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SPE 27561
Neural Networks: A New Tool for the Petroleum Industry?
J.K. Ali, British Gas PLC
COW19M f 994 SDCIEV O! Petrolnum E.gl. aem 1...
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ABSTRACT
Recent advances in neural networks have provided
computers (and machines) with intuition - the ability to
produce a reason-able result to a problem which is
intractable, or unreasonably hard, to deal with by formal
logicsl means. Neural networks can learn complex non-
linear relationships, &W when the input ifbnriaticm is
noisy and less precise. Neural net works have made strong
advances in pattern. recognition, dassiticiatio of noisy
data, nonlinear feature det&tion, market forecasting and
process modelling. These abilities mike the neural
network tecbnoiogy very well suited for solving problems
in the petroleum industry.
The aim of this paper is to give a synopsiiof the areas of
petrcdewn technology in which nemal networks have
been used with success, and to d~cuss other potential
areas of application. .!lome of the examples include
seismic pattern recognition, perineibllity predictions,
identification of iaiidstone Iitbofacies, drill bit diagnosis
and analysis and improvement of gas well producti&
Neural networks technology could a!so ciintibute
significantly to the analysis, prediction and optimisation
of well perforr&ice, intigrat ed reservoir characterisation
and portfolio management.
Although there has been some advances on the design of.
optimal mtwork structmes, it is slill largely am art to
determiue tbe best paradigm. The paper highlights key.
factors in tbe design or selection of neya~ .netvyks and.
tbe limitations of the commonly med models. It also
discusses the use of hybrid expert networks which
References and illustra<io; at end of paper
..
Society of PetrolewnEngineers
Mow(, tie. d ilOmIQJM mtded!0. 6!M<W BUbvitted byM Mb!(s). 03.,.!3CAth. Pawr
a.d are SUbioti 10 cwrsaion by m au!h.n(s). Tk ma!wa[. es Pr6%ented, d-s not neee5mrilY m!kti
SPE malngs w S.bjm 1. Wbllaion review by Editorial Cammlll-$ of !he SUGIBIY
US-4. T.!% 163245 sPEUT.
combine neural networks with rule-based ressoning and
fuzzy logic for general decision: making operations.
1NTRODUCTION
Neuxal netwotks have a long history, going bsck at Iesst
to tbe early 1940s. While theoretical work in the field
continued, developing ew imd well- fmmded learning
algorithms, with even a small number of published
demonstrator projects, resurgence of mass interest had to
wit for the publication of trainbfg algorithms capable of
overcoming the Iimitati.ons of tbe early networks (the
perception).
Its widespread use today is fraught with difiiclties ii
acYleving optimum performance, monitoring their
activity, and integrating them into existing sdutirms and
operating environments. But, most of all, there is a
lesrning curv~. of a. purely practical nature, that is
involved i.n understanding what nmral networks are
about, bow they operate, and what they can do [41].
There is by now a range of texts on the subject (see
reference for.. sample example) Imt they are not
necessarily helpful in persuading managers and other
decision makers that they should be. investigating the use
of neural networks i their work environments.
Numerous clues and giddines for applications of neural
algorithms and systems exists [42]. However, most such
applications have been presented to illustrate the
Op?ra~ng prin~pl~s Of neural netwOrk$ rather than tO
reflect a _practical focm. This ....study focuses m the
aPPlimtiOh of neural networks ii the petroleum indmtry.
The applications selected for coverage are believed to be
rrepresentatiye..of. tbe field, and the depth of coverage
- should prepare tbe reader to pmsue his~her own
217
 2 NEURAL NETWORKS: A NEW TOOL FOR TEE PETROLEUM INOUSTRY?
application project development. However, since the area
of neural networks is expan~lng very rapidly,. new
problems and solution approaches may emerge in the
near futime beyond those presented here. While being the
firit to use a new technology is hazardous, being among
the last may be disastrrms. Tecbnicd leadership is.
essential to maintaining a compan ys competitive
position in the rapidly evolving global economy. Neural
networks are at the stage where judtcious application can
produce major heneti~ failure to consider them may
result in a company loosing its competitive edge.
The paper is organised as follows. We first giVe an
overview of neural network classes, and their main
properties, and then give a review of applicatiorii in the
oil and gas industry. Next, we highlight key factors in
the de<l~ or selection of application systems. This is
followed hy a discussion of the current status and
Iirnltatioris of ne~ral networks technology. Finally, we
conclude with some thoughts on the future of neural
net works technology.
NEURAL NETWORKS
Neural networks form a broad category of computer
algorithms that solve several types of problems,
including pattern classification, function approximation,
pattern completion, pattern association, filtering,
optimisation and automatic control [42].
Two primary elements make up a neural network
processirig elements and interconnections. Processing
elements, tbe neural network equivalent of neurons, are
generally simple devices that receive a number of input
signals and, based on. those inputs, either generate a
signal (fire) m do not. The output signal of an individual
processing element is sent to many other processing
elements (and possibly back to itself) as input signal, via
the intwxmnections between processing elements.
The structure of the neural network is detined by the
interconnection architecture between the processing-
elements, the. rules that determine whether or not z
processing element will ..tire (the transfer function), and
the rules governing changes in the r+Live importamaof
individul interconnections to a processing elements
input (training laws).
Neural networks can be arbitrarily categorised by
topology, nmron model, and training algorithm. W,th
mow than 40 functioning models to choose from, it is
important to know which models have had tbe most
success and to understand their similarities and
differences [42]. Fig 1 is a iirnplified cltisifiiatiori o?
neural network models. Backpropagation is, by far and
away, the most heavily used algorithm, followed by the
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SPE 27561
Kohonen model.
Back-propagation networks
The ba:k,-propagation neural network (BPN) is probably
the most well-known and widely used fi.edforward neural
network system. The term back-propagation refers to the
training method by which the connection weights of the
network are adjusted. During operation, all informatibri
flow is feedforward. Flg 2 shows the basic structure of a
back propagation network.
in tbe BPN model [38], a group of neuro~ called input
neurnti, receive information from the real world. These
neurons are interconnected to another layer, called the
hidden layer, and they, in turn, are intermnne ted to
output neurons. Each interconnection has a nu& encal
value, called a weigh~ depending on the wiights,
different input patterns can result in the tiring of orie m
more output neurons. Through training, the output
nemoIIs are taught to give the correct answer depending
on the stimulus presented to the input neurons. T.o begin
with, the network learns a predestined set of input-output
example pairs by using a tw-phase.. propagat~ adapt
cycle. After appiying.:n. input patt$rn = a sti!mdvs tO
the first layer of network uriits, the input pattern is
propagated through each upper layer until an output is
generated. This .mtput patt.em is the mrnpared to the
de.iired output, and m error sigmil is computed for each
output unit.
The error signals are then tramsmit.ted back from the
outptit layer to. each node in the intermediate layer, that
contributes directly to the output. However, each unit in
tbe intermediate layer receives only a portion of. the total
error signal, based roughly on the relative contribution
the urilt made to the original output, This prc+e.%
repeats, layer by layer, until...each node in the network
has received an error signal that describes its relative
contribtim to tbe total error. Based on the error signal
received, connection weights are then updated by each
unit to cause the network to ccmverge towards a state,
that allows all the training patterns to be encoded.
The important feature of the back. propagatiori neural
network is that it learns to. mpmd,rce the outputs not by
jit mmembmiig the output appropriate for every input,.
but by learning the patterns contained within the data.
Once tr.iined, tbe network can make predictions from
novel sets of inputs.
Self-organisiig networks
The seti-organizing model, also known as Kohonen
network [39], is probably second ody to the back-
propagation archikctre, in terms of the number of
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SPE 27561
applications for which it is being used. The most
significant difference bet ween the. back-prg~gation and
self-organizing models is the fact that the self-organizing
model is trained without supervision. We present targets
values to the output nodes during back-propagation
training. In the self-cmganising model, however, we
present only the input patterns. The network simply
inspects the data for regularities, and organises itself in
such a way as to form an ordered description of the data.
It is a useful algorithm to use for vector qm.ntisation,
and has known optimality properties.
The self-organizing network tinsists of two Iayecs an
input layer and an output layer (Fig 3). Each neuron in
the input layer is connected to each neuron in the output
layer, by a connection with an associated weight.
Although each of the.layers can be represented in a
variety of ways, each i; typically represented as a tw~.
dimensional array of neurons. Within two dlmemicms,
obviously, the neurons could be arranged in many ways.,
Most often, they are arranged .in either. rectangdar or
hexagonal arrays. The network .cmates a 2-D feature
map of the input in such a way as to. presewe the
topological relationships hetween pattern vectors.
During traiding of the Kohonen network, continuous-
vahmd input vectors are presented sequentially in time,
without specifying the desired output. After mough
input vectors have been presented, weights will specify
cluster or vector centres that sample the input space,
such that the point density function of vector centres
tends to:appmximate theprobabi~;y density function of
the input vectors. In addltim, the weights will be
organised such that topologically close nodes ate
sensitive to inputs that are physically similar. O.utpu%
nodes will. thus be ordered in a natural manner.
The power of thk network lies in Yti ability to quantise
geometrically complex surfaces in any number of spatial
dimensions. Thus, it could, for example, be used t.o
spread a regular network around a reservoir, to help in
the.selection of grid points for tirite +rnent analysis or.
tinite difference shnulation.
Other netwmb _,, .,,___, . . . ..~ .. . . . .. .
While we have reviewed only the two most prominent
methods, we recognise that research is ad,ive in
developing even better methods in terms of both
prediction accuracy and speed of traiig [47].
APPLICATIONS IN TEE PETROLEUM INDUSTRY
The main virtues of newal itworks~e: I)l:aming, 2)
association ability, 3) real-~,rn~:apa&Hty,._4] self-
organisation, 5) robustness against noise, and 6) AUity
J.K. ALI 3
to generalii. These lead to a rough characterisation of
problems, which might he most suitable for applying
neural networks [46]: 1) Those in which detailed rules for
solving the problem are unknown, or are dfficult to
formalise, but the desired input-output set isknmvn, 2)
there are noisy data and, 3) high speed p~ocessing is
required. Thus, typical application areas that have been
considered in the petroleum industry are pattern
recognition signal processing robotics and c.cmtroi and
decision making models (Pig 4). A brief outline of these
application areas is given below.
Pattern/Glu&x Analysis
- Pattern recognition, A.s&cafion.co mipletion
-Associative memory, mipping, tempera.lmapping
me possible training rules for pattern and cluster
recognition depend heavily on the task domain, and the
properties of the classification desired. Back-propagation
and the Kohonen topographic map are the two most
popular rules, the former being supervised, the latter
unsupervised. The value of the unsupervised approach is
to discover any classes present. In pattern classification,
neurrd networks have to compete against well known
classical methods, such as k-nearest neighbour, minimum
distance, Parsen window and Bayesian techniques. These
methods are based on the use of sample patterns to
estimate certain statistical parameters of each pattern
class. The training patterns of each class are used to
compute ..parameters of the decision function
corresponding to that class. After the parameters in
question have been estimated, tbe structure of the
classhier is fixed, and its eventual performance will
depend on how well the actua[ pattern population satisfy
the underlying statistical assumption made in the
derivation of the classification method being wed.
The statistical properties of the pattern classes in a
problem often are unkmmvn, or cannot be estimated.
Neumd networks are best suited for pattern classification
problems because they can yield the required decision
functions directly via training. Then, making
assumptions regarding the underlying probability density
functions, or other probabilistic inf.jmmtion about the
., patter cl~sssunder cosideratio. isunmcessary.
Even in cases where other cla.wical rnethodscan be made
to pe~form more successfully, the robustness of a traimd
network to small changes in the problem may offer
longer-term economic advantages, in terms of
adaptibllity and reliability. If performance standard is
critical and the neural network solution is acceptable,
their speed, especially when implemented in hardware,
may seem very attr@ive [46].
Classification methods exist which do not need trairiig
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4 NEURAL NETWORKS: A NEW TOOL FOR TEE PETROLEUM INDUSTflY?
sets for learning. In particular, they do not need
information about the class of objects in the learning
stage, but learn them without a teacher (unsupervised
learning). One such group is called cluster analysis.
Cluster analysis can be applied in classification if for any
reason tbe training set cannot be prepared, or if
examples with known clmsevaluation are not available.
There are two main groups of cluatef tialysis methods -
the first is Kiiiachical, which .wqmmtially assign earb
pattern to one cluster, and the second non-hierachical
(e.g. MacQueen k-means), which assumes that the
number of clustets k is known. Kohonen self-organizing
feature maps represent unsupervised feed-forward
learning. The goal of the self-organisation is similar to
that presented in dmter analysis . to achieve the same
neural network output, as a response to input of similar
patterns.
A mapping problem is one .iri_ivhlch an input pattern is
associated with a particular output pattern. For
example, a pattern of valve sensor re.dngs may map to
a pattern of valve settings. BSckpropagation networks
ate very good at these problems. Temporal mapping is
just like any other mapping problems, except that the
input data includes a consideration of time. For
example, the input may he a time sequence of sensor
readings that must map to an ouiput pattern. Many
Process control patterns are temporal problems. Again,
backpmpagation networks can provide very good
solutions these problems.
Examples ;n the use of neural networks for pattern
analysis in tbe geosciences can be found in references
5,6,7,10,15 and 35.
S@@mage pr~g
- feature detection/location, pi;t<resegmentation:
compression and coding, detection of buried pipes
and of their corrosion, recognition of acoustical
signals, image reiogiiitiori arid storage, motion
detection
The key to success in exploration in the 1990s and
beyond will, undoubtedly, lie in the use of computers to
process and interpret tbe huge volmnes of data available
from iricieasingly detailed 3-D seismic surveys. 3-D
seismic techri:qtie plays an important role in reservoir
delineation. The technique is particularly popular in the
North Sea, because of its ability to spatially resolve
complex faults, grabens and salt domes. Furthermore,
since 3.-D techniqwe treats relative amplitudes of seismic
reflwticms better than the 2-D technique, the relative
amplitude variatiorii may be interpreted to map porosity
variations of tO identify the presence of gasNeural
networks will play a crucial role in the use and
interpretation of seiific data. This iii evident frorn the
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SPE 27561
range of works available in the literature
[4,8,12,14,15,18-21 and 24].
The object of interpretation is to present an undistorted
time structure of tbe reservoir, and map its lithological
variations. ID order to achieve thk objective, one must
systematically layer-strip each unconformity, map faults,
depth ..convert, and map the reservoir thickness and
lithology. Furthermore, the interpreter must examine
each fault within tbe reservoir to determine whether
fluids can flow across the fault
The interpretation procedurq based on paper sections, is
time coiiCiming-Ziid complicated, especially when the
data volume is large, as is tbe case in 3-D seismic
surveys where one would have to pick, cross-check and
map some 100,000 or more data points in order ti
perform the interpretation. A well designed neural
network system for seismic data interpretation will
greatly simplify this procedure.
Neural mtworks have been developed for the
identification of seismic horizons at well locations, and
time picking of borizoris and fault trajectories across the
seismic data volume [14, 18,20]. Horizon picking is still
commonly done by hand, a process which is ermr-prdne
and time consuming. ~his is because the actual process
of picking reflections has been a k,nd of private art, each
picker having hk/ber own little tricks and ways of
looking at the problem. Attempts to automate horizon
picking are hindered by the absence of a clear, robust
and universal picking algorithm. An automated picking
technique, using a trained back propagation network, is
described by Harrigs+ et al [14]. They show that the
neural method is useful in extracting geophysical events
where con.mntional patter techniques may fail, especially
where horizons are dk-continuous.
Image processitig refers to tbe manipulation of a digital
image in order to extract more information, than ii
a~parent from & iriitial visual inspection. A geoscientist
needs to perform one of two tasks with a digital imagti
1) determine qualitatively and quantitatively the gross
features of a dominant structure or pbwmmenon, and 2)
find small-scale meaningful structures.
Image-processing present problems to current neural
networks, because of the huge dimensions of the raw
data. A high-resolution image can easily contain one
million or more +ments in the input vector. Because of
the size limitation of cmrent neural networks, image
processing problems require special preprocessing
techniques (e.g. tiling or fast Fouriir trarisform tin tbe
data) and always must have the size of the input data
reduced.
 SPE 27561 J.K.
C-mtrOl applicatiorg ... . . ~ .===... .:.
remote sensing, guidance, robot control, pipeline
inspection
intelligent error recovery, fault d,agnosis, target
position learning
The use of neural networks in control applications -
including process control, robotics and industrial
manufacturing, among others - has recently experienced
rapid growth [47]. The basic objective of control is to
provide the appropriate input signal to a given physical
process to yield the desired respome. At thk stage of
neurocontrol development, several areas of possible
exploration are worth empbasising. Neural networks mm
be used as models of dynamical systems with outputs
dependent on input history. Suitable architectures and
more systematic modeling approaches need to be devised
for this purpose. Neural networhcan also serve as
controllers, and they seem to be especially promising for
nonlinear dynamical systems control. Acquisition and
storage of control information seems to be well smited to
the applications of associative memoiy concept. Such
neurocontrollers would take full advantage of associative
memory systems having high capacity, high speed, and
the ability to interpolate and extrapolate control data in
real time.
Predictions k cmdatiom. ,=.,-.. .. . . .-, ,... . . .
- Parameter prediction, function approximations
properties characterisation
The task of the geoscientist is to describe the reservoir as
completely and accmately as possible, using a variety of
methods, from seismica and well testing, to logging,
cuttings analysis, and coring. These methods present the
geoscientist with a valuable. range of scak- from a
photomicmgraph of a single filament of illite, and the
log investigating several feet a;ound the borehole, to the
well testing probing hundreds to thousands of feet into
the formation.
Many of tbe methods allow the geoscientist to estimate
the key formatiori descriptors - porosity, fluid saturation,
rmd permeti~ lity. Bt difererit methods may le.ti. to.
different values. Porosity, for example, meamred cm a
core that is removed from insitu pressure, temperature,
and fluid, then cleaned, dried, and resaturat ed may differ
from porosity determined from log measurements. Core
and log rnetbods not only measure porosity by different
means, they also sample different Xlnds of porosity at
different horiztmtal and vertical scales and under
different physiochemical conditions. In analysing data
from several measurements tberefore, a trustworthy
baseliie is needed, especially whe~e cme m more of the
tech~iques, like log-derived porosity lacks a calibration
standard. Core analysis freqtiently emerges as the
221
ALI 5
s@&rd. lt. is then. .le%syy to calibrate the other
measreg again:t this standard and to determine any
correlations that exist bet ween porosity, perrneabilit y
and fluid saturation.
Least.sqaI@ regression analysis is commonly used to
develoP lines_ mlationsbips between cor~derived
porosity and permeability data. This method assumes a
linearity between porosity and permeability. In many
fields, this relationship fails completely. Where several
metrological variables (large amounts of cement, wide
range in grain size, diagenetic alterations) have effect,
the linear trend disappears and the scatter is
symptomatic of complex mixtures. This scatter may just
be due to a combination of many linear trends, each
dependent on individual metrological variables. Porasity
alone does not serve ~ a good predictor of permeability.
.A better predictor can be found if metrological variables
can be included. Tbe use of some assumed multi.
regression model is possible, but with more than one
independent variable, the appropriate form of this
reiationsbip, unless based on theory, is a matter of
quess.vc,rk. Regression models will result in a distribution
of predicted values which is more narrow than tbe
original datz set altbrmgb this can -_beenhanced through
a weighting scheme, which then introduces some element
&subjectivity. In addition, unless some special filters are
used, tbe regression models camot pick p high
permeability streaks which are located immediately ~
adjacent to low porosity intervals. Predictions improve if
metrological controls can be .xcmmted for directly. This
can be done if good core observations are available to
train a neural n;twork. This the area currently receiving
most attention, as evident from the number of
publications [1,5,7,1 1,23,26,27,35,37].
Osborne [231 used the backpropagat ion model to study
the perrn&b-ility of the Roberts U;it in the Wasson ~eld
in Texas. The network bad 5 inputs (the geographic well
location in X-Y coordinate, subsea depth, porosity and
reservoir flow unit) yith a corresponding permeability
output. Cro-ssplot of core-derived permealdlit y versus
.@work-deriyec_. permetillity, gave a correlation
co.efticient of 0.81 compared to a value of 0.44 from the
regression-derived plot.
Another example is the prediction of abnormal pore
pressures, These pore pressures b.ave been the source of
such well problems as blowouts. stuck pipe, lack of
drilling progress, and lost circulation. Most present
techniqu~..estimate pore pressure only for shale or highly
shaly sand formations. However, a new approach, by
Accarain and Desbrandes [1], for sand formation pore
pressure estimstirm, 7S Iw.sed on neural networks. Tbe
BPN was used to determine the best mapping between
 .-

6 NEURAL fW17fORKS: A NW TOOL FOR TEE PETROLEW INOUSTRY? SPE 27561

core measurements such. ~ porosity, clay content, BPN model was set UD such that the immt variables
compressioiial and shear wave velocities of sandstone were: reservoir pressure, well productivity index,
core samples, and the effective (grain to grain) presstire wellhead pressure, water cut, and incremental gas oil
(stress). ratio. Optimuni gas liquid ratio (GLR) was defined as
the single output variable. The BPN model yielded more
piIHI~~ wpfi=ti -...,-~.,.. accurate lift gas allocation strategy than the prior
Economic F-m@,sting, .dasaficatibi problems using allocation method which w-= based on nonlinear
financial data regression of field data.
- Market analysis, risk analysis, portfolio
management l@figent databases and expert .s@erm
- Reasoning with uncertain informatiori~ information
The analysis of financial data is not ari exact science retrieval
since not all factors are known, and their
interrelationship is too- coinplex to be describd by a Generally, implicit knowledge is difflcuIt to quantise,
simple mathematical model. Neural networks, however, formalise, or sometimes even express verbally. In
can dkcern patterns among-input data and are therefore addition to these dKBculties, translation of inipliiit into
the right vehicle for such analysis. However, few studies explicit rules would thus lead to loss and distortion of
have been conducted using this technology [33], probably informatiori content. In other words, domains with
because.. ne.ur.al_n.etworks are still rather foreign to the implicit knowledge are difficult to express in terms of
financial community. accurate specificaflons of decision riles.

The opportunity exists to apply neural networks The neural network expert system can be trained to
technology to a wide. range of. business. Nd. figan@ ..~ociate. cause with. ~he effect data. This presents an
problems. These include oil and gas market analysis, ri~ alternative approach th-at is essential y data driven. This
anal ysis, portfolio management, market and customer apprOach h= in tbe middle ground between the N&
characterisation and the coordination of economic and b~d and Bayesian--approach. The experimental and
financial data. heuristic approach prevailing in building neural network
ex!=rt systems focuses. on repeated presentation of
Optimiition training examples of the various effects and causes. After
. project s.hediiiig, opt@@on ;; .transpoi~ - training of a suitable network aicbitecture is complete,
management test data and generalisation by tbe network should lead
Portfolio optimisation to a more robust expert system.

Optimisation in the petroleum industry infers tbe
selection of equipment aid operating conditions for the
production of oil and gas so that the profit ~,ill be a
maximum. This could be interpreted & meaning
determining the-i~ of prtidycig. gmditioris that will
maximise recoveries at the least cost. The former is a
mathematical problem of evaluating the appropriate
values of a set of variables to maximise a dependent
variable, whereas the latter may be. considered to be one
of locating a minimurn vtiue.. However, in terms of the
profit; botb types of problems are maximisation
problems, and tbe solution of both is generally
accomplished by means of an economic balance between
capital and operating costs. Optimisation procedures are
used in the design of topside processing tiiits and
equipments, and the allocation of offshore facilities.
Epping and NLtters [9] used the back-propagation model
for the analysiiind irnpititiernent of a number of wells in
two deep low-permeabllit.y gas reservoirs that did not
produce to expectation. Stoisits et al [31] used the back-
propagati.+ model to encode a rigorous deterministic
model for Opt?rnum allocatbnbf lift gas to wells. Tbe
For a rule-based system, whose knowledge base consists
of a set of explicit rules, the decision path =n be trac~
and explanation of the decision can be provided to the
user. fn the case of neural network expert systems,
however, conclusions are reached through a rather
complex, nonlinear and simultaneous synergistic
interaction of many units at a time. The accurate
justification of an hypothesis, therefore, involves all
nodes of the system. Some explanation capability exists
within a traii-edieural network expert system. Despite
Lts limitations, this capability can offer certain
interpretations to the user, and also reveal those input
variables that are more important and are likely to
contribute to deciiioris. For insRince, tbe positive and
nega~ivi signs of relatively large weights can be looked at
= indicative of positive and negative contributions,
respectively. Internal representation can further offer
heuristic interpretations of the knowledge processing
Whinthe system, and the layers of hidden units can be
viewed as a series of summarizing filters, or intermediate
hypothesis, that reduce application dimensionahty.

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SPE 27561 n. :..1 7

APPLICATfONS SYSTEM DESIGN
Selecting and deploying software is now viewed by most
oil companies % a strategic pfiichase decisiou. Omx a
commitment to a particular computing technology is
made, it embarks the company upon a path of
investment in hardware, software, training, support, and
data management that begins to permeate the basic
fabric of how the oil company explores for, develops and
produces oil and gas. Once embarked upon that path is
expensive to change.
Selecting. and implementing a neural network system
(Fig 5) calls for careful comideration, since tbe area of
neural networks technology is expanding very rapidly,
and new problems and mluticm approaches may emerge
in the near future beyond those cmmntiy offered.
Descending to the project level, it is important t.o assess
the available data before making any project
commitments, Indeed, tbe development of a ,mccessfl
aPPficatiOn EYstem is an iterative process (Fig 6). It
involves the testing of different paradigms and
parameter values, to arrive at an optimmn network
structure. Understandhg the problem well .mcmgb, to
know what kind of information is relevcmt, istbe key to
successful design. How your data is represented ad
translated also plays an important role in tbe networks
ability to grasp tbe problem. Tbe format of the data
(continuous, discrete, binary, symbolic, fuzzy, and so on)
I
and the range of the values represented (border and
diverse-valued patterns) require careful attention. Same
advice on the selection and preprocessing of data for
neural networks canbe found in St&n [45] and Lawmme
[40].

Toolkits comprising the basic algorithms are available GENERAL DSSCUSS1ONS

commercially, with comprehensive simulation
environments aimed at differen~ types of useIs, ranging The di5cultX with geaecieg~ data
from exploratory level to large-scale utilitiis, together
with customizing fiiilities for integration with existing Fundamental to an efficient. exploitation of rimral
soft ware, including provisioii of source data. networks technology is a well-formulated and integrated
data acquisition and management system. The
The minimum requirements Fm a b>orientated md petroleun indmtrys data comes in diverse types and
templat~ based network are a PC .wi~h ?. 486 processor formats, and no commonly accepted standard formats
(m a 386 proce.ss%r with a maths m-processor),. 4 Mb exists, rnakig the mamgement of the industrys data
HAM and 120 Mb Hard Disk. Coproccesssor accelerator ditlcult. As geoscientists mix interpretation from the
boards can be bought on the market. They typically four major disciplines - geology, geophysics, petrophysics
interface to personal computers or conventional and reservoir engineering - a foremost need is fora
workstations, and are able to enhance the speed of standard exploration and production data model: a
numerical computations considembl y, Coprocessor system of organisimg and defining geoscience information
accelerator hoards also make tbe simulations of nemal and interrelations between data to model the reservoir in
algorithms faster and more acm rate. A at ral a way that fulfills a need.
progression of these coproc%sors has produced neural
array processom with de.dicated arcbit ec tme and The petro~eum industry ba.s wrestled with key database
computation flow. A number of specialised parallel issues for years. Through tbe 1980s, tbe move toward
neurocomputers which are programmable are also integrating data across disciplines made it clear that a
avaiIable. cooperative effort involving vendors and users was
necessary to unify the field, or at least reduce the
Understandably, tbe detail features of any given neprd number of g@science data models. The focal point of
network depends primarily on its specific application. recent developments is Petrotecbnical Opm Software
For example, for identification of Fidar, pulse signals, COrp (POSC), a nonprofit organisation of oil companie,
proces.ting time k the most severe constraint but computer companies, and research groups [32]. POSC
memory size is not. On the other band, financial risk was founded in 1990 by major oil compani~ to address
evahation rnodelhg requires a very large, hut not the challenge of rapidly developing, mmxnmcted islands
necessarily very fast, network. Some other applications, of softwtie. and data. POSC is due to publish its
sncb as vision, may require uniidly large input/outPt standard before the end of i993, in tbe form of a four
bandwidth. The inpW/output bandwidth is understood volume series entitled Softtiir& Integration Platform
here to be tbe ..number of bits per second that can be Specifications. Tbes.e will focus on data models and
processed by tbe input/otpt nit. This brief database issues.
comparison of computational requirements for varioijs
tasks indicates tbat atrad~ off may be necessary between It is likely that this trend will have a significant impact
a networks processing time, memory size, and the on oil companies and vendors. WhiIe the payoffs cm be
input/output bandwidtb. substantial, costs to rebuild software technology and

228

8 NEURAL NETWORKS: A NEW TOOL FOR TEE PETROLEUM INDUSTRY?
construct the databases that conform to emerging
standards will be large.
Lhtattoils of current neural networks ----
There are three types of technical b~rie~. jhat. todays
neural networks face (a) the inability to handle large
amounts of data records (and as a result rely on
sampling), (b) the iiabilit y to deal with a large number
of data fields (due to network suffocation), and (c) the
inability to perform valuebas.ed analysis with
explanation, as is the case Flth statistics. Problem (a) is
serious for large databases since it provides too rough an
edge for decision making. For instance, mtist modern
logs are recorded digitally. The sampling rate will
normally be about once every 15 cm (6 in), although for
some logs it will bl M low as 3 cm (1.2 in). An average
well of say 2000. m willt~er~fore be sampled over lZO~O
, ...
times for each md,vldual log, and for a mite of 8 or so
typical 10gs, it will be sampled over 100,000 times. Thus
for 10 wells logged,. an. ayerage of a rni!NOn @a_s.et
needs to be processed. This amount of data creates
serious problems for many commercially available neural
networks.
There is no general purpose neural network that will
work with a broad class of problems, carry out
information discovery across large databases representing
data for a wide variety of different domains, and provide
the ease of development and use. that we require for
information d&overy in large databases. The emphasis
in using neural network is on obtaining good
classification performance rather than on interpreting
what the patterns in the data actually mean. Since
interpretability is a key issue of intelligent datab= es,
and one of the goals of informtilon dkcovery [44], the
s.ub.symboiic nature of existing neural @wor@. argues
against their usage as .:, d~overy method in the
development of intelligent database. applications.
The way forward
Neural networks, fuzzy logic, expert systems and genetic
algorithms are some of the ways of efficiently handling
problems that are rife with ambiguity, although each
method handles uncertain y differently. They are part of
tbe thltd-generation technologies (TGT) that will have
an immense influence on the way we do .tbings in future
(Table 3). If YOUuse a blend of these technologies, the
results are sometimes more than the sum of their parts.
For instance, combiriiiCg the computational power of
neural networks with the symbolic level of processing
conveyed by fuzzy logic, results iu a synergy that
improves speed, fault tolerance, and adaptiveness. Fwzy
logic is a rnultivaluid logic that allows. for degrees of set
membership (e.g. poor, intermediate, good and excellent
224
.-
SPE 27561
permeability). In fuzzy logic, tbe three logic operations
AND, OR, and NOT return adegree of membership that
is a number between O and 1 (h contrast to the
tr++tional Boolean values o~ TRUE (1) and FALSE
(O)): Thus fuzzy &icz emulates the burnan ability to
reason, and make use of approximate data, to find
precise solutions. The-three mtin dkti.nguisbhg feature=
of fuzzy logic are (a) use of symbolic variables in place
of or in addition to numeric variables, (b)
characterisation of simple relations between variables by
fuzzy conditional statements, and (c) characterisation 6f
complex relations by fuzzy algorithms. These features are
currently being exploited in the design of neuro-fuizy
learning con trol systems and dynamic neural networks
for pattern classification.
It is quite reasonable to expect that in the future, there
may be moresynergism between tbe learning methods
and conventional metbbds. For instance, because of the
great. Amputation differential between the conyentiOnal
statistical pattern recognition methods (e.g. linear
discriminant., k-nearest neighbour and Bayesian
cla.+fiers) and neural networks, it is not unreasonable to
initialise a back-propagation network with weights
derived from, say, a linear discriminant or perhaps some
other learning representation and method. Similarly,
weakest-li~k pruning, which is currently u=d for decision
trees, may be found to be valuable in pruning an
(ovettit) nemral network.
CONCLUDING, REMARKS
Neural networks development h= faced a renaissance in
the last decade, with a large number of application
areas. From the viewpint of the oil and gas industry, an
increasing number of studies can be o.hserved in the
recent literature, d.+ing with proposed applications of
neural networks in geology and geophysics, formatiori
evaluation and reservoir engineering.
These applications mainly use two neural network types:
feed-for.izaid riitworks with back-propagation learning
and self-organizing (Kohonen) mural networks. In this
paPer, we tirst give an overview of mural network
chses, and their main properties, and then give a review
of application in the oil and gas industry. I.n this early
ph~e of neural network development, the fist of
applications mentioned in this paper is by no means
complete. The theory of neural networks is still in early
phase. Wkh better understanding of processes going on
in such massively parallel structure% together with the
development of new fietwork architectures and numerical
convergence properties, more and more efficient
applications are still to come.
There will always be the temptation to indulge a form of
 SPE 27561 J.K.
myopia in the bright light of each technical success, but
neural network technology (like any technology) is most
effwtively executed when held surbordkmte to a higher
aim. Careful selection of the problems we want neural
networks to twkle is important: The energy and
resources. poured. into applications must be focused and
contained to obtain useful results. Neural networks
should be regarded as twds. They do not work by
themselves, but only perform a-s well as they are applied.
Knowledge about the domain of application is therefore
as important as familiarity with the networks
themselves..
At the moment, the neural network is oversold as the
solution to far too many problems. In practice, there are
often more direct and appropriate. methods. A neural
network is not always the best zolution for certain
problems. They are poor at precise calculations and
serial processing, nor are they able to pre$]ct or recognise
anything that does not inherentl~ contain some sort of
pattern. When faced with a problem, consider tirst the
divide and conquer approach. Perhaps you have a large
application problem in which you need some digital
signal processing, production roles, and pattern
recognition. If so, plan to use conventional programming
techniques for the signal processing, an expert system to
implement the rules, and a neural network to do just the
pattern recognition part of the problem.
Neural networks have a goad future ahead of them, and
there are some practical applications in geoscience that
theyre tackling now, or will he able to; before very long.
But the real breakthroughs are still to be made. The
effective uie of neural networks and other third.
generation technologies (e.g. fuzzy logic, genetic
algorithms, molecular modelling, expert systems and
virtwl reality) calls for cooperation between most
disciplines involved in the acquisition, interpretation and
usage of geoscience data: geologists, reservoir engineers,
geophysicists, well-loggers, computer engineers, computer
graphics experts, mathematicians and statisticians.
. [11] Gabbert, M.J., 1993. f.ke. of a stochastic gradient-
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 10 NEURALNETWOFLZS:
A NEWTOOLFOE TRE PETKOLIW INDUSTRY? SPE 27561

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 . .

12 NEURALNETWORKS:A NEW TOOLFUR TEE PETROLEUM

INOUSTRY? SPE 27561

Table 1: ti in which neural network mwtenw have . Rkk analvsis

been developed. . Portfolio ;P timisat ion
. Economic data coordkation
1. Geology & Geophysics . Marketing and customer cbaract erisation
. Reserve estimation (bpfi) -
Mineral identification from well logs (bpn) Table Z Tbe nature of the petroleum industrys data
. Locati.m of subsurface targets in geophysical data
(bpn) . W!de variety of data types and formats.
. Identification of Iithofamies pattern features (self- - Microscopic data from scanning electrm
organising) microscope (SEM), Pore Image Analysis (PIA)
Seismic phase identification (bpn), seismic pattern and conventional thin section analysis.
recognition (hybrid) - Macroscopic data from conventional core plugs.
. Seismic data compression - Megascopic data from wells which are cored and
. Sedimentology - sequence stratigraphy logged, residual oil saturation determination,
large scale pressure tests.
2. Drilling & Completion .~lgW::picdata from total formation to IegiOnal _
. MWD data analysis scale
. Drill bit diagnosis
. Selection and monitoring of drilling bits and . NO format standards.
drilling .mds . Fmmat to integrate. regional geology data, area
geology data, log data, well/producti.m data,
3. Formation Evaluation seismic data and core data.
. Porosity pmdktion - extrapolation Field unit.i; metricunits, laboratory-scale nits
Predlctiig carbonate permeabllit ies from Wbeli m
logs (bpn) Large memory and storage requirements.
. Fracture detection and delineation 100,000 or more data sets for training
. Principal component analysis of well log data
(stochastic gradient- ascent neural network) Potential need for lossless data compression.
. Identification of well-test interpretation model Image and seismic data compression
Pore pressure determination from log data (bp)
. Fast processing-speed requirements.
4. Production & Facilitim, , ,. - ,= ,. ~d_-time con.tr.ol
. Analysis and improvement of gas well production
(bpn)
. Deterniinistic model for optimal allocation of lift Table 3: The Tbiid Generation Tecbnologies (TGTs)
gas to. wells (hpn)
. Analysis and optimisation of topside processes . Neural networks
(bpn) . Parallel computing
c Plpelin*quality inspection . Fuzzy logic
. Production metering and control . Genetic algorithms
. Dhgncmis .md maintenance . Molecular modelling
. Allocation of offshore platforms . Fractal science
. Automatic planning and scheduling . Chaw
Target-recognition . Expert systems
. Intelligent databases & Multimedia
5.Reservoir Engineering .< 3D volume visualization_
.Reservoir simulation outrmt .medktion . Virtual reality -
.Inversion of simulation models
. Automatic hktory matching
. Pattern recognition of pressers+transient test data
. Reservoir properties predictions
Physical properties predlctio-ns

Pattern & trend analysis of case histories data

6. BUSINESS ECCIN(?MK%ld?NANCE . ..... , . -.

. 011 and Gas market analysis (hpn)

228
.,.

SPE 27561 J.K. ALI 13

Neural Networks
$

m ---- =%=-
+-- i !
Linear
1 :
.NOnlin ear
+

&.. -EEz!EEg
._ *IN:.!.L.1. .=.= .......=.
Fig 1: Classification of neural network models,

f.\
W30 <,.. . -.. .... . .,.=

II&?.%.
~.
Input
Pat tern

.
<3*,,7 ~~.:*,,.
,..,. ..,,., ....
v
I . 6
b2 bi . bias to node i
wji . weight to node j from node
b6

INPUT (3) HIDDEN (4) OUTPUT (1)

Fig 2: Basic structure of a back-prop network

229
 + ,.

14 NEURAL NElVORKS: A NEW TOOL FOR TEE PETROLEUM INOUSTRY? SPE 27561

Input

;; IT+: ,.
r ~, +. Weight
matrix
ji .. .
output
~.. , Vector
.... Oj

L. .. . .

Input slab Output slab

(Usually linear or (usually rectangular
rectangular array) or hexagonal array)

~ig ~. ~a~ic structUre of a self-organizing (Kohonen) maP.

--- .
= ~ - ~~~~~~
-..
.
. ..
:
IYx:te! 1.-. I I

1-
I I

~[~1,::~== ~~
.
Fig 4: Areas of application of rieural networks.

230
. . .

J,.K>.ALI 15.
SPE 27561

---- . .

.,

=-~ -T*I ..
.

E4Ema.,F5!?kET=
Fig 5: Neural network system implementation

. ,-.. ----- . ,..- . . . .:

I Collect Data
I . . .
[ He-process
....... Data I,_ . -n, .,,..
.,.= . . .. . ,.

Need
better
a
~- I.__. . . .-. .-,. ., ..
et Darameter va!ues ,. ..,.= ..=:::: :..,.,
l Try 1
+ =---l I
another
parayigm

n&&k ,,e
lEvaluate performance parameters network
structure
I .,. . .- ... . .
.,.
..- T :7=
* ~..
[ End i =
. -... ..-. _=
~.~= . . ...=. ~

Fig 6: Neural networks appl!cition development scheme.

231