How can statistical data analysis reduce the cost of energy production in the oil and gas industry?

Although our energy supply is not longed purely wedded to fossil fuels but produced from a wider range of sources such as solar or wind these days, there remains a considerable challenge in providing affordable and reliable energy to all households around the world. The economic efficiency of energy producing systems is currently greater than in the past, but there are still many people around the world who live with energy poverty. Data analysis can be a powerful means to increase energy production efficiency further, as a consequence reduce the cost. In this study, hydrocarbon production data from the oil and gas industry has statistically been analysed in order to reduce the total cost of operations and increase the economic recovery of wells. The study has focused on mitigating the uncertainty in well production data caused by discontinuous flow measurement of hydrocarbon production streams of individual wells. Our results show that for oil wells with large flow rate fluctuations, undertaking just one flow test per month can create unacceptable uncertainties in estimating the production of the well. The analysis suggests that increasing the number of flow tests per month from one to four can significantly decrease the estimation uncertainty and eventually increase the economic recovery of oil and gas for an individual field.