Improving Allocation and Hydrocarbon Accounting Accuracy Using New Techniques

Abstract

Summary In the oil industry, it is necessary to reconcile fiscally measured hydrocarbon production with estimated production from associated wells. This process is known as "allocation" and is important for a number of reasons, including accounting for field production to owners/governments, field surveillance, and volumetric input to reservoir simulators. Traditionally, allocation is performed on a monthly basis, reconciling the "less-accurate" sum of the well tests adjusted by well uptimes with the "more-accurate" fiscal measurements. This process is subject to a number of inherent inaccuracies, including less-than-perfect well tests, lack of knowledge of precisely when the wells were interrupted, unknown well-flow changes, and uncertainty as to how to allocate effectively the difference between fiscal and well-test measurements. Ineffective allocation can lead to financial consequences caused by inaccuracies in volumes allocated between various owners and tax regimes. Inaccuracies can also feed through to reservoir simulators, which may be used in corresponding decision-making processes (e.g., where to drill the next well). These inaccuracies are generally compounded with time because allocation is performed month after month throughout the field life cycle. Associated with hydrocarbon accounting are key performance indicators (KPIs) (e.g., well daily production and deferment rates). The purpose of this paper is to describe Shell's experiences in improving allocation accuracy and automatic KPI reporting through more-effective use of available production data and by using a continuous, rather than a discontinuous, hydrocarbon accounting process.