## Abstract

In this work, we evaluate different algorithms to account for model errors while estimating the model parameters, especially when the model discrepancy (used interchangeably with “model error”) is large. In addition, we introduce two new algorithms that are closely related to some of the published approaches under consideration. Considering all these algorithms, the first calibration approach (base case scenario) relies on Bayesian inversion using iterative ensemble smoothing with annealing schedules without any special treatment for the model error. In the second approach, the residual obtained after calibration is used to iteratively update the total error covariance combining the effects of both model errors and measurement errors. In the third approach, the principal component analysis (PCA)‐based error model is used to represent the model discrepancy during history matching. This leads to a joint inverse problem in which both the model parameters and the parameters of a PCA‐based error model are estimated. For the joint inversion within the Bayesian framework, prior distributions have to be defined for all the estimated parameters, and the prior distribution for the PCA‐based error model parameters are generally hard to define. In this study, the prior statistics of the model discrepancy parameters are estimated using the outputs from pairs of high‐fidelity and low‐fidelity models generated from the prior realizations. The fourth approach is similar to the third approach; however, an additional covariance matrix of difference between a PCA‐based error model and the corresponding actual realizations of prior error is added to the covariance matrix of the measurement error.

The first newly introduced algorithm (fifth approach) relies on building an orthonormal basis for the misfit component of the error model, which is obtained from a difference between the PCA‐based error model and the corresponding actual realizations of the prior error. The misfit component of the error model is subtracted from the data residual (difference between observations and model outputs) to eliminate the incorrect relative contribution to the prediction from the physical model and the error model. In the second newly introduced algorithm (sixth approach), we use the PCA‐based error model as a physically motivated bias correction term and an iterative update of the covariance matrix of the total error during history matching. All the algorithms are evaluated using three forecasting measures, and the results show that a good parameterization of the error model is needed to obtain a good estimate of physical model parameters and to provide better predictions. In this study, the last three approaches (i.e., fourth, fifth, sixth) outperform the other methods in terms of the quality of estimated model parameters and the prediction capability of the calibrated imperfect models.

The first newly introduced algorithm (fifth approach) relies on building an orthonormal basis for the misfit component of the error model, which is obtained from a difference between the PCA‐based error model and the corresponding actual realizations of the prior error. The misfit component of the error model is subtracted from the data residual (difference between observations and model outputs) to eliminate the incorrect relative contribution to the prediction from the physical model and the error model. In the second newly introduced algorithm (sixth approach), we use the PCA‐based error model as a physically motivated bias correction term and an iterative update of the covariance matrix of the total error during history matching. All the algorithms are evaluated using three forecasting measures, and the results show that a good parameterization of the error model is needed to obtain a good estimate of physical model parameters and to provide better predictions. In this study, the last three approaches (i.e., fourth, fifth, sixth) outperform the other methods in terms of the quality of estimated model parameters and the prediction capability of the calibrated imperfect models.

Original language | English |
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Pages (from-to) | 3300–3316 |

Number of pages | 17 |

Journal | SPE Journal |

Volume | 25 |

Issue number | 6 |

Early online date | 27 Apr 2020 |

DOIs | |

Publication status | Published - Dec 2020 |