Patent ID: 7512543

Claim:
A method for managing risk associated with one or more hydrocarbon reservoir exploitation strategies used for determining one or more risk management decisions, the method comprising: a. developing a reservoir model that incorporates a stochastic model of one or more uncertain model parameters; b. identifying one or more goals for optimization; c. identifying said one or more hydrocarbon reservoir exploitation strategies for achieving said one or more goals based on said reservoir model and associated uncertain parameters; d. identifying control variables and constraints associated with each of said one or more hydrocarbon reservoir exploitation strategies; e. identifying a set of equally probable reservoir model scenarios; f. formulating an objective function based on said one or more goals to determine the gain in value attributable to said one or more hydrocarbon reservoir exploitation strategies; and g. optimizing said objective function via at least one processor by using said set of scenarios and said control variables and constraints for each of said one or more hydrocarbon reservoir exploitation strategies to determine the optimum gain in value at a plurality of risk levels; h. creating a risk reward summary to analyze the determined optimum gain in value at said plurality of risk levels corresponding to said one or more hydrocarbon reservoir exploitation strategies that identifies said one or more risk management decision to optimize reservoir production value; and wherein said objective function is defined as F Î» =Î¼âˆ’Î»Ïƒ wherein Î¼ = âˆ‘ i â¢ w i â¢ g i , â¢ Ïƒ = âˆ‘ i â¢ w i â¡ ( g i - Î¼ ) 2 w i = 1 / N N = n m ; such that, F is said objective function, Î» is a risk aversion level, Î¼ is a mean of the gains in value of the goal and the standard deviation, Ïƒ is the standard deviation of these gains, N is the set of equally probable scenarios, g i , is the gain for i th scenario; n is the number of discrete points in each of said one or more uncertain parameters; and m is the number of uncertain parameters.