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216                                       Intelligent Digital Oil and Gas Fields


          the EnKF coupled with the streamline sensitivity-based covariance localiza-
          tion (Arroyo et al., 2008). Several techniques and workflows have been
          successfully developed in this area, such as methods based on sequential
          (or random-walk) McMC, originally developed in the areas of statistical
          physics (Neal, 1993).
             The McMC method is arguably the most rigorous statistical approach to
          sample from the stationary Bayesian distribution; however, when deployed
          in direct simulation, it imposes a high computational cost. To improve the
          performance of the McMC method, several enhancements were proposed,
          based on a two-step proposal of jointly sampling the model and data variables
          (Oliver, 1996), by constraining the proxy models using the streamline
          sensitivities (Efendiev et al., 2005; Ma et al., 2006; Maucec et al., 2007,
          2013a,b) or by coupling with adjoint methods (Schulze-Riegert et al.,
          2016). These techniques enhance the sampling efficiency of the McMC
          method and make it applicable for the inversion of large-scale reservoir
          models without sacrificing scientific rigor.
             Recently, Goodwin (2015) proposed an alternative to random-walk
          McMC, namely Hamiltonian McMC techniques which progress rapidly
          through the sampled space but require derivatives of likelihood that can
          be efficiently implemented with proxy models. In parallel, the development
          of AHM tools and approaches has also evolved toward “smart” proxy
          models in the form of surogate reservoir models (SRM) (Mohaghegh
          et al., 2015) and increasingly popular (meta)heuristic methods, such as
          PSO (Mohamed et al., 2010a) and differential evolution (Hajizadeh et al.,
          2010). Moreover, developments in the area of AHM are also leading toward
          joint inversion of the production and time-lapse seismic data, where the
          attributes of four-dimensional (4D) seismic inversion (e.g., water saturation)
          can provide spatially rich information on the fluid flow dynamics within
          subsurface reservoirs (van Essen et al., 2012; Jin et al., 2012). While the
          resulting reservoir model updates exhibit a considerable improvement in
          matching the saturation distribution in the field, the potential drawback is
          the dependence on the inversion data from 4D seismic surveys, which are
          difficult and expensive to obtain.
             This section continues with a review of modern model calibration and
          inversion techniques and then describes the E&P industry’s prevalent model
          parameterization, AHM, and finally outlines a few applications of IAM
          wokflows. For further reading, Schulze-Riegert and Ghedan (2007),
          Oliver and Chen (2011), and Rwenchungura et al. (2011), among others,
          provide comprehensive overviews of recent advancements made in the area
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