Water-cut prediction by reservoir simulation can be used as the main parameter to determine well shutdown time. In general, analytical formulations are used to determine the maximum water cut that a well can reach and this value is used as a monitoring parameter in reservoir simulation. Moreover, water-cut value can be a good indicator to evaluate field performance and it can be used as a variable in optimization process. This paper presents a methodology to optimize production strategy using water cut as a parameter to shut down wells and smart completions as a variable of the optimization process and as an economic indicator to evaluate strategy efficiency. A discussion on the use of water cut in a reservoir simulation is made, regarding the benefits and limitations of the use. The results show that using only analytical formulation to determine the water cut to shut down wells and completions is not a good approach to maximize production strategy Net Present Value (NPV). On the other hand, the optimization of well and valve operation using water cut significantly improves the NPV. Water cut is successfully used to indicate strategy efficiency and to suggest strategy modification. The results also show that it is necessary to be careful in the use of water cut in an optimization process, because it can present several limitations. This study may help engineers to decide if it is necessary to run an optimization process to determine the parameter used to shut down wells. Furthermore, the results show the importance of a good estimation of the time to shut down wells and completions to reach the optimum potential of a production strategy.

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