The theory of risk provides a systematic approach to handling uncertainty with well-defined risk and deviation measures. As the model-based economic optimization of the water-flooding process in oil reservoirs suffers from high levels of uncertainty, the concepts from the theory of risk are highly relevant. In this paper, the main focus is to offer an asymmetric risk management, i.e., to maximize the lower tail (worst cases) of the economic objective function distribution without heavily compromising the upper tail (best cases). Worst-case robust optimization and Conditional Value-at-Risk (CVaR) risk measures are considered with geological uncertainty to improve the worst case(s). Furthermore, a deviation measure, semi-variance, is also used with both geological and economic uncertainty to maximize the lower tail. The geological uncertainty is characterized by an ensemble of geological model realizations and the economic uncertainty is defined by an ensemble of varying oil price scenarios.
|Number of pages||5|
|Publication status||Published - 2016|
|Event||11th IFAC Symposium on Dynamics and Control of Process: SystemsIncluding Biosystems - Trondheim, Norway|
Duration: 6 Jun 2016 → 8 Jun 2016
Conference number: 11
Bibliographical noteGreen Open Access added to TU Delft Institutional Repository ‘You share, we take care!’ – Taverne project https://www.openaccess.nl/en/you-share-we-take-care Otherwise as indicated in the copyright section: the publisher is the copyright holder of this work and the author uses the Dutch legislation to make this work public.
- Water-flooding optimization
- Theory of risk
- Handling uncertainty
- Risk measures