Decision Analysis for Integrated Reservoir Management

Abstract

Abstract Decision analysis (DA) is presented asA tool for carrying out a thorough and logical evaluation of alternative strategies,A means of systematically determining the best available reservoir management strategy with the objective of maximizing the net present value of the asset and the company. Decision analysis is a framework for conducting integrated reservoir management. It is possible to integrate reservoir engineering, environmental regulations, environmental impact assessment, geochemistry, geological studies, process design, risk analysis, QC and financial appraisals with the aim of maximising the return on investment. The value of decision analysis is not only in helping to structure information and thinking, but also in providing a vehicle for communication between different groups and technical disciplines. A complex decision problem is decomposed into separate components, often in the form of a decision tree, on which perceptions of options, uncertainties and values can be explicitly represented. Decision analysis is an ideal tool for decision making in an environment of risk and uncertainty. The selection of a strategy for produced water handling and disposal is presented as an example of an application of decision analysis involving the integration of a variety of disciplines. Introduction This paper discusses the benefits of applying decision analysis (DA) to oilfield asset management. Since its development in the 1960's, DA has been used increasingly in most industries with respect to planning corporate strategy, investment in new products, production planning and the selection of site locations. The application of DA has been fuelled by its inclusion in most MBA courses. The oil industry has also seen increasing use of DA. Over the past four decades there has been an almost exponential growth in the number of SPE papers incorporating DA (Fig. 1). The first oil industry use of DA was related to decisions on exploration well drilling. The use of DA has now extended to, for example, IOR, scale control(1), drilling mud selection, fishing/side-tracking, value of well log information, mature field evaluation and reservoir souring. Conoco is an example of an oil company that champions the every day use of DA. The use of DA is a means of rationalizing decisions and integrating the various disciplines such as reservoir engineering, process design, production chemistry and financial. The DA process enables a more holistic view to be made within the context of the overall objective to increase the NPV of the oilfield asset.