Time-explicit methods for joint economical and geological risk mitigation in production optimization

Quick Review

“…The lack of reliability of long-term predictions is the key problem of many strategies. Given the time-dependent nature and the instability of oil prices, more often than not, it makes oil risky production [1,2].…”

A Novel Approach for Risk Minimization in Life-Cycle Oil Production Optimization

“…We do not consider important aspects connected to multi-objective optimization, e.g. the trade-off between long term vs short term profit (Van Essen et al, 2011;Christiansen et al, 2016). However, we note that our analysis on risk measures can be extended to such cases.…”

“…For these α values, CVaR α (ψ) is simply the mean of the j lowest profit outcomes. Finally, we note that for any α 1, CVaR α ψ(u, θ) is non-differentiable with respect to the controls, u. Non-differentiable points occur when two or more of the profit outcomes have the same value (Christiansen et al, 2016). In such cases the set of profit outcomes cannot be uniquely sorted in ascending order.…”

Optimal Well-Placement Using Probabilistic Learning

“…Thus, if tails of production are critical for decision making, a larger statistical ensemble is required, whereas assessments based on mean and variance would be treated sufficiently well with a smaller ensemble. In this context, both robust optimization [13,28], involving a combination of mean and variance, risk-based optimization involving probabilities of exceedance [2], conditional value-at-risk (CVaRO) [8] dealing with risks associated with low returns, and utility functions [16] have been considered. Several recent studies dealing with optimal well-placement have stressed the value of joint location/control optimization whereby both the location of the wells and production strategy over some time horizon are simultaneously optimized [5,6,18,28,29].…”