a different area and cost as well as different row arrangement and well constraints.

Number of islands and number of wells

The number of islands is limited by two main constraints: the maximum drilling reach for each well; and
the maximum number of wells per island. The model will adjust the number or positions of the islands to
meet these constraints. For instance, if wells cannot be drilled because they exceed the reach, the model
attempts to either shift the location of the island to satisfy the reach or increase the number of islands.
IPTC-19598-MS 5

We assume that well targets have been determined using a full reservoir simulation, which determines
the optimum placement and number of wells in the reservoir according to the performance of the reservoir
and production constraints. The present model then determines which islands will produce each well and
the 3D paths required to drill them based on their allocation to each island or platform.

Well Path Design

We develop an explicit well path model to determine the optimum 3D path that would satisfy typical drilling
constraints such as the maximum reach and acceptable build-up rate. This trajectory starts to incline at an
assigned kick-off point and then calculates each required curve in the path based on a satisfactory build
up and dogleg severity. At the reservoir section, the path must intersect a target entry and a target depth
point. In this model, we specify a rate of penetration (ROP) for each drilled section, which determines the
speed of drilling. As the well enters a hard formation and draws a complicated path, the ROP is expected to
be lower. This well path optimization modelling is integrated with the surface facility to ensure a realistic
path every time the model attempts to adjust the surface facility positions and network. The well path and
collision risk also depend on the well spacing at the surface. In the next subsection, we discuss the primary
considerations to determine well spacing on artificial islands.

Well Spacing
We introduce a constraint that allows to select different well spacing and to be able to see its impact on the
total NPV of the Project. Reducing the well spacing increases the NPV as this would mean a higher number
of wells per island or less overall size of islands if the number of wells is kept the same.

Island Connections and Pipeline Network

We provide the flexibility to choose between a causeway or a submarine pipeline option to connect the
islands. While causeway and bridges installations are costly, the operating costs could be lower when using
onshore trucks compared to offshore vessels. Therefore, we also introduce onshore and offshore operating
costs; with the onshore costs to be selected whenever the causeway option is studied in the model.
Understanding these distinct design constraints enable us to formulate our numerical model. In summary,
a model that can develop the optimum NPV plan for offshore developments in shallow-water fields must
consider the size, number and layout of the islands, the water depth, the number of wells, the well spacing,
the well paths, the island connections, and the pipeline network. Below, we propose a numerical model that
accounts for all these factors in a computer-based approach.

The Numerical Model

The numerical model suggests the optimum field development for ultra-shallow water fields that results in
the highest NPV. It considers the previously mentioned facility design, drilling and production constraints
pertaining both to artificial islands and offshore fixed-leg platforms.
The model can be integrated with a commercial reservoir simulation or be used in standalone calculations.
If combined with a reservoir simulation model, the model needs an XML file that contains the result of the
well position data in the form of (X, Y, and Z) coordinates as well as the forecasted production of each well
for every year. Otherwise, the user has the option to input the well locations and the production target of each
well for each year or just the initial year (Year = 0). If only the first year is suggested, the model estimates
the production decline for the desired evaluation period using a decline curve analysis as shown in Eq (1).

(1)

Where q(t) is the production rate at a specific year (t), q(i)is the initial production rate at the first year, b
is the degree of curvature of the line where b=0 is the exponential decline, and Di is the initial decline rate.
6 IPTC-19598-MS

The model also requires a bathymetry data and a field boundary which serves as water depth and location
constraint for the wells, surface facilities, and pipelines. Once this data is supplied, the model is initiated
by applying a k-means clustering technique to provide an initial guess for both the number and position of
surface facilities required to drill the given number of wells. A Mixed-Integer Linear Programming is then
used to allocate the wells to platforms or islands optimally and then to processing facilities based on the
minimum drilling and pipeline cost.
At each optimization run, the model outputs a detailed 3D well path trajectory for each well, including its
measured depth, inclination angles, and the time to drill the well. Similarly, the model provides an accurate
surface facility output, including the type, number, size, and location of surface facilities. The model also
details the optimum pipeline and causeway/bridges network if needed based on finding the least-cost tree.
From this data, the model estimates the drilling, pipeline, and surface facility costs and determines the
revenue based on the forecasted production from the reservoir model or the decline curve analysis. Finally,
NPV economic analysis using these costs and revenue is conducted. This process is repeated until the highest
NPV configuration is found.
After each run, a stochastic perturbation is conducted to alter the allocation of wells to platforms or islands
and similarly the distribution of islands or platforms to pipelines and surface facilities. The perturbation
causes a re-adjustment of platform positions and field configurations. This allows us to explore the field
space for other possible field networks. A Metropolis-Hastings algorithm is applied once a probability value
is reached to avoid being trapped in a local minimum. Figure 3 shows the flowchart of the process.

Figure 3—Optimization Algorithm Flowchart

IPTC-19598-MS 7

We must determine the capital costs, which include drilling and surface facility costs as well as the
operating costs to maintain and service the wells to carry out the economic assessment. Furthermore, we
must estimate the revenue from the generated production portfolio of the reservoir simulation model or using
the decline curve analysis. In the next section, we illustrate how the capital, operating costs, and revenue
are calculated in the numerical model.

Economic Model
A detailed capital and operating cost as well as revenue assessment are needed to ensure sound decisions
during the field development planning. While the oil and gas industry has developed experience in drilling
costs and installing facilities on the onshore and offshore platform developments, island and causeway
construction is not as common. Therefore, we outline generic drilling and surface facility cost models for
artificial islands based on a review of publicly available data. The cost of offshore facilities has been detailed
in Almedallah and Walsh (2019) and is summarized in Table 2.
In this model, the equation of the total capital cost is given by Eq (2):

(2)

Where Ctotal is the total capital (i.e. field) cost, Cdrilling is the drilling cost which accounts of a realistic
drilling cost, n is the number of wells to be drilled. Cfacility is the surface facility cost, and j is the total number
of facilities to be constructed.
8 IPTC-19598-MS

Table 2—Summary of the equations that are used for the artificial islands and the one used for the offshore platforms

In offshore platform developments, the drilling cost is calculated using offshore drilling data while in
the island development, it is calculated using onshore drilling data. The surface facility includes wellhead
platform, tie-in platform, submarine pipeline (both flowline and trunkline) and separation facility. For the
artificial islands, the surface facilities cost includes the island cost in addition to pipeline cost. The pipeline
cost will depend on the transportation option (i.e. using a causeway or offshore submarine pipelines). In
both cases, however, the surface facilities cost will include island cost which is described below.
IPTC-19598-MS 9

Once the drilling and surface facility capital costs as well as the onshore or offshore operating costs are
calculated using the functions above, an economic analysis using NPV can be carried out. In this model,
the parameters used to carry out this analysis is demonstrated in Table 3. The revenue is calculated using
the production portfolio generated from the reservoir simulation model and/or the decline curve analysis
multiplied by the oil price. A shutdown period is included that accounts for field maintenance and well
services activities. The default shutdown period is ten days, although we vary this period later in this
publication as part of the sensitivity analysis.

Table 3—NPV Analysis Parameters

Results and Case Studies

To demonstrate and validate the approach, we apply it to a case study that couples a reservoir simulation to
the integrated model detailed in this paper. The case study includes twenty-five wells that were optimally
placed using Eclipse, a commercial reservoir simulation software. The reservoir data used in the model is
shown in Table 4. In this case study, we replicate the surface bathymetry and topography of Long Beach,
California where one of the earliest artificial islands have been built due to shallow-water and the presence
of population near shore. The objective of this case study is to develop a plan using a) artificial island
constraints and b) offshore platform constraints and then assess the highest NPV option among the two.

Table 4—Reservoir Properties Data

The spacing constraints imposed on both the offshore platforms and the artificial islands are shown in
Figure 4. The minimum water depth for which an offshore platform can be installed is assumed to be ten
meters while we allow the artificial island to be on top of water depth that is as shallow as one meter. On
the one hand, the minimum exclusion zone for the platform is 500 meters; this sets the distance between
two offshore platforms to avoid unrealistic results and ensure safe passage for offshore vessels and rigs.
Whereas, the minimum execution zone for the artificial island is set to 300 meters since less offshore traffic
is anticipated when islands are in operation. The maximum rig reach for the offshore wells is capped at 8
km while artificial islands’ rig reach is set to 9 km. This complements our review which found that artificial
islands use onshore rigs which has better reach capabilities than offshore rigs.
10 IPTC-19598-MS

Figure 4—Sample graph to explain the minimum allowed water depth, the minimum exclusion zone,
and the maximum drill target reach for a) offshore platforms, b) and artificial islands on the right.

Using these constraints, we introduce below Case-Study A which applies artificial islands and Case
Study-B which uses offshore platforms, compare their results and then determine the highest NPV
configuration. Finally, we provide a discussion section which analyses the sensitive parameters to the results.

Case Study-A: Artificial Island Optimization:

This case study assumes that only artificial islands can be placed to drill the wells. A summary of the
constraints used for this case study is shown in Table 5.

Table 5—Case Study – A Constraints and Design Consideration Summary

At first, the model introduced a single island and tried to reach the wells from this only island; however,
it violated the constraint of the maximum 20 wells per island. Therefore, an additional island has been
introduced.
The k-means clustering method was able to identify an initial position for these two islands based on the
location of well targets but has not yet optimally place the islands as it has not incorporated other factors
such as water depth and the minimum distance between facilities. At the same time, the model applied the
MILP and has generated an initial allocation of wells to platforms. The results of setting this initial solution
are shown in Figure 5.
IPTC-19598-MS 11

Figure 5—Initial allocation and using k-means clustering, a) shows the first attempt with one island which
violated the maximum wells per island constraint while b) suggested two islands satisfying both constraints.

At each iteration, the model allows to calculate a 3D drilling path for each well and adjust the position
of the island, now, based on a weighted capital cost for surface facilities including water depth and drilling
costs. Based on the new capital cost and operating costs, the model estimates the production using declined
curve analysis and computes the NPV. The production decline using the exponential decline curve analysis
is shown in Figure 6.

Figure 6—Decline Curve Analysis Results for Island-A and Island-

B based on the a) initial allocation of wells b) final allocation of wells

At the final iteration, the model was not able to generate a better NPV configuration, and hence, the model
reached an optimal plan for this island development. The model was able to identify two islands which can
drill all the 25 wells of the development. These two islands are connected to a manifold by two flowlines
(572 and 300 meters) which then transports the crude to a gas-oil separation facility (GOSP) located onshore
by a trunkline. The location of these two islands as well as this pipeline connection is illustrated at early
iteration and final iteration in Figure 7.
12 IPTC-19598-MS

Figure 7—Results of Case Study-A after a) early iterations and b) at the final iteration, based
on minimum water depth of one meter. [Red lines are the location of well targets, yellow square
is the island location, black square is the manifold area, and blue pentagon is the GOSP]

The model was able to successfully place the islands in a proper water depth subject to the previously
identified minimum and maximum water depth constraints. Island B has been placed in a water depth of
one meter at exactly the minimum water depth constraint as expected since the model will favor lowering
the size of the island. It should be noted that this minimum constraint ensured that the island is not placed
in the mainland. This achieves the objective of placing the islands only in the offshore coast and avoids
the populated mainland area. On the other hand, Island A has been placed at 4.39 meters. The minimum
exclusion zone constraint of 300 meters has enabled to separate the placement of the islands apart which
could otherwise place Island A on also the shallow area closer to the coast, an obvious choice to reduce the
total size of the island. Detailed parameter analysis summary of the number of wells, water depth, flowline
distance, island areas, and island volumes are shown in Table 6.

Table 6—Detailed Parameter Analysis of Case-Study-A

The MILP has also successfully allocated the 25 wells to the two islands based on the minimum drilling
reach and cost. In this scenario, Island A has accommodated eleven (11) wells, whereas island B has been
allocated with fourteen (14) wells. This allocation has met the maximum drilling reach of 9000 meters and
maximum dogleg severity specified at 8 deg/100ft. Based on the identified maximum number of wells per
row (i.e. 5 wells per row), the wells spacing (i.e. 20 meters) and the row spacing (i.e. 50 meters), Island
A and Island B have placed the wells in three rows. Figure 8 illustrates the placement and distribution of
wells in the two islands.
IPTC-19598-MS 13

Figure 8—The resulting layout of island A and B including well and row spacing, number of wells and their allocation

The algorithm applied the cost functions that we listed earlier to obtain the results. Then, this data was
used by the NPV analyzer to generate a value of almost $4050 million US dollar.
It should be noted that the minimum water depth plays a vital role in the placement and the result field
network. To test the effect of choosing a minimum water depth, we vary the 1-meter minimum depth
restrictions to 3 meters. The field configuration for the 3-meter scenario is shown in Figure 9 when compared
to the 1-meter scenario has resulted in $6MM reduction in NPV. As expected, the higher the minimum
water depth is chosen, the less is the resulting NPV because additional volume of sand and construction
would be needed.

Figure 9—Results of Case Study-A at the final iteration, based on minimum water depth of 3 meters [Red lines are the location
of well targets, yellow square is the island location, black square is the manifold area, and blue pentagon is the GOSP

Case Study-B: Offshore Platform Optimization

The second case study assumes that only offshore platforms can be installed to drill the wells. The same
algorithm routines generated a field development plan with three wellhead platforms connected to a tie-
in platform which then connect to a GOSP. The resulting configuration is shown in Figure 10. Due to the
maximum constraint of having a maximum of 10 wells per platform, this case has allocated the 25 wells to
three wellhead platforms. In addition, it has placed the platform in a water depth that is above the minimum
depth specified in the constraint. Detailed analysis of the number of wells, water depth, and flowline distance
is presented in Table 7.
14 IPTC-19598-MS

Figure 10—Resulting configurations of wellhead platforms (Red lines are the location of well targets, yellow triangles
represent the platform locations, black triangle is the tie-in platform location, and blue pentagon is the GOSP)

Table 7—Detailed Results of Case Study-B

The NPV of this scenario is $3,168 MM, which is $890 MM less than the artificial island field
development presented in Case Study-A. This is attributed to several factors but mainly due to the higher
cost of platforms in case-study B which totaled $145 MM compared to the cost of artificial islands which
only costed $20.33 MM for both islands. Thus, the cost function that describes the behavior of the effects of
water depth, maximum number of wells per platform and the anticipated size of both platforms and islands
play a vital role in determining the highest NPV configuration of field developments. We show the results
of comparing drilling costs, total facility costs, and the NPV of artificial islands against offshore platforms
in Figure 11. Based on the results of our cost function and the input used for this case study, artificial islands
development is favored against offshore platforms.

Figure 11—Results of Comparing Costs and NPV (in $MM) of Artificial Islands and Offshore Platforms
IPTC-19598-MS 15

However, the artificial island might not always be the most economical configuration as it would be
strongly influenced by the specified constraints. As operators have different criteria and design restriction,
the advantage of this model is that it provides the flexibility to change these constraints to fit the required
operation and determine the economic impact of changing one constraint. For instance, we demonstrated in
Case Study-A how changing the minimum water depth from 1 meter to 3 meters had an impact on the total
net present value. Then, the operator can decide whether this impact is high or low based on their operation
and standards and the difference in NPV.
For our model and based on our assumed cost function and design assumptions, the parameters and
constraints have a variety of impact in the total NPV. In the next section, we present a sensitivity analysis to
highlight the most important factors when considering artificial island and offshore platform developments.

Discussion and Analysis

To evaluate the sensitivity and impact of the different design constraints, we focus on varying the constraints
related to artificial islands. Studies into the impact and sensitivity of these constraints on offshore platforms
can be found in previous publications, eg. (M. K. Almedallah & Walsh, 2019b) and (M. Almedallah,
Walsh, & Lau, 2018). In this paper, we focus our attention on understanding the effects on artificial island
development.
We selected the key and critical constraints related to artificial islands that we have previously reviewed,
and evaluate their impact based on the numerical model. These include 1) island layout shape, 2) well
spacing, 3) maximum number of wells, 4) row spacing, 5) pipeline and causeway installation option (i.e.
whether to have a causeway for well service and pipeline installation or use offshore vessels and install
submarine pipeline) and lastly 6) shutdown days in a year. For each of these constraints, we compare the
NPV results of Case Study-A (i.e. the Base Case) with three additional options, as highlighted in Table 8.

Table 8—Sensitivity Data

At first, we compare the Base Case which was presented in Case Study-A to the different scenarios
listed in Option-A, B, and C. This is to test and highlight the effect of having a different combination of
assumptions and constraints towards the results.
The bottom row of Table 7. highlights the results and show the wide variation in NPV compared to the
Base case. Because we changed more than one parameter at once, it is not possible to pinpoint a sole factor
to this wide variation. However, it is vital to see how different assumptions had resulted in a change of $246
MM to $188 MM to the NPV illustrating the importance of choosing and carefully studying the constraints.
16 IPTC-19598-MS

To be able to understand the effect of these individual parameters, we develop a tornado chart showing the
sensitivity range of each parameter as shown in.

Figure 12—Tornado chart highlighting the sensitivity of the model to the key constraints related to artificial islands

Based on Figure 12, the most sensitive parameter is the shutdown days per year as this will impact the
revenue and thus the NPV. Increased uptime is reported when using artificial islands over offshore platforms
because the operation and maintenance staff are situated on the islands and hence, they are located closer
to well and facilities -- enabling more rapid, frequent and efficient intervention. Furthermore, the wider
space of wells in the islands allows for less production shutdown time during rig moves (Talbot et al.,
2012). Therefore, this is a critical factor to evaluate and determine when using such models to choose a
development plan.
Another sensitive parameter is the maximum number of wells per island. In offshore platforms, as the
number of wells grows, the structure of the platforms also enlarges to a limit where the cost of procurement
and installation become prohibitive to add more wells. However, this constraint is not that strict in artificial
islands as larger island can be built with less procurement and installation restrictions. Thus, this provides
an advantage to artificial islands to place more wells in islands as can be demonstrated from the NPV results
in Figure 12.
In addition, the transportation and pipeline option has shown a sensitive behavior when varying from
causeway to offshore option. Based on the cost assumption of this model and the data of this case study,
the offshore option is favored when compared to causeway although operating costs as shown in Figure 13.
This is because $168 MM in construction costs is reduced by not building a causeway and its associated
(expensive) bridges. It is encouraging to see that the Thums Islands, which was used as a basis to develop
this case study, has also not applied a causeway option when developing the field. The advantages of this
model lie within its flexibility to analyze both options for any field development to determine the cost
magnitude of conducting both options.
IPTC-19598-MS 17

Figure 13—Results of Comparing Costs and NPV of Artificial Islands and Offshore Platforms

Well spacing and layout shape have a minimal cost impact on the economic result - this is mainly due
to the island cost function. The island cost function has a y-intercept of $10MM, representing fixed capital
costs that are unaffected by the reduction in island area. This behavior matches a realistic construction
project which will incur a fixed cost regardless of the magnitude of the project arising from equipment
mobilization, permits and licenses, and labor charges. Nevertheless, one should not ignore the effect of
reducing the size of an island area. Reducing an island size might have advantages related to minimizing
the environmental and construction impact, which not captured in our model.
There are other factors that could affect artificial islands optimizations, and due to the wide range of
development options, drilling, and facility design, optimization should be combined with other studies
related to the construction and environmental work for the islands to realize the full benefits of artificial
islands.

Conclusion
Artificial islands are employed in shallow-water oil and gas fields across the world. Their design and location
must be carefully selected to maximize the benefits of their use and minimize the associated investment.
Although many scholars optimized the offshore development using different optimization techniques, in the
literature, there is a lack of research on the optimization of artificial islands for the oil and gas industry. In
this paper, we first reviewed six artificial islands taken from six different locations to determine the unique
designs and constraints related to artificial islands and offshore platforms. Then, we used the collected
limitations on artificial island building to feed them to a numerical optimization algorithm to maximize
the NPV.
We show that the model can generate field configurations for both artificial island and offshore
developments in a short computational time, reducing the planning time. A multitude of potential
combinations exist when developing shallow-water fields, and hence, a computer-based approach is vital
to select the optimum combination with the highest NPV.
In summary, compared to offshore platforms for fields located in shallow water depth, the model has
shown that artificial islands have economic benefits in both capital (CAPEX) and operational (OPEX)
costs. CAPEX is lower because fewer islands and hence pipelines are constructed, which complements the
observation made by (A. Modavi, 2011). Moreover, artificial islands allow the use of powerful land-based
rigs capable of drilling more extended wells and reaching more of the reservoir which also supports the
18 IPTC-19598-MS

conclusion drawn by (Alnughaimish, Al-Hamdan, & Al-Shobaili, 2009; C. Modavi, Martin, Al Muflehi,
Walters, & Ismail, 2008).

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