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Title: From Tie Back To Allocation Business: A Prerequisite Is To Understand The Different Methods And Their Impacts For Fair Trade
Author: Dr. Bruno Pinguet, Anna Pieper
Source: 2019 North Sea Flow Measurement Workshop
Year Published: 2019
Abstract: Flowrate measurements are essential to the oil and gas industry for quantifying and optimizing the production but also for taxation, custody transfer, allocation, reservoir management, well testing, environmental reporting purpose. A given flowrate measurement is entirely and correctly defined if, and only if, it is accompanied by its associated uncertainty. The uncertainty is the degree of doubt about measurement,and it is related toa confidence interval to represent the likelihood that the real value of the measurement is within a specified interval. A reported measurement should specify these 3 quantities: the reading, the associated uncertainty, and the confidence level,but this is far to be the standard practice in the oil and gas industry. Today with roughly 100million BOPD,this is a business value of roughly 6Bn per day, and an error of 0.1% leads to more than 2Bn revenue per year,which can be a gain or loss during the trading among the partners.To trade successfully,companies must have a regulatory framework based on measurement confidence or uncertainty,but examples often are forgetting that allocation is also versus the quality of the produced fluids and final mixed product. A 30API and 45API oil have not the same value for a given volume,and this needs to be considered.The paper is proposing thru simple examples to show the impact of the allocation for a given hypothetical field either based on proportional based allocation, uncertainty-based allocation, and by value adjustment.When the uncertainty in a measurement is adequately assessed and stated, the fitness for the measurement can be proven and judged, and the allocation process should reflect such effort in obtaining the lowest uncertainty value. These scenarii will show how the production reconciliation can be drastically different for the different end-users and how important this should be understood clearly and applied adequately for fairness in business.

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