Photos courtesy of Exxon Corp.
Reservoir Engineering: Primary Recovery
In 1904, Anthony Lucas, the discov-
I erer of Spindletop, returned to
Beaumont, Texas, from a job in
Mexico and was asked by a reporter to
comment on Spindletops rapid decline in
production. He answered that the field had
been punched too full of holes. The cow
was milked too hard, he said, and more-
over she was not milked intelligently.1
Lucas comments were lost on early oil
operators, who gave little thought to reser-
voir depletion and behavior as they drilled
well after well in their newly discovered
fields. When natural flow played out, they
simply placed their wells on pumps. When
the pumps could no longer bring up eco-
nomical, amounts of oil or when water pro-
duction became excessive, a reservoir was
considered depleted.
In the late 1920s, methods for estimating
oil reserves and the quantities that might be
recoverable hadnt been worked out. Of
course, many of the pioneer oilmen knew
that the gas represented energy which, if it
Series Sponsored By SPE Foundation
16
could be controlled, could be put to work
lifting oil to the surface. But, control
involved numerous problems and everyone
was more interested in producing the oil
and selling it. Regulation of drilling and
production was still nonexistent, so waste
and overproduction were widespread.2 Gas
associated with oil was flared or simply
released into the atmosphere.
Several years later, the U.S. federal gov-
ernment referred to the billions of cubic
feet of gas that had been lost and publicly
deplored the practice. Remedial measures
were proposed that included cooperative
production by field operators and legisla-
tion to control producing rates and to pro-
hibit gas waste.1
Once operators discovered the results
of their wasteful ways, they quickly initi-
ated a series of technical studies of reser-
voir behavior and the physical properties
that controlled this behavior. Thus, the
profession of reservoir engineering was
officially born.
The Early Years
According to most authorities, reservoir
engineering officially began in the late
1920s. At this time, engineers engaged in
the recovery of petroleum began giving
serious consideration to gas-energy rela-
tionships. They recognized their need
for more precise information about hydro-
carbon activity in reservoirs that they
were producing.
Actually, reservoir study can be traced to
an earlier beginning when, in 1856,
Frenchman H. Darcy, became interested in
the flow characteristics of sand filters for
water purification. This interest led him to
resort to experiments which, in turn, led to
the real foundation of the quantitative the-
ory of the flow of homogeneous fluids
through porous media. These classic exper-
iments resulted in Darcys law.3
Since 1928, the art of forecasting the
future performance of an oil and/or gas
reservoir based on probable or presumed
conditions has evolved steadily. In the
early 1920s, reservoir engineering was
OCTOBER 1999
concerned largely with empirical perform-
ance, with the exception of the laboratory
work done on fluid and rock properties.
Ultimately, this experimental work provid-
ed a foundation for the mathematical
equations that were derived later during
the 1930s.
From the beginning, engineers recog-
nized that oil-recovery methods based on
wellhead or surface data were generally
misleading.4 They knew they must obtain
a more thorough understanding of the
functions of the reservoir in order to max-
imize the recovery of its hydrocarbons.
This fact set in motion the evolution that
has resulted in todays engineered reser-
voir. Along the evolutionary trail leading to
the present, developments in applied
mathematics, numerical analysis, comput-
er hardware and software, geology, geo-
physics, and geostatistics became part of
reservoir engineering.
Fluid Flow
Hydrocarbons are complex fluids that gen-
erally exist in an untapped reservoir in liq-
uid and gaseous states and are considered
to be at equilibrium. Likewise, they are
expected to behave in accordance with pre-
dictable functional pressure/volume/tem-
perature (PVT) relationships. If all the gas
is dissolved in the oil, the single phase is
considered to be a liquid phase and the
reservoir is called a dissolved-gas reser-
voir. On the other hand, if there are hydro-
carbons as vaporized gas that are recover-
able as natural gas liquids on the surface,
the single phase is considered to be a gas
phase and the reservoir is called a wet-
gas reservoir.
In some reservoirs, both liquid and
gaseous phases may exist. These are called
gas-cap reservoirs. If an artesian water
supply is directly associated with any of
these reservoirs or expanding water is the
dominant producing force; the reservoir is
termed a waterdrive reservoir.
Challenges to reservoir engineers begin
when the reservoir is opened to production
and the flow of hydrocarbons begins. At
this point, reservoir pressures drop; fluids
comprising gas, oil, and water expand;
phase equilibria are disturbed; and alter-
ations in the physical properties of the fluid
phases occur in various degrees throughout
the entire reservoir. In short, the oil has
become active. With further withdrawal
of fluids, changes continue and difficult
18
second-order partial-differential equations
are needed to describe the unsteady-state
flow of expansible fluids.
From 1927 to 1930, Jan Versluys, a well-
known hydrologist working for Royal
Dutch Shell, wrote numerous articles on
the physics of oil producing formations that
were widely published. In 1931, Morris
Muskat and H.G. Botset wrote several
papers on the flow of reservoir fluids. These
papers and articles were instrumental in
advancing the knowledge of reservoir
dynamics to its present state.
Today, most reservoir engineers consid-
er that, of the many great reservoir-engi-
neering pioneers, Muskat probably had the
greatest impact, relates Joe Warren, a per-
sonal friend of the late Morris Muskat. A
native of Riga, Latvia, Muskat attended
Marietta College and Ohio State U. and
ultimately received a PhD degree in physics
from the California Inst. of Technology in
1929. Following his graduation from Cal
Tech, Muskat joined the Gulf Research and
Development Co. where, at the age of 31,
he wrote The Flow of Homogeneous Fluids
Through Porous Media, a seminal publica-
tion for reservoir engineering. Twelve years
later, in 1949, he wrote a second book,
Physical Principles of Oil Production.
Together, these books provided a sound
analytical foundation for reservoir engi-
neering by combining fluid mechanics with
phase behavior.
Muskat also published technical
papers in such diverse fields of interest as
hydrodynamics, lubrication theory, and
the mechanics of shaped charges, Warren
recalls. As a matter of fact, he received
an original patent for his work on the use
of shaped charges in oilwell perforat-
ing applications.
A paper written in 1933 by T.V. Moore,
Ralph J. Schilthuis, and William Hurst
advanced reservoir science further. The
paper presented the first equation for
unsteady-state radial flow of expansible
reservoir fluids. It reported the develop-
ment of a linear second-order equation sim-
ilar to the classic heat-flow equation that
adequately described the flow of a single-
phase compressible (or expansible) liquid
in a reservoir. A year later, in 1934,
Schilthuis and Hurst published the applica-
tion of the equation to the calculation of
reservoir-pressure changes in an east Texas
field and to the prediction of the effect
thereon of changes in production rates.5
Phase Relationships
In considering the drive mechanisms influ-
encing a reservoir, a reservoir engineer
must determine the fluid phases that exist,
their compositions and the changes that
normally would take place during natural
flow under the drive in order to predict the
behavior of the reservoir.
Among the first to realize the importance
of fundamental studies of phase relation-
ships were B.H. Sage and W.N. Lacey. In the
1930s, they published a series of papers
reporting the results of their continuing
research in the field of phase behavior.
Among their significant contributions was
the recognition and characterization of
condensate reservoirs.6
Sampling and Measurement Devices
Early reservoir engineers recognized that
both temperature and pressure influence
the behavior of reservoir fluids. Since the
measurement of reservoir pressure and
temperature was basic to enabling reser-
voir-performance calculations, the develop-
ment of a method, or device that would
measure them became a priority.
The development of continuously
recording instruments such as the pressure
gauges invented by P. Comins and
Geophysical Research Corp. and subsurface
temperature-measuring devices developed
by C.E. Van Orstrand contributed greatly to
this new science.
Likewise, early pioneers realized that, in
order to calculate volumes of oil and gas in
place, they would need to know the change
in the physical properties of bottomhole
samples of the reservoir fluids with pres-
sure. Accordingly, in 1935, Schilthuis
described a sampler and a method of meas-
uring the physical properties of bottomhole
samples.
Measurements included PVT relation-
ships, saturation or bubble-point pressure,
total quantity of gas dissolved in the oil,
quantities of gas liberated under various
conditions of temperature and pressure,
and the shrinkage of the oil resulting from
the release of its dissolved gas from solu-
tion. These data made the development of
certain useful equations feasible and pro-
vided an essential correction to the volu-
metric equation for calculating oil in place.7
Material-Balance Equations
In 1935, D.L. Katz of the U. of Michigan
proposed a tabular method of obtaining a
OCTOBER 1999
material balance for a closed reservoir.
Basically, a material-balance equation is a
statement that accounts for the volumes
and quantities of fluids that are initially
present in, produced from, injected into,
and that remain in a reservoir at any state
of its depletion.
Also, that same year, Schilthuis published
a material-balance equation that included
the same terms of fluid volumes and
changes with time as Katzs method. The
application of Katzs method required the
experimental determination of phase equi-
libria data; the Schilthuis method represent-
ed a simplification in that the requisite
terms were reduced to simpler expressions.
A bit later, Schilthuis proposed a
method to calculate water encroachment
using the material-balance equation, but
his method required accurate production-
history data. Several years later, William
Hurst developed a method for determin-
ing the rate of water influx that was inde-
pendent of the material-balance equation
and production history; only data on pres-
sure history and rock and fluid properties
were required.8
Displacement-Efficiency Equation
In 1940, S. Buckley and M.C. Leverett pro-
posed two displacement-efficiency equa-
tions concerning the displacement of
immiscible fluids. These equations provid-
ed another powerful tool for reservoir engi-
neers and scientists. One equation
describes the fraction of immiscible dis-
placing fluid flowing with the oil through a
unit rock volume; the other describes the
rate of advance of a particular degree of sat-
uration of the displacing fluid that exists in
that volume.
These valuable equations are used in the
calculation of recovery by an immiscible dis-
placing fluid, natural or induced. And, they
played a key role in allowing later engi-
neered waterflood predictions. Applications
include prediction of the effects of relative
viscosity or permeability, volumetric rate,
formation dip, differential fluid density, and
wetting and pressure gradient on recovery
under specified conditions.9
Maximum Efficient Rate of Production
Through the years, it has been learned that
oil is recovered by three different natural
mechanismssolution-gas drive, gas-cap
drive, and waterdrive. These mechanisms
may be effective individually or in combi-
nation. They differ in recovery efficiency.
Recovery can be increased by controlling
the reservoir so that the most efficient avail-
able mechanism becomes the dominant
one or by injecting gas or water to supple-
ment or modify the natural drive.
20
In practice, one of the most effective
means of achieving efficient recovery is
through control of the rate of production of
oil, water, and gas. The knowledge gained
through studies of reservoir behavior led to
the concept of maximum efficient rate of
production. For each particular reservoir, it
is the rate that, if exceeded, would lead to
avoidable underground waste through loss
of ultimate oil recovery. This concept has
found widespread application by both
industry and regulatory bodies for the effi-
cient recovery of petroleum.10
Reservoir Simulation
By the 1950s, most of the fundamentals of
modern reservoir engineering were in
place. The next evolutionary milestone was
the emergence of reservoir simulation.
The earliest simulators (circa 1930) were
essentially sandboxes constructed with
transparent glass sides. These elementary
simulators allowed researchers to view fluid
flow directly. During this era, most reser-
voir scientists assumed that the reservoir
was a single tank or cell in which the fluid
flowed from one side to the other.
These early modeling attempts were
used to study water coning, states Donald
Peaceman, a retired Exxon researcher and
industry consultant. The models allowed
researchers to see the activity that occurs
when a well is produced. The production of
the oil causes the pressure around the well
to decrease and that causes the water to
cone up and be produced with the oil.
It wasnt until the 1930s that people in has continued to evolve to the point that it
the oil industry started looking at reservoir
mechanics in any kind of a scientific way,
he continues. So this was one of the first
attempts to understand why water starts to
be produced with the oil and why the pro-
duced-water/oil ratio increases with time.
Twenty years later, with the advent of
computers, reservoir modeling advanced
from sandboxes and electrical analogs to
numerical simulators. In numerical simula-
tion, the reservoir is represented by a series
of interconnected blocks and the flow
between blocks is solved numerically. Early
computers were small and had little memo-
ry, which limited the number of blocks that
could be used.
When I went to work in 1951, recalls
Peaceman, we had nothing that you could
call a computer. We did have access to
some accounting machines that the
accounting department would let us use,
but only at night, he remembers.
Our job was to model the flow of gas
through the porous rock of a field. To
accomplish this, we had to use a converted
accounting machine that had a capacious
memory of 56 words of eight decimal digits
each, could not store a program, and
strained to complete five-floating point
operations per second, says Peaceman as
though he still finds it hard to believe.
Our management did have the vision to
see that digital computation was going to
be the way to do reservoir modeling in the
future, but that vision was still pretty faint,
he remembers.
In 1955 we significantly increased our
computing capacity when we acquired a
Bendix G-15, explains Peaceman, as he
recalls his past experiences involving the
evolution of reservoir-simulation comput-
ers. This [computer] had vacuum-tube
electronics, but its storage was almost com-
pletely on a magnetic drum. Within the
next few years, we obtained IBMs first
widely used scientific computer, the 704. It
was a binary machine, with built-in float-
ing-point hardware. Its central memory was
magnetic core, and its secondary storage
was magnetic tape, he continues.
Also, Fortran was not yet available. Our
programs were written in assembly lan-
guage, but that didnt bother us, since we
were already used to dealing with machines
that were much less user friendly.
During the following decades, computing
power increased which, in turn, allowed
engineers to create bigger, more geological-
ly realistic models that required greater data
input. This demand was met by the creation
of increasingly complex and efficient simu-
lation programs with easy-to-use data
preparation and results-analysis packages.
Over the years, numerical simulation
has become a reservoir-management tool
for all stages of the life of the reservoir. No
longer is it used only for comparing the
performance of reservoirs under different
OCTOBER 1999
production schemes or for troubleshoot-
ing failed recovery methods. Today, they
plan field development, design measure-
ment campaigns, and guide investment
decision-making.11
Reservoir Management
Webster defines management as the judi-
cious use of means to accomplish an end.
Thus, reservoir management can be inter-
preted as the judicious use of various
means available in order to maximize the
benefits from a reservoir.
According to several authors who have
written on reservoir-management practices,
reservoir management involves making cer-
tain choices: either let it happen or make it
happen. Without planning, they say, the
generation of benefits from a reservoir
operation is left to chance.12 With sound
management practices, they conclude, the
generation of benefits is enhanced and
chances of profit are maximized.
In 1963, John C. Calhoun Jr., in an arti-
cle written for the JPT, described the engi-
neering system of concern to the petroleum
engineer as being composed of three princi-
pal subsystems.
1. Creation and operation of wells.
2. Surface processing of the fluids.
3. Fluids and their behavior within the
reservoir.
The first two depend on the third
because the type of fluids (oil, gas, and
water) and their behavior in the reservoir
will dictate where and how many wells to
drill and how they should be produced
and processed to maximize profits,
states Calhoun.13
Technically, reservoirs have been man-
aged for more than a 100 years, but true
reservoir management has been practiced
only when a major expenditure is planned,
such as original field development or water-
flood installation. In fact, until 1970, most
people considered reservoir management as
synonymous with reservoir engineering.14
However, during the past three decades, its
integration with other sciences, such as
geology, has created a truer reservoir-man-
agement approach.
During its evolution from purely reser-
voir engineering to the more integrated
reservoir-management function, the sci-
ence of forecasting the future performance
of an oil or gas reservoir went through two
distinct periods.
In the first periodthe four decades
before 1970reservoir engineering was
considered the only item of technical
importance in managing a hydrocarbon
reservoir. In 1962, Wyllie emphasized two
key pointsclear thinking using funda-
mental reservoir-mechanics concepts and
automation using basic computers.15
In the second periodthe three decades
since 1970the concept of managing oil
and gas reservoirs has evolved more toward
the integration of reservoir engineering
with other scientific disciplines, namely
geology and geophysics.
Craig emphasized the value of detailed
reservoir description using geological, geo-
physical, and reservoir-simulation con-
cepts.16 He challenged explorationists,
with their knowledge of geophysical tools,
to provide a more accurate reservoir
description that could be used in engineer-
ing calculations.
In the last 10 years, it has become clear
that reservoir management is not synony-
mous with reservoir engineering and/or
reservoir geology. Instead, it is a blending of
these disciplines into a team effort. Projects
undertaken during the past 10 to 15 years
have seen the integration of efforts into
multidisciplinary project teams that work
together to ensure development and execu-
tion of the reservoir-management plan.
The Future
The science of reservoir engineering will
continue to evolve; newer and better
methods of predicting reservoir behavior
will be found. However, when it comes to
reservoir management, true integration of
the geosciences into reservoir engineering
will take time because the disciplines do
not communicate well. Simply recogniz-
ing that integration is beneficial will
not be sufficient. True integration will
require persistence.17
And, while a comprehensive program for
reservoir management is desirable, every
reservoir may not warrant a detailed pro-
gram because it might not be cost-effective.
In these cases, reservoir engineering alone
may be sufficient.

References
11. Reistle, C.E. Jr.: Chapter 12: Reservoir Engineering, History of Petroleum Engineering, API, New York City (1961) 816.
12. The Production Research Divisions 30 Years with Humble, Humble Oil and Refining Company, Houston (1959) 11.
13. Muskat, M.: The Flow of Homogeneous Fluids Through Porous Media, McGraw-Hill Book Co. Inc., New York City (1937) 55.
14. Craft, B.C. and Hawkins, M.F.: Applied Petroleum Reservoir Engineering, second edition, Prentice Hall, Englewood Cliffs, NJ (1991) 2.
15. Reistle, C.E. Jr.: Chapter 12: Reservoir Engineering, History of Petroleum Engineering, API, New York City (1961) 830.
16. Reistle, C.E. Jr.: Chapter 12: Reservoir Engineering, History of Petroleum Engineering, API, New York City (1961) 831.
17. Craft, B.C. and Hawkins, M.F.: Applied Petroleum Reservoir Engineering, second edition, Prentice Hall, Englewood Cliffs, NJ (1991) 2.
18. Reistle, C.E. Jr.: Chapter 12: Reservoir Engineering, History of Petroleum Engineering, API, New York City (1961) 832.
19. Reistle, C.E. Jr.: Chapter 12: Reservoir Engineering, History of Petroleum Engineering, API, New York City (1961) 833.
10. The Production Research Divisions 30 Years with Humble, Humble Oil and Refining Co., Houston (1959) 18.
11. Adamson, G. et al.: Simulation Throughout the Life of a Reservoir, Oilfield Review, Schlumberger Oilfield Services, Houston (Summer 1996) 16.
12. Satter, A., Varnon, J., and Hoang, M.: Integrated Reservoir Management, paper SPE 22350 presented at the 1992 SPE International Meeting on
Petroleum Engineering, Beijing, 2427 March, 16.
13. Calhoun, J.C. Jr.: A Definition of Petroleum Engineering, JPT (July 1963).
14. Thakur, G.C.: Reservoir Management: A Synergistic Approach, paper SPE 20138 presented at the 1980 SPE Permian Basin Oil and Gas Recovery
Conference, Midland, Texas, 89 March.
15. Wyllie, M.R.J.: Reservoir MechanicsStylized Myth or Potential Science? JPT (June 1962) 583.
16. Craig, F.F. et al.: Optimized Recovery Through Continuing Interdisciplinary Cooperation, JPT (July 1977) 755.
17. Satter, A., Varnon, J., and Hoang, M.: Integrated Reservoir Management, paper SPE 22350 presented at the 1992 SPE International Meeting on
Petroleum Engineering, Beijing, 2427 March.

22 OCTOBER 1999