We propose a decision-making approach for optimizing the profitability of hydrocarbon reservoirs. The proposed approach addresses the overwhelming complexity of the overall optimization problem by suggesting an oilfield operations hierarchy that entails different time scales. We discuss system identification, optimization, and control that are appropriate at various levels of the hierarchy and capitalize on the abilities of permanently instrumented and remotely actuated fields. Optimization is performed in real-time and is based on feedback. We provide details on real-time identification of hybrid models and their use at the scheduling and supervisory control levels. Case studies using field-calibrated simulation data demonstrate the applicability and value of the proposed approach. Directions for future development are given.