In the petroleum industry, decisions important for the oil companies and for Norway are taken every day. A good decision can result in large income or greatly reduced expenses. Description of uncertainty can be crucial to make the right decision. Examples on decisions are:

• Positioning of an exploration well among possible oil or gas prospects.
• Decision on development of oil or gas fields.
• Evaluation of an expensive drilling operation.

Complicated problems and large uncertainty are characteristic for many projects in the oil industry. Most projects show similarities, but usually differences make it impossible to apply previous results directly. For example, an oil production well might have several horizontal branches, while a gas injector can be a simple vertical well. When estimating costs for such drilling operations, this must be taken into account.

Models

To solve such problems, we build models. A model is based on the knowledge of geologists, engineers or economists on the problem, and makes it possible to calculate volumes, income, or costs for a project from data available. The models can be everything from large flow simulation models for estimation of recoverable oil and gas volumes to simple worksheets with specification of different costs in a drilling operation.

Estimation of uncertainty

When estimation uncertainty, our knowledge about statistical modeling is combined with the engineer's knowledge about the problems. The challenge is to identify important elements in the problem and build an uncertainty model which can be easily handled. With help of flexible and efficient PC tools, the different problems can be modeled fast. We also make courses, tools and models, to help the engineers to be able to do the uncertainty studies without much knowledge about statistical modeling.