The term "Real-Time Optimization" (RTO) has rapidly found its way into common usage in the oil and gas industry, as it already has in many others. However, RTO in the oil and gas industry is usually used more as a slogan rather than describing a system or process that truly optimizes anything at all, let alone does so in real-time. In this paper, we describe what RTO means in the exploitation of hydrocarbons and what technologies are available now and are likely to be available in the future. We discuss how it is misunderstood and what real financial benefits await those who adopt it. Furthermore, we are working toward developing a method of classification to allow us to establish where a field operation lies on the RTO ladder, and to help plan a strategy to generate the benefits that moving up the RTO ladder can offer on specific fields and assets. The paper also describes a new SPE Technical Interest Group (TIG), explaining why it has been formed, and outlining its objectives and some planned deliverables. Real-time Optimization - Concepts and Definitions What is optimization? Intuitively most people agree on what we mean by "optimize." This comes down to understanding the dictionary definition; that is, to make the most of; to plan or carry out an economic activity with maximum efficiency; to find the best compromise among several often conflicting requirements, as in engineering design. Therefore, examples of what is usually meant by optimization in the oil and gas industry include:Maximizing hydrocarbon production or recovery,Finding the best solution in the region of physical and financial constraints to produce a decision,Maximizing net present value (NPV) through changes in capital expenditure (CAPEX) and/or operational expenses (OPEX). These elements, in turn, improve financial efficiency in portfolio management and risk analysis, andAdvanced real-time optimization: behavioral prediction and inference, pattern recognition to identify states of a group of wells, continuous adaptation and self-tuning ability. Although we may readily agree on these (and other) descriptions of what would be the outcome of optimization, agreeing what it actually means appears to be more complex. The reason for this is that the term optimization is usually used very loosely, whereas it needs to be defined rigorously and mathematically, while honoring the real-life physical system constraints that exist in the overall production process.

The Real-Time Optimization Technical Interest Group (RTO TIG) has endeavored to clarify the value of real-time optimization projects. RTO projects involve three critical components: People, Process, and Technology. Understanding these components will help to establish a framework for determining the value of RTO efforts. In this paper, the Technology component is closely examined and categorized. Levels within each Technology category are illustrated using spider diagrams, which help decision-makers understand the current status of operations and the impact of future RTO projects. Uncertain value perception in our industry has been one of the critical issues in adopting RTO systems. Therefore, case histories are reviewed to demonstrate the impact of RTO projects. To assist RTO project promotion, we list lessons learned through case histories, suggest a justification process, and present a simple economic example. Introduction Industry case histories demonstrate many types of benefits from RTO, such as volume increase, ROI increase, decision quality, HSE improvement, and opex reduction. However, they have lacked systematic project evaluation methods or processes for justification. Today, promoting RTO is in essence a competition for capital within producing companies. The project teams that recognize this fact and then clearly outline the purpose, benefits, costs (direct or indirect), and strategic business alignment of their proposals will be in an advantageous position to secure funding. Because RTO is still an emerging discipline, classifying projects of this nature is still dependent on an individual's point of view. This paper is intended to enable classification of RTO in an objective manner and to help provide a common vocabulary to address issues. Three Cornerstones in Adopting New Technology In adopting any new technology, TIG members realize that there are three major factors: People, Process, and Technology, as shown in Fig. 1. New RTO technology can achieve the benefits we seek, but it is not likely without corresponding changes in the way we work with others and in the processes or workflow in which we perform tasks. This challenge is common to the implementation of any new technology, whether RTO or not. Engineers tend to emphasize the technology aspect because we are most familiar with it, but the other aspects are equally important. For example, the lack of workflow modification, which requires training and possible organizational changes, is tends to result in unsustainable efforts and ultimately underperformance of the investment in RTO. People People issues manifest themselves in several ways1: corporate culture, organizational structure, and training. Corporate culture is the set of tacit understandings and beliefs that form the foundation of how an organization works. It is a mental model that people have about the nature of an organization and how it sees itself. Within an organization, culture is "how things are done around here." The culture of an organization can be appropriate and supportive to an organization's goals and strategies, or it can hinder its initiatives and projects. Usually any major change in an organization, such as deployment of new technology, radical strategic shifts, or new initiatives, is countercultural. That is, the change breaks existing cultural rules and assumptions, and the change is automatically resisted and thereby impeded.

Shale gas is a growing resource worldwide as many basins are being explored and produced. However, little is still known and understood about two key parameters in gas shales: the gas-filled porosity and permeability. Digital rock physics technique, presented in this paper, contains three basic steps: (a) 3D CT imaging at 200 nanometer resolution, and/or FIB-SEM (focused ion beam combined with SEM) imaging at 3-15 nanometer resolution (b) segmentation of the digital volume to quantitatively identify the components, including the mineral phases, organic-filled pores, and free-gas inclusions; and (c) computations of TOC (Total Organic Content), porosity, pore connectivity, and permeability in three axis.A number of gas shale samples have been used, to specifically analyze the pore systems. The characteristics including dual porosity, organics distribution, gas-filled porosity distribution, and how these properties relate to the maturity of the organic material. Pore geometries (pores filled either with organics or free gas) of these samples fall into the following categories: (a) relatively large (up to 4 micron) with poorly disconnected pores; (b) pores connected by very thin (down to 15 nanometers) conduits; (c) dual porosity system where the large pores are interconnected by large conduits and very thin conduits are interconnected and also connected to the large pores. Within each of these three categories, the pore space may be (a) completely filled with organics or (b) partially or completely filled with gas.The latter is of most interest as it is a gas source. In such systems we observe various geometries of pore space, including (a) disconnected pores floating in the organics and (b) connected pores within the organics. TOC, open pore volumes, as well as pore-space connectivity are not just qualitatively estimated from the images but quantitatively computed for a given sample. Our ongoing effort is to relate the quantitative patterns thus computed to the maturity of shale.

This paper details the progress made with the implementation of BP's FIELD OF THE FUTURE program over the past four years. It first describes the approach taken by BP to install real time data infrastructure in many sectors of its operations. To date this infrastructure has included the installation of 1800km of fibre optic cable, the registration of nearly two million real time data tags within a common real time data backbone, and construction of more than twenty Advanced Collaborative Environments supporting production and drilling operations. The paper then describes some of the activities underway in BP's operations, and the associated benefits, including:use of advanced well monitoring technology to manage sand production and other aspects of well performance in 20 fields (1–3% production benefit)examples of full field optimisation/visualisation and associated benefits (1–2% production benefit)the development of a new downhole flow control capability for high rate sand prone wells (resource/reserve benefit)early experience with the application of temperature profile monitoring and of life of field seismic (resource/reserve benefit) Finally, the paper describes the people, process and organisation activity undertaken in several of BP's large operating areas which have directly impacted many of the operational staff working in these areas through an extensive set of change management workshops and similar activity. The lessons learned from these activities over the past four years include the need to:define support and maintenance resources up frontidentify and standardize infrastructure requirements for new projectstake a centralized global approach to planning deployment but a local approach to implementationfully resource change management activity 1. Background to BP's FIELD OF THE FUTURE Program BP's FIELD OF THE FUTURE program (Ref 1) was established in 2003 with an initial focus on engagement and deployment, the objective being to deploy core technologies in a limited number of assets in order to build a track record, to re-affirm the prize and to build a technical and architectural foundation for subsequent 'bigger moves'. These early deployments, conducted over the period from 2003 to 2005, confirmed the potential of the program to add significant value across a broad range of asset types. Since that time the program has evolved to focus on the three areas, as described pictorially below in Figure 1. The common feature of most of the elements of the program is that they are related one way or another to real time data, and are aimed at high rate fields which form a significant part of BP's current and future portfolios. BP is also working on high well count fields onshore in North America where cost effective solutions for optimization of gas well deliquification is the focus. These and other technologies generally impact production, recovery or both. Over the next 10 years or so, it is expected that the program will contribute in excess of 1 billion barrels of recovery and 100 M/bd to BP's E&P segment.

Summary The Real-Time Optimization (RTO) Technical Interest Group (TIG) has endeavored to clarify the value of real-time optimization projects. RTO projects involve three critical components: People, Process, and Technology. Understanding these components will help establish a framework for determining the value of RTO projects. In this paper, the Technology component is closely examined and categorized. Levels within each Technology category are illustrated by use of spider diagrams, which help decision makers understand the current status of operations and the future RTO status. The perception of uncertain value has been one of the critical issues in adopting RTO systems in our industry. Therefore, case histories are reviewed to demonstrate the impact of RTO projects. To assist RTO project promotion further, we list lessons learned, suggest a justification process, and present a simple example of an economic-evaluation process. Introduction Industry case histories demonstrate many types of benefits from RTO such as production-volume increase; better return on investment (ROI); higher decision quality; health, safety, and environment (HSE) improvements; and operational expenditures (OPEX) reduction. However, they have lacked systematic project-evaluation processes for justification. Today, promoting RTO is, in essence, a competition for capital within a company. The project teams that recognize this fact and then clearly outline the purpose, benefits, costs (direct or indirect), and strategic business alignment of their proposals will be in an advantageous position to secure funding. Because RTO is still an emerging discipline, classifying projects of this nature is still dependent on an individual's point of view. This paper provides classification of RTO to help provide a common vocabulary to address a multitude of issues.