Assessing the value of oilfield sensors

SPE paper on the application and value of oilfield sensors presented by researchers at the University of Texas at the recent Digital Energy Conference and Exhibition.

SPE paper 109628-MS presents an interesting approach to assessing the value of oilfield information and specifically looked at the benefit of oilfield sensors in SAGD heavy oil operations along with other production scenarios. UT researchers used formal methods for valuing or monetizing information (VOI) used in other industries and applied them to oilfield sensors that provide real time operating data.

The VOI method in assessing the value of sensors in heavy oil operations is to first estimate the value of a course of action without sensors and then re-estimate the result with sensors. If the difference between the two expected values is greater than the cost of using the sensors, they have a net positive VOI and should be installed.

The VOI approach models:

• the uncertainty in the outcome of decisions
• the ability of the sensors to change a decision
• the ability of the sensors to change the financial outcome of a course of action

The paper concludes that the real-time sensors are indeed a benefit to heavy oil SAGD operations. As we continue to optimize heavy oil operations, data driven processes enabled through real-time sensors will be increasingly important - understanding and quantifying the benefit of this information will be key in planning these systems.

Kambiz.