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Title: Systematic bias in pro rata allocation schemes
Author: Armin Pobitzer
Source: 2017 North Sea Flow Measurement Workshop
Year Published: 2017
Abstract: Misallocation due to allocation uncertainty may result in increased exposure to economic risk for owners or stakeholders in hydrocarbon fields. It is often assumed that allocation errors are random and that they will even out over time, irrespective of the system setup and allocation uncertainty. In this paper, we show that this is normally not the case, even for simple allocation systems using standard pro rata allocation. For instance, a two-field pro rata allocation setup with a high measurement uncertainty for one of the meters compared to the other, causes the field with the highest allocation uncertainty to be systematically under-allocated. We show that this misallocation is inherent to the allocation system, and will occur even without any systematic measurement error present.

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