RESERVOIR ENGINEERING & MANAGEMENT

UNIT 1

1. Principles of Reservoir Engineering

Scope & importance of Reservoir Engineering

The technology concerned with the prediction of the optimum economic

recovery of oil or gas from hydrocarbon-bearing reservoirs. It is an eclectic
technology requiring coordinated application of many disciplines: physics,
chemistry, mathematics, geology, and chemical engineering. Originally, the role
of reservoir engineering was exclusively that of counting oil and natural gas
reserves. The amount of oil or gas that can be economically recovered from the
reservoir is a measure of the wealth available to the owner and operator. It is
also necessary to know the reserves in order to make proper decisions
concerning the viability of downstream pipeline, refining, and marketing facilities
that will rely on the production as feedstock.

The scope of reservoir engineering has broadened to include the analysis of

optimum ways for recovering oil and natural gas, and the study and
implementation of enhanced recovery techniques for increasing the recovery
above that which can be expected from the use of conventional technology.

The amount of oil in a reservoir can be estimated volumetrically or by material

balance techniques. A reservoir is sampled only at the points at which wells
penetrate it. By using logging techniques and core analysis, the porosity and net
feet of pay (oil-saturated interval) and the average oil saturation for the interval
can be estimated in the immediate vicinity of the well. The oil-saturated interval
observed at one location is not identical to that at another because of the
inherent heterogeneity of a sedimentary layer. It is therefore necessary to use
statistical averaging techniques in order to define the average oil content of the
reservoir (usually expressed in barrels per net acre-foot) and the average net
pay. The aerial extent of the reservoir is inferred from the extrapolation of
geology and fluid content as well as the drilling of dry holes beyond the
productive limits of the reservoir. The definition of reservoir boundaries can be
heightened by study of seismic surveys, particularly 3-D surveys, and analysis of
pressure buildups in wells after they have been brought on production.

The overall recovery of crude oil from a reservoir is a function of the production
mechanism, the reservoir and fluid parameters, and the implementation of
supplementary recovery techniques. In general, recovery efficiency is not
dependent upon the rate of production except for those reservoirs where gravity
segregation is sufficient to permit segregation of the gas, oil, and water. Where
gravity drainage is the producing mechanism, which occurs when the oil column
in the reservoir is quite thick and the vertical permeability is high and a gas cap is
initially present or is developed on producing, the reservoir will also show a
significant effect of rate on the production efficiency. Reservoir engineering
expertise, together with geological and petrophysical engineering expertise, is
being used to make very detailed studies of the production performance of crude
oil reservoirs in an effort to delineate the distribution of residual oil and gas in the
reservoir, and to develop the necessary technology to enhance the recovery.

The first chemical tracer

Test Conducted at NCPA’s well
C-11 in January 1990.

The application of reservoir engineering begins during the exploration phase of

the project with the analysis of the initial geophysical measurement data that
indicate a promising geothermal system, and it continues throughout the
operational life of the geothermal resource. It is the reservoir engineer’s task to
test wells, monitor their output, design new wells, and predict the long-term
performance of the reservoir and wells. This design and prediction is
accomplished by studying field and operational measurement data and using
computer models to project the field operation into the future. During operation of
a geothermal field, the reservoir engineer will be able to compare the actual
performance to the predicted performance. If necessary, the engineer can modify
the management plan for the geothermal field to obtain more efficient operation.

Sedimentary formations suitable for hydrocarbon reserves

The first requisite for hydrocarbon is a reservoir: a rock formation
porous enough to contain oil or gas and permeable enough to allow their
movement through it. Oil and gas occur in sedimentary rock formation laid down
in ancient riverbeds or beaches, and also occasionally in dune sands or deep-
sea sands. Where the limestone is porous and permeable they also form
reservoirs, as in reefs built up by corals, and in places where waves and tidal
currents exist. In carbonate formation, limestone (Ca CO3) and dolomite (Mg
CO3), which are more brittle and soluble than sandstones, secondary porosity is
found in fractures, solution channels. The more prolific Iranian Petroleum
Reservoirs are made of fractured carbonates.
Hydrocarbons can occur within and around igneous rocks, sometimes in
commercially significant quantities. Igneous or closely associated rocks can be
hydrocarbon sources in the conventional sense (biotic) as well as possibly
through abiotic processes. Maturation is extremely variable, depending on the
extrusive/intrusive nature of the activity and the relative importance of a deep
heat source. Igneous volatiles and hydrothermal fluids may also be important in
mobilizing and moving hydrocarbons. Igneous rocks can have good reservoir
qualities, and they can produce their own trapping structures as well as being
part of a larger feature.

Though oil is mainly found in sedimentary rocks, all sedimentary rocks do not
contain oil. An oil reservoir must have three pre-requisite conditions:

1. Porosity so as to accommodate sufficiently large amount of oil.

2. Permeability to discharge oil and/or gas when well has been drilled.
3. The porous sand beds, sand stone, conglomerates of fissured limestone
containing oil should be capped by impervious beds so that oil does not
dissipate by percolation in the surrounding rocks.

Oil is usually found where the sedimentary rock strata are inclined and folded; in
a sort of chamber or reservoir, in the highest possible situation. Normally, oils are
associated with water. Being lighter than water, it collects in the anticlines or fault
traps above the surface of water. Gas is still lighter and occurs above oil. Thus
on drilling an oil well, one finds gas followed by oil, although gas seepage is not
always a sure indicator of an oil reservoir.

Classification

Sedimentary rock types are classified in one of three categories. The

clastic category forms from fragmented sediment. Portions of eroded or
weathered rock bind, producing clastic subcategories of conglomerate,
sandstone, siltstone, or shale. Grain size distinguishes rocks in each clastic
subcategory.

A second category of sediment and sedimentary rock is termed chemical. As a

result of dissolution, sediment of pre-existing rock(s) somewhat congeals and
travels in a body of water. Usually evaporation settles the deposit which then
completely solidifies. The product is a type of chemical sedimentary rock,
commonly limestone.
 The last category of sedimentary rock is known as biogenic or organic. The
biogenic method, while chemical, is categorized separately because leftovers of
living organisms compose the sediment. Shells and plant fragments unite in
biogenic sedimentary rocks. Biogenic rocks form from evaporative and chemical
processes which glue fossils into one mass. Limestone and coal are examples of biogenic
sedimentary rocks.

Brief description of origin, migration & accumulation of

hydrocarbon fluids
Origin of fossil fuels
Fossil fuels are those energy sources that formed from the remains of
once-living organisms. They include oil, natural gas, coal, and fuels derived from
oil shale and tar sand. The differences in the physical properties among the
various fossil fuels arise from differences between the starting materials from
which the fuels formed and changes to those materials after the organisms died
and were buried within the layers of the earth. Petroleum means rock-oil, and
comes from the Latin Petra, meaning rock or stone, and oleum, meaning oil.
Liquid petroleum, or oil, comprises a variety of liquid hydrocarbon compounds;
compounds made up of different proportions of the elements carbon and
hydrogen. There are also gaseous hydrocarbons (natural gas), in which methane
is the most common component. Hydrocarbon mixtures usually also contain
minor amounts of nitrogen, oxygen, and sulfur as impurities.
 The production of a large deposit of any fossil fuel requires an even larger
initial accumulation of organic matter, which is rich in carbon and hydrogen.
Another requirement is that the organic debris be buried quickly to protect it from
the air so that decay by biological activity or reaction with oxygen will not destroy
it. Microscopic life is abundant over most of the earth’s oceans. When these
organisms die, their remains can settle to the sea floor. There are also
underwater areas near Shorelines, such as on many continental shelves, where
sediments derived from continental erosion accumulate rapidly. In such a setting,
the starting requirements for the formation of oil are satisfied; there is an
abundance of organic matter rapidly buried by sediment. Oil and most natural
gas are believed to form from such accumulated marine microorganisms. Some
natural gas deposits that are not associated with oil may form from deposits of
plant material buried in sediment. As burial continues, the organic matter begins
to change. Pressures increase with the weight of the overlying sediment or rock;
temperatures increase with depth in the earth; and slowly, over long periods of
time, chemical reactions take place. These reactions break down the large,
complex organic molecules into simpler, smaller hydrocarbon molecules. In the
early stages of petroleum formation, the deposit may consist mainly of larger
(heavy) hydrocarbons, which have the thick, nearly solid consistency of asphalt.
As the petroleum matures, and as the breakdown of large molecules continues,
successively “lighter” hydrocarbons are produced. Thick liquids give way to
thinner ones, from which lubricating oils, heating oils, and gasoline are derived.
In the final stages, most or all of the petroleum is broken down further into very
simple, light, gaseous molecules—natural gas. Most of the maturation (cooking)
process occurs in the temperature range of 50° to 100° C (approximately 120° to
210° F). Above these temperatures, the remaining hydrocarbon is almost entirely
methane (natural gas); with further temperature increases, methane can also be
broken down and destroyed.

Migration and accumulation

Once the solid organic matter is converted to liquids and/or gases, the
hydrocarbons need to migrate out of the source rocks in which they formed in
order to form a commercial deposit. The majority of petroleum source rocks are
fine grained sedimentary rocks (like shale), from which it would be difficult to
extract large quantities of oil or gas quickly. However, oil and gas are able to
migrate out of their source rocks into more permeable rocks over the long spans
of geologic time. Most people have the incorrect notion that there are
underground “lakes” of oil. The oil industry has helped feed this misconception
by talking about oil “pools.” The truth is that virtually all the oil is contained in tiny
holes
in solid rock. These holes, or pores, are filled with water, gas, or oil. But if the
holes are not connected, then oil can’t flow out of the rock. The ability of liquid to
flow through the pores is permeability. So, in addition to high porosity, which
allows the rock to hold large amounts of oil, the rock must have good
permeability, which allows oil to flow quickly out of the rock. A rock with good
porosity and permeability is a reservoir rock. Most oils and all natural gases are
less dense than water, so they tend to rise as well as to migrate laterally through
the water-filled pores of permeable rocks.
Unless sealed by impermeable cap rocks, oil and gas may keep rising right up to
the earth’s surface. These substances escape into the air, the oceans, or they
flow out onto the ground at oil and gas seeps. These natural seeps, which are
one of nature’s own pollution
Sources are not very efficient sources of hydrocarbons for fuel compared with
present day extraction methods.
Commercially, the most valuable deposits are those in which a large quantity of
oil and/or gas is concentrated and confined) by geologic traps, such as folds and
faults. If the reservoir rocks are not naturally permeable enough, it may be
necessary to fracture (crack
open) them artificially with explosives or with water or gas under high pressure to
increase the rate at which oil or gas flows through them.
 Porosity

Porosity or void fraction is a measure of the void spaces in a

material, and is a fraction of the volume of voids over the total volume, between
0–1, or as a percentage between 0–100percent. It is defined by the ratio:

Where VV is the volume of void-space (such as fluids) and VT is the total or bulk
volume of material, including the solid and void components. Both the
mathematical symbols φ and n are used to denote porosity.

Two types of porosity are

a. Total &

b. Effective porosity

Total porosity

Total Porosity is the ratio:

Sum of the volumes of all pores in the rock
--------------------------------------------------------
Total Volume of rock

The volume of the reservoir rock which is fluid (oil, water, gas) filled, expressed
as a percentage or a fraction of the gross (bulk) rock volume.

Effective porosity

Effective Porosity is the ratio:

Sum of the volumes of all interconnected pores in the rock
-----------------------------------------------------------------
Total Volume of rock

Effective porosity excludes isolated pores and pore volume occupied by water
adsorbed on clay minerals or other grains. Effective porosity is typically less than
total porosity. In the original definition of core analysts, the volume of connected
pores in a unit volume of rock. Effective porosity in this sense is the total porosity
less the isolated porosity. It is the porosity measured by most core analysis
techniques that do not involve disaggregating the sample. In these techniques, the
porosity is usually measured on totally dried core samples. Drying removes most of
the clay-bound water.

In log interpretation, effective porosity means the total porosity less the clay-bound
water. The definition is based on the analysis of shaly formations, in which the
clay-bound water is considered immobile and hence ineffective. Isolated porosity is
rare in such formations and is ignored, being included in the effective porosity.

Effective porosity on dried core samples is therefore greater than effective porosity
from log analysis, and close to the total porosity from log analysis. In humidity-
dried cores, part of the clay-bound water is not removed, and the difference is
reduced.

In some usage, the capillary-bound water is not considered part of the effective
porosity. In this case effective porosity is synonymous with free fluid. Effective
porosity is measured in volume/volume, percent or porosity units.

1.5 Connate water saturation and irreducible oil saturation

The lowest water saturation, Swi, that can be achieved in a core

plug by displacing the water by oil or gas. The state is usually achieved by flowing
oil or gas through a water-saturated sample, or spinning it in a centrifuge to
displace the water with oil or gas. The term is somewhat imprecise because the
irreducible water saturation is dependent on the final drive pressure (when flowing
oil or gas) or the maximum speed of rotation (in a centrifuge).
The related term connate water saturation is the lowest water saturation found in
situ.

1.6 Pressure transient analysis

The analysis of pressure changes over time, especially those

associated with small variations in the volume of fluid. In most well tests, a limited
amount of fluid is allowed to flow from the formation being tested and the pressure
at the formation monitored over time. Then, the well is closed and the pressure
monitored while the fluid within the formation equilibrates. The analysis of these
pressure changes can provide information on the size and shape of the formation
as well as its ability to produce fluids.

1.7 Pressure built up test

The use of pressure buildup data has provided the reservoir engineer
with one more useful tool in the determination of reservoir behavior. Pressure
buildup analysis describes the build up in well bore pressure with time after a well
has been shut in. One of the principal objectives of this analysis is to determine
the static reservoir pressure without waiting weeks or months for the pressure in
the entire reservoir to stabilize.

Because the buildup in well bore pressure will generally follow some definite
trend, it has been possible to extend the pressure buildup analysis to determine:

• Effective reservoir permeability

• Extent of permeability damage around the well bore
• Presence of faults and to some degree the distance to the faults
• Any interference between producing wells
• Limits of the reservoir where there is not a strong water drive or where the
aquifer is no larger than the hydrocarbon reservoir

Certainly all of this information will probably not be available from any given
analysis, and the degree of usefulness or any of this information will depend on
the experience in the area and the amount of other information available for
correlation purposes. The general formulas used in analyzing pressure buildup
data come from a solution of the diffusivity equation. In pressure buildup and
draw down analyses, the following assumptions, with regard to the reservoir,
fluid and flow behavior, are usually made:

Reservoir

• Homogeneous
• Isotropic
• Horizontal of uniform thickness Fluid:
• Single phase
• Slightly compressible

Flow:

• Laminar flow
• No gravity effects

Pressure buildup testing requires shutting in a producing well. The most common
and the simplest analysis techniques require that the well produce at a constant
rate, either from startup or long enough to establish a stabilized pressure
distribution.

The pressure is measured immediately before shut-in and is recorded as a

function of time during the shut-in period. The resulting pressure buildup curve is
analyzed for reservoir properties and well bore condition. Stabilizing the well at a
constant rate before testing is an important part of a pressure buildup test. If
stabilization is overlooked or is impossible, standard data analysis techniques
may provide erroneous information about the formation.
THE NEED FOR RESERVOIR LIMIT TESTS
A reservoir limit test is a drawdown test to determine the pore volume connected
to a well. Knowledge of the pore volume connected to a discovery well is vital in
determining whether or not to develop a pool. Many such post-discovery
decisions are made on the basis of core and log data.
However, while such data is readily available and relatively easy to use, it
only reflects the reservoir at or near the well bore, thus usually represents only a
small part of the reservoir. Hence the need exists for surveying a large portion of
the reservoir, and it is the reservoir limit test that has been specifically designed
with this in mind.

THE NATURE OF THE TEST

The test requires that a well that has been shut in to stabilize the reservoir
pressure be produced at a constant rate for a period long enough for the onset of
a pseudo steady-state flow regime in the reservoir At pseudo steady state, the
pressure decline throughout the reservoir becomes a linear function of time with
a proportionality constant that is directly related to the reservoir volume

THE FEASIBILITY OF THE TEST

Since the test must satisfy certain strict design criteria in order to be valid, and
since the pressure response may render achievement of those criteria
impractical, the following must be considered to determine whether or not the test
would be feasible in a given reservoir. The producing time must exceed the time
required for the onset of pseudo steady-state flow in the reservoir. In some
cases, particularly where the reservoir is large, the permeability is low or both,
the testing time would become impractically long. The production rate must be
sufficient to cause a discernible pressure drop. This may be difficult to achieve in
a low-productivity well. The rate should be held constant during the test. This
may be difficult to achieve in a prolonged test. The test rate should not result in a
pressure drawdown that would cause free-gas saturation, since this could
complicate interpretation of the test results. The presence of an external drive
makes it impractical to conduct a reservoir limit test.

Test-Design Calculations
Test-design calculations are made to estimate a range of pressure responses
based on a range of possible reservoir properties. To have an idea about the
reservoir properties, it is generally good practice to run a short transient test on
the well soon after completion. Such tests would provide some of the data
required for design calculations and, in addition, help to assess the potential of
the well. The latter is very important especially when there is significant well bore
damage. The common practice in test-design calculations has been to assume
that the reservoir is a closed square except where geology in the area suggests
otherwise. On the basis of this shape, and assuming an area equivalent to one or
two drilling spacing units, the time for the onset of pseudo steady- state flow may
be estimated
If the estimated time is so long as to result in poor economics, operational
problems, or both, the reservoir limit test should be replaced by the so-called
"economic limits test", which is run to estimate a minimum oil in place using the
early-time pressure data. This type of test is mandatory where the reservoir is so
large as to result in flaring of significant volumes of solution gas during the test.

1.8 Oil water contact

A bounding surface in a reservoir above which predominantly oil occurs and

below which predominantly water occurs. Although oil and water are immiscible,
the contact between oil and water is commonly a transition zone and there is
usually irreducible water adsorbed by the grains in the rock and immovable oil
that cannot be produced. The oil-water contact is not always a flat horizontal
surface, but instead might be tilted or irregular.

1.9 Transition zone

An area in which water is too shallow for acquisition of marine seismic data with
towed streamers, such as near the shoreline, marshes and lagoons. In some
cases, source explosives can be rammed into the unconsolidated sediments of
transition zone environments rather than drilling more costly shot holes. Likewise,
hydrophones can be placed by ramming to couple the receiver to the Earth better
and to save time and money during survey acquisition.

On drilling into a transition zone where pore pressure gradient is increasing, the
decrease in bottom hole differential pressure results in an increase in penetration
rate thus deviating from the compaction trend established in the normally
pressured sequences above. In theory, the greater the overpressure/under
compaction the higher the drillability/penetration rate and this proportionality
should allow the pore pressure to be quantified.
 However, any changes in drilling parameters are also likely to effect penetration
rate therefore it is necessary to "normalise" penetration rate for such
changes. The most widely used equation to accomplish this normalisation is the
"corrected drilling exponent" or Dxc .

Where: R = penetration rate (ft/hr); N = rotation speed (rpm); W = weight on bit

(klbs); B = hole diameter (ins); FBG = normal formation balance gradient and
ECD = equivalent circulating density.

This dimensionless number is plotted every metre or 5 feet intervals in shale.

Logarithmic or semi-logarithmic scale plots will in consolidated sediments
produce a straight line compaction trend. On entering the transition zone Dxc
points plotted will move to the left of the normal compaction trend as the
drillability of the shale increases.

The ratio method can be used to calculate the pore pressure by dividing the Dxc
value on the normal compaction trend by the observed Dxc value at the depth of
interest and multiplying it by the normal formation balance gradient, which
offshore is usually taken to be that of seawater (1.04 g/cc or 8.66 ppg).

It is important to remember that the Dxc was designed to be used for vertical
holes drilled through transition zones of undercompacted clays using roller cone
bits. In other situations, such as complex carbonate rich lithologies or where PDC
bits are used, other normalizing equations have been developed.
 Unit-2 Gas liquid equilibria

2.1 Bubble point pressure

The pressure above which the fluid essentially remains in the liquid phase and all volatile
components are dissolved in the liquid.

Equations

Standing Correlation

o Pb = 18.2[(Rs/Sg) 0.83 10 a - 1.4

o a = 0.00091 (T) - 0.0125 Sapi
o Pb - Bubble Point Pressure (psi)
o Rs - gas solubility at bubble point (scf/stb)
o Sg - Specific Gravity of Gas under surface conditions
o T - Reservoir temperature (deg.F)

Assumptions

Standing correlation equation for Bubble Point pressure

2.2 Gas oil ratio

When oil is brought to surface conditions it is usual for some natural gas to come out of
solution. The gas/oil ratio (GOR) is the ratio of the volume of gas that comes out of
solution, to the volume of oil at standard conditions.

A point to check is whether the volume of oil is measured before or after the gas comes
out of solution, since the oil volume will shrink when the gas comes out.

In fact gas dissolution and oil volume shrinkage will happen at many stages during the
path of the hydrocarbon stream from reservoir through the well bore and processing plant
to export. For light oils and rich gas condensates the ultimate GOR of export streams is
strongly influenced by the efficiency with which the processing plant strips liquids from
the gas phase. Reported GORs may be calculated from export volumes which may not be
at standard conditions.

The GOR is usually measured in cubic feet of gas per barrel of oil or condensate.

If the GOR is greater than 10,000 cf/bbl, then the field is usually described as a gas well.
If less than 10,000, then the field is generally described as an oil well.

2.3 Formation volume factor of oil & gas

Oil and dissolved gas volume at reservoir conditions divided by oil volume at standard
conditions. Since most measurements of oil and gas production are made at the surface,
and since the fluid flow takes place in the formation, volume factors are needed to
convert measured surface volumes to reservoir conditions.

Oil formation volume factor

Oil formation volume factors are almost always greater than 1.0 because the oil in the
formation usually contains dissolved gas that comes out of solution in the well bore with
dropping pressure. The Oil Formation Volume Factor is a measure of the reduction in the
volume of crude oil as it is produced.

Gas formation volume factor

Gas volume at reservoir conditions divided by gas volume at standard conditions. This
factor is used to convert surface measured volumes to reservoir conditions, just as oil
formation volume factors are used to convert surface measured oil volumes to reservoir
volumes.
Equations

General Equation

o Bo = Vor/Vop
o Bo - Formation Volume Factor (rb/stb)
o Vor - Volume of oil + dissolved volatiles at reservoir conditions (rb)
o Vop - Volume of produced oil under stock tank conditions (stb)
o Standing Correlation - Below Bubble Point Pressure
o Bo = 0.972 + 0.000147 F 1.175
o F = Rso (Sg/So) 0.5+ 1.25 T
o Rso - Solution GOR (scf/stb)
o Sg - Gas Gravity
o So - Oil Gravity
o T - Temperature (deg.F)
o Correlations - Above Bubble Point Pressure
o Bo = Bob exp[co (pb - p)]
o Bob = Formation volume factor at Bubble Point (rb/stb)
o co - Oil Compressibility (1/psi)
o Pb - Bubble Point Pressure (psi)
o P - Reservoir Pressure (psi)

Assumptions

o Single Phase

2.4 Shrinkage factor of reservoir oil

The shrinkage factor of crude oil from separator conditions varies, dependant upon the
pressure and temperature of the separator and the individual fluid properties. The more
volatile the separator liquid phase, the more impact separator conditions and shrinkage
will be. Shrinkage value will be very dependant upon the separator pressure and
temperature and will change as these values vary.

Measuring the Crude Oil Shrinkage Factor

Good shrinkage measurement is best approached by collecting the primary separator

liquid and performing a separator test on it. This involves simulating shrinkage in the
laboratory at each stage of separation (pressure and temperature) from primary separator
to stock tank conditions. Different liquid streams (with different compositions), will
require laboratory analysis for each stream. The only problem with this approach is if
separator conditions change so will the shrinkage. There are a couple of ways to take this
into account.

It is done by collecting a separator liquid sample at the maximum pressure a separator

will be operated (preferably at a lowest temperature) to allow the maximum amount of
gas in solution. The sample is then compositionally analyzed and subjected to a separator
test, duplicating standard separator conditions from primary separator through stock tank
conditions. Examples are of the primary separator at 1100 psia and 100°F, second stage
separator at 750 psia and 85°F, third stage separator at 340 psia and 75°F, fourth stage
separator at 120 psia and 105°F, and stock tank at 15 psia and 85°F. Utilizing the
composition and the results from the separator test, an equation-of-state (EOS) computer
model is "tuned" to the measured shrinkage data. This tuned model can then be used to
predict shrinkage values at different separator pressure or temperature conditions with the
resulting data well within a 5% error band.

Alternatively, a series or matrix of separator tests at separator conditions covering the

anticipated spread of pressures and temperatures can be performed in the laboratory.
These tests generate a matrix of shrinkage values covering the anticipated range. The data
can establish a table or equation to yield shrinkage value as a function of separator
conditions. Typically, only primary separator conditions are varied. This approach can be
used with the equation-of-state computer model instead of physically performing the
matrix of separator tests — it is important to perform one experimentally to tune the
EOS, however.

Measuring Shrinkage Factor at the Well site

The "shrinkage tester" suggested for well site installation provides a rough shrinkage
value, one that probably isn’t is sufficient if your system is a 30°API oil and separator
conditions are not subject to significant change. Typically such equipment employ a
vessel filled with separator liquid at pressure (although not necessarily at temperature).
The volume of this vessel is known and calibrated. The vessel is then drained into a non-
pressurized graduated container while the entrained gas is allowed to escape. The
shrinkage value is simply the non-pressurized volume divided by the volume of the
pressurized vessel (dead oil divided by live oil volumes). Petroleum table values can
correct the non-pressurized volume to standard conditions (15°C or 60°F) although this is
often not done, adding yet another error.

This method does not take into account changes in shrinkage value caused by multiple
pressure/temperature changes of the liquid as produced by secondary and tertiary
separators. On an offshore platform and all the way to the shore base, typically there will
be several downstream separators in line from the primary separator. Each one of these
separators will have an impact on the shrinkage value and this is part of the reason they
are in place. Not taking temperature into account, there will be less shrinkage with more
stages of separation as the oil pressure is reduced to atmospheric pressure.

Shrinkage tester
2.5 Differential gas liberation process

In the differential liberation process, the solution gas that is liberated from an oil sample
during a decline in pressure is continuously removed from contact with the oil, and
before establishing equilibrium with the liquid phase. This type of liberation is
characterized by a varying composition of the total hydrocarbon system.

The experimental data obtained from the test include:

• Amount of gas in solution as a function of pressure

• The shrinkage in the oil volume as a function of pressure

• Properties of the evolved gas including the composition of the liberated gas, the gas
compressibility factor, and the gas specific gravity

• Density of the remaining oil as a function of pressure

The differential liberation test is considered to better describe the separation process
taking place in the reservoir and is also considered to simulate the flowing behavior of
hydrocarbon systems at conditions above the critical gas saturation. As the saturation of
the liberated gas reaches the critical gas saturation, the liberated gas begins to flow,
leaving behind the oil that originally contained it. This is attributed to the fact that gases
have, in general, higher mobility than oils. Consequently, this behavior follows the
differential liberation sequence. The test is carried out on reservoir oil samples and
involves charging a visual PVT cell with a liquid sample at the bubble-point pressure and
at reservoir temperature. As shown schematically in above Figure, the pressure is reduced
in steps, usually 10 to 15 pressure levels, and all the liberated gas is removed and its
volume is measured at standard conditions. The volume of oil remaining VL is also
measured at each pressure level. It should be noted that the remaining oil is subjected to
continual compositional changes as it becomes progressively richer in the heavier
components. The above procedure is continued to atmospheric pressure where the
volume of the residual (remaining) oil is measured and converted to a volume at 60°F,
Vsc. The differential oil formation volume factors Bod (commonly called the relative oil
volume factors) at all the various pressure levels are calculated by dividing the recorded
oil volumes VL by the volume of residual oil Vsc, or:

The differential solution gas-oil ratio Rsd is also calculated by dividing the volume of gas
in solution by the residual oil volume. Relative total volume Btd from differential
liberation as calculated from the following expression:

Btd = Bod + (Rsdb - Rsd) Bg

Where

Btd = relative total volume, bbl/STB

Bg = gas formation volume factor, bbl/scf

The gas deviation z-factor of the liberated (removed) solution gas at the specific pressure
and these values are calculated from the recorded gas volume measurements as follows:
Where

V = volume of the liberated gas in the PVT cell at p and T

Vsc = volume of the removed gas at standard condition

Flash gas liberation process

Flash or equilibrium separation is the condition that occurs when the fluid's pressure is
radically and suddenly changed and the whole system immediately separates into two
phases. In the laboratory, this type of liberation of gas is carried out in a mercury cell or
in a small-scale separator at surface temperature. It is felt that flash liberation most nearly
approximates the situation that occurs in field separators. In the flash gas liberation
process, all of the gas evolved from a reduction in pressure remains in contact with the
liquid phase. A typical example is the surface separator. In this the oil and gas are kept in
the vessel sufficiently long to approximate equilibrium for the pressure and temperature
in the vessel.
Another method is a lab test called a constant composition expansion or the constant
mass expansion is available. In addition it is possible to measure the volume of liquid and
gas if a windowed cell is used. This is not commonly done for oil and is used frequently
for gas condensates.
Schematic of (a) flash liberation and (b) differential liberation. The degree to which oil
volume is effected by the separation process is dependent on the composition of the oil.
In the case of low shrinkage oil (c), differential liberation provides for a larger volume of
stock tank oil. High shrinkage oil (d) is affected differently. The composition of the
reservoir fluid will determine which of the two processes results in a greater degree of oil
shrinkage. For most black oils, differential liberation results in less shrinkage.

Multistage separation is an attempt to approach differential separation at the surface in

order to achieve a larger volume of oil in the stock tank per barrel produced. There is also
an optimum set of separator conditions (pressure, temperature) for maximizing stock-
tank-oil volume.
2.6 Retrograde condensation in gas reservoir

The formation of liquid hydrocarbons in a gas reservoir as the pressure in the reservoir
decreases below dew point pressure during production. It is called retrograde because
some of the gas condenses into a liquid under isothermal conditions instead of expanding
or vaporizing when pressure is decreased.
2.7 Reservoir drive mechanisms

Producing oil and gas needs energy. Usually some of this required energy is supplied
by nature. The hydrocarbon fluids are under pressure because of their depth. The gas and
water in petroleum reservoirs under pressure are the two main sources that help move the
oil to the well bore and sometimes up to the surface. Depending on the original
characteristics of hydrocarbon reservoirs, the type of driving energy is different.

Solution Gas Drive Reservoirs

When a newly discovered reservoir is below the bubble point pressure, there will be
free gas as bubbles within the oil phase in reservoir. The reservoir pressure decreases as
Production goes on and this causes emerging and expansion of gas bubbles creating extra
Energy in the reservoir. These kinds of reservoirs are called as solution gas drive
reservoirs. Crude oil under high pressure may contain large amounts of dissolved gas.
When the reservoir pressure is reduced as fluids are withdrawn, gas comes out of the
solution and displaces oil from the reservoir to the producing wells. The efficiency of
solution gas drive depends on the amount of gas in solution, the rock and fluid properties
and the geological structure of the reservoir. Recoveries are low, on the order of 10-15 %
of the original oil in place (OOIP).
Recovery is low, because the gas phase is more mobile than the oil phase in the reservoir.
Solution gas drive reservoirs are usually good candidates fro water-flooding

Gas Cap Drive Reservoirs

Sometimes, the pressure in the reservoir is below the bubble point initially, so there is
more gas in the reservoir than the oilcan retain in solution. This extra gas, because of
density difference, accumulates at the top pf the reservoir and forms a cap. These kinds of
reservoirs are called a gas cap drive reservoir. In gas cap drive reservoirs, wells are
drilled into the crude oil producing layer of the formation. As oil production causes a
reduction in pressure, the gas in gas cap expands and pushes oil into the well bores.
Expansion the gas cap is limited by the desired pressure level in the reservoir and by gas
production after gas comes into production wells.

Schematic of a Typical Gas Cap Reservoir

Water Drive Reservoirs

Most oil or gas reservoirs have water aquifers. When this water aquifer is an active
one, continuously fed by incoming water, then this bottom water will expand as pressure
of the oil/gas zone is reduced because of production causing an extra driving energy. This
kind of reservoir is called water drive reservoirs. The expanding water also moves and
displaces oil or gas in an upward direction from lower parts of the reservoir, so the pore
spaces vacated by oil or gas produced are filled by water. The oil and gas are
progressively pushed towards the well bore. Recovery efficiencies of 70 to 80 % of the
original oil in place (OOIP) are possible in some water drive reservoirs.
 Schematic of a Typical Water Drive Reservoir

Gravity Drainage Reservoirs

Gravity drainage may be a primary producing mechanism in thick reservoirs that have
a good vertical communication or in steeply dipping reservoirs. Gravity drainage is a
slow process because gas must migrate up structure or to the top of the formation to fill
the space formerly occupied by oil. Gas migration is fast relative to oil drainage so those
oil rates are controlled by the rate of oil drainage.

Under-saturated Reservoirs

A crude oil is under-saturated when it contains less gas than is required to saturate the
oil at the pressure and temperature of the reservoir. When the oil is highly under-
saturated much of the reservoir energy is stored in the form of fluid and rock
compressibility. Pressure declines rapidly as fluids are withdrawn from the under-
saturated reservoir until the bubble point is reached. Then, solution gas drive becomes the
source of energy for fluid displacement. Reservoir fluid analysis, PVT behavior and the
pressure data will identify an under-saturated reservoir. Those reservoirs are good
candidates for water injection to maintain a high pressure to increase oil recovery.

2.8 PVT properties of reservoir fluids

Fluids exist in reservoirs as mixtures of gas, oil, and water. Some reservoirs may contain
only gas and water, only oil and water, or mixtures of gas, oil, and water. Irrespective of
the proportions of these fluids present in a reservoir, obtaining fluid samples and studying
their phase behavior in a laboratory are necessary for establishing reservoir type, devising
strategies for reservoir management, and estimating expected hydrocarbon recovery. The
importance of collecting representative reservoir fluid samples (preferably early in the
life of the reservoir) and having the samples analyzed in a reputable laboratory can not be
over emphasized. It is one of the essential functions of the engineers working on new or
existing reservoirs as an integral part of a comprehensive data collection program.

Phase Diagrams

The PVT properties of reservoir fluids are introduced by reviewing the basic concepts of
phase diagrams. Phase diagrams are graphical representations that relate the properties of
a fluid system. The properties used in the representation could be intensive or extensive
properties. Intensive properties (pressure, temperature, density) are independent of the
extent of the system. Extensive properties (mass, volume, heat) depend on the extent of
the system. Common forms of phase diagrams show pressure-temperature (P-T),
pressure-volume (P-V), and temperature-volume (T-V) relationships. The basic concepts
of phase behavior and phase diagrams are discussed in this book by the use of P-T
diagrams.
PVT STUDY:

(i) PV Diagram:

A pressure volume diagram (or P-V diagram, or volume-pressure

loop) is used to describe a thermal cycle involving the following two variables:

 Volume (on the X axis)

 Pressure (on the Y axis)

(ii) PT Diagram:

A common graphic used to illustrate the relationship of substances in their

phase states as a function of pressure and temperature is the P-T diagram. It is also
referred to as a phase state diagram or a phase change diagram. The asterisk in the P-T
diagram below identifies a pressure-temperature combination that is known as the triple
point. That is where the substance can exist as a solid, a liquid, or a vapor.
 PT diagram for ultramafic rocks.

(iii) Bubble point:

When heating a liquid consisting of two or more components, the bubble

point is the point where first bubble of vapor is formed. Given that vapor will probably
have a different composition than the liquid, the bubble point (along with the dew point)
at different compositions are useful data when designing distillation systems. For single
component mixtures the bubble point and the dew point are the same and are referred to
as the boiling point.

(iv) Dew Point:

The dew point is the temperature at which a given parcel of

humid air must be cooled, at constant barometric pressure, for water
vapor to condense into water. The condensed water is called dew. The dew point is a
saturation temperature.
The dew point is associated with relative humidity. A high relative humidity indicates
that the dew point is closer to the current air temperature. Relative humidity of 100%
indicates the dew point is equal to the current temperature and the air is maximally
saturated with water. When the dew point remains constant and temperature increases,
relative humidity will decrease.

Unit-3
Methods of reservoir estimation

Reserves and its classification

Reserves are those quantities of petroleum claimed to be

commercially recoverable by application of development projects to known
accumulations under defined conditions.] Reserves must satisfy four criteria:
They must be:

 discovered through one or more exploratory wells

 recoverable using existing technology
 commercially viable
 remaining in the ground

All reserve estimates involve uncertainty, depending on the amount of

reliable geologic and engineering data available and the interpretation of
those data. The relative degree of uncertainty can be expressed by dividing
reserves into two principal classifications—"proven" (or "proved") and
"unproven" (or "unproved"). Unproven reserves can further be divided into
two subcategories—"probable" and "possible"—to indicate the relative
degree of uncertainty about their existence. The most commonly accepted
definitions of these are based on those approved by the Society of Petroleum
Engineers (SPE) and the World Petroleum Council (WPC) in 1997.
Proven reserves

Proven reserves are those reserves claimed to have a reasonable certainty

(normally at least 90% confidence) of being recoverable under existing
economic and political conditions, with existing technology. Industry
specialists refer to this as P90 (i.e., having a 90% certainty of being
produced). Proven reserves are also known in the industry as 1P.

Proven reserves are further subdivided into "proven developed" (PD) and
"proven undeveloped" (PUD). PD reserves are reserves that can be produced
with existing wells and perforations, or from additional reservoirs where
minimal additional investment (operating expense) is required. PUD reserves
require additional capital investment (e.g., drilling new wells) to bring the
oil to the surface.

Proved reserves are the only type the U.S. Securities and Exchange
Commission allows oil companies to report to investors. Companies listed
on U.S. stock exchanges must substantiate their claims, but many
governments and national oil companies do not disclose verifying data to
support their claims.

Unproven reserves

Unproven reserves are based on geological and/or engineering data

similar to that used in estimates of proven reserves, but technical,
contractual, or regulatory uncertainties preclude such reserves being
classified as proven. Unproven reserves may be used internally by oil
companies and government agencies for future planning purposes but are not
routinely compiled. They are sub-classified as probable and possible.

Probable reserves are attributed to known accumulations and claim a 50%

confidence level of recovery. Industry specialists refer to them as P50 (i.e.,
having a 50% certainty of being produced). These reserves are also referred
to in the industry as 2P (proven plus probable).

Possible reserves are attributed to known accumulations that have a less

likely chance of being recovered than probable reserves. This term is often
used for reserves which are claimed to have at least a 10% certainty of being
produced (P10). Reasons for classifying reserves as possible include varying
interpretations of geology, reserves not producible at commercial rates,
uncertainty due to reserve infill (seepage from adjacent areas) and projected
reserves based on future recovery methods. They are referred to in the
industry as 3P (proven plus probable plus possible)

Strategic petroleum reserves

Many countries maintain government-controlled oil reserves for both

economic and national security reasons. According to the United States
Energy Information Administration, approximately 4.1 billion barrels
(650,000,000 m3) of oil are held in strategic reserves, of which 1.4 billion is
government-controlled. These reserves are generally not counted when
computing a nation's oil reserves.

A more sophisticated system of evaluating petroleum accumulations was

adopted in 2007 by the Society of Petroleum Engineers (SPE), World
Petroleum Council (WPC), American Association of Petroleum Geologists
(AAPG), and Society of Petroleum Evaluation Engineers (SPEE). It
incorporates the 1997 definitions for reserves, but adds categories for
contingent resources and prospective resources.

Contingent resources are those quantities of petroleum estimated, as of a

given date, to be potentially recoverable from known accumulations, but the
applied project(s) are not yet considered mature enough for commercial
development due to one or more contingencies. Contingent resources may
include, for example, projects for which there are currently no viable
markets, or where commercial recovery is dependent on technology under
development, or where evaluation of the accumulation is insufficient to
clearly assess commerciality.

Prospective resources are those quantities of petroleum estimated, as of a

given date, to be potentially recoverable from undiscovered accumulations
by application of future development projects. Prospective resources have
both an associated chance of discovery and a chance of development.

The United States Geological Survey uses the terms technically and
economically recoverable resources when making its petroleum resource
assessments. Technically recoverable resources represent that proportion of
assessed in-place petroleum that may be recoverable using current recovery
technology, without regard to cost. Economically recoverable resources are
technically recoverable petroleum for which the costs of discovery,
development, production, and transport, including a return to capital, can be
recovered at a given market price.

Unconventional resources exist in petroleum accumulations that are

pervasive throughout a large area. Examples include extra heavy oil, natural
bitumen, and oil shale deposits. Unlike conventional resources, in which the
petroleum is recovered through well bores and typically requires minimal
processing prior to sale, unconventional resources require specialized
extraction technology to produce. For example, steam and/or solvents are
used to mobilize bitumen for in-situ recovery. Moreover, the extracted
petroleum may require significant processing prior to sale (e.g., bitumen
upgraders). The total amount of unconventional oil resources in the world
considerably exceeds the amount of conventional oil reserves, but is much
more difficult and expensive to develop.
Volumetric estimation
• Most commonly used after discovery and early stage of production.
• Standard reserve equation with appropriate choice of parameter:
 Area
 Reservoir parameter (Area, Thickness, Porosity, water saturation,
formation volume factor).
 Recovery factor.

Volumetric Estimate of hydrocarbon in place consists of the following steps:

– Determination of rock volume (hydrocarbon saturated portion) from area
and thickness.
– Determination of average porosity.
– Determination of water saturation to obtain hydrocarbon saturation.
– Volume correction of hydrocarbon at atmospheric pressure and
temperature.

Material Balance Method

Can be applied after obtaining certain amount of production data e.g.
– Production Volume.
– Reservoir Pressure and Temperature.
– Fluid analysis data.
– Log Data, Core data.
– Drive Mechanism.
Decline Curve Analysis
 Analysis of production decline curve can provide estimation of three
important items.
 Remaining Oil and gas reserves.
 Future expected production rate.
 Remaining productive life of well or reservoir.
Additionally explanation of any anomalies that appear on the graph is useful.
Analysis is only valid provided that the well (s) is (are) not altered and the
drainage is constant.

Reservoir simulation method

Reservoir simulation models are used by oil and gas companies in the
development of new fields. Also, models are used in developed fields where
production forecasts are needed to help make investment decisions. As
building and maintaining a robust, reliable model of a field is often time-
consuming and expensive; models are typically only constructed where large
investment decisions are at stake. Improvements in simulation software have
lowered the time to develop a model. Also, models can be run on personal
computers rather than more expensive workstations.

For new fields, models may help development by identifying the number of
wells required, the optimal completion of wells, the present and future needs
for artificial lift, and the expected production of oil, water and gas.

For ongoing reservoir management, models may help in improved oil

recovery by hydraulic fracturing. Highly deviated or horizontal wells can
also be represented. Specialized software may be used in the design of
hydraulic fracturing, and then the improvements in productivity can be
included in the field model. Also, future improvement in oil recovery with
pressure maintenance by re-injection of produced gas or by water injection
into an aquifer can be evaluated. Water flooding resulting in the improved
displacement of oil is commonly evaluated using reservoir simulation.

The application of enhanced oil recovery (EOR) processes requires that the
field possesses the necessary characteristics to make application successful.
Model studies can assist in this evaluation. EOR processes include miscible
displacement by natural gas, CO2 or nitrogen and chemical flooding
(polymer, alkaline, surfactant, or a combination of these). Special features in
simulation software are needed to represent these processes. In some
miscible applications, the "smearing" of the flood front, also called
numerical dispersion, may be a problem.

Reservoir simulation is used extensively to identify opportunities to increase

oil production in heavy oil deposits. Oil recovery is improved by lowering
the oil viscosity by injecting steam or hot water. Typical processes are steam
soaks (steam is injected, then oil produced from the same well) and steam
flooding (separate steam injectors and oil producers). These processes
require simulators with special features to account for heat transfer to the
fluids present and the formation, the subsequent property changes and heat
losses outside of the formation.

A recent application of reservoir simulation is the modeling of coal bed

methane (CBM) production. This application requires a specialized CBM
simulator. In addition to the normal fractured (fissured) formation data,
CBM simulation requires gas content data values at initial pressure, sorption
isotherms, diffusion coefficient, and parameters to estimate the changes in
absolute permeability as a function of pore-pressure depletion and gas
desorption.

Fundamentals

Traditional finite difference simulators dominate both theoretical and

practical work in reservoir simulation. Conventional FD simulation is
underpinned by three physical concepts: conservation of mass, isothermal
fluid phase behavior, and the Darcy approximation of fluid flow through
porous media. Thermal simulators (most commonly used for heavy oil
applications) add conservation of energy to this list, allowing temperatures
to change within the reservoirs
Numerical techniques and approaches that is common in modern simulators:

 Most modern FD simulation programs allow for construction of 3-D

representations for use in either full-field or single-well models. 2-D
approximations are also used in various conceptual models, such as
cross-sections and 2-D radial grid models.
 Theoretically, finite difference models permit discredit of the reservoir
using both structured and more complex unstructured grids to accurately
represent the geometry of the reservoir. Local grid refinements (a finer
grid embedded inside of a coarse grid) are also a feature provided by
many simulators to more accurately represent the near wellbore multi-
phase flow affects. This "refined meshing" near wellbores is extremely
important when analyzing issues such as water and gas coning in
reservoirs.
 Representation of faults and their transmissibility are advanced features
provided in many simulators. In these models, inter-cell flow
transmissibility’s must be computed for non-adjacent layers outside of
conventional neighbor-to-neighbor connections.
 Natural fracture simulation (known as dual-porosity and dual-
permeability) is an advanced feature which model hydrocarbons in tight
matrix blocks.
 A black oil simulator does not consider changes in composition of the
hydrocarbons as the field is produced. The compositional model is a
more complex model, where the PVT properties of oil and gas phases
have been fitted to an equation of state (EOS), as a mixture of
components. The simulator then uses the fitted EOS equation to
dynamically track the movement of both phases and components in
field.

The simulation model computes the saturation change of three phases (oil,
water and gas) and pressure of each phase in each cell at each time step. As a
result of declining pressure as in a reservoir depletion study, gas will be
liberated from the oil. If pressures increase as a result of water or gas
injection, the gas is re-dissolved into the oil phase.

A simulation project of a developed field, usually requires "history

matching" where historical field production and pressures are compared to
calculated values. In recent years optimisation tools such as MEPO has
helped to accelerate this process, as well as improve the quality of the match
obtained. The model's parameters are adjusted until a reasonable match is
achieved on a field basis and usually for all wells. Commonly, producing
water cuts or water-oil ratios and gas-oil ratios are matched.

Enhanced / Improved Oil Recovery Methods

Enhanced oil recovery (EOR) refers to the process of producing liquid
hydrocarbons by methods other than the conventional use of reservoir
energy and reservoir re-pressurizing schemes with gas or water. On the
average, conventional methods of production produce about one-third of the
initial oil in place in a given reservoir. The remaining oil, nearly two-thirds
of the initial resource, is a large and attractive target for EOR methods. The
next few sections provide an introduction to this important topic in reservoir
engineering.
Formula for estimation of oil reserve
OIIP = Oil initially in Place

OIIP = VR x Ф x 1/Bo x (1-Sw)

VR = Rock Volume (Area x Average Thickness)

Ф = Porosity
Bo = Formation Volume Factor
Sw = Water saturation
 Unit-4

Enhanced/improved oil recovery methods

Mobilization of Residual Oil

During the early stages of a water flood in a water-wet reservoir system,
the brine exists as a film around the sand grains and the oil fills the
remaining pore space. At a time intermediate during the flood, the oil
saturation has been decreased and exists partly as a continuous phase in
some pore channels but as discontinuous droplets in other channels. At the
end of the flood, when the oil has been reduced to residual oil saturation, the
oil exists primarily as a discontinuous phase of droplets or globules that
have been isolated and trapped by the displacing brine.
The water flooding of oil in an oil-wet system yields a different fluid
distribution at. Early in the water flood, the brine forms continuous flow
paths through the center portions of some of the pore channels. The brine
enters more and more of the pore channels as the water flood progresses. At
residual oil saturation, the brine has entered a sufficient number of pore
channels to shut off the oil flow. The residual oil exists as a film around the
sand grains. In the smaller flow channels, this film may occupy the entire
void space.
The mobilization of the residual oil saturation in a water-wet system
requires that the discontinuous globules be connected to form a continuous
flow channel that leads to a producing well. In an oil-wet porous medium,
the film of oil around the sand grains must be displaced to large pore
channels and be connected in a continuous phase before it can be mobilized.
The mobilization of oil is governed by the viscous forces (pressure
gradients) and the inter-facial tension forces that exist in the sand grain-oil-
water system.
Miscible Injection Processes
It was noted that microscopic displacement efficiency is largely a function
of interfacial forces acting among the oil, rock, and displacing fluid. If the
interfacial tension between the trapped oil and displacing fluid could be
lowered to 10~2 to 10"3 dyne/cm, the oil droplets could be deformed so that
they would squeeze through the pore constrictions and combine with other
droplets to yield a continuous oil phase. A miscible process is one in which
the interfacial tension is zero; that is, the displacing fluid and residual oil
mix to form one phase. If the interfacial tension is zero, the capillary
number becomes infinite and the microscopic displacement efficiency is
maximized.
There are, in general, two types of miscible processes.
One is referred to as the single-contact miscible process and involves
such injection fluids as liquefied petroleum gases (LPG) and alcohols. The
injected fluids are miscible with residual oil immediately on contact.
The second type is the multiple-contact, or dynamic, miscible process.
The injected fluids in this case are usually methane, inert fluids, or an
enriched methane gas supplemented with a CrQi fraction; this fraction of
alkanes has the unique ability of behaving like a liquid or a gas at many
reservoir conditions. The injected fluid and oil are usually not miscible on
first contact but rely on a process of chemical exchange of the intermediate
hydrocarbons between phases to achieve miscibility.

Chemical Injection Processes

Chemical flooding relies on the addition of one or more chemical
compounds to an injected fluid either to reduce the interfacial tension
between the reservoir oil and injected fluid or to improve the sweep
efficiency of the injected fluid by making it more viscous, thereby
improving the mobility ratio. Both mechanisms are designed to increase the
capillary number.

Three general methods are used in chemical flooding technology.

The first is polymer flooding, in which a large macromolecule is used to
increase the displacing fluid viscosity. This process leads to improved sweep
efficiency in the reservoir of the injected fluid. The remaining two methods,
micellar-polymer flooding and alkaline flooding, make use of chemicals that
reduce the interfacial tension between an oil and a displacing fluid.
The addition of molecules of large molecular weight (i.e., polymers) to
injected water can often increase the effectiveness of a conventional water-
flood. Polymers are usually added to the water in concentrations ranging
from 250 to 2000 parts per million (ppm). A polymer solution is more
viscous than a brine without polymer. In a flooding application, the
increased viscosity alters the mobility ratio between the injected fluid and
the reservoir oil. The improved mobility ratio leads to better vertical and
areal sweep efficiencies and thus higher oil recoveries. Polymers have also
been used to alter gross permeability variations in some reservoirs. In this
application, polymers form a gel-like material by cross-linking with other
chemical species. The polymer gel sets up in high permeability streaks and
diverts the flow of subsequently injected fluids to a different location.
The improvement in oil recovery when using polymers is a result of
improved sweep efficiency over what is obtained during a conventional
water-flood. Typical oil recoveries from polymer flooding are in the range
of 1 to 5% of the initial oil in place. It has been found that a polymer flood
is more likely to be successful if it is started early in the producing life of
the reservoir.
The micellar-polymer process uses a surfactant to lower the interfacial
tension between the injected fluid and the reservoir oil. A surfactant is a
surface-active agent that contains a hydrophobic ("dislikes" water) part to
the molecule and a hydrophilic ("likes" water) part. The surfactant migrates
to the interface between the oil and water phases and helps make the two
phases more miscible. Interfacial tensions can be reduced from —30
dyne/cm, found in typical water flooding applications, to 10"4 dyne/cm with
the addition of as little as 0.1 to 5.0 weight % surfactant to water-oil
systems. Soaps and detergents used in the cleaning industry are examples of
surfactants. The same principles involved in washing soiled linen or greasy
hands are used in "washing" residual oil off of rock formations.
As the interfacial tension between an oil phase and a water phase is
reduced, the capacity of the aqueous phase to displace the trapped oil phase
from the pores of the rock matrix increases. The reduction of interfacial
tension results in a shifting of the relative permeability curves such that the
oil will flow more readily at lower oil saturations.
When an alkaline solution is mixed with certain crude oils, surfactant
molecules are formed by chemical reactions between the alkaline solution
and the oil. When the formation of surfactant molecules occurs in situ, the
interfacial tension between the brine and oil phases can be significantly
reduced. The reduction of interfacial tension causes the microscopic
displacement efficiency to increase, thereby increasing oil recovery.

Thermal Processes
Primary and secondary production from reservoirs containing heavy, low-
gravity crude oils is usually a very small fraction of the initial oil in place.
These types of oils are very thick and viscous and as a result do not migrate
readily to producing wells. It is not uncommon for viscosities of certain
heavy crude to decrease by several orders of magnitude with an increase of
temperature of 100 to 200T. This suggests that if the temperature of a crude
oil in the reservoir can be raised by 100 to 200°F over the normal reservoir
temperature, the oil viscosity will be reduced significantly and will flow
much more easily to a producing well. The temperature of a reservoir can be
raised by injecting a hot fluid or by generating thermal energy in situ by
combusting the oil. Hot water or steam can be injected as the hot fluid.
Three types of processes are generally used in the industry: (1) the
continuous injection of hot fluids, such as hot water or steam; (2) the
intermittent injection of steam, referred to as steam cycling; and (3) the
injection of air or oxygen-enriched air to aid in the combustion of reservoir
oil.
The continuous injection of hot fluids is usually accomplished by
injecting either hot water or steam and is much like a conventional water
flood. When steam is injected into the formation, the thermal energy is used
to heat the reservoir oil. Unfortunately, the energy also heats the entire
environment, such as formation rock and water. Some energy is also lost to
the under burden and overburden. Once the oil viscosity is reduced by the
increased temperature, the oil can flow more readily to the producing wells.
The steam moves through the reservoir and comes in contact with cold oil,
rock, and water. As the steam contacts the cold environment, it condenses. A
hot water bank is formed and acts as a water flood, pushing additional oil to
the producing wells.
Several mechanisms responsible for the production of oil from a steam
injection process have been identified. These include thermal expansion of
the crude oil, viscosity reduction of the crude oil, changes in surface forces
as the reservoir temperature increases, and steam distillation of the lighter
portions of the crude oil.
The intermittent injection of steam, referred to as the steam stimulation
process or the cyclic steam process, begins with the injection of steam for a
period of days to weeks. The well is then shut in, and the steam is allowed to
soak the area around the injection well. This soak period is fairly short,
usually from one to five days. The injection well is then placed on
production. The length of the production period is dictated by the oil
production rate, and it can last from several months to a year or more. The
cycle is repeated as many times as economically feasible. The oil production
decreases with each new cycle.
 Mechanisms of oil recovery that result from this process include (1)
reduction of flow resistance near the wellbore by reducing the crude oil
viscosity and (2) enhancement of the solution gas drive mechanism by
decreasing the gas solubility in an oil as temperature increases.
In heavy oil reservoirs, the steam stimulation process is often applied to
develop injectivity around an injection well so that a continuous steam injec-
tion process can be conducted.

The injection of air or oxygen-enriched air is referred to as the in situ

combustion process. Early attempts to apply the combustion process
involved what is called the forward dry combustion process. The crude oil
was ignited down hole, and then a stream of air or oxygen-enriched air was
injected into the well where the combustion was originated. The flame front
was then propagated through the reservoir. Large portions of heat energy
were lost to the surroundings with this process. To reduce the heat losses, a
reverse combustion process was conceived. In reverse combustion, the oil is
ignited as in forward combustion, but the air stream is injected into a
different well. The air is then "pushed" through the flame front as the flame
front moves in the opposite direction. Researchers found the process to
work in the laboratory, but when it was tried in the field on a pilot scale, it
was never successful. In the field, the flame would shut off because there
was no oxygen supply. When oxygen was injected, the oil would often self-
ignite. The whole process would then revert to a forward combustion
process.
When the reverse combustion process failed, a new technique called the
forward wet combustion process was introduced. This process begins as a
forward dry combustion, but once the flame front has been established, the
oxygen stream is replaced with water. As the water comes in contact with
the hot zone left by the combustion front, it flashes to steam, using energy
that otherwise would have been wasted. The steam moves through the
reservoir and aids in the displacement of oil. The wet combustion process
has become the primary method of conducting combustion processes.
Not all crude oils are amenable to the combustion process. For the com-
bustion process to function properly, the crude oil must contain enough
heavy components to serve as the source of fuel for the combustion. This
usually requires an oil of low API gravity.
Most of the oil that has been produced by EOR methods to date has been
a result of applying thermal processes. There is a practical reason for this, as
well as several technical reasons. To produce more than 1 to 2% of the
initial oil in place from a heavy oil reservoir, thermal methods had to be em-
ployed. As a result, thermal methods were investigated much earlier than
either miscible or chemical methods, and the resulting technology was
developed much more rapidly.

OVERALL RECOVERY EFFICIENCY

The overall recovery factor (efficiency) RF of any secondary or tertiary

oil recovery method is the product of a combination of three individual
efficiency factors as given by the following generalized expression:

RF = ED EA EV

In terms of cumulative oil production, NP = NS ED EA EV

Where

RF = overall recovery factor

NS = initial oil-in-place at the start of the flood,
STB NP = cumulative oil produced,
STB ED = displacement efficiency
EA = areal sweep efficiency
EV = vertical sweep efficiency
The displacement efficiency ED is the fraction of movable oil that has been
displaced from the swept zone at any given time or pore volume injected.
Because an immiscible gas injection or water flood will always leave behind
some residual oil, ED will always be less than 1.0.

The areal sweep efficiency EA is the fractional area of the pattern that
is swept by the displacing fluid. The major factors determining areal sweep
are:

•Fluid mobilities
•Pattern type
•Areal heterogeneity
•Total volume of fluid injected

The vertical sweep efficiency EV is the fraction of the vertical section of

the pay zone that is contacted by injected fluids. The vertical sweep
efficiency is primarily a function of:

 Vertical heterogeneity
 Degree of gravity segregation
 Fluid motilities
 Total volume injection

Note that the product of EA EV is called the volumetric sweep efficiency

and represents the overall fraction of the flood pattern that is contacted by
the injected fluid.
In general, reservoir heterogeneity probably has more influence
than any other factor on the performance of a secondary or tertiary
injection project. The most important two types of heterogeneity
affecting sweep efficiencies, EA and EV, are the reservoir vertical
heterogeneity and areal heterogeneity.
Vertical heterogeneity is by far the most significant parameter influ-
encing the vertical sweep and in particular its degree of variation in the
vertical direction. A reservoir may exhibit many different layers in the
vertical section that have highly contrasting properties. This stratification
can result from many factors, including change in depositional
environment, change in depositional source, or particle segregation.
Water injected into a stratified system will preferentially enter the layers
of highest permeability and will move at a higher velocity. Consequently,
at the time of water breakthrough in higher-permeability zones, a
significant fraction of the less-permeable zones will remain unflooded.
Although a flood will generally continue beyond breakthrough, the
economic limit is often reached at an earlier time.

Areal heterogeneity includes areal variation in formation properties (e.g.,

h, k,ϕ, Swc), geometrical factors such as the position, any sealing nature of
faults, and boundary conditions due to the presence of an aquifer or gas
cap. Operators spend millions of dollars coring, logging, and listing
appraisal wells, all of which permits direct observation of vertical
heterogeneity. Therefore, if the data are interpreted correctly, it should be
possible to quantify the vertical sweep, EV, quite accurately. Areally, of
course, matters are much more uncertain since methods of defining
heterogeneity are indirect, such as attempting to locate faults from well
testing analysis. Consequently, the areal sweep efficiency is to be
regarded as the unknown in reservoir-development studies. All three
efficiency factors (i.e., ED, EA, and EV) are variables that increase during
the flood and reach maximum values at the economic limit of the
injection project. Each of the three efficiency factors is discussed
individually and methods of estimating these efficiencies are presented.
 Unit-5
Reservoir Management Concepts

This chapter presents a historical review of reservoir management

practices and discusses technological advances made and computer tools
developed in recent years to facilitate better reservoir management. It also
provides a reservoir management definition, discusses synergy and
teamwork, examines the integration of geosciences and engineering, and
analyzes the timing for reservoir management.

DEFINITION OF RESERVOIR MANAGEMENT

There are many reservoir engineers, geologists, and geophysicists who

realize that the maximum coordination of their disciplines is essential to the
future success of the petroleum industry. With this in mind, they follow the
principles of reservoir management for maximizing economic recovery of
oil and gas. One of the objectives of this section is to define reservoir
management The Webster Dictionary defines management as the "judicious
use of means to accomplish an end." Thus, the management of reservoirs can
be interpreted as the judicious use of various means available to a
businessman in order to maximize his benefits (profits) from a reservoir.

Reservoir management has been defined by a number of other authors.

Basically, sound reservoir management practice relies on the utilization of
available resources (i.e., human, technological and financial) to maximize
profits/profitability index from a reservoir by optimizing recovery while
minimizing capital investments and operating expenses. Reservoir
management involves making certain choices. Either let it happen, or make
it happen.
HISTORY OF RESERVOIR MANAGEMENT
Most people considered reservoir management synonymous with reservoir
engineering. As recently as the early 1970s, reservoir engineering was
considered the most important technical item in the management of
reservoirs. However, after understanding the value of geology, synergism
between geology and reservoir engineering became very popular and proved
to be quite beneficial.

Reservoir management has advanced through various stages in the past 30

years. The developmental stages of reservoir management could be
described as the following:

Stage 1—before 1970, reservoir engineering was considered the most

important technical item in the management of reservoirs. In 1962, Wyllie
emphasized two key items: (1) clear thinking utilizing fundamental reservoir
mechanics concepts and (2) automation using basic computers. In 1965,
Essley described "reservoir engineering" and concluded that in spite of the
technical advancement of reservoir engineering, vital engineering
considerations are often neglected or ignored.

Stage 2—This covers the time period of the 1970s and 1980s. Craig et al.
(1977) and Harris and Hewitt (1977) explained the value of synergism
between engineering and geology. Craig emphasized the value of detailed
reservoir description, utilizing geological, geophysical, and reservoir
simulation concepts. He challenged explorationists, with the knowledge of
geophysical tools, to provide a more accurate reservoir description to be
used in engineering calculations. Harris and Hewitt presented a geological
perspective of the synergism in reservoir management. They explained the
reservoir heterogeneity due to complex variations of reservoir continuity,
thickness patterns, and pore-space properties (e.g., porosity, permeability,
and capillary pressure).

FUNDAMENTALS OF RESERVOIR MANAGEMENT

Although the synergism provided by the interaction between geology and

reservoir engineering has been quite successful, reservoir management has
generally been unsuccessful in recognizing the value of other disciplines
(e.g., geophysics, production operations, drilling, and different engineering
functions).
The prime objective of reservoir management is the economic optimization
of oil and gas recovery, which can be obtained by the following steps:
 Identify and define all individual reservoirs in a particular field and
their physical properties.
 Deduce past and predict future reservoir performance.
 Minimize drilling of unnecessary wells.
 Define and modify (if necessary) wellbore and surface systems.
 Initiate operating controls at the proper time.
 Consider all pertinent economic and legal factors.
Thus, the basic purpose of reservoir management is to control operations to
obtain the maximum possible economic recovery from a reservoir based on
facts, information, and knowledge.

In 1963, Calhoun described the engineering system of concern to the

petroleum engineer as being composed of three principal subsystems:
 Creation and operation of wells.
  Surface processing of the fluids.
 Fluids and their behavior within the reservoir.

The first two subsystems depend on the third because the type of fluids (i.e.,
oil, gas, and water) and their behavior in the reservoir will dictate how many
wells to drill and where, and how they should be produced and processed to
maximize profits.
Since the goal is to maximize profits, neglecting or de-emphasizing any of
the previous items could jeopardize our objective. For example, we could do
well in studying the fluids and their interaction with rock (i.e., reservoir
engineering), but if the proper well and/or surface system design is not
considered, then recovery of oil and/or gas will not be optimized

The suggested reservoir management approach emphasizes interaction

between various functions and their interaction with management,
economics, proration, and legal groups. The reservoir management model
that involves interdisciplinary functions has provided useful results for many
projects.

SYNERGY AND TEAM

Successful reservoir management requires synergy and team efforts. It is

recognized more and more that reservoir management is not synonymous
with reservoir engineering and/or reservoir geology. Success requires
multidisciplinary, integrated team efforts. The players are everybody who
has anything to do with the reservoir. The team members must work together
to ensure development and execution of the management plan. By crossing
the traditional boundaries and integrating their functions, corporate resources
are better utilized to achieve the common goal.
All development and operating decisions should be made by the reservoir
management team, which recognizes the dependence of the entire system
upon the nature and behavior of the reservoir. It is not necessary that all
decisions be made by a reservoir engineer; in fact, a team member who
considers the entire system, rather than just the reservoir aspect, will be a
more effective decision maker. It will help tremendously if the person has
background knowledge of reservoir engineering, geology, production and
drilling engineering, well completion and performance, and surface
facilities. Not many people in an organization have knowledge in all areas.
However, many persons develop an intuition for the entire system and know
when to ask for technical advice regarding various elements of the system.
The team effort in reservoir management cannot be overemphasized. It is
even more necessary now than it has ever been because the current trend of
the oil industry is not one of expansion. Most companies are carrying on
their production activities with a staff much smaller than had existed just
five years ago.
Also, with the advent of technology and the complex nature of
different subsystems, it is difficult for anyone to become an expert in all
areas. Therefore, it is obvious that the reduction of talent and the
increasingly complex technologies must be offset by an increase in
quality, productivity, and emphasis on the team effort.
A team approach to reservoir management can be enhanced by the
following:
 Facilitate communication among various engineering disciplines,
geology, and operations staff by: (a) meeting periodically, (b)
interdisciplinary cooperation in teaching each other's functional
objectives, and (c) building trust and mutual respect. Also, each
member of the team should learn to be a good teacher.
 To some degree, the engineer must develop the geologist's knowledge
of rock characteristics and depositional environment, and a geologist
must cultivate knowledge in well completion and other engineering
tasks, as they relate to the project at hand.
 Each member should subordinate their ambitions and egos to the goals
of the reservoir management team.
 Each team member must maintain a high level of technical
 competence.
 Reservoir engineers should not wait on geologists to complete their
work and then start the reservoir engineering work. Rather, a constant
interaction between the functional groups should take place. For
example, it is better to know early if the isopach and cumulative
oil/gas production maps do not agree rather than finalize all isopach
maps and then find out that cumulative production maps are indicating
another interpretation of the reservoir. Using an integrated approach to
reservoir management along with the latest technological advances
will allow companies to extract the utmost economic recovery during
the life of an oil field. It can prolong the economic life of the
reservoir.

In summary, the synergism of the team approach can yield a "whole greater
than the sum of its parts”

Today, it is becoming common for large reservoir studies to be integrated

through a team approach. However, creating a team does not guarantee an
integration that leads to success. Team skills, team authority, team
compatibility with the line management structure, and overall understanding
of the reservoir management process by all team members are essential for
the success of the project. Also, most reservoir management teams are being
assembled only at key investment times. Missing today are ongoing
multidisciplinary reservoir management efforts for all significant reservoirs.
Synergy is not a new concept. Halbouty, chairman and CEO of Michael T.
Halbouty Energy Co. in Houston, a long-time advocate of synergy and team
approach, recognized this concept as basic to future petroleum reserves and
production.

Major producers also have used the integrated approach for years. As an
early example, Amoco IntL Oil Co. used a multidisciplinary approach in the
East Unit of the North Sea Leman field from the time the field came pn
stream in 1968. The field contained more than 10 Tcf [280 x 106 m3] of gas
—then the world's largest producing offshore gas field.

Working in a complex fault system, the company's reservoir engineers

worked closely with geologists to "produce an accurate a priori reservoir
description." The team tested the description against field perforrmance in a
2D fine-grid, single-phase model and refined it with measured pressures
from the first six years of production. The team gained valuable insight into
fault configurations and the relationships of gas in place, permeability, and
reserves.

Geologists reviewed the locations of faults and reservoir boundaries in the

historical map. The resulting model successfully predicted pressure for an
additional two years. The proven accuracy of the model led to confident
planning of future platform and compression requirements, providing more
than three years' lead time to install equipment.

Organization and management of the reservoir management team requires

special attention. Formation of the team, selection of team members,
appropriate motivational tools, and composition of the team should be
carefully considered.
Other aspects such as team leadership, establishment of team goals and
objectives, and performance appraisals of the team members are some
matters that play a key role in effective reservoir management.

Once a team is formed and begins to function, another item of significance

is how to sustain team effort. It is easy to get excited when the teams are set
up, at times of major expenditures, development effort, 3-D seismic
program, and so forth; however, to get the ongoing attention by a
multidisciplinary team for all major reservoirs requires great commitment by
the operating company.
One model of the team approach follows:
 Functional management nominates team members to work on a
project team with specific tasks in mind.
 The team reports to the production manager for this project. Also, the
team selects a team leader, whose responsibility is to coordinate all
activities and keep the production manager informed.
 The team members consist of representatives from geology and
geophysics, various engineering functions, field operations, drilling,
finance, and so forth.
 Team members prepare a reservoir management plan and define their
goals and objectives by involving all functional groups. The plan is
then presented to the production manager; and after receiving the
manager's feedback, appropriate changes are made. Next the plan is
published and all members follow the plan.
 The team members' performance evaluation is conducted by their
functional heads with input from the team leader and the production
manager. The performance appraisal, in addition to various
dimensions of performance, includes teamwork as a job requirement.
 Teams are rewarded recognition/cash awards upon timely and
effective completion of their tasks. These awards provide an extra
motivation for team members to do well.
 As the project goals change (e.g., from primary development to
secondary process), the team composition changes to include
members with the required expertise. Also, this provides an
opportunity to change/rotate team members with time.
 Approvals for project AFE's (Appropriation For Expenditures) are
initiated by the team members; however, the engineering/ operations
supervisor and/or production manager have the final approval
authority.
 Sometimes conflicting priorities for the team members develop
because they essentially have two bosses (i.e., their functional heads
and the team leader). These conflicts are generally resolved by
 constant communication among the team leader, functional heads, and
the production manager.

INTEGRATION OF GEOSCIENCE & ENGINEERING

Halbouty stated in 1977: "It is the duty and responsibility of industry

managers to encourage full coordination of geologists, geophysicists, and
petroleum engineers to advance petroleum exploration, development, and
production."
Despite the emphasis, progress on integration has been slow.
Sessions and Lehman presented the concept of increased interaction between
geologists and reservoir engineers through multifunctional teams and cross-
training between the disciplines. They stated that production geology and
reservoir engineering within the conventional organization function
separately, and very seldom does a production geologist get in-depth
experience in reservoir engineering and vice versa. They advocated cross-
exposure and cross-training between disciplines. Integrated reservoir
management training for geoscientists and engineers offered by many major
oil and gas companies is designed to address these needs.
Sessions and Lehman presented Exxon's three case histories where the
geology-reservoir engineering relationship was promoted through both a
team approach and an individual approach. The results of the three cases
(project-based approach, team-based approach, and multi-skilled individual
approach) were very positive.

Synergy and team concepts are the essential elements for integration 0f
geosciences and engineering. It involves people, technology, tools, and data.
Success for integration depends on:
 Overall understanding of the reservoir management process,
technology, and tools through integrated training and integrated job
assignments.
  Openness, flexibility, communication, and coordination.
 Working as a team.
 Persistence.

Reservoir engineers and geologists are beginning to benefit from seismic

and cross-hole seismology data. Also, it is essential that geological and
engineering ideas and reasoning be incorporated into all seismic results if the
full economic value of the seismic data is to be realized.
Perfectly conscientious and capable seismologists may overlook a possible
extension in a proven area because of their unfamiliarity with the detailed
geology and engineering data obtained through development.

For this reason, geological and engineering data should be reviewed

and coordinated with the geophysicists to determine whether or not an
extension is possible for the drilling of an exploratory well. Most of the
difficulties encountered in incorporating geological and engineering
knowledge into seismic results and vice versa may be averted by an
exchange of these ideas between the three disciplines.

Robertson of Arco points out that the geologic detail needed to properly
develop most hydrocarbon reservoirs substantially exceeds the detail
required to find them.21 This perception has accelerated the application of
3D-seismic analysis to reservoir management. A 3D-seismic analysis can
lead to identification of reserves that may not be produced optimally (or
perhaps not produced at all) by the existing reservoir management plan. In
addition, it can save costs by minimizing dry holes and poor producers.

The initial interpretation of a 3D-seismic survey affects the original

development plan. With the development of the field, additional information
is collected and is used to revise and refine the original interpretation. Note
that the usefulness of a 3D-seismic survey lasts for the life of the reservoir.
The geophysicists' interpretation of the 3D-seismic data may be combined
with the other relevant information regarding the reservoir (i.e., trap, fault,
fracture pattern, shapes of the deposits). The 3D-seismic data guide interwell
interpolations of reservoir properties. The reservoir engineer can use the
seismic volume to understand lateral changes.

The 3D-seismic analysis can be used to look at the flow of fluids in a

reservoir. Such flow surveillance is possible by acquiring baseline 3D-data
before and after the fluid flow and pressure/temperature changes. Although
flow surveillance with multiple 3D-seismic surveys is at an early stage of
application, it has been successfully applied in thermal recovery projects.
Cross-well seismic tomography is developing into an important tool for
reservoir management, and within the last few years there have been notable
advances in the understanding of the imaging capability of cross-well
tomograms. The fundamental requirements for the technology have been
demonstrated. High-frequency seismic waves capable of traveling long
interwell distances can be generated without damaging the borehole, and
tomographic inversion techniques can give reliable images as long as the
problems associated with nonuniform and incomplete sampling are handled
correctly.

Cross-well seismology is becoming an important tool in reservoir

management. Current applications focus on the monitoring of enhanced oil
recovery processes, but perhaps most important is the potential of the
method to improve our geological knowledge of the reservoir. So far, most
cross-well seismic surveys have been done for the purpose of mapping steam
zones in steam flood operations. Seismology is well suited for this
application, since the presence of live steam in the reservoir sharply reduces
the P-wave velocity. Moreover, for high-gravity oils in unconsolidated sand
reservoirs the seismic P-wave velocity decreases significantly with increased
temperature. Consequently, seismic velocities can be used as a measure of
reservoir temperature and/or an indicator of live steam within the reservoir.
The role of geology in reservoir simulation studies was well described by
Harris in 1975. He described the geological activities required for
constructing realistic mathematical reservoir models. These models are used
increasingly to evaluate both new and mature fields and to determine the
most efficient management scheme. Part of the information contained in the
model is provided by the geologist, based on studies of the physical
framework of the reservoir. However, for the studies to be useful the
geologist must develop quantitative data. It is important that the geologist
and the engineer understand each other's data.
As described by Harris, both engineering and geological judgment must
guide the development and use of the simulation model. The geologist
usually concentrates on the rock attributes in four stages:
(1) rock studies establish lithology and determine depositional environment,
and reservoir rock is distinguished from nonreservoir rock
(2) framework studies establish the structural style and determine the three-
dimensional continuity character and gross-thickness trends of the reservoir
rock
(3) reservoir-quality studies determine the framework variability of the
reservoir rock in terms of porosity, permeability, and capillary properties
(the aquifer surrounding the field is similarly studied)
(4) integration studies develop the hydrocarbon pore volume and fluid
transmissibility patterns in three dimensions.

Throughout his work, the geologist requires input and feedback from the
engineer. Core-analysis measurements of samples selected by the geologist
provide data for the preliminary identification of reservoir rock types. Well-
test studies aid in recognizing flow barriers, fractures, and variations in
permeability. Various simulation studies can be used to test the physical
model against pressure-production performance; adjustments are made to the
model until a match is achieved.
Many companies have initiated the development of a three-dimensional
geological modeling program to automate the generation of geologic maps
and cross-sections from exploration data.

INTEGRATING EXPLORATION AND DEVELOPMENT

TECHNOLOGY

New developments in computer hardware, technology, and software are

enhancing integration of multidisciplinary skills and activities. The
mainframe supercomputers, more powerful personal computers, and
workstations have revolutionized interdiscipline technical activities and
industry business practices, making them more responsive and effective.

Recently, Oil and Gas Journal published a special report on "Integrating

Exploration and Development Technology" using state-of-the-art computing
and communications. The OGJ special report states that integration is
changing the way oil companies work. However, integration also creates
challenges, from managing computer systems to designing organizations, to
making best use of interdisciplinary teams.

Advancements in 3-D seismic acquisition and processing are credited to the

massive number-crunching supercomputers such as Cray computers. 3-D
seismic data along with computer-processed logs and core analyses
characterize or describe more realistically and accurately the reservoir
providing the 3-D computer maps. The reservoir engineers use these maps
along with rock and fluid properties and production/injection data to
simulate reservoir performance and to design depletion and development
strategies for new and old fields. The supercomputers made reservoir
simulators work faster and more accurately. The integration process from
reservoir characterization to reservoir simulation, which requires
interdisciplinary teamwork has been made practical and efficient by
utilization of computers.

Interactive workstations interface several machines together locally in a

physical cluster or using networks and software to link central processing
units (CPUs) from various sites into a virtual cluster. The machines include
high-end PCs, Suns, DECs, IBMs, MicroVAX’s, Hewlett-Packard (HPs),
and Silicon Graphics hardware. Contrary to the workings of the
supercomputers and mainframe computers, the interactive workstations
allow data migration, analysis, and interpretation on truly interactive domain
rather than batch mode. The workstations are also capable of utilizing many
geoscience and engineering software interactively. The demands for
workstations of various kinds are ever increasing in the industry because
they are becoming the workhorse of the integrated geoscience and
engineering teams.

The computer networks that link the IBM mainframe computers, Cray
supercomputers, Unix workstations, and PC token ring networks together
provide the mechanism for effective communication and coordination from
various geographical office locations. Major oil companies have worldwide
computer links between all divisions and regional offices. The office-to-
office communication has been made very quick (almost instantaneous),
productive, and cost-effective by computer networking. The IBM
mainframe-based PROFS/Office Vision electronic mail facili-ties,
videoconference centers in various geographical locations, and workstations'
images of maps, graphs, and reports via network communications are
excellent examples of networking. The networks have made the tasks of the
integrated teams easier, faster, and immensely productive.

While networks provide an efficient means to move digital data, retrieval

and storing of data pose a major challenge in the petroleum industry today.
The problems are:
• Incompatibility of the software and data sets from the different
disciplines.
• Databases usually do not communicate with each other.

Many oil companies are staging an integrated approach to solving these

problems. In late 1990, several major domestic and foreign oil companies
formed Petrotechnical Open Software Corporation (POSC) to establish
industry standards and a common set of rules for applications and data
systems within the industry. POSC's technical objective is to provide a
common set of specifications for computing systems, which will allow data
to flow smoothly between products from different organizations and will
allow users to move smoothly from one application to another. POSC
members are counting on POSC and its major software vendors to provide a
long-term solution to database-related issues.

3-D computer visualization via a video monitor of a reservoir at a micro- or

macro-scale is the latest major breakthrough in computer technology. The
awesome power of visualization lies in its ability to synthesize diverse data
types viz., geology, land, geophysics, petrophysics, drilling, and reservoir
engineering, and attributes for better understanding and capturing by human
senses. 3-D visualization technique will enhance our understanding of the
reservoir, providing better reservoir description and simulation of reservoir
performance. It may very well be the most powerful and persuasive
communication tool of the integrated teams for decades to come.

Now, a time and cost-effective way to integrate exploration and production

activities using existing hardware and software is available. A fully open-
data exchange system, which was jointly created by Finder Graphics
Systems Inc., GeoQuest, and Schlumberger, is being distributed as the
Geoshare standards. Members of the Geoshare user's group, which consists
of many geoscientific software developers and oil and gas operators, will
soon be able to transfer data and interpretations among their various data
bases in support of E&P techniques.

It is a completely open and expandable standard whose future lies with the
Geoshare user's group.

Traditionally, finding and producing hydrocarbons were considered the

essence of success in the upstream end of the petroleum industry. Now,
companies are viewing their options as far more flexible, and a diversified
portfolio of skills within an integrated and flexible business framework is
emerging .
The use of asset management teams is now standard practice in many
companies. Even though this kind of teamwork and flexibility is a step in the
right direction, it does not really address broader organization and
information technology issues. In the emerging second approach, which
works from the bottom up, changes in information technology alone (both
hardware and software) are intended to eliminate problems of knowledge
transfer and communication.

The modern reservoir management process involves establishing a purpose

or strategy and developing a plan, implementing and monitoring the plan,
and evaluating the results. None of the components of reservoir management
is independent of the others. Integration of all these are essential for
successful reservoir management. It is dynamic and ongoing. As additional
data become available, the reservoir management plan is refined and
implemented with appropriate changes. While a comprehensive plan for
reservoir management is highly desirable, every reservoir may not warrant
such a detailed plan because of cost effectiveness. However, the key to
success is to have a management plan (whether so comprehensive or not)
and implement it from day one.

SETTING GOALS
Recognizing the specific need and setting a realistic and achievable purpose
is the first step in reservoir management. The key elements for setting a
reservoir management goal are:
• Reservoir characteristics.
• Total environment.
• Available technology.
Understanding of each of these elements is the prerequisite to establishing
short- and long-term strategies for managing reservoirs.
Reservoir Characteristics
The nature of the reservoir being managed is vitally important in setting its
management strategy. Understanding the nature of the reservoir requires a
knowledge of the geology, rock and fluid properties, fluid flow and recovery
mechanisms, drilling and well completions, and past production
performance
Total Environment
Understanding of the following environments is essential in developing
management strategy and effectiveness:
 Corporate—goal, financial strength, culture, and attitude.
 Economic—business climate, oil/gas price, inflation, capital, and
personnel availability.
 Social—conservation, safety, and environmental regulations.
Technology and Technological Toolbox
The success of reservoir management depends upon the reliability and
proper utilization of the technology being applied concerning exploration,
drilling and completions, recovery processes, and production. Many
technological advances have been made in all of these areas. However, they
offer opportunities that may or may not be appropriate for every reservoir.

DEVELOPING PLAN AND ECONOMICS

Formulating a comprehensive reservoir management plan is essential for the
success of a project. It needs to be carefully worked out involving many
time-consuming development steps.
Development and Depletion Strategy
The most important aspect of reservoir management deals with the strategies
for depleting the reservoir to recover petroleum by primary and applicable
secondary and enhanced oil recovery methods.
Development and depletion strategies will depend upon the reservoir's life
stage.

Developing Plan

Development & Depletion Strategies

Environmental Considerations

Data Acquisition & Analyses

Geological & Numerical Model Studies

 Production & Reserves Forecasts

Facilities Requirements

Economic Optimization

Management Approval

In case of a new discovery, we need to address the question of how to best

develop the field (i.e., well spacing, number of wells, recovery schemes,
primary, and subsequently secondary and tertiary). If the reservoir has been
depleted by primary means, secondary and even tertiary recovery schemes
need to be investigated.
Environmental Considerations
In developing and subsequently operating a field, environmental and
ecological considerations have to be included. Regulatory agency constraints
will also have to be satisfied. These are very sensitive and important aspects
of the reservoir management process.

Data Acquisition 8c Analysis

Reservoir management starting from developing a plan, implementing the
plan, monitoring and evaluating the performance of the reservoir requires a
knowledge of the reservoir that should be gained through an integrated data
acquisition and analysis program. The key steps are
(1) plan, justify, time, and prioritize,
(2) collect and analyze, and
(3) validate/store
(data base).
An enormous amount of data are collected and analyzed during the life of a
reservoir. An efficient data management program—consisting of collecting,
analyzing, storing and retrieving—is needed for sound reservoir
management. It poses a great challenge.

Geological and Numerical Model Studies

The geological model is derived by extending localized core and log
measurements to the full reservoir using many technologies, such as
geophysics, mineralogy, depositional environment and diagenesis. The
geological model, particularly the definition of geological units and their
continuity and compartmentalization, is an integral part of geostatistical and
ultimately reservoir simulation models.

Production and Reserves Forecasts

The economic viability of a petroleum recovery project is greatly
influenced by the reservoir production performance under the current and
future operating conditions. Therefore, the evaluation of the past and present
reservoir performance and forecast of its future behavior is an essential
aspect of the reservoir management process. Classical volumetric, material-
balance, and decline-curve analysis methods, and high-technology black oil,
compositional and enhanced oil recovery numerical simulators are used for
analyzing reservoir performance and estimating reserves. Reservoir
simulators play a very important role in formulating initial development
plans, history matching and optimizing future production, and in planning
and designing enhanced oil recovery projects.

Facilities Requirements
 Facilities are the physical link to the reservoir. Everything we do to
the reservoir, we do through the facilities. These include drilling,
completion, pumping, injecting, processing, and storing. Proper design and
maintenance of facilities has a profound effect on profitability. The facilities
must be capable of carrying out the reservoir management plan, but they
cannot be wastefully designed.
Economic Optimization
Economic optimization is the ultimate goal selected for reservoir
management. Figure 3-6 presents the key steps involved in economic
optimization.
Management Approval
Management support and field personnel commitment are essential for the
success of a project.
IMPLEMENTATION
Once the goals and objectives have been set and an integrated reservoir
management plan has been developed, the next step is to implement the
plan.
 The first step involves starting with a plan of action, including all
functions. It is common for many reservoir management efforts to
devise a plan, but this plan usually does not involve all functional
groups. Thus, not all groups buy into these programs, and the
cooperation between various functions is below the desired level. If a
plan is to be developed and implemented in the best way, it must have
commitment from all disciplines, including management.
 Start with a plan of action, involving all functions.
 Flexible plan.
 Management support.
 Commitment of field personnel.
 Periodic review meetings, involving all team members
(interdisciplinary cooperation in teaching each other's functional
objectives).
 The plan must be flexible. Even if the reservoir management team
members prepare plans by involving all functional groups, it does not
guarantee success if it can not be adapted to surrounding
circumstances (e.g., economic, legal, and environmental).
 The plan must have management support. No matter how technically
good the plan, it must have local and higher level management
blessings. Without their support, it would not be approved. Thus, it is
necessary that we get management involved from "day one."

 No reservoir management plan can be implemented properly without

the support of the field personnel. Time and time again we have seen
reservoir management plans fail because either they are imposed on
field personnel without thorough explanations or they are prepared
without their involvement. Thus, the field personnel do not have a
commitment to these plans.
 It is critical to have periodic review meetings, involving all team

members. Most, if not all, of these meetings should be held in the field
offices. The success of these meetings will depend upon the ability of
each team member to teach their functional objectives.2
 The important reasons for failure to successfully implement a plan
are: (1) lack of overall knowledge of the project on the part of all team
 members, (2) failure to interact and coordinate the various functional
groups, and (3) delay in initiating the management process.

SURVEILLANCE AND MONITORING

Sound reservoir management requires constant monitoring and
surveillance of the reservoir performance as a whole in order to determine if
the reservoir performance is conforming to the management plan. In order to
carry out the monitoring and surveillance program successfully, coordinated
efforts of the various functional groups working on the project are needed.
An integrated and comprehensive program needs to be developed for
successful monitoring and surveillance of the management project. The
engineers, geologists, and operations personnel should work together on the
program with management support. The program will depend upon the
nature of the project. Ordinarily, the major areas of monitoring and
surveillance involving data acquisition and management include:
(1) oil, water and gas production,
(2) gas and water injection,
(3) static and flowing bottom hole pressures,
(4) production and injection tests,
(5) injection and production profiles, and any others aiding surveillance.
In case of enhanced oil recovery projects, the monitoring and surveillance
program is particularly critical because of the inherent uncertainties.

EVALUATION
The plan must be reviewed periodically to ensure that it is being
followed, that it is working, and that it is still the best plan. The success of
the plan needs to be evaluated by checking the actual reservoir performance
against the anticipated behavior.

It would be unrealistic to expect the actual project performance to match

exactly the planned behavior. Therefore, certain technical and economic
criteria need to be established by the functional groups working on the
project to determine the success of the project. The criteria will depend upon
the nature of the project. A project may be a technical success but an
economic failure.
How well is the reservoir management plan working? The answer lies in the
careful evaluation of the project performance. The actual performance (e.g.,
reservoir pressure, gas-oil-ratio, water-oil-ratio, and production) needs to be
compared routinely with the expected
In the final analysis, the economic yardsticks will determine the success or
failure of the project.
REVISION OF PLANS & STRATEGIES
Revision of plans and strategies is needed when the reservoir performance
does not conform to the management plan or when conditions change. The
answers to questions such as is it working, what needs to be done to make it
work, what would work better, must be asked and answered on an ongoing
basis in order for us to say we are practicing sound reservoir management.
REASONS FOR FAILURE OF RESERVOIR MANAGEMENT
PROGRAMS
There are numerous reasons why reservoir management programs have
failed. Some of the reasons are listed below:

Un-integrated System
It was not considered as a part of a coupled system consisting of wells,
surface facilities, and the reservoir. Not all of these were emphasized in a
balanced way. For example, one could do well in studying the fluids and
their interaction with rock (i.e., reservoir engineering); but, by not
considering the well and/or the surface system design, the recovery of oil
and/or gas was not optimized. Most people can cite examples of mistakes
made where we thoroughly studied various aspects of the reservoir and made
decisions resulting in too many wells drilled, improper application of well
completion technology, and/or inadequate surface facilities available for
future expansion.
Perhaps the most important reason why a reservoir management program is
developed and implemented poorly is an unintegrated group effort.
Sometimes the operating decisions are made by people who do not recognize
the dependence of one system on the other. Also, the people may not have
the required background knowledge in critical areas (e.g., reservoir
engineering, geology and geophysics, production and drilling engineering,
and surface facilities). Although it may not be absolutely necessary for
reservoir-management decision makers to have a working knowledge in all
areas, they must have an intuitive feel for them.
The team approach to reservoir management involving interaction between
various functions has been recently emphasized

Starting Too Late

Reservoir management was not started early enough; and when
initiated, management became necessary because of a crisis that occurred,
and it required a major problem to be solved. Early initiation of a
coordinated reservoir management program could have provided a better
monitoring and evaluating tool, and it could have cost less in the long run.
For example, a few early Drill Stem Tests (DSTs) could have helped decide
if and where to set pipe. Also, performing some early tests could have
indicated the size of the reservoir.
Early definition and evaluation of the reservoir system is a prerequisite to
good reservoir management. The collection and analysis of data play an
important role in the evaluation of the system. Most often, an integrated
approach of data collection is not followed, especially immediately after the
discovery of a reservoir. Also, in this endeavor not all functions are
generally involved. Sometimes the reservoir management staff has
difficulties in justifying the data collection effort to management because the
need for the data, along with its costs and benefits, are not clearly shown.

Lack of Maintenance

Calhoun draws an analogy between reservoir and health management.

According to his concept, it is not sufficient for the reservoir management
team to determine the state of a reservoir's health and then attempt to
improve it. One reason for reservoir management ineffectiveness is that the
reservoir and its attached system's (wells and surface facilities) health
(condition) is not maintained from the start.