System Optimisation

Like most engineering systems, oil & gas production systems are defined by a large number of design parameters. The engineers job is to determine which set of parameters are most appropriate for a particular project.

This can be achieved through optimization, where important design variables are adjusted to maximise the value of the development. The value will often be measured in terms of Net Present Value, Internal Rate of Return or Profitability Index. In addition, the optimisation must also take account of constraints and technical feasibility issues.

For example, when delivering fluids through a pipeline system where the overall flow rate is defined (perhaps through a sales contract), it is important to establish the optimal balance between pipeline size and pumping costs. As the pipeline size is increased, the pumping costs are reduced, meaning that there is a trade-off to be made between the capital costs of the pipeline and the capital/operating costs of the pumps. Systems such as this are commonplace in gas transmission systems where intermediate compressor stations are used for maintaining pressure. In this instance the question of optimisation involves the minimisation of the system’s lifecycle costs.

However, for upstream oil & gas developments, the flow rate is not usually defined, and the optimisation is a trade-off between incremental revenue and incremental capital expenditure (CAPEX). Traditionally the optimization of such systems has relied on heuristics and engineering experience. However, this often leads to cost reductions which can produce sub-optimal solutions. In reality, optimisation of upstream oil & gas production systems needs to balance the CAPEX against the revenues generated through production.

Using the latest in integrated reservoir modelling techniques, FEESA can study the impact of important design decisions such as tubing sizes, number of wells, pipeline route/size, or artificial lift methods on the production through field life, and we can relate this to the true worth of the project or Net Present Value (NPV).