An Overview of Back Allocation Techniques

Xu Zhang

December 2007
 Table of Contents

Introduction ................................................................................................................................2
Back Allocation Process..............................................................................................................2
Determine Fluid Volumes .......................................................................................................3
Compute Allocation Factor......................................................................................................4
Compute Allocated Inflow Volume .........................................................................................4
Literature Overview ....................................................................................................................5
Schlumberger Technology...........................................................................................................7
Software Applications .............................................................................................................7
Case Studies............................................................................................................................8
Summary.....................................................................................................................................9
References ..................................................................................................................................9

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 An Overview of Back Allocation Techniques

Introduction

In development and operation of oil and gas fields, the actual production rate of a well can be
measured only when the well is being tested. The well is usually tested for about several hours
periodically or infrequently. Usually, the production streams from the individual wells are
transported to a common point for processing and selling, where an accurate measurement of the
volume is made.

Another common industry practice is to commingle production from a wellbore that is completed
in multiple layers, zones, or reservoirs. In these situations, it is challenging to determine the
individual flow rates from each layer. One operating practice is to isolate each layer for testing
and determine what fraction of the total production can be attributed to each entity.

Increasing development costs in deepwater operations has led to a practice to tieback sub-sea
wells to hub facilities. The various tiebacks which introduce commingled production with
different ownership and royalty rates significantly increase the complexity of the process
determining individual well production, portion of sales, etc.

In the oil and gas industry, the Back Allocation techniques have been developed and are
routinely used to allocate actual production and injection volumes for wells and/or completions,
based on infrequent well test data or theoretical calculations with well and reservoir
characteristics. The allocated well daily rates are essential for integrated studies, reservoir
simulations, field surveillance, production optimizations, as well as reserves accounting. The
success of any study relies on the accuracy of the information from the back allocation process.

Back Allocation Process

Back allocation is a process of apportioning produced fluids among upstream wells within a
production network. A production network normally consists of a number of facilities that are
interconnected for separating, disposing, measuring, and moving the produced fluids from wells
to the market.

Back allocation begins at downstream starting nodes and works one node at a time toward
upstream wells. At each node, the total quantity of the outflow fluids is balanced with that of the
inflow fluids, by performing the procedure with steps (1) Determine fluid volumes; (2) Compute
allocation factor; and (3) Compute allocated inflow volumes.

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Determine Fluid Volumes

Fluid volumes are either measured or estimated at different places throughout the entire
production network. However, direct measurements at every facility, especially at oil wells, are
not always available. For those wells without direct measurements, it is necessary to use
estimated volumes.

The volumes of the produced fluids can be estimated by using well test data that provides the
capacity flow rate information for each fluid phase during the testing period.

Estimations can also be performed by using various mathematical techniques. The most standard
mathematical model used is a polynomial equation. A fifth order polynomial equation would
suffice for most requirements. The polynomial equations are derived using reservoir data,
pipeline conditions or curve fitting for a multi-point well test.

One of estimation methods is to predict well performance using look-up rate tables generated
from intersections of IPR and TPR curves based on well tests. In this procedure, the flowing
bottomhole pressures are computed and cross plotted against flow rates to determine an IPR
curve (Vogel or Fetkovich type) for a well. A set of TPR curves is then generated from the
tubing hydraulics model for the well. The intersection of the IPR curve and TPR curves is
calculated to form look-up tables where flow rates are stored as a function of flowing tubing
pressures, as shown in Figure 1. From a measured flowing tubing pressure, the look-up tables are
interpolated to calculate a production rate that is integrated over time to estimate the production
volume for the well.

Figure 1: IPR and TPR Curves

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Compute Allocation Factor

In the allocation process, the total of all outflow volumes is first calculated. Then the resulting
volumes are distributed among the inflow nodes. The simple network below illustrates this
calculation process.

At node J, there are two outflows going to nodes S1 and S2; there are also three inflows coming
from nodes W1, W2, and W3.

The Allocation Factor (AF) of a node is determined by taking the ratio of the summation of all
outflows to the summation of all the inflows before allocation, as follows:

AF = (sum of outflows) / (sum of inflows before allocation)

Using this definition, the field factor for the above example, can be calculated as follows:

AF = (3300 + 2100) / (1900 + 1400 + 2500) = 5400/5800 = 0.931

Compute Allocated Inflow Volume

Once the Allocation Factor has been determined, the allocated volume for each inflow node can
be calculated using proration. The proration is achieved by multiplying the AF with each
measured or estimated inflow volume, as follows:

Allocated volume = AF x inflow volume

Therefore, for the above example, the allocated volumes for inflow nodes W1, W2, and W3 are
computed by multiplying AF (0.931) with the estimated volumes (1900, 1400, and 2500), as
follows:

Computed W1 Allocation Volume = 0.931 x 1900 = 1769

Computed W2 Allocation Volume = 0.931 x 1400 = 1303
Computed W2 Allocation Volume = 0.931 x 2500 = 2328

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After proration, allocated volume of the inflows at each node are balanced with that of the
outflows, such that

Sum of outflows = Sum of allocated inflows

For the above example, the material balance is shown as follows:

3300 + 2100 = 5400 = 1769 + 1303 + 2328

These allocated volumes are also shown in the network below

Literature Overview

Bergren at el.1 presented three-phase production allocation programs that have evolved in the
Prudhoe Bay eastern operating area. The allocation process involves three steps. First, the
Fetkovich inflow performance relationship (IPR) is determined by cross plotting liquid rates
against flowing BHPs, and the tubing performance relationship (TPR) is developed from the
tubing hydraulics model for each tubing flowing pressure (naturally flowing wells) or each
combination of tubing flowing pressure and lift gas rate (gas-lifted wells). Second, the
intersections of the Fetkovich IPR curve and TPR curves are calculated. The resultant liquid
rates are stored in tabular formats called rate or look-up tables, as a function of flowing tubing
pressures or combinations of flowing tubing pressures and lift gas rates. Third, the measured
flowing tubing pressures and lift gas rates are used to calculate oil, gas, and water production
rates on a continuous basis, by interpolating values from the look-up tables.

Lobato-Barradas at el.2 proposed a rate allocation method based upon the integrated
compositional surface-subsurface modeling. The system is used to allocate the oil and gas
production of 72 wells from six different fields. The integrated algorithm coupled the PVT,
network, and reservoir models. The PVT model deployed the Ahmed’s version of the Peng-
Robinson EOS that characterizes fluids from the reservoirs. The model of the surface network
was developed as a single integrated hydraulic system comprising of all elements from the
reservoir sandface of the wells to the common measurement points downstream. Zero-
dimensional compositional material balance models described reservoir compartments with

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Fetkovich aquifers. The solution of the integrated system is iterative. The proposed algorithm
was used as a prior study to analyze, reallocate, and validate the production history that was
going to be used in an integrated reservoir study.

Popa et al.3 used data mining tools to perform zonal allocation and increase production
opportunities. The proposed methodology was applied and executed in Kern River Field in
California, which has over 8000 producers, 1200 injectors, and 100 years of production history.
First, with input of well completion, zone markers, and production data, a neural network
indicator model was developed to predict the expected daily oil production for the wells not
effectively draining the lower zones. Then, the expected oil production together with a risk factor
is fed into the fuzzy expert system that ranks the candidates and provides a prioritized list of the
wells for remedial work design and economical calculations.

Widarsono et al.4 applied the fuzzy logic to allocate production in 93 commingle producers in
Central Sumatera field where only a few wells had undergone production tests and none of them
had undergone production logging. The goal of the study presented in the paper is to obtain the
detailed production contribution from individual layers for the field’s reservoir simulation and
production evaluation/prediction. To investigate the pattern of relationships between production
contribution of layers and petrophysical, geological, and engineering data, the fuzzy logic has
been chosen based on its capacity of accommodating both numeric (permeability, porosity, etc.)
and non-numeric (facies, lithology, etc.) data. The Fuzzy interpretation model can be developed
to allocate production among reservoir layers under commingle production scheme.

Gonzales el al.5 detailed an allocation process implemented by BP for its GoM deepwater
production. Increasing development costs in deepwater operations has led to a practice to tieback
sub-sea wells to hub facilities. The commingled production with different ownership and royalty
rates increases the complexity of the rate allocation process. This needs an unconventional
method that requires sampling for fluid characteristics and continuous measurement of oil, gas,
and water. The proposed monthly production allocation workflow can be broken into three main
functional areas including (1) data acquisition; (2) allocation processing; and (3) reporting or
interfaces into downstream tools and applications. The benefits derived from the new technology
far exceed BP’s original goals for the system. The allocation process is now conducted on a daily
basis, much close to real time. The increased accuracy and liability of the daily allocation
process provides the basis for enhancing daily production and maximizing ultimate recovery
from the reservoir.

McCracken et al.6 employed the downhole pressure data measured from permanent downhole
gauges to back allocate rates from the commingled wells or zones. The proposed workflow
involves several steps. First, the initial rates are obtained with the allocation factors based on
infrequent surface well tests. The measured downhole pressure is analyzed using pressure
transient analysis and the initial rates. Second, a simple reservoir model was developed using the
results (kh, skin, faults, barriers, and boundaries) from the pressure transient analysis and
calibrated to match the measured downhole pressure. The history-matched reservoir model is
then used to predict rates using the measured downhole pressure as an input. Finally, a
reallocation algorithm is used to adjust the predicted rates to ensure that the measured total
production is honored.

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Schlumberger Technology

Schlumberger offers a variety of software applications, technical solutions, and consulting

services to help the clients set up the system and workflow for efficient and accurate rate
allocation processes.

Software Applications

FieldBA application7 is a powerful tool that provides a systematic, efficient, and repeatable
process for allocating sales and production volumes measured at downstream facilities back to
upstream facilities or wells in a network. FieldViz, a companion product for FieldBA, allows
network visualization of oil and gas producing facilities. FieldBA/FieldViz can be integrated
with Avocet Data Manager8, FieldView-FDC, Finder, and third party ODBC databases.

Allocation capabilities:

• Daily and monthly, production and sales allocations

• Allocations for production fluids (mass & volume) by disposition (flare, fuel, etc), water
and gas injection, gas lift
• Computation of potential, estimated, deferred and allocated results
• Component allocation by volume, mass, energy and moles – includes liquid to gas
equivalence models
• Two phase grouped component allocations
• Utilization of high frequency choke and well head data for choke and polynomial models
• Ability to define pre-execution and post-execution database processes
• Includes virtual meters for defining mathematical derived measurements

Network configuration and visualization capabilities:

• Reads facility setup and facility connections from Avocet Data Manager, FieldView-
FDC, Finder and third party databases
• Allows creation of sub-networks for easier allocation execution and display
• Allows new connections between facilities to be defined using visual tools
• Enables date-specific visualization and animation of created networks with ability to
position objects, zoom, rotate, turn, save and print networks
• Ability to define node attributes (start, end, fixed, intermediate, break) to create back
allocation networks that are different from physical networks

Back allocation rates derived from well test data and polynomial equation methods were found to
be quite unreliable in some cases. However, Neural Networks, trained on the well test data
(tubing head pressure, water cut, gas lift and, choke size), are capable of predicting reliable well
production rates on a continuous basis.

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DECIDE! application9 is the first software introducing Neural Networks and Genetic Algorithms
specially designed for the needs of the E&P industry. DECIDE! provides all necessary features
which allow the flexible development of Neural Network models for predictive Data Mining:

• All model parameters are under control of the user

• Clustering, classification and prediction architectures are available
• Recurrent and Time-Delay Neural Networks (TDNN) are built in
• Trained models may be used for prediction and optimization tasks
• Dynamic graphics enable online evaluation of the model performance

One major problem however faced in many fields is the absence of sufficient historical well test
data to train the Neural Networks. To overcome this limitation a unique hybrid approach of
merging wellbore and surface facilities simulator (PIPESIM) and a computationally intelligent
(non-parametric) modeling method using Neural Networks (DECIDE!) has been proposed10.
Listed below are the main steps involved in this approach:

• Build PIPESIM well models using reservoir properties, tubing survey and PVT data
• Calibrate PIPESIM models with available well test data
• Generate flow rates from PIPESIM for all known well-head pressures
• Preprocess data and extract training data using DECIDE!
• Train and optimize Neural Networks, and schedule real-time rate allocation

The main benefit demonstrated by this approach is the possibility to provide continuous well rate
estimation, making use of the existing well sensors without the need for extra instrumentation or
interruption to production operations.

Case Studies

Hamad et al.11,12 demonstrated a back allocation system that was implemented for ZADCO, a
major operating company in Abu Dhabi. The System allows apportioning fluids among more
than 1000 upstream sources within a production network from the production volumes accurately
measured at the downstream facilities. In the field, the oil production string is calculated by one
of these theoretical volume computation methods: (1) Well characteristics formula; (2) Well flow
test formula; and (3) Transient calibration coefficient formula. The new back allocation
application (FieldBA/FieldViz) obtains required data from the Finder master database, performs
back allocation, and writes the allocated volumes back to the same database. Some advantages of
the new system includes (1) flexibility of including new theoretical volume computation methods
and modifying the existing ones; (2) capability of visualizing the physical and back allocation
networks; and (3) graphical features suitable for better data quality control.

Graf et al.13,14,15 introduced a rigorous well model that not only optimizes production from
intelligent wells but also back-allocates commingle production to completions. The proposed
workflow is divided into two stages. In the first stage, the well model is constructed and
calibrated with all available data from log interpretation, lab measurements, to dynamic test data.
The applications involved in this stage include Petrel, SWPM, Saphire, Weltest200, PipeSim,

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and ECLIPSE. In the second stage, the well model is transformed into a response surface known
as the proxy model. A neural network is trained on the response surface to relate the measured
data from the sensors to the completion flow calculated from the well model. Trained with all
simulations, the neural network is capable of stochastically predicting production share for
individual completions on a real-time basis. Applications such as Cougar, Decide!, Watcher, and
Aurum are employed in the second stage.

Floyd at al.16 presented case studies which apply advanced allocation processes coupled with
simulation engines and Neural Networks. In the first project, a system combining process
simulation and Avocet Allocation was set up for TOTAL-UK. With input of measured mass flow
rates at separators, fuel and flare consumption, and tagged component properties per wells, the
process simulation was performed to compute component and water mass flow rates per well at
exit points. Then the mass component allocation process was carried out to allocate volume flow
rates (Qo, Qo, Qw) for wells. In the second project, an intraday estimate process was proposed
and implemented for PEMEX. The process employed Avocet Capture, intraday data, and custom
well model to track events (hours on) and changes in attributes (pressure, choke, etc.), and
calculate flow rates in a 24-hour period. DECIDE! data hub was used to acquire high frequency
data. PIPESIM models and Neural Networks were used to plug missing values and validate
allocations.

Summary

• The commingled production from wells is usually measured at downstream facilities. The
measured volumes are needed to accurately allocated back to wells and/or completions
for field surveillance, reservoir management, production optimization, and reserves
accounting.

• With the traditional Back Allocation method, actual production volumes for wells and/or
completions are estimated based upon infrequent well test data or theoretical calculations
using well and reservoir characteristics. In some cases, the back allocation rates derived
from this method were found to be quite unreliable.

• By introducing Data Mining and Artificial Intelligence methods, Schlumberger has

developed an advanced, hybrid allocation technique merging wellbore surface facilities
simulator (PIPESIM) with computationally intelligent Neural Networks (DECIDE!) to
improve allocation accuracy and provide rate estimation in real time.

References

1. Bergren, F.E., Lagerlef, D.L., and Feldman, S.: “Three-Phase Well-Level Production
Allocation at Prudhoe Bay,” SPE 35674, SPE Computer Applications (April 1997) 55.

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2. Lobato-Barradas, G., Dutta-Roy, K., Moreno-Rosas, A., Ozgen, D., and Firincioglu, T.:
“Integrated Compositional Surface-Subsurface Modeling for Rate Allocation
Calculations,” SPE 74382, the SPE International Petroleum Conference and Exhibition,
Villahemosa, Mexico, 10-12 February 2002.

3. Popa, C., Popa, A., and Cover, A.; “Zonal Allocation and Increased Production
Opportunities Using Data Mining in Kern River,” SPE 90266, the SPE Annual Technical
Conference and Exhibition, Houston, U.S.A., 26-29 September 2004.

4. Widarsono, B., Atmoko, H., Robinson IV, W., Yuwono, I.P., Saptono, F., and Ridwan:
“Application of Fuzzy Logic for Determining Production Allocation in Commingle
Production Wells,” SPE 93275, the 2005 SPE Asia Pacific Oil & Gas Conference and
Exhibition, Jakarta, Indonesia, 5-7 April 2005.

5. Gonzales, P., Simonton, C., and Wadle, T.: “Allocation Process Modeling for Deepwater
Production,” SPE 101318, the 2006 Abu Dhabi International Petroleum Exhibition and
conference, Abu Dhabi, U.A.E, 5-8 November 2006.

6. McCracken, M. and Chorneyko, D., “Rate Allocation Using Permanent Downhole

Pressures,” SPE 103222, the 2006 SPE Annual Technical Conference and Exhibition,
San Antonio, Texas, U.S.A., 24-27 September 2006.

7. "FieldBA/FieldViz - Fundamentals and Product Overview," InfoStream Production

Solutions, November 2004,
www.hub.slb.com/Docs/ofs/ires/gq_production_solutions/FieldBA_Overview.pdf

8. "Avocet Allocation - Accurate end-to-end production accounting, back allocation,

network visualization, and reporting," 2007,
www.hub.slb.com/Docs/ofs/sis/07_is_183_avocet_alloca.pdf

9. "Accurate Back Allocation With Neural Networks, DECIDE! - Case Study," September
2004,
www.hub.slb.com/Docs/ofs/ires/gq_production_solutions/Rate_Allocation_case_study.p
df

10. "DECIDE! Rate Estimation & Flow Status," June 2005,

www.hub.slb.com/Docs/ofs/ires/gq_production_solutions/DECIDE_rate_estimation_and
_flow.pdf

11. Hamad, M., Sudharman, S., and Al-Mutairi, A.: “Back Allocation System with Network
Visualization,” SPE 88747, the 11th Abu Dhabi International Petroleum Exhibition and
conference, Abu Dhabi, U.A.E, 10-13 October 2004.

12. Al-Marzooqi, A., Al-Nawfali, I., Hamad, M., and Yousif, M.: "Case Study:
FieldBA/FieldViz implementation at ZADCO, Abu Dhabi, U.A.E.," August 2003,
www.hub.slb.com/Docs/ofs/ires/im_field_location/FieldBA_FieldViz_Case_Study1.pdf

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13. Graf, T., Graf, S.P., Evbomoen, P., and Umadia, C.: “A rigorous Well Model to Optimize
Production from Intelligent Wells and Establish the Back-allocation Algorithm,” SPE
99994, the SPE Europec/EAGE Annual Conference and Exhibition, Vienna, Austria, 12-
15 June 2006.

14. Graf, T., Umadia, C., Evbomoen, P., and Graf P.: "Workflow for back-allocation and
production optimization of intelligent well completions," InTouch 4221208, July 2006.

15. Graf, T. and Umadia, C.: "Back-allocation in Real-time of Commingling Wells with
Intelligent Well Completions," SPE 105987, the 30th SPE Nigeria Annual International
Conference and Exhibition, Abuja Nigeria, July 31 - August 2, 2006.

16. Floyd, B., Baarda, M., and Stundner, M.: "Advanced Allocation processes coupled with
Simulation Engines and Neural Networks," Enhancing & Optimizing Information
Management Solution Delivery, 1-3 November, 2006, Kuala Lumpur, Malaysia,
http://www.eureka.slb.com/WS.cfm?ID=213&Page=Talk&TalkID=1229

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