Fuzzy logic applied to value of information assessment in oil and gas projects.

Vilela, Martin; Oluyemi, Gbenga; Petrovski, Andrei

Abstract

The concept of value of information (VOI) has been widely used in the oil industry when making decisions on the acquisition of new data sets for the development and operation of oil fields. The classical approach to VOI assumes that the outcome of the data acquisition process produces crisp values, which are uniquely mapped onto one of the deterministic reservoir models representing the subsurface variability. However, subsurface reservoir data is not always crisp; it can also be fuzzy and may correspond to various reservoir models to different degrees. The classical approach to VOI may not, therefore, lead to the best decision with regard to the need to acquire new data. Fuzzy logic, introduced in the 1960s as an alternative to the classical logic, is able to manage the uncertainty associated with the fuzziness of the data. In this paper, both classical and fuzzy theoretical formulations for VOI are developed and contrasted using inherently vague data. A case study, which is consistent with the future development of an oil reservoir, is used to compare the application of both approaches to the estimation of VOI. The results of the VOI process show that when the fuzzy nature of the data is included in the assessment, the value of the data decreases. In this case study, the results of the assessment using crisp data and fuzzy data change the decision from ‘acquire’ the additional data (in the former) to ‘do not acquire’ the additional data (in the latter). In general, different decisions are reached, depending on whether the fuzzy nature of the data is considered during the evaluation. The implications of these results are significant in a domain such as the oil and gas industry (where investments are huge). This work strongly suggests the need to define the data as crisp or fuzzy for use in VOI, prior to implementing the assessment to select and define the right approach.

Citation

VILELA, M., OLUYEMI, G. and PETROVSKI, A. 2019. Fuzzy logic applied to value of information assessment in oil and gas projects. Petroleum science [online], 16(5), pages 1208-1220. Available from: https://doi.org/10.1007/s12182-019-0348-0

• Journal Article Type: Article
• Acceptance Date: Apr 19, 2019
• Online Publication Date: Jul 3, 2019
• Publication Date: Oct 31, 2019
• Deposit Date: May 23, 2019
• Publicly Available Date: May 27, 2019
• Journal: Petroleum science
• Print ISSN: 1672-5107
• Electronic ISSN: 1995-8226
• Publisher: Springer
• Peer Reviewed: Peer Reviewed
• Volume: 16
• Issue: 5
• Pages: 1208-1220
• DOI: https://doi.org/10.1007/s12182-019-0348-0
• Keywords: Value of information; Fuzzy logic; Uncertainty and risk management; Oil and gas industry
• Public URL: https://rgu-repository.worktribe.com/output/243582
• Contract Date: May 27, 2019