Bi-­Objective Optimization of Subsurface

CO2 Storage with Nonlinear Constraints

Using Sequential Quadratic Programming
with Stochastic Gradients
Quang Minh Nguyen1 ‍ ‍, Mustafa Onur1* ‍ ‍, and Faruk Omer Alpak2 ‍ ‍

1
The University of Tulsa
2
Shell International Exploration & Production Inc

Summary

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This study focuses on carbon capture, utilization, and sequestration (CCUS) via the means of nonlinearly constrained production optimi-
zation workflow for a CO2-­enhanced oil recovery (EOR) process, in which both the net present value (NPV) and the net present carbon
tax credits (NPCTC) are bi-­objectively maximized, with the emphasis on the consideration of injection bottomhole pressure (IBHP)
constraints on the injectors, in addition to field liquid production rate (FLPR) and field water production rate (FWPR), to ensure the
integrity of the formation and to prevent any potential damage during the life cycle injection/production process. The main optimization
framework used in this work is a lexicographic method based on the line-­search sequential quadratic programming (LS-­SQP) coupled
with stochastic simplex approximate gradients (StoSAG). We demonstrate the performance of the optimization algorithm and results in a
field-­scale realistic problem, simulated using a commercial compositional reservoir simulator. Results show that the workflow can solve
the single-­objective and bi-­objective optimization problems computationally efficiently and effectively, especially in handling and honor-
ing nonlinear state constraints imposed onto the problem. Various numerical settings have been experimented with to estimate the Pareto
front for the bi-­objective optimization problem, showing the trade-­off between the two objectives of NPV and NPCTC. We also perform
a single-­objective optimization on the total life cycle cash flow, which is the aggregated quantity of NPV and NPCTC, and quantify the
results to further emphasize the necessity of performing bi-­objective production optimization, especially when used in conjunction with
commercial flow simulators that lack the capability of computing adjoint-­based gradients.

Introduction
Large-­scale deployment of CCUS projects is a crucial component in the transition to a decarbonized economy. In subsurface engineering
applications, CCUS involves the injection of CO2 into deep underground formations with structural closure, such as saline aquifers and/
or depleted oil/gas reservoirs. Not only carbon could be permanently geologically sequestered in said scenarios, but, during the injection
process, CO2 could also allow additional hydrocarbons to be recovered and marketed, resulting in more profit to be earned.
During the design of a CO2 injection process with specified well placement, coming up with a set of optimal well controls is important.
In such cases, life cycle production optimization, defined as the minimization or maximization of one or multiple production-­driven
objective functions via changing the well controls during a reservoir’s lifetime (Brouwer et al. 2004; Jansen et al. 2005; Chen and
Reynolds 2016; Alpak et al. 2021), would play a critical component. One challenge arisen is to obtain the optimal cash flow (i.e., maxi-
mum life cycle NPV), while also trying and maintain the maximum CO2 storage, which could be quantified either in terms of mass, vol-
ume, or carbon tax credits (CTCs) (Jones and Sherlock 2021; Sun et al. 2021; Nguyen et al. 2023b). This concern in the decision-­making
process gives rise to the need for a bi-­objective optimization solution (Alpak et al. 2022; Wang et al. 2022; Nguyen et al. 2023b), to bal-
ance the conflicting criteria and objectives.
Many different algorithms are available for solving a general multi-­objective optimization problem, and they could be categorized into
two families: derivative-­free and gradient-­based methods. The algorithms within the first class, such as genetic algorithm (Gen and Cheng
2000), particle swarm optimization algorithms (Kennedy and Eberhart 1995; Shi and Eberhart 1998; Bonyadi and Michalewicz 2017),
and bi-­objective mesh adaptive direct search algorithm (Alpak et al. 2022), may avoid the local maxima/minima, given the appropriate
size of population and parameter settings or optimization. However, the computational cost of these derivative-­free methods could easily
become infeasible as the dimension of the design vector exceeds a hundred, and/or if the cost of the evaluation of the objective function
is expensive, such as the requirement of running a complex numerical model. One example in petroleum engineering literature is the work
of Isebor et al. (2014), who presented a particle swarm optimization-­based strategy to solve a bi-­objective optimization problem for gen-
eral oilfield development. However, one of the biggest drawbacks of their method is the requirement on the order of 800,000 reservoir
simulation runs to generate the bi-­objective Pareto front, which would be impractical for realistic optimization problems. Employing
techniques like semi-­analytical solutions (Nguyen et al. 2020a, 2020b; Zhang et al. 2023) could possibly attenuate the computational
expense. However, their applicability remains limited, especially when dealing with complex reservoir systems as often encountered in
practical scenarios. Generally speaking, derivative-­free methods are only computationally efficient on small-­scale problems; thus, for
large-­scale problems with hundreds or thousands of design parameters, gradient-­based methods are much more computationally feasible
and efficient, especially when derivative information is available, whether via the means of adjoint method (Kraaijevanger et al. 2007;
Sarma et al. 2008; Voskov 2013; Kourounis et al. 2014), finite-­difference estimation, or stochastic approximation (Spall 1998; Chen 2008;
Chen et al. 2009, 2017; Fonseca et al. 2017; Lu et al. 2017b; Li et al. 2022; Almasov and Onur 2021, 2023; Atadeger et al. 2023; Nguyen

*Corresponding author; email: mustafa-onur@utulsa.edu

Copyright © 2024 Society of Petroleum Engineers
This paper (SPE 214363) was accepted for presentation at the SPE Europe Energy Conference (EUROPEC) featured at the 84th EAGE Annual Conference & Exhibition, Vienna,
Austria, 5–8 June 2023, and revised for publication. Original manuscript received for review 20 March 2023. Revised manuscript received for review 7 November 2023. Paper peer
approved 26 November 2023.

April 2024 SPE Journal 1919

et al. 2022, Nguyen et al. 2023a, 2023b). The augmented Lagrangian method (ALM) has been traditionally known as an external penalty
method to handle general nonlinear optimization problems (Nocedal and Wright 2006; Antoniou and Lu 2007). However, its biggest
drawback is the associated computational cost, especially in the specific context of production optimization (Chen 2011; Chen et al. 2012;
Lu et al. 2017a; Chen and Reynolds 2018) that requires the use of reservoir simulators to evaluate the objective function values, since
ALM workflows involve both outer-­loop and inner-­loop procedures. The outer-­loop procedure of the method updates the penalty param-
eters based on the solution of the inner-­loop procedure, while the solution of the inner-­loop procedure depends on the penalty parameters
set by the outer loop, making the method particularly computationally demanding. Liu et al. (2018) demonstrated that sequential quadratic
programming (SQP) methods significantly outperform ALM, both in terms of the computational cost, the ability to honor nonlinear con-
straints, and handling the constraint violations, thus making SQP a better and more suitable candidate than ALM for nonlinearly con-
strained optimization problems. This is a major motivation for us to choose an SQP-­based optimization workflow in this study.
A multi-­objective optimization problem could be solved in various ways. Popular, well-­known methods such as the weighted sum
method (Gass and Saaty 1955; Zadeh 1963), the normal boundary intersection method (Das and Dennis 1998), and the lexicographic
method (Marler and Arora 2004) can be implemented via the use of the derivative information. All three methods approach the problem
by transforming the original multi-­objective optimization problem into one or a series of multiple single-­objective optimization problems.
Liu and Reynolds (2016a) used constrained weighted sum and constrained normal boundary intersection methods to solve the nonlinearly
constrained bi-­objective production optimization problem using ALM. In the work of Liu and Reynolds (2016b), they also applied the
lexicographic method to solve the boundary-­constrained bi-­objective production optimization problem. The work presented by both Liu
and Reynolds (2021) and Liu and Reynolds (2016b) is limited to adjoint-­based gradient solutions. To the best of our knowledge, when

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dealing with commercial and proprietary reservoir simulators, typically they either have very limited or no adjoint capability at all, except
for the one described in Kraaijevanger et al. (2007). Consequently, ensemble-­based optimization methods using stochastic gradients are
considered the best alternative approach instead (Fonseca et al. 2017; Chen et al. 2017; Liu and Reynolds 2020, 2021), as they allow the
users to treat the reservoir simulator as a black box.
Nguyen et al. (2023a) developed efficient SQP-­based workflows that are coupled with StoSAG, introduced by Fonseca et al. (2017)—
namely, the LS-­SQP and trust-­region sequential quadratic programming variants—to handle the nonlinearly constrained production opti-
mization problems. The LS-­SQP workflow, specifically, has been used successfully by Nguyen et al. (2023a, 2023b), in conjunction with
the lexicographic method, to solve a bi-­objective optimization problem in CCUS on a Brugge reservoir model (Chen et al. 2010; Chen
and Oliver 2010; Peters et al. 2010; Dehdari and Oliver 2012; Almasov et al. 2022; Li and Onur 2023) with imposed field liquid produc-
tion rate (FLPR) and field liquid production rate (FWPR) nonlinear state constraints. In their work, the two objective functions are nega-
tive life cycle NPV and negative life cycle NPCTC. However, although the optimization workflow proved effective and efficient, Nguyen
et al. (2023a, 2023b) did not have IBHP imposed as part of the nonlinear state constraints, which is a critical component as this quantity
plays a significant role in preserving the formation integrity during the CO2 injection process. Therefore, in this work, we utilized the
LS-­SQP optimization workflow by Nguyen et al. (2023a, 2023b) for an extended case study with IBHP state constraints. Additionally, in
this work, we wish to demonstrate the importance of performing a bi-­objective production optimization via a single-­objective optimiza-
tion example, using the total life cycle cash flow, defined as the sum of NPV and NPCTC, as the objective function to be optimized.
This paper is organized as follows. First, we briefly present the methodology, which focuses on the definition of the optimization prob-
lems. Then, we present the results for the Brugge field. The specific case study being investigated here is a compositional multiphase flow
Brugge model under CO2 injection, like Nguyen et al. (2023b), simulated using a commercial compositional reservoir simulator. The
results to be presented in this paper involve the single-­objective optimization solutions, a bi-­objective optimization solution for a fixed
relaxation value, and the construction of the bi-­objective Pareto front to demonstrate the tradeoff between the two competing objectives,
all with nonlinear state constraints enforced for FLPR, FWPR, and IBHP. Through the Pareto front result, we also emphasize the impor-
tance of performing bi-­objective optimization via the comparison with the single-­objective solution from optimizing the total life cycle
cash flow. Finally, we present our summary and conclusions of the work.

Methodology
In this section, we describe the theory and methodology used to perform the nonlinearly constrained bi-­objective production optimization
of CO2 storage.

Constrained Bi-Objective Production Optimization Problem. The conventional single-­objective deterministic production optimization
problem refers to the estimation of the optimal design variables on predefined control timesteps that minimize the negative NPV, or
equivalently, maximize the NPV of the production life cycle. In this work, like Nguyen et al. (2023a, 2023b), we convert any maximization
into its equivalent minimization form, for the sake of consistency with the theories of convex optimization. The production optimization
problem is subjected to bound constraints on the design variables and operational constraints that are typically represented as nonlinear
state constraints. For a multiphase flow deterministic reservoir under CO2 injection, we define the negative life cycle NPV objective
function as 8̂ 9
2 3>
ˆ
< >
  X N t
tn
N
X P         XNI    =

JNPV u =  4 c o q
N n
u  cw q
N n
u  cCO prd q
N n
u  c CO inj q
N n
u 5 , (1)
ˆ tn o,i w,i 2 CO2 prd,i 2 CO2 inj,j >
>
n=1 :̂   i=1 j=1 ;
‍ 1 + b 365 ‍
 T  T
where ‍u = u1 , u2 , : : : , uNu = u1,1 , u1,2 , : : : , uNw ,Nc ‍ is the ‍Nu -‍ ­dimensional column design vector containing all the production and
injection well controls and ‍uk,m‍denotes the control of well ‍k ‍at the mth control step, with a total of ‍Nw ‍wells and ‍Nc ‍control timesteps. In
Eq. 1,  ‍ tn‍ denotes the size of the nth simulation timestep, whereas ‍tn‍ stands for the cumulative time at the end of the nthtimestep. The
number of producers, the number of injectors, and the number of timesteps are denoted by ‍NP ,‍ ‍NI ,‍ and ‍N t ,‍ respectively. The terms ‍qN no,i ,‍
n n
‍qN w,i ,‍ and ‍qN CO2 prd,i ‍ denote the average oil production rate, average water production rate, and average CO2 production rate of the pro-
ducer ‍i ‍over the nth timestep, respectively, whereas qN nCO2 inj,j denotes the average CO2 injection rate of injector j over the nth timestep.
‍ ‍
‍co,‍ ‍cw ,‍ ‍cCO2 prd ,‍ and ‍cCO2 inj‍ denote the oil price, produced water treatment cost, produced CO2 treatment and capture cost, and CO2
injection cost, respectively. The constant ‍b‍is the annual discount rate. The first term in the summation in Eq. 1 above corresponds to the
oil revenue. The second term denotes the water production cost. The third term is the CO2 production cost. The fourth term corresponds
to the CO2 injection cost. As such, Eq. 1 describes the subsurface performance-­driven elements of project economics and represents a

1920 April 2024 SPE Journal

first-­order approximation to the actual NPV. Note that we disregard the capital expendityre (CAPEX) in any of our objective formulations
because it is typically a constant quantity that is independent of the design variables of interest and does not play a significant role in the
optimization process itself. Also, in this study, the CO2 source for injection is assumed to be solely external, because produced CO2 would
need to undergo several post-­production processes such as separation, impurity treatment, drying, compression, and so on, which would
result in some downtime before it would be available for reinjection. Additionally, the case study setup in this work, which we will discuss
later in this paper, does not result in significant CO2 production. Therefore, our justification of solely externally sourced CO2 injection is
valid.
For a single-­objective deterministic production optimization problem, the general nonlinearly constrained optimization problem for
the NPV is defined as the following nonlinear programming (Liu and Reynolds 2020, 2021; Nguyen et al. 2023a, 2023b):
 
minimize JNPV u , (2a)
‍ u2R Nu ‍
up
‍ subject toW ulow
i  ui  ui , i = 1, 2, : : : , Nu ,‍ (2b)
 
‍ ci u  0, i = 1, 2, : : : , Nic ,‍ (2c)

up  
where ‍ulow
i ‍ and ‍ui ‍denote the lower and upper bounds of the ith control variable, respectively, for a total of ‍Nu ‍ control variables. ‍ci u ‍
denotes the general form of the ith inequality constraint, for a total of ‍Nic ‍ inequality constraints enforced in the reservoir model. It is

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important to note that ‍ci u ‍ could be either linear or nonlinear, but without the loss of generality, we can assume them to be nonlinear
state constraints.
Ideally, the nonlinear constraints should be satisfied at every simulation timestep. However, the simulation timesteps are internally
controlled by the reservoir simulator; thus, using these timesteps to enforce the nonlinear state constraints could create inconsistency in
results and possibly numerical instability. For example, between two reservoir simulation calls used to estimate the StoSAG gradient, the
number of simulation timesteps, as well as their lengths, could already be very different. Therefore, it is better and more numerically stable
to enforce the nonlinear state constraints, which could be obtained from the simulation output, at predetermined periods. Focusing on how
the optimization results change concerning these time lengths is out of the scope of this study. Thus, in this work, we choose the control
timesteps as fixed time lengths to enforce the nonlinear state constraints.
For the case study presented in this paper, we consider the most common types of well-­control variables, which consist of bottomhole-­
pressure-­controlled producers and rate-­controlled injectors. These control variables are subject to both lower and upper bounds. As in the
case of Nguyen et al. (2023b), the state constraints are imposed due to the limitations of produced liquid handling and injection capacities
at the surface. These limitations are translated to the optimization problem in terms of upper bounds on FLPR and FWPR, respectively.
However, as we have emphasized earlier, we also include upper-­bounded IBHP as our state constraint. For most simulators, rate quantities
such as FLPR or FWPR, averaged for each control timestep could be trivially computed by extracting the cumulative liquid or water
production information, respectively, then computing the incremental gain from the start to the end control timestep, and finally dividing
it by the length of the control timestep. For IBHP, because its values are output for each simulation timestep, therefore, for the injection
well ‍w ‍and at control timestep  ‍ tn,‍ the control-­step IBHP is calculated using the following discrete integration:
2 3
Nsim,n1
1 4 X IBHPw,i+1 + IBHPw,i  
IBHPw,n = tn,i+1  tn,i 5 , (3)
tn 2
‍ i=1 ‍

where ‍Nsim,n‍ denotes the number of simulation timesteps within the control timestep  ‍ tn‍. ‍tn,i ‍ is the ith simulation time, with its corre-
sponding instantaneous IBHP value ‍IBHPw,i ‍from the simulation output, for ‍tn,i .‍ Note that Eq. 3 represents the computation of the average
value with midpoint Riemann sum (or composite trapezoidal rule). Along with rate constraints such as FLPR and FWPR, IBHP opera-
tional constraints are important and need to be taken into consideration to ensure the formation integrity and to prevent any potential
damage during the life cycle injection/production process. We do not include field gas production rate (FGPR) in this work since the only
gas being produced is CO2 (from the injection streams), which is not significant in this work. There is no hydrocarbon gas in the case study
setup (both from the reservoir’s initial condition and fluid composition) considered in this work, which we will describe in detail later.

In the context of CCUS, especially in the United States, industrial organizations that store CO2 are refunded with CTCs from the fed-
eral government to further incentivize the activities and investment in CCUS projects. Similar to the life cycle NPV as shown in Eq. 1,
the CTCs are also subject to monetary depreciation and inflation. Following Nguyen et al. (2023b), it is important to consider a separate
NPCTC objective function:
2 3
NI 
  Nt
X tn X  
JNPCTC u =  4 rCO2 qN nCO2 inj,j u 5,
tn (4)
n=1   j=1
‍ 1 + b 365 ‍
where ‍rCO2‍denotes the CTC (Sun et al. 2021; Nguyen et al. 2023b).
A few important remarks regarding the simplifications considered in our objective functions defined by Eqs. 1 and 4 are as follows:
First, we assume that the infrastructure necessary for handling CO2 is already in place; that is, CAPEX can be ignored if the facilities
required to inject and/or process the CO2 are in place. However, if the CO2-­EOR strategy is compared against recovery strategies that do
not require acquiring CO2, then any additional CAPEX associated with putting CO2 infrastructure in place should be considered. Second,
the CO2 source for injection is assumed to be solely external, because produced CO2 would need to undergo several post-­production
processes such as separation, impurity treatment, drying, compression, etc., which would result in some downtime before it would be
available for reinjection. Additionally, the case study setup in this work, which we will discuss later in this paper, does not result in very
significant CO2 production. Therefore, our justification of solely externally sourced CO2 injection is valid. Third, we treat a CTC and a
carbon credit rather similarly so that royalties and other types of financial constructs could be ignored in the objective functions. Usually,
a tax credit has a known value per ton of CO2, while carbon credits are bought and sold on the financial markets, and their values therefore
depend on supply and demand. Finally, we assume that both NPV and NPCTC depreciate over time with the same discount rate ‍b‍. It is

April 2024 SPE Journal 1921

important to note that maximizing NPCTC does not necessarily mean maximizing NPV or vice versa. A multi-­objective optimization
approach is needed to discern distinct control strategies that describe alternative compromises between NPCTC and NPV.
The maximization of both the life cycle NPV and NPCTC is important and needs to be balanced; hence, the goal is to solve the fol-
lowing bi-­objective nonlinearly constrained production optimization problem (Nguyen et al. 2023b):
˚    
minimize JNPV u , JNPCTC u , (5a)
‍ u2R u
N ‍
up
‍ subject toW ulow
i  ui  ui , i = 1, 2, : : : , Nu ,‍ (5b)
 
‍ ci u  0, i = 1, 2, : : : , Nic .‍ (5c)
 
Note that,
 in Eq. 5, the two objective functions are organized in decreasing order   of importance [i.e., ‍JNPV u ‍ is prioritized over
‍JNPCTC u ].‍ Therefore, throughout this study, we refer to ‍JNPV u ‍and ‍JNPCTC u ‍as the primary objective function and the secondary
objective function, respectively. Nguyen et al. (2023b) presented an efficient procedure to solve the bi-­objective problem using the lexi-
cographic method (Marler and Arora 2004) based on LS-­SQP coupled with StoSAG (Nguyen et al. 2023a, 2023b). For more details
regarding the StoSAG gradients, please refer to Fonseca et al. (2017). In the proposed lexicographic-­based workflow by Nguyen et al.
(2023b), the first step is to solve the single-­objective NPV optimization
  problem as described in Eq. 2 to obtain the optimal well controls
u* and the corresponding minimum primary objective ‍JNPV u ‍. Then, the second step of the workflow is to solve the following optimi-
zation problem:

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minimize JNPCTC u ,
‍ u2R u
N ‍ (6a)
   
‍ subject toW JNPV u   JNPV u ,‍ (6b)
up
‍ ulow
i  ui  ui , i = 1, 2, : : : , Nu ,‍ (6c)
 
‍ ci u  0, i = 1, 2, : : : , Nic ,‍ (6d)

where ‍ 2 (0, 1]‍ is a preset value

  of relaxation indicating the fraction of decrease in the life cycle NPV [or equivalently, increase in the
 ‍JNPV u ]‍ that the optimization operation is willing to sacrifice to gain an improvement in the secondary objective
negative life cycle NPV
function ‍JNPCTC u ‍. For example, if ‍ = 0.95‍is chosen, it means that the state constraint given by Eq. 6b would allow the maximum of
5% decrease in the life cycle NPV, to further increase the life cycle NPCTC.

Normalization of the Design Variables and Constraints. The magnitudes of the design variables affect the performance of gradient-­
based optimization algorithms in general. Therefore, to make the step-­size selection process  stable, it is necessary to perform the
normalization of the design variables, which rescales the design variables into the interval of ‍ 0, 1 ‍as follows:
ui  ulow
uN i = up i low , (7)
‍ ui  ui ‍

for all ‍i = 1, 2, : : : Nu ‍. Similarly, for the nonlinear state constraints, their values are also rescaled by their corresponding imposed lower or
upper thresholds to prevent any numerical ill-­conditioning or instability. For example, instead of directly enforcing the upper-­bounded
FLPR constraints given by
 
‍ cj uN = FLPRj + FLPRup  0,‍ (8)

for each of the control steps ‍j = 1, 2, : : : , Nc ,‍ we enforce the following normalized constraints

  FLPRj
cNj uN = + 1  0. (9)
‍ FLPRup ‍

Therefore, the post-­normalization single-­objective NPV optimization problem, as given by Eq. 2, becomes
 
minimize JNPV uN , (10a)
‍ uN 2R Nu ‍
‍ subject toW 0  uN i  1, i = 1, 2, : : : , Nu ,‍ (10b)
 
‍ cN i uN  0, i = 1, 2, : : : , Nic .‍ (10c)
 
Likewise, the post-­normalization optimization problem of the secondary objective function ‍JNPCTC uN ‍given by Eq. 6 becomes
 
minimize JNPCTC uN , (11a)
‍ uN 2R u
N
  ‍  
‍ subject toW J NPV u
N   JNPV uN ,‍ (11b)
‍ 0  uN i  1, i = 1, 2, : : : , Nu ,‍ (11c)
 
‍ cN i uN  0, i = 1, 2, : : : , Nic .‍ (11d)

Note that the optimization problems defined by Eqs. 10 and 11, are solved by the bi-­objective lexicographic-­based LS-­SQP workflow as
presented by Nguyen et al. (2022), instead of Eqs. 2a and 6a, Eqs. 2b and 6b, and Eqs. 2c and 6c, respectively.

1922 April 2024 SPE Journal

Model Description
In this section, we describe the reservoir model used and optimization parameter settings applied to our case study of bi-­objective optimi-
zation of CO2 storage in a depleted oil reservoir.

Reservoir Model. Like Nguyen et al. (2023b), we use the Brugge reservoir model (Chen et al. 2010; Chen and Oliver 2010; Peters et al.
2010; Dehdari and Oliver 2012; Almasov et al. 2022; ) for our CCUS case study, with a compositional fluid model to simulate a depleted
oil reservoir using the CMG-­GEM compositional simulator. The reservoir model, as illustrated in Fig. 1, consists of a total of 60,048
gridblocks (44,550 active cells) with 10 injectors and 20 producers. In this study, we only consider the base case (58th realization) for
deterministic production optimization. The initial reservoir pressure is 3,500 psi, and the water-­oil contact depth is 5,377 ft. For more
details regarding the compositional fluid data, please refer to Yu et al. (2014) and Nguyen et al. (2023b). The Peng-­Robinson equation of
state is used in this work in the compositional fluid model.

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Fig. 1—3D visualization of the Brugge reservoir model with 30 wells.

Constraint and Optimization Settings. In our study, we consider a 3,600-­day life cycle production optimization, with 20 uniform control
steps of 180 days each. Hence, the number of control variables in this bi-­objective optimization problem is ‍Nu ‍= 600, and their lower and
upper bounds are documented in Table 1. The enforced nonlinear state constraints, consisting of IBHP, FLPR, and FWPR, are shown in
Table 2. Note that, as the model has 10 injectors and 20 control timesteps, we would have 20 FLPR constraints, 20 FWPR constraints,
and ‍20  10 = 200‍IBHP constraints, totaled to 240 constraints. It is important to note that these constraints are enforced externally in the
optimization workflow, rather than being handled internally by the simulator’s field management framework, due to two main reasons.
First, it is to ensure the numerical stability of stochastic gradient estimation, which is particularly true for IBHP because, if the simulator
enforces this operational mode internally for injectors, it could result in multiple control solutions yielding the same objective function
value. Second, the purpose of having “control timesteps” is to operate the wells at a constant schedule within such time periods. As a
result, if the constraints listed in Table 2 are enforced internally by the simulator, then we could observe nonconstant rate/BHP control
schedules within one or more control timesteps. In fact, Liu and Reynolds (2020) show that the computationally viable alternative of
letting the reservoir simulation enforce the nonlinear state constraints using its internal heuristics may yield significantly inferior results.

Variable Units Lower Bound Upper Bound

Production BHP psi 1,000 3,000
CO2 injection rate MMscf/D 10.0 15.0

Table 1—Lower and upper limits of the well controls in this study.

Type of Constraint Units Type of Inequality Upper Bound

IBHP psi 
‍ ‍(upper-­bounded) 4,060
FLPR STB/D 
‍ ‍(upper-­bounded) 50,000
FWPR STB/D 
‍ ‍(upper-­bounded) 40,000

Table 2—Summary of the imposed nonlinear state constraints.

April 2024 SPE Journal 1923

 The optimization parameters used with the multi-­objective LS-­SQP framework coupled with StoSAG gradients by Nguyen et al.
(2023b) are summarized in Table 3. As we follow the workflow documented in Nguyen et al. (2023a, 2023b), the convergence criteria
used in this study consist of the objective function change and L2-­norm of design vector change between two consecutive optimization
iterations ‍ ‍and ‍ + 1‍, which are mathematically expressed as follows:
ˇ  +1   ˇ
ˇJ uN  J uN  ˇ  
   "J and uN +1  uN  2  "u ,
‍ J uN 
‍
where is the maximum objective function change tolerance and is the maximum design vector change tolerance, as tabulated in Table 3.
‍J ‍is any arbitrary objective function.

LS-­SQP Parameter Value

Maximum number of gradient recomputations 3
Maximum number of backtracking cuts 5
Maximum backtracking step size 1
Backtracking step size cut factor 0.5

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Maximum number of optimization iterations 200
Maximum objective function change tolerance 10−3
Maximum design vector change tolerance 10−3
StoSAG number of perturbations 15
StoSAG variance 0.012
StoSAG temporal correlation length 5

Table 3—Summary of the bi-­objective LS-­SQP

parameters used on Nguyen et al. (2023b) workflow.

Economical Parameters for Objective Functions. The constants in two objective functions defined by Eqs. 1 and 4 are summarized in
Table 4. For more details regarding the carbon-­related parameters specifically, please refer to Schmelz et al. (2020), Jones and Sherlock
(2021), and Smith et al. (2021).

Economic Parameter Notation Units Value

Oil price ‍co ‍ USD/STB 82
Water treatment cost ‍cw ‍ USD/STB 5
(*)
CO2 injection cost ‍cCO2 inj‍ USD/tCO2 10
(*)
CO2 production treatment cost ‍cCO2 prd ‍ USD/tCO2 47
(*)
Carbon tax credit ‍rCO2‍ USD/tCO2 35
Annual discount rate ‍b‍ – 0.1
(*)
tCO2 = metric ton of CO2

Table 4—Summary of the economical parameters used in the

NPV and NPCTC objective functions.

Computational Results. In this section, we present the bi-­objective optimization results obtained from applying the LS-­SQP framework
by Nguyen et al. (2023b). Additionally, we show the optimization results without bi-­objective optimization to further emphasize the
importance of having multiple objective functions.

Single-Objective Optimization. In this first subsection, we show the solution obtained by solving the single-­objective NPV optimization
problem as defined by Eq. 10. The control variables are uniformly initialized as ‍uN 0i = 0.5‍ for all ‍i = 1, 2, : : : , Nu .‍ To emphasize the
importance of bi-­objective optimization that will be presented later in this section, we also perform a single-­objective optimization of the
total life cycle cash flow, which is the sum of the two objective functions, defined as
‍ JTot (u)
N =JNPV (u)
N + JNPCTC (u),N ‍ (12)

and we minimize it using Eq. 10 with ‍JTot (u) N ‍. We denote the corresponding optimal control solution as ‍uN ‍. Fig. 2
N ‍ instead of ‍JNPV (u)
compares the results based on the sum of the two single-­objective functions given by Eq. 12 and the single-­objective NPV optimization,
while their corresponding optimal well control schedules are displayed as heatmaps in Fig. 3. Additionally, we added to Fig. 2 the NPV
convergence curves for the single-­objective NPV optimization solution without IBHP nonlinear state constraints, indicated by the dark
gray line, to demonstrate how our IBHP-­constrained solutions of interest differ from it.  
Specifically for the results with IBHP constraints, an optimal solution ‍uN ‍ from single-­
ˇ objectively optimizing ‍JNPV uN ‍ is found after
  ˇ
53 SQP iterations, corresponding to 1,403 reservoir simulation calls. The NPV value is ˇ‍JNPV uN ˇ = 3.990  109‍USD, and the NPCTC

1924 April 2024 SPE Journal

Fig. 2—Comparison of NPV results between single-­objective NPV optimization solution and single-­objective total cash flow
optimization, both with IBHP constraints imposed, using LS-­SQP workflow by Nguyen et al. (2023b). The gray line represents the
reference optimization result without imposing IBHP constraints.

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ˇ  ˇ
evaluated at this solution is ˇ‍JNPCTC uN  ˇ = 5.264  108‍USD, resulting in the total cash flow of ‍4.515  109‍USD, whereas it takes 54
SQP iterations
ˇ and 1,422ˇ reservoir simulations forˇ single-­objective
ˇ total life cycle cash flow optimization. In that case, the NPV and
NPCTC are ˇ‍JNPV uN  ˇ = 3.943  109‍USD and ˇ‍JNPCTC uN  ˇ = 5.740  108‍USD, respectively, which sum up to the total cash flow
of ‍4.517  109‍USD, which is quite close to the total cash flow value evaluated at ‍uN ‍. These NPV values are lower than the one obtained
without IBHP constraints imposed of ‍4.139  109‍USD (dark gray line in Fig. 2), which is reasonable because imposing more constraints
tightens the feasible region of the optimization problem and hence lowers the optimal values of the objective functions.
The imposed nonlinear state constraints are shown in Figs. 4 and 5, respectively, in which the light green lines indicate the imposed
upper bound for each type of constraint. In both figures, we also add the solution for single-­objective NPV optimization solution without
IBHP nonlinear state constraints. In all cases considered, the maximum FLPR and FWPR values are reached within the first control step,
following a similar decreasing trend over time. For IBHP-­constrained cases, some wells reach the imposed upper bound, as shown in
Fig. 5. The IBHP trend appears consistent from one injector well to another injector well. For the case of single-­objective total life cycle
cash flow optimization specifically, Injector 6 has a small but acceptable constraint violation for IBHP in control timestep 6 at the solution
‍uN ‍.

Fig. 3—Optimal single-­objective optimization schedule heatmaps for cases with IBHP nonlinear state constraints.

Fig. 4—Comparison of FLPR and FWPR nonlinear state constraints obtained from the maximizations of the sum of the two single-­
objective functions (Eq. 12) and the single-­objective function of NPV (Eq. 2 with Eq. 1). The green line represents the upper bound.
Orange lines indicate FLPR and FWPR constraint values for single-­objectively optimizing NPV without imposing IBHP constraints.

April 2024 SPE Journal 1925

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Fig. 5—Comparison of IBHP nonlinear state constraints between the two single-­objective results for 10 injector wells. The green
line represents the upper bound. Orange lines indicate IBHP values for single-­objectively optimizing NPV without imposing IBHP
constraints.

Bi-Objective Optimization. Here, we focus on solving the NPCTC optimization problem as defined by Eq. 11 as the second step of
the lexicographic method. Note that for the initialization, we follow the procedure as stated by Nguyen et al. (2023b) to initialize the
design vector at the optimal solution ‍uN ‍of single-­
 objective NPV optimization. The negative life cycle NPV state constraint given by Eq.
6b is upper-­
  bounded using the value of ‍JNPV uN  = 3.990  109‍ USD, while the initial negative NPCTC objective function value is
8
‍JNPCTC uN = 5.264  10 ‍USD.
Throughout this whole subsection, we show the results using ‍ = 0.95‍ for the state constraint given by Eq. 6b, corresponding to the
maximum
ˇ allowance
 ˇ of a 5% decrease in the life cycle NPV. Therefore, upon convergence, it is expected that the NPV cannot be lower
than ˇ‍JNPV uN  ˇ = 3.775  10ˇ9‍USD. Fig. 6 shows the bi-­objective optimization results for NPCTC and NPV, in which the green dashed
 ˇ  
lines represent the bound value ˇ‍JNPV uN  ˇ,‍ serving as the lower bound for NPV or upper bound for ‍JNPV uN .‍ The optimization work-
flow achieves convergence after 76 iterations, corresponding to 1,530 reservoir simulation calls. We can see that, at the early stage of the
ˇbi-­objective
 optimization
ˇ process, the NPV fluctuates and violates a lot and then laterˇ stabilizes. ˇThe optimal NPCTC found is
ˇJNPCTC uN opt ˇ = 6.097  108 USD, which is a 15.6% increase compared with its value ˇJNPCTC uN  ˇ as the initial guess of the bi-­
‍ ‍ ˇ  ˇ ‍ ‍
objective problem, and a 6.2% increase compared with ˇ‍JNPCTC uN  ˇ.‍

Fig. 6—Bi-­objective NPCTC and NPV optimization results for 

‍ ‍= 0.95. The green dashed lines indicate the bound of the NPV state
constraint in the lexicographic method.

The schedule heatmaps at the bi-­objective optimum are shown in Fig. 7, which appear to be quite different from the ones in Fig. 4. To
better demonstrate how the injection rates evolve visually, we also include the results for ‍ = 0.99‍in Fig. 7. For
ˇ the case
 with
ˇ ‍ = 0.99‍
specifically, upon convergence, we obtained the NPV of ‍3.950  109‍USD, which is equal to the set bound of ˇ‍0.99JNPV uN  ˇ.‍ The opti-
mal NPCTC we obtained is ‍5.932  108‍USD, which corresponds to a 12.7% uplift over the initial guess. From Fig. 7, we observe that

1926 April 2024 SPE Journal

 Fig. 7—Optimal bi-­objective optimization schedule heatmaps for 
‍ ‍= 0.95 and 
‍ ‍= 0.99.

the injection rates for both ‍ = 0.95‍and ‍ = 0.99‍are significantly higher (identified by more red colors in the control steps), which trans-
lates directly into higher CO2 storage in the reservoir. The values of the imposed field rate and IBHP nonlinear state constraints are shown
in Figs. 8 and 9, respectively. Unlike the single-­objective solutions, here we observe much higher FLPR and FWPR at the beginning,

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because of more fluids being displaced due to higher CO2 injection. We also notice higher IBHP on the injectors from Fig. 9, and the
values are closer to the imposed upper bound. This behavior is consistent and is directly correlated with the higher CO2 injection rates
observed in Fig. 7.

Fig. 8—Imposed FLPR and FWPR nonlinear state constraints for bi-­objective optimization with 
‍ ‍= 0.95.

Fig. 9—Imposed IBHP nonlinear state constraints for bi-­objective optimization with 
‍ ‍= 0.95.

Numerical Construction of the Bi-Objective Pareto Front. By repeatedly solving the bi-­objective optimization problem as defined
by Eq. 11 with different values of ‍ ,‍ we can approximate the bi-­objective Pareto front, which represents the trade-­off between the two
competing objectives, as demonstrated in Nguyen et al. (2023b). Lower values  of ‍ ‍ means more relaxation on the NPV constraint,
resulting in a larger feasible region for the second objective function ‍JNPCTC uN ‍ to further decrease. One different solution we have
shown in the previous subsection is with ‍ = 0.99‍. Here, we construct the Pareto front using ‍ = f0.65, 0.7, 0.75, 0.8, 0.85, 0.9, 0.95, 0.99g‍,
as shown in Fig. 10. For more details, please refer to Table 5. Again, decreasing values of ‍ ‍is equivalent to being willing to sacrifice more
NPV in exchange for more gain in NPCTC. The selection of the maximum value ‍ = 0.99‍, rather than exactly equal to 1 in the formal
formulation of the lexicographic method (Marler and Arora 2004; Nguyen et al. 2023b), is for the purposes of allowing a small tolerance
window in NPV state constraint to ensure convergence and stability of the optimization algorithm, due to the inaccuracy in the estimation

April 2024 SPE Journal 1927

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Fig. 10—Numerical approximation of the Pareto front.

ˇ  ˇ
of stochastic gradients. Note that, on each datapoint generated, the final NPV value does not need to be equal to the bound ˇ‍JNPV uN  ˇ‍
as specified in the state constraint given by Eq. 6b. We observe a steep improvement in the NPCTC between ‍ = 0.99‍and ‍ = 0.9.‍

‍ ‍ NPV (‍109‍USD) NPCTC (‍108‍USD)

0.65 2.671 6.194
0.70 2.877 6.191
0.75 3.001 6.185
0.80 3.195 6.166
0.85 3.394 6.129
0.90 3.586 6.108
0.95 3.778 6.085
0.99 3.950 5.932

Table 5—Numerical values of the bi-­objective

solutions used to construct the Pareto front.

We also include in Fig. 10 the solution ‍uN ‍ from optimizing the total cash flow, as shown in the first subsection, to emphasize the
necessity of performing bi-­objective optimization, especially with the usage of stochastic gradients. By comparing the optimum ‍uN ‍
(indicated by the red triangular marker in Fig. 10) with the ‍ = 0.99‍solution from the Pareto front, notice that, although the NPV values
are similar, the NPCTC values are very different, specifically it is much higher at ‍ = 0.99.‍ This indicates that separating the two objective
functions instead of lumping them helps avoid this suboptimum, especially as the NPV value is observed to be significantly larger than
NPCTC in terms of magnitude. Also from the Pareto front, we can conclude that for the case study considered here, we observe that there
is not a significant improvement of NPCTC for ‍  0.75.‍ Fig. 11 shows visualization of the CO2 entrapment at the end of the simulation
for various investigated cases. It is worth noting that the results shown in Fig. 11 represent the case where we set the BHP for all producer
wells at its lower bound of 1,000 psi and the injection rates at the upper bound of 15 MMscf/D, as requested by one of the technical
reviewers. For this case, the NPV value is ‍2.109  109‍USD, and the NPCTC value reaches the maximum possible value at ‍6.321  108‍
USD. We can see that the primary objective (NPV) of such a case is inferior compared with any of the results we have presented so far.
One important point to note is that although in this work (and in Nguyen et al. 2023b), there is quite a big difference between the mag-
nitudes of NPV and NPCTC, specifically with NPV being more dominant. However, this is consistent with practical settings, as although
industrial companies are pushing for low-­carbon solutions with a major focus on CCUS, their main revenues are still coming from oil and
gas operations. In other words, carbon tax cannot replace oil and gas revenues in terms of monetary value, but it is still something that
must be done. We will not go into the details of the real market of carbon credits, as it is very complex and focusing on it is not the scope
of our study, but we convey our point of NPCTC being much more important than just its monetary value.

1928 April 2024 SPE Journal

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Fig. 11—Top-­view comparison of the different CO2 saturation distributions pre-­optimization and post-­optimization after life cycle
simulation. Maximum capacity (f) shows the case where the injection rates are set at the maximum and the production BHPs are
set at the minimum.

Discussion
In this section, we provide a clear explanation as to why the two objective functions (negative NPV given by Eq. 1 and negative NPCTC
given by Eq. 4) should not be combined into a single-­objective (“NPV”) function. Here, we further discuss why a single-­objective func-
tion is not appropriate to solve the multi-­objective optimization problem considered in this study.
As we stated previously, negative NPV (Eq. 1) and negative NPCTC (Eq. 4) present two conflicting objectives in the sense that we
want to maximize NPV due to oil production via injection of CO2 while maximizing the net CTC by sequestering as much CO2 as possible
in the reservoir. The optimal solution to these conflicting objectives calls for multi-­objective optimization, so we envision the problem as
a multi-­objective optimization problem. As stated in many previous works focused on solving multi-­objective optimization problems [for
example, see Liu and Reynolds (2016a, 2016b, 2016c) and Alpak et al. (2022)], the solution to the multi-­objective optimization problem
is the Pareto front (a hyper-­surface in the multi-­objective optimization problem). Like in our study, when only two objective functions are
considered, the Pareto front is a curve on a 2D plot that represents the tradeoff between the two objectives. The defining characteristic of
the Pareto front is that, given any specific point on the Pareto front, it is impossible to find another point on the Pareto front or another
feasible point that yields a greater value of all objective functions. In other words, the Pareto front serves as the boundary of a region that
represents all possible solutions in the search space. If we simply combine the two conflicting objective functions as a single-­objective
function, then the optimal solution of this combined problem will not represent an optimal solution on the Pareto front but a suboptimal
solution.
Moreover, we refer the readers to an example from Alpak et al. (2022); see Fig. 21 of the cited reference. The authors concluded that
it is tedious and time-­consuming to find the correct weighting factors for potentially conflicting objectives in an aggregated weighted-­sum
objective function approach. Indeed, Alpak et al. (2022) as well as Liu and Reynolds (2016c) reported that only a (small) relevant portion
of the Pareto front could be determined with the weighted-­sum method. Even when proper weights are determined, and with four times
more total objective function evaluations (compared with their proposed bi-­objective workflow), the weighted-­sum approach could only
construct six (red) points on the Pareto front (blue points) in Fig. 21 of Alpak et al. (2022).
Coming back to our paper, we presented our single-­objective optimization results in Figs. 2 and 3. As can be seen from Fig. 2 and the
corresponding discussions that follow Figs. 2 and 3, by  performing single-­
 objective optimization on the NPV only, we can evaluate the
value of the combined single-­objective function ‍JTot = JNPV + JNPCTC ‍ at the optimal (‍4.515  109‍ USD, with the NPV and NPCTC
being ‍3.990  109‍USD and ‍5.264  108‍USD, respectively). When we perform single-­objective optimization on ‍JTot ‍instead, we obtained
9 9 8
‍JTot = 4.517  10 USD‍, with the NPV and NPCTC being ‍3.943  10 ‍USD and ‍5.740  10 ‍USD, respectively. We did observe that, in
both cases, ‍JTot ‍is close in monetary value (with a small difference due to numerical errors), but the values in the constituting objective
functions are different. It is important to note that the single-­objective NPV solution does not directly contribute to the bi-­objective Pareto
front but rather serves as the starting point to construct the Pareto front in the bi-­objective optimization process.
As we proceeded to show in Fig. 10 in the manuscript and discussed in detail in the section “Numerical Construction of the Bi-­
Objective Pareto Front,” by comparing the optiml ‍uN ‍(indicated by the red triangular marker in Fig. 10) with the γ = 0.99 solution from
the Pareto front, notice that, although the NPV values are similar, the NPCTC values are very different; specifically, it is much higher at
γ = 0.99. We emphasized the necessity of separating the two objective functions instead of lumping them to avoid such suboptimum,
especially as the NPV value is observed to be significantly larger than NPCTC in terms of magnitude. So, when the two conflicting objec-
tive functions are within different ranges of values (could even be some orders of magnitude different, as in our discussion after Table 5
and before Fig. 11), combining the two objectives is not recommended as the larger-­valued objective would dominate in the solution-­
finding process. This is especially even more important with the use of stochastic gradients in optimization. Although, in this work, we
did not perform different combinations of weights, such as Liu and Reynolds (2016c) and Alpak et al. (2022), for our combined objective
function approach, as it is very time-­consuming (especially with a compositional model), clearly, with the result presented, the optimal
solution from the combined approach is not lying on the Pareto front. To be specific, the red triangular marker is nowhere near the green
marker with γ = 0.99 in Fig. 10. Again, an exhaustive search could be performed, but it would be too computationally inefficient.

Conclusions
In this work, we use the StoSAG gradient-­based LS-­SQP workflow (Nguyen et al. 2023a) coupled with the lexicographic method, as
described in Nguyen et al. (2023b) to solve the bi-­objective production optimization design for CCUS on the Brugge model. Besides

April 2024 SPE Journal 1929

FLPR and FWPR as presented in Nguyen et al. (2023b), our production optimization case study also involves operational constraints on
BHP for rate-­controlled injectors, which is a critical factor in the CO2 injection design process. As shown and discussed in the “Results”
section earlier, the well-­control solution obtained from optimization without IBHP constraints results in higher NPV as expected but
exceeds the threshold IBHP value in exchange. The conclusions of this study are as follows:
• The algorithm solves the nonlinearly constrained single-­objective optimization problems, in which the objectives are the NPV and the
total cash flow, respectively. The NPV values are ‍3.990  109‍USD and ‍3.943  109‍USD, respectively. At the single-­objective NPV
optimum, the NPCTC is ‍5.264  108‍USD.
• The second step of the lexicographic method is to optimize the NPCTC under an additional state constraint on the NPV. The controls
for this bi-­objective problem are initialized at the optimum from the single-­objective NPV optimization problem. By allowing the
maximum decrease of 5% in the NPV (‍ = 0.95), 8
‍ we obtained the optimal NPCTC of ‍6.097  10 ‍USD, which is equivalent to a 15.6%
uplift compared with its value at the single-­objective NPV optimum.
• The imposed nonlinear state constraints are always honored during both single-­objective and bi-­objective optimization processes.
We observe higher IBHP values at the bi-­objective optimum, closer to the imposed upper bound, compared with their single-­
objective optimal values. This is consistent and is directly correlated with the increase in injection rates as reported in the schedule
heatmaps.
• A numerical approximation of the Pareto front is constructed by solving the bi-­objective optimization with different values of ‍ .‍ The
results show a steep improvement in the NPCTC at high values of ‍ ‍followed by a plateau as ‍ ‍decreases. For our case study with the
Brugge model setup, there is no significant increase in NPCTC for ‍  0.75.‍
•

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The constructed Pareto front also helps emphasize the necessity of performing bi-­objective optimization with two separate objective
functions, especially when coupled with stochastic gradients, rather than performing a single-­objective optimization of the total life
cycle cash flow. The results show that at the optimum ‍uN ‍ from optimizing the total life cycle cash flow, the NPV obtained is like its
value in bi-­objective optimization with ‍ = 0.99,‍ but the NPCTC obtained from bi-­objective optimization is much higher.

Acknowledgments
This research was conducted under the auspices of Tulsa University Petroleum Reservoir Exploitation Projects (TUPREP). The first and
second authors thank TUPREP member companies for their support and acknowledge the CMG for making available multiple GEM
licenses. Some portions of this paper constitute Quang Minh Nguyen’s PhD dissertation.

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1932 April 2024 SPE Journal