Oil production optimization of petroleum reservoirs under uncertainty give rise to large-scale optimization problems. Ensemble-based methods for production optimization are used in combination with gradient-based optimization algorithms. Use of commercial-grade simulators able to handle real-scale reservoir models and compute the gradient by the adjoint method is essential for implementing such methods in real-life. However, the simulation time for a single ensemble model renders the problem computationally intractable. Therefore, model reduction is needed. We introduce a grid coarsening method that maintains the overall dynamics of the flow, by preserving the geological features of the model. In this paper, we present a software tool for oil production optimization and a semi-automated workflow for grid coarsening and property upscaling. The software tool integrates state-of-the-art optimization algorithms, ensemble-based optimization strategies and reservoir simulators with adjoint capability. The software is based on the Eclipse input file-format, which enables use of existing reservoir models for production optimization. This allows for oil production optimization of both black-oil and compositional flow models and brings model based production optimization a step closer to routinely implementation in reservoir management workflow. We present the workflow of the optimization software and numerical examples that demonstrates the application of ensemble-based production optimization.