Profit and Risk Measures in Oil Production Optimization

Andrea Capolei, Bjarne Foss, John Bagterp Jørgensen

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Abstract

In oil production optimization, we usually aim to maximize a deterministic scalar performance index such as the profit over the expected reservoir lifespan. However, when uncertainty in the parameters is considered, the profit results in a random variable that can assume a range of values depending on the value of the uncertain parameters. In this case, a problem reformulation is needed to properly define the optimization problem. In this paper we describe the concept of risk and we explore how to handle the risk by using appropriate risk measures. We provide a review on various risk measures reporting pro and cons for each of them. Finally, among the presented risk measures, we identify two of them as appropriate risk measures when minimizing the risk.
Original languageEnglish
Title of host publicationProceedings of the 2nd IFAC Workshop on Automatic Control in Offshore Oil and Gas Production OOGP 2015
Volume48
Publication date2015
Pages214-220
DOIs
Publication statusPublished - 2015
Event2nd IFAC Workshop on Automatic Control in Offshore Oil and Gas Production - Florianópolis, Brazil
Duration: 27 May 201529 May 2015

Conference

Conference2nd IFAC Workshop on Automatic Control in Offshore Oil and Gas Production
CountryBrazil
CityFlorianópolis
Period27/05/201529/05/2015
SeriesI F A C Workshop Series
ISSN1474-6670

Keywords

  • Production optimization
  • Oil production
  • Risk measures
  • Stochastic problems

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