Oil and Gas Production Optimization; Lost Potential due to Uncertainty

Abstract The information content in measurements of offshore oil and gas production is often low, and when a production model is fitted to such data, uncertainty may result. If production is optimized with an uncertain model, some potential production profit may be lost. The costs and risks of introducing additional excitation are typically large and cannot be justified unless the potential increase in profits are quantified. In previous work it is discussed how bootstrapping can be used to estimate uncertainty resulting from fitting production models to data with low information content. In this paper we propose how lost potential resulting from estimated uncertainty can be estimated using Monte-Carlo analysis. Based on a conservative formulation of the production optimization problem, a potential for production optimization in excess of 2% and lost potential due to the form of uncertainty considered in excess of 0.5% was identified using field data from a North Sea field.