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Optimization of Production Operations in Petroleum Fields

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SPE 77658
Optimization of Production Operations in Petroleum Fields
Pengju Wang, SPE, Stanford University; Michael Litvak, SPE, BP; Khalid Aziz, SPE, Stanford University
Copyright 2002, Society of Petroleum Engineers Inc.
This paper was prepared for presentation at the SPE Annual Technical Conference and
Exhibition held in San Antonio, Texas, 29 September–2 October 2002.
This paper was selected for presentation by an SPE Program Committee following review of
information contained in an abstract submitted by the author(s). Contents of the paper, as
presented, have not been reviewed by the Society of Petroleum Engineers and are subject to
correction by the author(s). The material, as presented, does not necessarily reflect any
position of the Society of Petroleum Engineers, its officers, or members. Papers presented at
SPE meetings are subject to publication review by Editorial Committees of the Society of
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acknowledgment of where and by whom the paper was presented. Write Librarian, SPE, P.O.
Box 833836, Richardson, TX 75083-3836, U.S.A., fax 01-972-952-9435.
Abstract
For some petroleum fields, optimization of production
operations can be a major factor for increasing production
rates and reducing production costs. While for single wells or
other small systems simple nodal analysis can be adequate,
large complex systems demand a much more sophisticated
approach. Many mature fields are produced by gas-lift under
multiple constraints imposed by the field handling capacity of
the system. In this paper we present an optimization technique
for allocating production rates and lift-gas rates to wells
of large fields subject to multiple flow rate and
pressure constraints.
The well rate and lift-gas rate allocation problem has been
addressed in the literature1-13. However, existing methods are
either inefficient or make significant simplifications. This
often leads to suboptimal operations. This paper proposes a
new formulation of the problem that is able to handle flow
interactions among wells and can be applied to a variety of
problems of varying complexities. We show that the proper
formulation of the optimization problem is important in the
practical use of modern optimization techniques. Once
formulated, the optimization problem is solved by a sequential
quadratic programming algorithm. Our results show that the
procedure developed in this paper is capable of handling
complex oil production problems.
Introduction
In petroleum fields, hydrocarbon production is often
constrained by reservoir conditions, deliverability of the
pipeline network, fluid handling capacity of surface facilities,
safety and economic considerations, or a combination of these
considerations. While production can be controlled by
adjusting well production rates, allocating lift-gas rates, and in
some fields, by switching well connections from one flowline
to another flowline, implementation of these controls in an
optimal manner is not easy. The objective of dynamic
production optimization is to find the best operational settings
at a given time, subject to all constraints, to achieve certain
operational goals. These goals can vary from field to field and
with time. Typically one may wish to maximize daily oil rates
or minimize production costs.
Various aspects of production optimization have been
addressed in the literature. For example, several researchers1-5
have studied the problem of allocating limited amount of
available gas to specified wells for continuous gas-lift. Fang
and Lo6 proposed a linear programming technique to allocate
lift-gas and well rates subject to multiple flow rate constraints.
Barnes et al.7 developed an optimization technique for a
portion of the Prudhoe Bay field in Alaska. This model
maximizes oil production while minimizing the need for gas
processing. Several papers8-10 have reported results for the
production optimization of the Kuparuk River field in Alaska.
The techniques published so far1-10 either addressed only a part
of the optimization problem of interest to us or made
significant simplifications during the optimization process.
In most commercial reservoir simulators11,12, flow rate
constraints on facilities are handled sequentially by ad hoc
rules. In addition, gas-lift optimization is done separately from
the allocation of well rates. Because of the nonlinear nature of
the optimization problem and complex interactions, results
from such procedures can be unsatisfactory.
In a companion paper Wang et al.13 presented a procedure
for the simultaneous optimization of well rates, lift-gas rates,
and well connections subject to multiple pressure, flow rate,
and velocity constraints. While this approach was successful,
it was limited in its ability to handle flow interactions among
wells when allocating well rates and lift-gas rates.
Here we extend the work of Wang et al.13 and propose a
new formulation for the problem of simultaneously optimizing
the allocation of well rates and lift-gas rates. The optimization
problem is solved by a sequential quadratic programming
algorithm, which is a derivative-based nonlinear optimization
algorithm. The proposed method is tested on several
examples. Results show that the method is capable of handling
flow interactions among wells and can be applied to a variety
of problems of varying complexities and sizes.
2 P. WANG, M. LITVAK, AND K. AZIZ
Description of the Optimization Problem
Reservoir Model. The reservoir is modeled by a conventional
black-oil reservoir simulator. It provides the conditions at the
well blocks that form the boundary conditions for the
gathering system.
Model of the Gathering System. The gathering system is
modeled as a tree-like network without loops. It includes
wells, links, and nodes. A well refers to a wellbore and its
surrounding reservoir conditions (potentially the whole
reservoir). Links refer to any device or facility across which
pressure changes. A link can be a tubing string, a choke, or a
pipeline. A node represents a flow junction or the terminal
point of a link. The fluid injection system is not considered in
this work. Fig. 1 is a schematic illustration of such a
gathering system.
For the multiphase flow in the gathering system, fluid
properties are represented by a black-oil model. The pressure
drop through a tubing or a pipeline is modeled by a drift-flux
model presented in reference 12. We choose the drift-flux
model because of its differentiability, which is an important
property when we solve the optimization problem using
derivative-based optimization algorithms. The pressure drop
through chokes is modeled by a multiphase choke model
developed by Sachdeva et al14. This model is able to handle
both critical and subcritical multiphase flows through
a restriction.
Optimization Problem. The objective can be maximizing or
minimizing the oil, gas, or water flow rate from the field or
some facilities. For example, we can maximize the total oil
flow rate from the field, or minimize the total lift-gas rate for
gas-lift wells. The decision variables include the well
production rates (controlled by the well chokes) and the lift-
gas rates. The constraints include maximum/minimum flow
rates and pressure constraints imposed on production wells or
network nodes, and maximum amount of lift-gas available for
gas-lift wells.
In this work we optimize the short-term production
operation based on static reservoir conditions. However, the
optimization tools can be combined with a reservoir simulator,
and applied repeatedly to optimize the long-term
production operations.
Optimization Method
For the optimization problem described here, Wang et al.13
presented a mixed integer linear programming (MILP) method
and a genetic algorithm. The MILP method is efficient,
however, it ignores flow interactions during the optimization
process, thus allocates well rates based on possibly inaccurate
well deliverabilities (how much flow rate we can produce
from each well). As a result, in some cases, the MILP method
tends to over-inject lift-gas and cannot optimally allocate well
rates. The genetic algorithm partially handles the flow
interaction, however, it is inefficient because it does not utilize
any derivative information of the objective and constraint
SPE 77658
functions. It is desirable to have an optimization method that is
able to handle the flow interactions and is computationally
efficient. Such methods are often derivative-based nonlinear
optimization algorithms. In this paper, we use a sequential
quadratic programming algorithm to solve the well rates and
lift-gas rates optimization problem.
Example Problem. Formulation plays an important role in
optimization. We use an example problem to illustrate the
difficulties in formulating the well rates and lift-gas rates
optimization problem and show how can these difficulties can
be resolved. In the example problem, two gas-lifted wells are
connected to a common manifold, then they are connected to a
separator through a common pipeline. The separator is
operating at a fixed pressure. The flow rates of each well are
controlled by a choke between the tubing string and the
manifold. The tubing strings, chokes, and pipelines are
modeled as links. The junctions of two or more links are
modeled as nodes. Fig. 1 illustrates the gathering system of
this problem. The oil production in this problem is constrained
by the water handling capacity of the separator and a
minimum bottom hole pressure limit on each well. The
objective is to maximize the daily oil production by allocating
the lift-gas rate and well rates of each well. We first look at
how the multiphase flow in this system can be modeled. Then
we analyze the potential difficulties of this optimization
problem. Finally we propose a formulation that is able to
handle these difficulties.
Governing Equation. The multiphase flow in a gathering
system is described by mass conservation and the Kirchoff’s
law. The mass conservation requires that every node should
have zero net flow rate unless it is a boundary node. The
Kirchoff’s law requires that the pressure for a node should be
the same no matter from which path it is computed.
We choose the oil flow rate of each well as the
independent variables and demonstrate how to construct the
governing equations for multiphase flow of the
example problem.
Given the oil flow rate of a well, we obtain the water and
gas flow rates of that well using appropriate well models.
Because the gathering system has a tree-like structure and the
fluid flows from the bottom up through the production tree,
according to mass conservation, the flow rate in every node
can be determined by summing up all the flow streams
entering that node:
q np ,i = ∑ q wp , j , p = o, g , w , …………………(1)
j∈Ω iw
where q np ,i denotes the flow rate of phase p in node i , q wp , j
denotes the flow rate of phase p for well j (phase g includes
both the formation gas and lift-gas), and Ω iw denotes the set
of wells whose flow streams enter node i .
Because of the tree-like structure of the gathering system,
there is a unique path connecting the separator with any well.
Suppose node j receives fluids only from well j . We can
SPE 77658 OPTIMIZATION OF PRODUCTION OPERATIONS IN PETROLEUM FIELDS
calculate the pressure of node j from two pressure transverse
calculations. The first calculation is from the reservoir to node
j . Denote the pressure for node j obtained from this
calculation as p rj . The second calculation is from the
separator (we assume the separator is operating at a fixed
pressure) to node j along the path connecting the separator
and node j , Denote the pressure for node j obtained from
this calculation as p sj . We name node j as the solution node
of well j . We choose a solution node for every well and
perform the described pressure transverse calculations.
According to Kirchoff’s law, the feasible set of oil flow rates
is governed by:
p rj − p sj = 0 , j ∈ Ω ns , Ω ns = nw , …………..(2)
where Ω ns denotes the set of solution nodes, nw denotes the
number of production wells.
In principle, for a particular well, we can choose its
solution node from any node that receives fluids only from
that well. For instance, in the example problem, we can choose
either node 3, 5, or 7 as the solution node for well 1, node 4, 6,
or 8 as the solution node for well 2. In practice, we always
choose the wellbores, i.e., node 7 and 8, as the solution nodes.
This choice has certain computational advantages. For
instance, when computing the pressure drop across a surface
choke, we always compute its upstream pressure based on its
downstream pressure and the flow rate across it. This
guarantees a unique upstream pressure no matter the flow
through the choke is critical or subcritical.
Equation (2) has nw independent variables and nw
equations. It forms a closed system of equations, and can be
solved by the Newton-Raphson method. Appendix A shows a
procedure for calculating the partial derivatives of p sj with
respect to the independent variables, which are required in the
Newton-Raphson method.
Computational Difficulties of Standard Formulation. A
straightforward formulation of the well rates and lift-gas rates
allocation problem is to choose the choke diameters and lift-
gas rates as the decision variables and formulate the
optimization problem as follows
(P1) maximize f (x ) , ………………….(3a)
subject to l ≤ F (x ) ≤ u , ………...(3b)
where f (x ) denotes the objective function, F (x ) denotes the
constraint functions, and l and u denote the lower and upper
bounds of the constraints. For the example problem, f (x ) is
the oil flow rate from the separator, F (x ) represents the water
flow rate from the separator, and the bottom hole pressures of
the two wells. We name this standard formulation as (P1).
In (P1), given x , a particular set of choke diameters and
lift-gas rates, to evaluate f (x ) and F (x ) , the flow rates and
pressures of some wells and facilities, Equation (2) has to be
3
solved to obtain the oil flow rate for each well. In some cases,
this can cause severe computational difficulties. For instance,
if some wells are so deep that they cannot produce without
appropriate amount of lift-gas, Equation (2) will have no
feasible solutions unless appropriate amount of lift-gas is
allocated to those wells. In addition, Equation (2) will have no
feasible solutions if excessive amount of gas is injected to a
well while the choke for that well is set to a small value in the
optimization process. Therefore, there is a large chance that
the solution process for problem (P1) will fail because we can
not evaluate the objective and constraint functions for a
particular x .
Another significant drawback of formulation (P1) is that it
is not good at handling well shut-in actions. When a well, say
well j , is converted from open status to shut-in status, we
need to solve two sets of Equation (2) with different
dimensionalities (one set without well j and one set with well
j being slightly opened) to evaluate the partial derivatives of
the objective function and constraint functions with respect to
the choke diameter for that well. This procedure can be time-
consuming and the results can be inaccurate, time-consuming
because we need to solve two sets of nonlinear equations to
obtain one partial derivative, inaccurate because we have to
use finite differences to approximate the derivatives of a
potentially non-smooth function.
Some of these computational difficulties are inherent in the
governing equation, Equation (2). When we formulate
Equation (2), we assume that the fluid flows up the production
tree. Replacing Equation (2) with another set of governing
equations may help to resolve some computational difficulties,
but some difficulties will persist, such as infeasible
combination of lift-gas rates and choke settings, and well shut-
in handling. Furthermore, as we will demonstrate by an
example, even when these computational difficulties do not
appear, the computational efficiency of formulation (P1) can
be disappointing.
New Formulation. Here we derive a new formulation to
overcome these limitations. The fundamental idea of the new
formulation is to avoid solving Equation (2) when evaluating
the objective and constraint functions.
In the new formulation we choose the oil flow rate and the
lift-gas rate for each well as the decision variables and use the
fact that for fixed flow rates the pressure drop across the choke
increases as the choke closes. In the example problem, we
choose the wellbores as the solution nodes. For a particular set
of oil and lift-gas rates, denoted as x , we calculate the bottom
hole pressures using the two pressure transverse calculation as
described before. When we perform the pressure transverse
calculation from the separator side, we set all surface chokes
fully open. The set of oil and lift-gas rates x is within the
deliverability capacity of the gathering system if we have
p rj − p sj ≥ 0 , j = 1,..., n w , ………………………(4)
4 P. WANG, M. LITVAK, AND K. AZIZ
where p rj is the bottom hole pressure for well j calculated
from the reservoir side, p sj is the bottom hole pressure for
well j calculated from the separator side. In other words, if a
set of oil and lift-gas rates satisfies inequality (4), we can
produce the gathering system with that set of oil and lift-gas
rates by, where appropriate, adjusting some of the well
chokes.
The well rates and gas-lift optimization problem is now
formulated as
(P2) maximize f (x ) , ………………….(5a)
subject to l ≤ F (x ) ≤ u , ………...(5b)
p rj − p sj ≥ 0 , j = 1,..., n w . ….…(5c)
We name constraint (5c) the deliverability constraint. As in
formulation (P1), f (x ) and F (x ) denote the flow rates and
pressures of some wells or facilities. However, in (P2), they
are evaluated in a different way. In (P2), given a set of oil and
lift-gas rates, x , the flow rate and bottom hole pressure of a
well are computed from the reservoir side using appropriate
well models when computing p rj ; the flow rate and pressure
in network nodes are computed from the separator side when
computing p sj . Constraint (5c) ensures the optimal oil and a
lift-gas rate for problem (P2) is within the deliverability
capacity of the gathering system. Thus they can be produced
from the gathering system by appropriately adjusting the
choke diameters.
In the optimization process of (P2), we calculate p rj and
p sj , but do not require them to satisfy Equation (2), thus we
avoid the limitations encountered in (P1). In addition, we need
not pay special attentions to well shut-in actions. After we
obtain the optimal solution, we can decide the well status
according to their oil rate and the status of constraint (5c). In
the optimal solution, for well j , a zero oil flow rate indicates
that well j should be closed; a positive oil rate but inactive
deliverability constraint ( p rj > p sj ) indicates that well
should be partially closed; a positive oil rate and active
deliverability constraint ( p rj = p sj ) indicates that well j
should remain fully open.
Solution of the Optimization Problem. Formulation (P1) and
(P2) are nonlinear constrained optimization problems. In this
work, they are solved by SNOPT15, a general-purpose system
for solving large-scale optimization problems. SNOPT
implements a sequential quadratic programming (SQP)
algorithm that obtains search directions from a sequence of
quadratic programming subproblems. SNOPT requires
relatively few evaluations of the problem functions. Hence it
is especially effective if the objective or constraint functions
are expensive to evaluate15. The SQP algorithm used in
SNOPT is fully described in Gill et al.16
SPE 77658
SQP is a derivative-based optimization algorithm. Its
successful application requires efficient and accurate
evaluations of gradients of objective and constraint functions.
In this work, we are able to compute the gradient information
efficiently and accurately by exploring the tree-like structure
of the gathering system and utilizing automatic differentiation
techniques17. The details of this procedure are presented in
Appendix B.
Examples
We present three examples in this section. The first example
compares the performance of the MILP method with the SQP
method for a well rates and lift-gas allocation problem. The
second example compares the computational efficiency of
formulation (P1) and (P2). The third example demonstrates the
computational efficiency of formulation (P2) on problems of
various sizes and properties.
Example 1: Comparison between the MILP Method and
the SQP Method. This is a synthetic example with ten
vertical wells. The reservoir grid block pressures around these
wells vary between 3400 psi to 4900 psi. All wells are
connected to the same platform through tubing strings, chokes
with a maximum diameter of 48/64 inches, and surface
pipelines with a diameter of 3.5 inches and lengths between 60
to 2000 ft. The platform is connected to a separator through a
pipeline with a diameter of 5.5 inches and a length of 4000 ft.
The separator is operated at a fixed pressure of 160 psi. The
oil gravity is 31° API. The specific relative gravity of gas is
0.8. Fig. 2 shows the configuration of the gathering system.
Table 1 shows the reservoir conditions and wellbore
information for each well. Table 2 shows the length, depth,
diameter, and absolute roughness of every pipe and tubing in
this example.
The problem is to maximize the total oil production rates
by allocating production rates and unlimited lift-gas to
individual wells. The constraint is that the total water
production rate can not exceed 5000 STB/D.
The optimization problem is solved by the MILP method13
as follows.
j
1. Choose a realistic flowing pressure at the platform.
Suppose wells are producing with a set of un-optimized
lift-gas rates as shown in column 2 of Table 3. We
simulate the multiphase flow in the gathering system and
obtain the flowing pressure at the platform, which is 1545
psi. Table 3 also shows the oil flow rate, the water cut,
and the gas oil ratio (GOR) for each well obtained in
this step.
2. Construct the gas-lift performance curves. First we fix the
platform pressure at 1545 psi. Then for any well, say well
j , given its gas-lift rate, we can determine its oil flow
rate by solving the multiphase flow problem for the flow
path connecting well j and the platform. For each well,
we compute its oil flow rate for different gas-lift rates,
namely, 0, 200, 500, 1000, 2000, 3000, 4000, 5000, 6000,
and 7000 MSCF/D, and obtain its gas-lift performance
SPE 77658 OPTIMIZATION OF PRODUCTION OPERATIONS IN PETROLEUM FIELDS
curve. Fig. 3 plots the gas-lift performance curves we
obtained in this step.
3. Allocate the lift-gas. First we approximate each gas-lift
performance curve using a piece-wise linear curve, and
formulate the well rates and lift-gas allocation problem as
a mixed integer linear programming (MILP) problem13.
Then we solve the MILP problem and obtain the optimal
solution, which predicts that the field will produce at an
oil flow rate of 12449 STB/D. The allocated lift-gas rate
and oil rate for each well are presented in Table 4.
4. Update the multiphase flow. We allocate the optimal set
of lift-gas rate from Step 3 to each well, simulate the
multiphase flow in the gathering system, and obtain the
oil flow rate of each well. Results indicate that the field
can produce at a total oil flow rate of 12045 STB/D and a
total water flow rate of 4830 STB/D, which does not
violate the total water flow rate constraint. The flowing
pressure at the platform is 1595 psi.
We now proceed to solve the same optimization problem
using the SQP method with formulation (P2). We select the oil
flow rate and lift-gas rate for each well as the decision
variables. Starting with an initial guess of 400 STB/D oil flow
rate and 3000 MSCF/D lift-gas rate for every well, the
program converges to the optimal solution using 27 function
evaluations. One function evaluation refers to one complete
evaluation of the objective and constraint functions and their
derivatives. The allocated oil rate and lift-gas rate for each
well is shown in Table 4. Results indicate that the field will
produce at a total oil flow rate of 13019 STB/D and a total
water flow rate of 5000 STB/D. The flowing pressure at the
platform is 1079 psi. Note that in this example the flowing
pressure at the platform is sensitive to the flow rates in the
common flow line.
Some comments on the MILP method and the SQP method
are appropriate at this stage:
1. In Step 2 of the MILP method, in order to construct the
gas-lift performance curves, we need to fix the platform
pressure to a rather arbitrary value. The results of the
MILP method will largely depend on this value. However,
there is no simple way to tell which value is appropriate
to choose.
2. In Step 3 of the MILP method, the lift-gas is allocated
based on existing gas-lift performance curves. It ignores
the fact that increasing the flow rate from one well will
decrease the flow rate from other wells sharing a common
flowline. So the MILP method tends to over-inject lift-gas
in Step 3.
3. The SQP method takes the flow interaction into account
through the deliverability constraint (5c), and is able to
make more informed decisions. For example, well 8 and 9
have high GORs. For the same amount of oil produced,
these two wells will cause a larger pressure drop through
the common flowline than the rest of the wells,
consequently it will reduce the flow rates from other
wells. The SQP method identifies this. It shuts in well 8
and partially close well 9 to fully utilize the deliverability
capacity of the common flowline. As a result, the SQP
5
method allocates much less lift-gas but produces 8% more
oil than the MILP method does.
4. The major computational effort of the MILP method is in
constructing the gas-lift performance curves. Thus the
computational time of the MILP method is proportional to
the number of wells in the system. The computational
time of the SQP method depends on many factors and is
hard to predict. For this particular example, the
computational time required for the MILP method and the
SQP method is of the same order.
Finally we mention that this problem cannot be solved by
formulation (P1), because some wells (i.e. well 7) are too
weak to flow under certain conditions and well shut-in actions
(i.e. well 1, 4, and 8) must be performed in the optimization
process.
Example 2: Efficiency Comparison of Formulation (P1)
and (P2). Formulation (P2) is easier to implement and is more
robust than formulation (P1). However, formulation (P2) turns
an unconstrained optimization problem into a constrained one.
We must ensure that such a reformulation does not make an
easy problem hard to solve. The purpose of this example is to
show that the performance of formulation (P2) is not
necessarily worse than formulation (P1) on problems that can
be solved by both formulations.
In this example, the reservoir conditions and the
configuration of the gathering system is exactly the same as in
Example 1. The difference is that the tubing strings and pipes
are made shorter in this example so that all wells can produce
without gas-lift.
We present two scenarios. The first scenario is an
unconstrained gas-lift optimization problem. The objective is
to maximize the total oil production by allocating lift-gas.
Both formulation (P1) and (P2) are used to solve this problem,
and they yield the same optimal solution, which is zero lift-gas
rate for every well. However, formulation (P2) converges
much faster than formulation (P1). Formulation (P2) optimizes
both the oil flow rate and lift-gas rate of every well. Starting
with an initial guess of 400 STB/D oil flow rate and 5000
MSCF/D lift-gas rate for every well, formulation (P2)
converges to the optimal solution with 21 function
evaluations. Formulation (P1) optimizes only the lift-gas rate.
Starting with an initial guess of 5000 MSCF/D lift-gas rate for
every well, formulation (P1) converges to the optimal solution
with 67 equivalent function evaluations. The convergence
history of formulation (P1) and (P2) is plotted in Fig. 4.
The second scenario is a constrained well rates and gas-lift
optimization problem. The objective is to maximize the total
oil production rate by allocating lift-gas and adjusting choke
diameters. The total water flow rate can not exceed 20,000
STB/D. Again, both formulations yield the same optimal
solution: zero lift-gas rate for all wells, and the well choke for
well 4, the well with highest water cut, is partially closed.
However, formulation (P2) is much more efficient than
formulation (P1). Starting with an initial guess of 400 STB/D
oil flow rate and 5000 MSCF/D lift-gas rate for every well,
formulation (P2) converges to the optimal solution with 20
6 P. WANG, M. LITVAK, AND K. AZIZ
function evaluations. Starting with an initial guess of 5000
MSCF/D lift-gas rate and fully open choke status, formulation
(P1) converges to the optimal solution with 82 equivalent
function evaluations. The convergence history is plotted in
Fig. 5.
In both scenarios, formulation (P2) performs better than
formulation (P1).
Example 3: Efficiency of Formulation (P2). The purpose of
this example is to demonstrate the computational efficiency of
formulation (P2) on problems with various sizes and
properties.
We consider three gathering systems with 2, 10, and 50
production wells, respectively. Fig. 6 shows the configuration
of these gathering systems. For each gathering system, we
consider three optimization problems: unconstrained,
constrained by total water flow rate, constrained by total gas
and water flow rates. The objectives of all problems are to
maximize the daily oil production by allocating the well and
lift-gas rates. We solve the 9 optimization problems using
formulation (P2). The initial guess for every optimization
problem is 400 STB/D oil flow rate and 3000 MSCF/D lift-gas
rate for every well. The convergence criteria for the
optimization process are presented in Table 5.
Table 6 shows the number of function evaluations
required to solve the optimization problem and the total oil,
gas, water, and lift-gas rate of the optimal solution for every
problem. Constraints can greatly influence problem difficulty.
For example, problem 7, 8, and 9 have the same size but
require 62, 50, and 28 function evaluations, respectively. The
number of function evaluations required is not sensitive to the
problem size. All of the problems discussed here can be solved
within about 60 function evaluations (one function evaluation
is equivalent to one Newton iteration when Equation (2) is
solved by the Newton-Raphson method). In other words, all of
the problems discussed here can be solved within
approximately 10 times the number of iterations normally
required to solve the network problem (defined by Equation
(2)) by the Newton-Raphson method. Thus, we conclude that
the SQP method with formulation (P2) is computationally
efficient.
Discussion
We have proposed a new formulation (P2) for the optimization
problem of allocating well rates and lift-gas rates
simultaneously subject to multiple flow rate and pressure
constraints. The optimization problem is solved by a SQP
algorithm. Results demonstrate that the SQP method performs
much better on certain problems than the MILP method
reported elsewhere6,13. This is due to the fact that the MILP
method optimizes the well rates and lift-gas rates based on
gas-lift performance curves and ignores the deliverability
constraint of the gathering system in the optimization process,
while the SQP method makes no such simplifications. We
demonstrated that formulation (P2) is appropriate for the
simultaneous optimization of well rates and lift-gas rates,
because with this formulation, it is easier to handle well shut-
SPE 77658
in actions and avoid other computational difficulties.
Furthermore, with (P2) the optimization problem can be
solved efficiently.
There are however some limitations of formulation (P2). In
the optimal solution of (P2), sometimes a well can have a zero
oil rate and a positive lift-gas rate, which is not realistic. This
positive lift-gas rate is used to lighten the oil column+ so that
constraint (5c) is satisfied. Fortunately, our experience shows
that the value of this lift-gas rate usually is small and has little
impact on the solution of the optimization problem.
More research work can be done on this subject. We can
incorporate more decision variables into the optimization
problem, such as pump horsepower and subsurface choke
settings for multilateral and multisegment wells. We can
modify the construction procedure of Equation (2) to allow
loops in the network. It is also necessary to investigate the
performance of the linear optimization methods and the
nonlinear optimization method under different conditions. We
are currently extending formulation (P2) to handle
multiobjective optimization of production operations in
petroleum fields.
Conclusions
1. A new formulation is proposed for the optimization
problem of allocating well rates and lift-gas rates. The
new formulation is able to handle flow interactions among
wells and can be applied to difficult situations where
some wells are too weak to produce without appropriate
amount of lift-gas injection.
2. The optimization problem is solved by a derivative-based
optimization method (SQP). The gradient information is
computed efficiently and accurately by exploring the tree-
like structure of the gathering system and utilizing
automatic differentiation techniques.
3. The proposed formulation is tested on several examples.
Results show that the new formulation is both robust and
efficient.
4. The proposed optimization method can be used for real-
time production control or for reservoir developments.
Acknowledgements
The financial support of members of the Stanford University
Reservoir Simulation Industrial Affiliates Program (SUPRI-B)
is gratefully acknowledged. We thank the systems
optimization lab. at Stanford University for supplying us
SNOPT 5.315, a general purpose nonlinear constrained
optimizer. We thank Mathematics and Computer Science
Division at Argonne National Laboratory and the Center for
Research on Parallel Computation at Rice University for
+
In calculating the pressure drop through a tubing string, when
the flow rates approach zero (the well is closing), we still use
the same multiphase flow model to compute the pressure drop
through the tubing string, so that the pressure drop changes
smoothly when the flow rates approach zero.
SPE 77658 OPTIMIZATION OF PRODUCTION OPERATIONS IN PETROLEUM FIELDS 7

supplying us ADIFOR 2.017, an automatic differentiation Systems”, paper SPE 35616 presented at the Gas Technology
software. Conference held in Calgary, Alberta, Canada, April 28 – May 1,
1996.
3. Nishikiori, N., Redner, R. A., Doty, D. R., Schmidt, Z.: “An
Nomenclature
improved Method for Gas Lift Allocation Optimisation”, paper
BHP = bottom hole pressure, psi SPE19711 presented at the 64th Annual Technical
f (x ) = objective function of an optimization problem Conference and Exhibition of SPE held in San Antonio, TX,
F (x ) = constraint functions of an optimization October 8-11, 1989.
problem 4. Martinez, E. R., Moreno, W. J., Moreno, J. A., and Maggiolo,
R.: “Application of Genetic Algorithm on the Distribution of
l = lower bounds of constraints
Gas Lift Injection”, paper SPE 26993 presented at the III Latin
u = upper bounds of constraints American/Caribbean Petroleum Engineering Conference held in
n w = number of production wells Buenos Aires, Argentina, April 27-29, 1994.
p = pressure in nodes or wells, psi 5. Dutta-Roy, K., and Kattapuram, J.: “A New Approach to Gas-
Lift Allocation Optimisation”, paper SPE 38333 presented at the
p rj = pressure of solution node j calculated from 1997 SPE Western Regional Meeting held in Long Beach,
the reservoir side, psi California, June 25-27, 1997.
pj s = pressure of solution node j calculated from 6. Fang, W. Y., and Lo, K. K.: “A Generalized Well-Management
the separator side, psi Scheme for Reservoir Simulation”, SPE Reservoir Engineering,
May 1996, 116-120.
n
q p,i = flow rate of phase p in node i , STB/D or 7. Barnes, D. A., Humphrey, K., and Muellenberg, L., A.:
MSCF/D “Production Optimization System for Western Prudhoe Bay
q tp = total field flow rate of phase p , STB/D or Field, Alaska”, paper SPE 20653 presented at the SPE 65th
MSCF/D Annual Technical Conference and Exhibition held in New
Orleans, LA, September 23-26, 1990.
w
q p,i = flow rate of phase p in well i , STB/D or 8. Stoisits, R. F., Batesole, E. C., Champion, J. H., and Park, D. H.:
MSCF/D “Application of Nonlinear Modelling for Rigorous
x = decision variables (choke diameters and lift- Representation of Production Facilities in Reservoir
gas rates in formulation (P1); oil flow rates Simulation”, paper SPE 24898 presented at the 67th Annual
and lift-gas rates in formulation (P2)) Technical Conference and Exhibition of the SPE held in
Washington, DC, October 4-7, 1992.
α ij = parameters that affect the pressure drop
9. Stoisits, R. F., Scherer, P. W., and Schmidt, S. E.: “Gas
between node i and node j Optimization at the Kuparuk River Field”, paper SPE 28467
Ω n = set of solution nodes presented at the SPE 69th Annual Technical Conference and
s
Exhibition held in New Orleans, LA, September 25-28, 1994.
w
Ωi = set of wells whose fluids enter node i 10. Stoisits, R. F., Crawford, K. D., MacAllister, D. J., and
McCormack, M. D., Lawal, A. S. L., and Ogbe, D. O.:
Operators “Production Optimization at the Kuparuk River Field Utilizing
= dimensionality of a set Neural Networks and Genetic Algorithms”, paper SPE 52177
• presented at the 1999 mid-continent Operations Symposium
held in Oklahoma City, Oklahoma, March 28-31, 1999.
Subscripts 11. VIP-EXECUTIVE Technical Reference. Landmark Graphics
g = gas phase, including formation gas and lift-gas Corporation, 1997.
o = oil phase 12. ECLIPSE 300 Technical Description, Schlumberger
p = GeoQuest, 2001.
fluid phase 13. Wang, P., Litvak, M., and Aziz, K.: “Optimization of Production
s = solution node from Mature Fields”, paper presented at the 17th World
w = water phase Petroleum Congress, Rio de Janeiro, Brazil, 1-5
September 2002.
Superscripts 14. Sachdeva, R., Schmidt, Z., Brill, J.P., and Blais, R.M.: “Two-
n = network nodes Phase Flow Through Chokes”, paper SPE 15657 presented at
r = reservoir side 61st SPE Annual Technical Conference and Exhibition held in
s = separator side New Orleans, LA October 5-8, 1986.
t = total field flow rate 15. Gill, P.E., Murray, W., and Saunders, M.A.: User’s Guide for
SNOPT (version 5.3): A Fortran Package for Sparse Nonlinear
w = wells
Programming. Technical Report SOL 86-2, 1998.
16. Gill, P.E., Murray, W., and Saunders, M. A.: An SQP Algorithm
References for Large-scale Constrained Optimization, Numerical Analysis
1. Kanu, E. P., Mach, J., and Brown, K. E.: “Economic Approach Report 97-2, Department of Mathematics, University of
to Oil Production and Gas Allocation in Continuous Gas Lift”, California, San Diego, La Jolla, CA, 1997.
Journal of Petroleum Technology, October 1981, 1887-1892. 17. Bischof, C., Carle, A., Hovland, P., Khademi, P., and Mauer, A.:
2. Buitrago, S., Rodríguez, E., and Espin, D.: “Global Optimization ADIFOR 2.0 User’s Guide. Technical Report CRPC-95516-S,
Techniques in Gas Allocation for Continuous Flow Gas Lift Centre for Research on Parallel Computation, Rick University.
8 P. WANG, M. LITVAK, AND K. AZIZ SPE 77658

SI Metric Conversion Factors The pressure gradients of node j can be computed as

°API 141.5/(131.5 + °API) = g/cm3 ∂p j ∂p j ∂pi ∂p j ∂α ij ,m
bbl × 1.589 873 E-01 = m3 = • +∑ • , …..(A2)
ft × 3.048* E-01 = m ∂x k ∂pi ∂x k m ∂α ij ,m ∂x k
ft3 × 2.831 685 E-02 = m3 where x k is the kth decision variable, for example, the oil
°F (°F-32)/1.8 = °C
rate of a well, α ij, m is the mth parameter that affects the
in. × 2.54* E-02 = m
psi × 6.894 757 E-00 = kPa pressure drop between node i and node j .
scf × 2.863 640 E-01 = std m3 Note that we already have ∂pi / ∂x k and pi .
scf/bbl × 1.801 175 E-01 = std m3/m3
* ∂α ij ,m / ∂x k can often be computed analytically. ∂p j / ∂pi
Conversion factor is exact
and ∂p j / ∂α ij ,m can be approximated using finite
Appendix A: Computation of Gradients differences or computed using automatic differentiation
When solving problem (P2) using the SNOPT15, we need to techniques. In this work, we use ADIFOR16 (see Appendix
compute the derivatives of the objective function f (x ) and B) to generate an augmented computer program that
the constraint functions F (x ) , p rj , and p sj with respect to computes ∂p j / ∂pi and ∂p j / ∂α ij ,m .
the decision variable x . In this appendix, we illustrate a 3. Repeat Step 2 for all nodes or wells in level l + 1 .
procedure that computes the pressure gradients of all nodes 4. Let l := l + 1 . Repeat Step 2 and 3 until we obtain the
efficiently and accurately by exploring the tree-like structure pressure and pressure gradients for all nodes of the
of the gathering system and utilizing an automatic gathering system.
The derivatives obtained through this procedure have the
differentiation technique. The gradients of p rj , p sj , f (x ) ,
same accuracy as the corresponding simulation model.
and F (x ) can either be obtained during this procedure or are
straightforward to compute. Appendix B: ADIFOR
ADIFOR17 is a tool for the automatic differentiation of
Computation of Pressure Gradients for Network Nodes. functions written in Fortran 77. Given a Fortran 77 source
We need to define some terminology. A well or a node can code and a set of user specified dependent and independent
have one active output node, which is the adjacent variables, ADIFOR will generate an augmented derivative
downstream node connected to that well or node. A node can code that computes the partial derivatives of all of the
have multiple input nodes or wells, which are the adjacent specified dependent variables with respect to all of the
upstream nodes or wells connected to that node. Nodes are specified independent variables. ADIFOR is a collaborative
arranged in levels. The nodes with fixed pressure are assigned project between the Mathematics and Computer Science
to the first level. For a node in level l , all its input nodes or Division at Argonne National Laboratory and the Center for
wells are in level l + 1 . The pressure of all nodes and their Research on Parallel Computation at Rice University.
derivatives are computed as follows:
1. For level 1, all nodes are boundary nodes. The pressures
are specified by the user and their derivatives are zero.
2. For node j or well j in level l + 1 , suppose we know
the pressure and pressure gradients of its output node, say
node i , in level l , then the pressure of node j can be
expressed as
( )

p j = f pi , α ij , …………………………….(A1)


where α ij denotes the parameters that affects the pressure
drop between node i and node j , such as the flow rates
or the pipe diameter between node i and node j . In this
work, a drift flux model12 is used to compute the pressure
drop across a tubing string or a pipeline. The Sachdeva
model14 is used to model the multiphase flow across
a choke.
SPE 77658 OPTIMIZATION OF PRODUCTION OPERATIONS IN PETROLEUM FIELDS 9

Node 1 Table 1: Well data for Example 1

(separator) No. Diam. skin kx ky Sw Sg Block Pres.
Pipe (ft) (md) (md) (psia)
1 0.400 1 50 50 0.60 0.10 3800
Node 2 2 0.475 0 100 100 0.30 0.40 3400
(manifold) 3 0.400 1 70 70 0.50 0.15 4500
4 0.475 0 500 500 0.70 0.00 3900
5 0.400 1 50 50 0.25 0.40 4800
6 0.475 0 100 100 0.20 0.30 3400
Node 3 Node 4
7 0.400 1 70 70 0.50 0.25 3500
Choke 8 0.475 0 500 500 0.20 0.50 4900
Node 5 Node 6 9 0.400 1 70 70 0.20 0.45 4200
10 0.475 0 500 500 0.40 0.39 3900
Tubing

Node 7 Node 8 Table 2: Tubing string and pipeline data for Example 1
*
No. Diam. Length Depth Up-temp. Down- Roughness
(inch) (ft) (ft) (°F) temp. (°F) (inch)
Well 1 Well 2 1 3.0 8000 8000 160 110 0.0003
2 3.5 8000 8000 160 110 0.0003
Figure 1: Example optimization problem 3 3.5 7500 7500 160 110 0.0003
4 3.5 7800 7800 160 110 0.0003
5 3.5 8000 8000 160 110 0.0003
6 3.5 7700 7700 160 110 0.0003
7 3.5 8500 8500 160 110 0.0003
Separator 8 3.5 7000 7000 160 110 0.0003
21 9 3.5 8000 8000 160 110 0.0003
10 3.5 8000 8000 160 110 0.0003
Platform 11 3.0 500 0 110 110 0.0003
12 3.5 60 0 110 110 0.0003
13 3.5 1200 0 110 110 0.0003
14 3.5 300 0 110 110 0.0003
11 12 13 14 15 16 17 18 19 20 Pipes 15 3.5 400 0 110 110 0.0003
16 3.5 700 0 110 110 0.0003
Chokes 17 3.5 1800 0 110 110 0.0003
18 3.5 2000 0 110 110 0.0003
19 3.5 1000 0 110 110 0.0003
20 3.5 600 0 110 110 0.0003
1 2 3 4 5 6 7 8 9 10 Tubing 21 5.5 4000 0 110 110 0.0003
*
strings No. 1-10 are tubing strings. No. 11-21 are pipelines. Fig. 2 shows
the connectivity between the tubing strings, pipelines and nodes.

1 2 3 4 5 6 7 8 9 10 Wells

Figure 2: Configuration of the gathering system

for Examples 1 and 2
10 P. WANG, M. LITVAK, AND K. AZIZ SPE 77658

Table 3: Well rates obtained in Step 1 of the MILP method for Example 1
Well Lift-gas Rate Oil Rate Water Cut Gas Oil Ratio
(MSCF/D) (STB/D) (MSCF/STB)
1 3000.00 735.35 0.53 1.21
2 0 988.90 0.26 12.50
3 2000.00 2590.69 0.38 1.65
4 3000.00 828.18 0.70 1.02
5 0 1168.80 0.16 13.41
6 0 1143.09 0.07 6.84
7 2000.00 144.49 0.47 2.87
8 0 933.03 0.11 40.38
9 0 740.73 0.10 31.41
10 3000.00 2911.25 0.22 1.02
* **
Total Flow Rate 13000.00 121842.52 6149.55 10618.42
*
total water flow rate, STB/D
**
total formation gas flow rate, MSCF/D

Table 4: Allocated gas-lift and oil rates for Example 1

Step 3 of the MILP Method Step 4 of the MILP method the SQP method
Well lift-gas rate oil flow rate lift-gas rate oil flow rate lift-gas rate oil flow rate
(MSCF/D) (STB/D) (MSCF/D) (STB/D) (MSCF/D) (STB/D)
* *
1 2674.00 668.36 2674.00 649.60 - -
2 0 988.64 0 947.07 0 1237.64
3 5000.00 2678.83 5000.00 2608.54 0 3233.68
* * * * * *
4 - - - - - -
5 0 1168.09 0 1149.46 0 1293.56
6 506.22 1149.29 506.00 1082.15 0 1621.08
7 7000.00 927.29 7000.00 872.57 750.15 3108.30
* *
8 0 932.62 0 933.03 - -
** **
9 0 741.21 0 731.75 0 270.72
10 7000.00 3194.95 7000.00 3070.97 2769.25 4301.56
Total Flow Rate 22180.22 12449.24 22180.00 12045.15 3519.40 13019.66
*
shut-in wells
**
partially closed wells

3500

3000

2500 Well 1
Well 3
OIL RATE, STB/D

2000 Well 4
Well 6
1500 Well 7
Well 10
1000

500

0
0 1000 2000 3000 4000 5000 6000 7000 8000
LIFT-GAS RATE (MSCF/D)

Figure 3: Gas-lift performance curves generated in Step 2 of the MILP method for Example 1.
For clarity, the gas-lift performance curves for high GOR wells (like well 6) are not plotted.
SPE 77658 OPTIMIZATION TECHNIQUES FOR PRODUCTION OPERATION IN PETROLEUM FIELDS 11

Separator

Pipe
40000

35000 Choke
OBJECTIVE FUNCTION, STB/D

30000
P2
25000 P1 Tubing
string
20000

15000 Wells
10000 a) Gathering system with 2 wells
5000
Separator
0
0 10 20 30 40 50 60 70
NUMBER OF FUNCTION EVALUATIONS Platform

Figure 4: Convergence history of formulation (P1) and (P2) for the Pipes
first problem in Example 2

Chokes
40000

35000
OBJECTIVE FUNCTION, STB/D

Tubing
30000 strings
25000 P2

20000 P1 Wells
15000 b) Gathering system with 10 wells

10000
Separator
5000

0
0 20 40 60 80 100
NUMBER OF FUNCTION EVALUATIONS
Manifold Manifold

Figure 5: Convergence history of formulation (P1) and (P2) for the Manifold
second problem in Example 2 Manifold
Manifold

Wells
c) Gathering system with 50 wells (with a choke installed right
before the manifold for every well)

Figure 6: Schematic illustration of the gathering systems for

Example 3
12 P. WANG, M. LITVAK, AND K. AZIZ SPE 77658

Table 5: Convergence criteria for optimization problems in Example 3

*
Major feasibility tolerance 5.0e-4
*
Major optimality tolerance 1.0e-3
*
Minor feasibility tolerance 5.0e-4
*
Please refer to reference 15 for an explanation of these convergence criteria.

Table 6: Computational efficiency of formulation (P2) on various optimization problems

Optimization Number of Constraints Number of Total Oil Rate Total Water Rate Total Gas Rate
Problem Wells Function (STB/D) (STB/D) (MSCF/D)
Evaluations
1 2 None 21 1976.52 1557.85 33788.40
2 2 11 1480.38 1000.00 30678.47
qwt ≤ 1000 STB/D
3 2 14 1267.21 1000.00 20000.00
qwt ≤ 1000 STB/D
qgt ≤ 20000 MSCF/D
4 10 None 49 14884.96 9457.70 69325.22
5 10 37 14585.92 8000.00 65930.24
q wt ≤ 8000 STB/D
6 10 45 14333.10 8000.00 50000.00
qwt ≤ 8000 STB/D
q gt ≤ 50000 MSCF/D
7 50 None 62 83423.14 42877.16 342617.65
8 50 50 81698.21 35000.00 357747.04
qwt ≤ 35000 STB/D

9 50 28 81067.22 35000.00 300000.00

qwt ≤ 35000 STB/D
q gt ≤ 300000 MSCF/D

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