Journal
COMPUTERS & CHEMICAL ENGINEERING
Volume 24, Issue 2-7, Pages 1049-1055Publisher
PERGAMON-ELSEVIER SCIENCE LTD
DOI: 10.1016/S0098-1354(00)00529-9
Keywords
oilfield planning; royalties; taxes; tariffs; disjunctive programming
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The design and planning of offshore oilfield infrastructures includes several discrete decisions over a long time horizon, as well as complexities arising from nonlinear reservoir behavior and business considerations. This leads to very large mixed integer nonlinear programming (MINLP) models that are very difficult and expensive to solve. It is for this reason that simplified economic objective functions have been used in the past. We show that when complex business rules, such as tariff, tar; and royalty calculations are added to the model, substantial increases in the net present value (NPV) of the project are obtained. However, including these calculations leads to more than an order of magnitude increase in the computational effort required. We address this issue by proposing a disjunctive modeling framework for complex economics, and we show that in a particular instance it solves twice as fast as an intuitive big-M modeling framework. (C) 2000 Elsevier Science Ltd. All rights reserved.
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