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Title: When By-Difference Allocation Is The Best Choice
Author: Astrid Marie Skalvik, Ranveig Nygaard Bjrk, Eivind Nag Mosland
Source: 2019 North Sea Flow Measurement Workshop
Year Published: 2019
Abstract: It is often assumed that pro rata allocation is always superior to by-difference allocation in terms of uncertainty. In this paper, it is shown that for some combinations of production and gas lift rates, by-difference allocation may result in uncertainties significantly lower than pro rata allocation. The objective of this work is to show how the total economic risk obtained by different allocation methods heavily depend on the production profiles. It is focused upon the importance of gas lift and gas production rates. The aim is to establish some useful rules of thumb to identify cases where the uncertainty of an input parameter/measurement is amplified (through the sensitivity coefficients) to such an extent that the calculations would have been more accurate if the measurement had been omitted. Such measurements will increase the allocation uncertainty and thus the financial risk of loss related to misallocation, even when the cost of collecting the information is not included.Analytic equations, which may be used to estimate the allocation uncertainty and thus the economic risk for different allocation principles and production profiles, are presented. Based upon the analytical equations, it is demonstrated how different allocation principles (pro rata vs by-difference) may be optimal for different sets of realistic production profiles.

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