Stochastic VoI Analysis of Seismic Information Using a Full Cycle Approach
Authors: Martinelli Gabriele , Surovtsev Dmitry 
Published: May 2016

Abstract
The work analyzes the contribution of adding 3D seismic information in an exploration prospect assessment project. The analysis follows the classical VoI framework, where a prior value is computed, and different accuracy values are tested for the 3D seismic contribution. The novelty lies in the ability of capturing the value of seismic throughout a whole integrated approach, from modeling the subsurface effect of the seismic survey to capturing its effect in terms of distribution of expected resources, up to a complete full-cycle economic evaluation of the project. We can therefore compute the prior and posterior distribution of the monetary value of the different projects, and use such values to estimate the Value of Information in a fully stochastic way. A complete sensitivity analysis is presented, both for what concerns the effect of seismic information on different volumetric parameters, and for what concerns the accuracy of the seismic information itself, ranging from perfect to imperfect information.
The case study represents a conventional onshore oil prospect. A contemplated 3D seismic survey may change the geological model either making it more positive or exposing details that can cause failure.

1. Introduction
The paper addresses the problem of evaluating the value of seismic information in an exploration decision context. As compared to previous works in the literature (cfr. Pickering and Bickel, 2006 and Bickel, 2008) the discussed approach introduces two novel elements. First, we aim to provide a framework that couples the classical Value of Information (VoI) formulation with a complete full cycle evaluation of the economical potential of the project throughout the lifecycle of the field. Second, we aim to propose a stochastic formulation of the VoI that would allow the decision maker to read it really as a value (potentially with a certain utility function associated to it), and not just as the maximum price that we would be willing to pay for a determined piece of information, as it is usually intended in the literature. We will show that it is possible to take a step in this direction without losing the main and important theoretical results proven in the past 40 years, and thoroughly reviewed in (Bratvold et al., 2009).
The original VoI formulation dates back to (Howard, 1966), and to (Grayson, 1960), for what concerns its original application to the oil and gas industry. Along the years, the idea of evaluating the economical feasibility of certain investments through this tool has increased enormously in our industry, and now it is standard practice to apply such workflow at least when evaluating large and risky investments. In recent years, literature reviews such as the one provided by (Bratvold et al., 2009) and by (Smalley et al., 2008) have appeared, in order to present some recent applications of the Value of Information, and to provide a theoretical basis for its computation. As they point out, in fact, our industry is still lacking a unified framework to compute the Value of Information, and this is one of the reasons why there is still a certain level of distrust among the practitioners when using such tools.