Abstract
This paper presents a model to assist in setting the daily production rates for an offshore oilfield to achieve a quarterly production target. The produced crude oil is frequently accompanied by the production of gas, which has much lower value. Since there are environmental limits to the amount of gas that can be flared to waste, problems on gas-processing can very quickly limit oil output. With the commencement of natural decline in many oilfields in the North Sea, the loss of crude output as a result of gas constraints cannot be compensated in the same planning period. This makes the ultimate output, and hence the reward, more sensitive to the problems associated with gas-processing. The model uses a stochastic dynamic programming algorithm to maximize the financial reward. Gas-related limiting factors and the oil and gas plant downtime are considered. The user is allowed to interrogate the model and interact with it when major unforeseen restrictions are imposed on gas capacities. The output includes the optimal production rate and probability and cost of not achieving the target.