Integrated Geological-Engineering-Economic or for Optimization Decision-Making in Unconventional Oil and Gas Horizontal Wells

Abstract Unconventional oil and gas resources hold immense potential and represent the primary option for alleviating the imbalance between oil and gas supply and demand. However, the high costs associated with engineering operations pose challenges for profitable development. Practical experiences have demonstrated that an integrated approach combining geological and engineering strategies is an effective means to reduce costs and enhance efficiency. Given the multitude of geological conditions and engineering parameters that influence development profit, which surpass the scope that can be comprehensively grasped by expert experience alone, the current integrated optimization decisions primarily relying on expert experience may not necessarily constitute globally optimal solutions. In contrast, the widespread and successful applications of operations research in various sectors of the national economy, including military and engineering fields, have shown its significant potential for quantitatively solving optimal decision-making problems in complex systems. Therefore, this study leverages operations research theory to first construct production models and cost models for unconventional oil and gas resources as functions of all geological conditions and engineering construction parameters. Subsequently, a profit (= production - cost) objective function is established, thereby transforming the practical problem of optimal integrated geological-engineering decision-making into a mathematical problem of maximizing the profit objective function. Following this, computer software is developed to determine the maximum value of the objective function and the corresponding values or matches of geological conditions and engineering parameters, enabling quantitative, scientific, and optimal decision-making in integrated geological-engineering projects. If successful, this approach will facilitate the profitable development of numerous unconventional oil and gas resources.