The petroleum industry is vital to the Norwegian economy. Norway is the third largest oil exporter in the world, and will become the second largest gas exporter at the end of this decade. Approximately 30% of Norway's petroleum reserves have been depleted and production might soon start to decrease. There is a widespread understanding that more "brain per barrel" is needed to maintain current profit levels.
The activities on the Norwegian Continental Shelf are often referred to as a frontier in the oil industry, characterised by many challenging field developments and high recovery rate. Being a successful technological pioneer is important when Norwegian companies apply for licenses abroad and want to sell technology and services. There are huge uncertainties related to the petroleum industry, including oil price, production volumes and rates, success of new technology, and natural hazards. Production forecasting is used for optimising depletion strategies and for predicting cash flow. Reservoir description is fundamental in reservoir management, including drilling of new wells and optimising production rates. To enhance oil recovery, integration of information from well logs, seismics, well testing and production data, is necessary. NR is an international leader in the development of 3D stochastic models of complex heterogeneous reservoirs. Methods developed by NR are used by more than 50 oil companies worldwide, as software tools distributed by the Norwegian software vendor Roxar. New methodology may also be included in this software.
Stochastic reservoir models are based on spatial statistics, Bayesian conditioning of data and large simulation models. Some of the challenges are: merging the soft geological knowledge with a huge amount of measured data, representing the uncertainty in a large multidimensional model, integrating and conditioning on non-linear data types on different scales and producing efficient simulation algorithms. Statistics is the perfect tool for combining sources of information into a consistent unified description. It also allows for a qualified statement about the prediction uncertainty. An improvement of today's technology will increase the production and be of huge value.
Large industry projects like drilling a new well or building a new platform represent enormous industrial risks. Plans must often be changed because new data arrive, delays occur or costs increase. Quantification of risk and the use of formal methods to support decision-making under uncertainty will give significant benefits. The centre aims to become a leading actor in the quantification of risk in large industrial projects, including the search for new drilling sites, leading to better decisions that reduce costs significantly.
The corporate partner in this area is Statoil, the largest Norwegian oil company. Statoil is among the leading oil companies in reservoir description, and is known for its high recovery factor. This is among others due to good statistical reservoir description.