Loss Circulation Prevention during Drilling Operation - Risk Analysis Approach and its Implications

Drilling engineers and operators are stuck with challenges associated with loss circulation of drilling fluids in wellbores during drilling operation. At such times, a clear and careful decision is required in order to minimize cost or save resources that would have been lost in the bid to remedy the situation. This then informs the need to deploy reliable tools that will inform useful decisions as drawn from a thorough risk-analysis coined from the information gathered from the formation characteristics and operating pressure. In this study, a real-time statistic based approach was adopted in carrying out risk-evaluation of loss circulation events in a wellbore. Based on the expected opportunity loss analysis, it is often non-negotiable to consider other options when the analytical solution suggests that the well should be “abandoned”. For the decision tree, at the decision node, D1, the expected loss of the seal off zone option is $161.25, the expected loss of the drill ahead option is $19.2 and the expected loss of the abandon option is $13.2. Since the expected loss of the abandon option is less than the expected value of both the seal off and the drill ahead option, it is recommended to abandon the well. Furthermore, the risk analysis proved to be a veritable tool considering the cost implications of other options; and can also serve as basis for automated decision-making.

Triangular distribution and PERT method vs. payoff matrix for decision-making support in risk analysis of construction bidding: A case study

Decision-making in construction bidding represents a complex process due to the present risk. Risk or uncertainty cannot be ignored and should be treated as a constituent of decision-making. The paper aims to emphasize the importance of probability theory by comparing insufficiently applicable methods in practical bidding. The triangular distribution and the PERT method belong to three-point estimate techniques, while payoff matrices represent a multi-criteria approach. Also, selected methods belong to quantitative techniques for risk cost analysis. Still, the risk costs determination of the unit costs and the total costs of bids is often based on an intuitive approach. Therefore, compared results of the triangular distribution, PERT method, and payoff matrix techniques (minimin, minimax, expected monetary value, and expected opportunity loss) indicate the significance of risk costs estimating in tendering. The analysis of the results showed some overlaps in risk costs values obtained by the PERT method and expected monetary value technique. Those are due to the specificity of the chosen practical example and cannot be adopted as a rule. This means that selected methods and techniques are very useful for all bid estimation. The paper proved the complexity of decision-making, where the primary goal is to award a contract.

Economic Value of Low Flow Data

By means of the Bayesian decision approach the economic value of low flow data is considered with special reference to the design of treatment plants for typical Danish conditions. For a specific case the worth of primary data in form of direct observations of low streamflows has been investigated in terms of an expected opportunity loss (EOL). Indirect information concerning the low flow properties of interest may be obtained by means of a secondary data set in combination with a regression model. In this study is suggested a heuristic method for the economic evalution of a secondary set of data taking into account the uncertainty embedded in the regression model.

ECONOMIC OPTIMUM RECORD LENGTH

Uncertainty in hydrologic design parameters is reflected as an increase in expected project costs. The Bayesian or statistical decision approach produces a minimum-cost decision for a specific design, yielding the expected opportunity loss, EOL, a measure of the uncertainty inherent in the decision process. The uncertainty stems from the fact that the population value of the design parameters is unknown. Additional information can be obtained by collecting more data, and the value of these data is measured by the decrease in EOL. But there are costs involved in getting additional data: the cost of continued data collection and the cost of delaying the construction of the project (benefits foregone). The expected economic optimum record length is defined at the point where the marginal benefits of additional data are equal to the marginal costs of obtaining those data. The theory is applied to sediment load data used to design the sediment storage portion of a reservoir. Based on an economic efficiency criterion, the expected optimum record length is found to be 12 years, given that 5 years of data are available at the time of the analysis. Objectives like environmental quality and social benefits are disregarded in this analysis.