A Procedure for Assessing the Value of Oilfield Sensors

Abstract

Summary Spurred by improvements in reliability, cost, and accuracy, sensors offer a means of increasing expected ultimate hydrocarbon recovery in producing assets as well as in planned and prospective projects. Ultimate hydrocarbon recoveries larger than those currently achieved are possible, especially when sensors are used with advanced recovery methods. However, it is often unclear if the incremental recovery justifies the cost of installing the sensors. This paper proposes a method for estimating incremental values attributable to real-time sensors and provides a demonstration of the method for several production technologies and reservoir settings. The method offers a transparent and practical means of making value of information (VOI) computations to be implemented readily by project teams. An additional benefit of this method is that the process of specifying the inputs to the analysis facilitates a systematic discussion of strengths and weaknesses, and builds consensus regarding assumptions. The method is applied to four scenarios developed by a panel of industry experts to represent generic, but yet realistic reservoirs. The results for these scenarios indicate the value of sensors depends on the market price for product and the type of reservoir and production technology. The greatest absolute economic value for the use of sensors is obtained for a deepwater reservoir, while the greatest economic value per equivalent barrel of oil produced is obtained for a mature onshore reservoir. These expected economic values are intended to be compared to the cost required to implement the sensors to assess whether or not there is an expected net benefit.