Engineering Decision-Making Under Uncertainty in Petroleum Engineering

Engineering Decision-Making Under Uncertainty: Why Every Petroleum Engineer Needs More Than Accurate Calculations

Every petroleum engineer at some point in their career comes to terms with the fact that they will have to make important decisions long before all of the answers appear.

Engineering Decision-Making Under Uncertainty

Decisions, such as whether to complete a well immediately or defer the completion to gain more insight on the well's potential. Decisions, such as whether a well's production decline is transient or a permanent loss of production. Decisions, such as whether to increase the choke size to improve production, or if that decision would lead to faster water production, and cause a premature abandonment. However, the reality is that most of these decisions do not always have clear cut answers.

A petroleum engineer should not be penalized for making a decision in the face of uncertainty, because that is the environment petroleum engineers work in.

Uncertainty is not a factor that petroleum engineers should try to avoid, rather it is a factor that they need to overcome and make decisions through.

It is important to understand that the technical competence of a petroleum engineer can be judged on how well they are performing when they make decisions in spite of uncertainty.

Uncertainty Exists Throughout the Petroleum System

Engineers who study reservoir characterization develop their work because they need to deal with uncertainty from subsurface formations which remain hidden from view. The processes of geological interpretation and permeability distribution and fluid contacts and recovery mechanisms all show different levels of uncertainty.

The process of extracting hydrocarbons from underground reserves leads to surface-bound hydrocarbons which scientists study but still contain uncertainty.

The production systems create extra unknown elements which affect flow assurance and equipment performance and separator efficiency and measurement accuracy and corrosion and facility limits and operational system trustworthiness. Engineers face more challenges because of economic conditions and environmental demands and market changes.

Uncertainty exists in every field according to this perspective. It exists from the beginning of petroleum value chain operations which start with reservoir assessment and continue until the end of international delivery.

Good Decisions Are Not the Same as Perfect Predictions

The statement above demonstrates that good decision-making does not require perfect prediction capabilities. People in engineering make incorrect judgments because they think that advanced decision-making needs better prediction results. Actual decision-making requires more than just prediction as its essential element. Engineers who have extensive experience know that multiple outcome scenarios exist which will produce different technical and financial results. They proceed to evaluate different options while assessing their results to identify which option maintains technical validity across various likely scenarios. Engineers use this method to convert their work from simple number crunching into an organized framework for making choices. The decision becomes unreliable because it fails to meet multiple requirements which establish its trustworthy status.

Integrated Thinking Produces Better Engineering Decisions

The main reason many engineering projects collapse is engineers who develop their projects through non-integrated thinking methods. A reservoir engineer may optimize production without fully considering surface processing limitations. A facilities engineer may improve equipment efficiency without recognizing reservoir behavior. Operations teams resolve production problems which lead to reservoir difficulties that last for an extended period. Petroleum systems operate as interconnected components rather than separate units. The entire production process gets affected by every technical decision that engineers make. Engineers use an integrated reservoir-to-surface view to identify operational problems which occur between systems. The system design process results in decisions which boost overall system efficiency instead of single system parts. This systems-oriented approach

Developing Better Engineering Judgment

Engineering judgment requires both experience and employment because experience alone is insufficient. Engineers develop strong engineering judgment through their training in structured analysis and their ability to evaluate assumptions and their capacity to handle uncertain situations and their practice of integrating information from various technical fields. The advanced engineering tools of today enable more advanced simulation and analysis functions. Engineering reasoning remains essential because it cannot be duplicated by any existing model. Models assist with decision-making processes but they do not make decisions on their own. Petroleum engineers achieve success through their technical expertise and their ability to think methodically while understanding how to use information but also knowing its limits.

Final Thoughts

Uncertainty is not a weakness of engineering, it is the environment within which petroleum engineering decisions take place.

The engineers who are most successful at making such decisions are not necessarily those with the most information, but rather people who possess an enhanced ability to interpret limited information, to evaluate, compare, and contrast options, and to think through the entire petroleum system.

It is these topics that are discussed in part in this book, Petroleum Engineering: From Reservoir to Surface in the Context of Engineering Decision-Making Under Uncertainty. Those who wish to explore the concept of petroleum engineering decision-making in greater depth will find additional articles related to this topic in the Reference section of PetroPulse Insights here.

Read Also

➡ Why Reservoir-to-Surface Integration Matters More Than Ever in Petroleum Engineering.

➡ Petroleum Engineering Book Overview

➡ From Reservoir to Surface: Why Integration Matters (It will be published later.)