CHAPTER 1 INTRODUCTION

The objectives of this chapter is to introduce reservoir simulation, to know the role of reservoir
simulation as a tool of reservoir engineer in reservoir engineering study, to know the phases in
conducting a reservoir simulation in brief, and to know the classification of reservoir
simulators.

1.1 WHAT IS RESERVOIR SIMULATION?

Reservoir simulation is an area of reservoir engineering in which computer models are used to
predict the flow of fluids (typically, oil, water, and gas) through porous media. A reservoir
simulation model is developed by combining knowledge from physics, mathematics, reservoir
engineering, advanced computation, and computer programming. A reservoir simulation
model simulates reservoir characterization and production history, and predicts oil and gas
reservoir performance under various operation conditions. It is a powerful tool to understand
reservoir without touching the reservoir.

There are different tools that can be used to understand reservoirs from different perspectives.
Well testing, well logging, material balance analysis, production decline analysis, and
reservoir simulation. Reservoir simulation is a fairly new field in reservoir engineering study.
In reservoir engineering study, there is always the need to assess the reservoir development
plan and minimize its risk in a hydrocarbon recovery project, which can easily involve a
capital investment of hundreds of millions of dollars. Factors contributing to this risk include
the complexity of the reservoir because of heterogeneous and anisotropic rock properties;
regional variations of fluid properties and relative permeability characteristics; the complexity
of the hydrocarbon-recovery mechanisms; and the applicability of other predictive methods
with limitations that may make them inappropriate. The first three factors are beyond the
engineer's control.

With the development of computational science and computation capability of computers,

reservoir simulation comes into the play. Reservoir simulation starts from 1970s, from black-
box type (e.g., BOAST reservoir simulator) to highly user friendly type (most modern
reservoir simulators are user friendly, e.g., Eclipse and CMG). Reservoir simulation now is
among those must-have skills for experienced reservoir engineers, and it is a very important
tool for a comprehensive reservoir engineering study. Armed with friendly user graphic
interfaces (UGI), it is not an unapproachable humongous task for most reservoir engineers any
more. Actually, it is easy for someone with a technical inclination to become entranced with
using this tool.

Despite the power of reservoir simulation, it can be a dangerous tool. It will calculate
meaningless results with incredible precision. Many individuals and c o m p a n i e s have
been burned when inappropriate use was made of this tool. As a result, some managers
became disenchanted with simulation, and they were no longer interested in being fooled
by this technique. With significant improvements in simulation t e c h n i q u e s , this attitude
h a s diminished gradually. In reality, failures occurred because the people applying t h e
t ech n o l o g y either d i d n o t understand or properly communicate their assumptions and
corresponding limitations of the results. It takes discipline to realize numerical modeling has
both strengths and weaknesses.

In general, reservoir engineering is difficult. Since oil and gas are buried deep underground,
it is not possible to see a reservoir or to touch it. Unlike production equipment, such as a
gas plant, it is not possible to control physical conditions. A reservoir engineer’s job is to
understand and predict what cannot be seen or touched. A number of indirect tools and
measurements are required. In this regard, a reservoir simulator is superb. It allows one to
test quantitatively how different processes affect production results. It allows complex
geometries to be evaluated that cannot be solved easily, if at all, by analytical equations.
Although the simulator allows evaluation of complex problems, it is a passive tool. It can
evaluate input, but it is not capable of determining input that should have been entered.

1.2 IMPORTANT THINGS TO KNOW FOR RESERVOIR SIMULATION

CONCEPTUAL MODEL
Certain approaches in different disciplines give a perspective that makes success either easier or
more likely. A successful approach to reservoir simulation is to maintain a conceptual model of
the reservoir. This must include:

• The shape and location

• The type of reservoir fluid
• Fluid flow properties of the rocks
• Drive mechanisms
• Visualization of flow patterns

Armed with this model, it is possible to proceed, to understand, and to predict performance with
reasonable accuracy.

GEOLOGICAL MODELS
Successful reservoir simulation requires detailed knowledge of geological models. This will
immediately put a number of reservoir engineers out of their comfort zone. They will point out
they are not geologists. In fact, it is not necessary to develop the model—the job of the
geologist—but it is a reservoir engineer’s responsibility to understand the model. Geology, to a
greater or lesser extent, affects all five of the critical elements of reservoir description in the
conceptual model. Two examples are shown in Figures 1–1 and 1–2.
 Figure 1.1 Depiction of Keg River Figure 1.2 Depiction of Cardium Bar
Pinnacle

The Keg River Reef is thick and limited in areal extent, somewhat like an office building.
Vertical floods work very well in this type of reservoir. The Cardium Bar is long and thin, not
very thick, and not very wide. It is normally impossible to implement a pattern waterflood in
such a reservoir. Although these are simplified examples, the geological models obviously
have immediate implications.

In many respects, a reservoir simulator is nothing more than an ultra-sophisticated mental

model. The model grid and input will be generated to correspond with this mental model. One
of the most powerful aspects of simulation is the ability to propagate these assumptions through
the production cycle of a reservoir. Reservoirs have many features that can be categorized into a
number of geological models. An understanding of geological principles is essential to a
reservoir simulation engineer.

MODEL CHANGES WITH TIME

As a reservoir matures and more wells are drilled, more pieces of the puzzle are available. The
conceptual model of the reservoir will change with time. In most cases, the model will be
refined continually. In some instances, accepted ideas will have to be discarded and a newer
model developed.

DANGERS IN APPLICATION
The consistent use of a mental image, a reservoir model, has one serious danger; the
model can become reality to the reservoir engineer. Sophisticated reservoir calculations,
particularly mathematical models, have an almost hypnotic quality. For this reason, some
reservoir engineers earn a reputation for being out of touch. It is necessary to ask if the answers
are relevant to developing cash flow for a producing company. At the other extreme, some
petroleum engineers are convinced reservoir engineering analysis is so theoretical as to be of no
practical application. Do not believe this. Most senior engineering managers, vice presidents,
and quite a few presidents have a reservoir engineering background.

PATTERN RECOGNITION
It is appropriate to put reservoir simulation in its proper context. The art of reservoir
engineering involves pattern recognition. The results from many different techniques must be
integrated to develop a correct interpretation of reservoir behavior. Different types of data
vary in accuracy. Therefore, input screening is required. Different sources of information can
conflict. Frequently, not all of the data desired or required is available. In this case, properties
will have to be estimated from other sources. To make matters worse, many of the
sophisticated techniques used by reservoir engineers provide interpretations that are not
unique. Multiple solutions often exist. As a consequence, the science gets a little fuzzy and
becomes an art. Experience counts heavily in reservoir engineering.

1. 3 PHASES IN A TYPICAL RESERVOIR SIMULATION STUDY

This section briefs the life cycle of reservoir simulation, and how to conduct a successful
reservoir simulation study in the real life of a reservoir engineer. The life cycle of reservoir
simulation is illustrated in figure 1.3.

GEOLOGICAL REVIEW
The first thing required to perform a reservoir simulation study is an understanding of the
geology. From an engineering point of view, the key is the physical arrangement of the
reservoir and connectivity (or continuity) of the reservoir. The flow properties of different parts
of the reservoir will also correspond to parts of the geological model. Normally, petro-physical
or log analysis properties are reviewed at this stage.

RESERVOIR PERFORMANCE REVIEW

In the next stage, the reservoir engineer must become familiar with production performance.
Normally, this includes such things as water cut, reservoir pressure, and gas-to-oil ratio (GOR)
trends. Combined with some PVT data, the potential drive mechanisms should be identified at
this stage. The objectives of the study should be determined also. It is important the required
results be stated in concrete terms. Often, a material balance study is done. There is a lot of
overlap on the input for a material balance study and reservoir simulation input, so this may not
involve too much extra time.

DATA GATHERING
A reservoir simulation involves a considerable amount of data input. In the first stage, all data
are screened for quality. For most simulations, lab data is not available for all of the input.
Correlations or data from offsetting or analogous pools must be used. Geological maps of
porosity, net pay, and permeability must be developed and translated into the grid format.

Relative permeability and capillary pressure data are normally screened. PVT data is similarly
screened. Very often, multiple sets of data must be correlated and differences resolved (if
possible). This must be checked for consistency and then put into the data set. This also means
digitizing reservoir maps of structure, net pay, porosity, and permeability.

INITIALIZATION
In this stage, the basic data is collected, and
preliminary calculations are made for running
the simulator. Grid-block water saturations are
calculated based on capillary pressure data. The
importance of water saturations is indirect; the
correct determination of OOIP is the main
objective. Most programs feature data-checking
routines at this stage.

HISTORY MATCHING

The numerical model is run through time with

the base product production (oil or gas) specified
in the model input. The idea is to match the rest
of the production behavior, such as the GOR,
water production, or condensate rates, to the
actual behavior that has occurred in the
reservoir. History matching consumes roughly
one-third of total study time, making it the
largest single component.

History matching includes a tuning phase. The

model is run with the historical base product
production specified—usually oil. The idea is to
match GORs, water cuts, and pressures
predicted by the model to actual performance.
This part of the study is usually the most time-
consuming, normally averaging one-third of
total study time. The permeability × height (kh)
or bottomhole pressure (BHP) of the wells is
then adjusted to match actual field performance.

Figure 1.3 Reservoir simulation workflow

PREDICTIONS
At the end of the tuning phase the model is usually terminated with a restart. This input data file
contains all of the information necessary to continue a simulation at a later time. Several
different production scenarios or alternatives are run from the same time step and compared.
With different runs, various injector patterns, changes in rates, and producer-injector locations
can be studied.

REPORTING/PRESENTATION
In the final stage, the results are presented and documented. Simulation generates an enormous
amount of input and output data, so this takes considerable time and ingenuity to appropriately
condense the results in a meaningful way (graphs in many cases). The assumptions on which a
simulation is based are extremely important, so they should be documented. Therefore, properly
documenting the procedures and results is important.

1.4 ROLES OF RESERVOIR SIMULATION IN RESERVOIR LIFE CYCLE HISTORY

The exact details of how much and what kind of detail will be included in a reservoir simulation
will depend strongly on where the pool is in its production life cycle. This section is a quick
review of the life of an oil and gas pool as seen through the eyes of a reservoir engineer.

EXPLORATION STAGE
Most pools are originated as a concept by an exploration geologist. This concept describes a
particular size, location, and trapping mechanism for an oil and/or gas pool. The exploration
geologist sells his idea or concept to his management. The appropriate land is obtained.
Usually, more detailed analysis is done using tools such as seismic to confirm structure.

The next step is to convince the management personal to drill a well and test the concept.
Geologists are similar to reservoir engineers in that they must maintain conceptual models of
their plays. Remember, for every seven or eight exploration wells drilled, only one will be
successful on average.

A reservoir engineer normally becomes involved on the minority of successful exploration

wells. Typically, this happens after the well has been drilled and logged but not yet tested or
cased. At this stage of development, the objective will be to understand as much as possible
about the potential new reservoir:

• What does the reservoir look like? Initially, our knowledge of the shape and size
of the reservoir is governed by the exploration geologist’s exploration concept.
• What are the fluids in the reservoir? One of the reservoir engineer’s key
objectives is to determine the fluids present. Some information may be known
from logs, such as whether it is a gas or oil reservoir.
• What are the fluid flow properties? This involves either specifying or interpreting
data from rock samples, well tests, and/or logs.
• What are the flow patterns in the reservoir? This information may not be known
completely. However, the perforations in some wells need to be located to take
 advantage of the perceived flow patterns.

Armed with this understanding, management will ask the reservoir engineer to:

• tell them what data needs to be obtained

• locate the initial completion (perforations)
• design appropriate reservoir tests
• assess the significance of the discovery, i.e., reserves

Likely, several wells will be drilled to delineate a field. As each well is drilled, completed, and
tested, the process will be repeated. The analytical approaches and tools used at this stage
include test planning and interpretation, core analysis, PVT fluid tests, log calculations, and
volumetric reserves determination.

EXPLOITATION STAGE
Eventually, the field will be turned over to an exploitation team, which normally consists of
development geologist(s) and reservoir engineer(s). The basic objective is to finish drilling up
the field and completing development. The geological model will become considerably more
detailed, since there is much more data now available. Using your understanding of the
reservoir, the objectives become:

• To determine the optimum development of the field with regard to number of

wells, spacing of wells, placement of wells. This normally involves a great deal
of optimization. Each well will likely be justified with detailed economic
calculations.
• To identify the best long-term method of depleting the reserves. Is enhanced
recovery appropriate? If there is a gas cap, when should it be produced? If there
is a nonassociated gas accumulation, is there an underlying aquifer in
communication with it that will affect the depletion strategy?
• To determine the amount of oil and gas. This information is normally needed to
plan surface facilities such as gas plants, batteries, and offshore platforms.
• To maintain this information for corporate reporting. Management monitors
performance and reports the results to shareholders.

The tools used include P(ressure)T(ransient)A(analysis) test interpretation, economic

evaluation packages, reservoir simulation, coning correlations, material balance, and
production decline analysis.

ENHANCED RECOVERY DESIGN

In many cases, this is an extension of the exploitation phase. However, waterflooding may be
delayed until more production data is obtained. Enhanced oil recovery (EOR) is often
implemented much later than the majority of well development. Tools and concepts used in the
implementation of EOR include calculations for:
 • Displacement or Volumetric Efficiency (ED): fractional flow, Buckley-Leverett
theory
• Horizontal Sweep Efficiency (EA): correlations for various patterns are used
• Vertical Sweep Efficiency (EV): layering calculations include those of Stiles and
Dykstra-Parsons
• Reservoir Simulation: if properly applied, numerical simulation can take all of
the previous factors into account, as well as more detailed accounting for areal
variations in reservoir properties
• Economics: for these projects, the economics can get quite sophisticated,
particularly those involving tertiary schemes such as carbon dioxide (CO2) and
hydrocarbon miscible flooding (HCMF)

PERFORMANCE MONITORING/OPTIMIZATION
Information is normally limited during the planning stages. Very often, therefore, it is necessary
to make many assumptions. If these assumptions are correct, then the field should produce as
planned. In general, our knowledge is never that good, and some previously unknown aspects of
the reservoir will become apparent by the analysis of production performance. The objective is
to determine why the reservoir performance is not matching our prediction. This knowledge is
used to correct our conceptual model of the reservoir and devise plans to improve reservoir
performance. Usually, it is possible to improve performance compared to existing levels, if the
field is not performing as expected. Typically, the following are monitored:

• GORs
• water breakthroughs
• pressure in the reservoir
• production response (hump or no hump)

If everything is as expected, it is likely little else needs to be done. Small, well-defined fields
are more likely to perform as expected, but this is rarely the case on large fields. Some
companies formalize this process with a reserves review at regular intervals. Typically, this is
on the order of every four years for a large pool. For small pools, which deplete rapidly, this
may be required annually.

Tools used at this stage include contour plots of GORs, water breakthrough time, and pressures.
Voidage replacement ratios (VRR) are also useful to monitor the effectiveness of injection. For
more detailed studies, material balance calculations will be required and reservoir simulations
performed.

1.5 RESERVOIR SIMULATOR CLASSIFICATION

Reservoir simulators can be classified in several ways. The most common criteria for classifying
reservoir simulators are the type of reservoir and reservoir fluids to be simulated and the
recovery processes occurring in the subject reservoir. Reservoir simulators can also be classified
according to the coordinate system used in the model, the number of dimensions in space, and
the number of phases.

Classifications based on reservoir and fluid type may include gas-, black-oil-, and compositional
reservoir simulators. Classifications based on recovery processes include simulators categorized
into conventional-recovery, chemical-flood, thermal-recovery, and miscible­ displacement
simulators. Usually conventional recovery simulators and black-oil simulators are synonymous.
Figure 1.4 shows groupings of specific recovery methods under any of these categories.
Reservoir simulators based on reservoir and fluid descriptions fall into two categories: black-oil
and compositional simulators. Black-oil simulators are used in situations where recovery
processes are insensitive to compositional changes in the reservoir fluids. In black-oil
simulators, mass transfer is assumed to be strictly pressure dependent. In these simulators, the
fluid properties Bo, Bg, and Rs govern PVT behavior. Compositional simulators are used when
recovery processes are sensitive to compositional changes. These situations include primary
depletion of volatile-oil and gas-condensate reservoirs, as well as pressure maintenance
operations in these reservoirs. Also, multiple contact miscible processes are generally modeled
with compositional simulators. In compositional simulators, a cubic equation of state governs
the PVT behavior.

Fig. 1.4 Classification of hydrocarbon recovery methods

When classifying reservoir simulators by recovery processes, primary-oil-recovery mechanisms,

such as solution-gas drive, gas-cap expansion, gravity drainage, and water drive, can all be
modeled with a conventional or black-oil simulator. In addition, secondary­ recovery
mechanisms, such as water or gas injection (where mass­ transfer effects are negligible), can
also be modeled with a black-oil simulator. Chemical-flooding processes, such as polymer or
surfactant floods, require a chemical-flooding simulator. These simulators differ from black-oil
simulators in that additional conservation equations are used to track the individual chemical
species used in the flood. Thermal-recovery processes, such as steam floods and in­ situ-
combustion processes, require thermal-recovery simulators for reservoir forecasts. These
simulators use an energy-balance equation in addition to the mass-balance equations. Generally,
thermal­ recovery simulators use a compositional approach. A recent development in reservoir
simulation has been the multipurpose reservoir simulator. These simulators generally are
developed with the most flexible assumptions and algorithms, so they are capable of modeling
all the recovery mechanisms discussed earlier.

Reservoir simulators and their applications can also be classified by their geometry and
dimensionality. For example, three-dimensional (3D) simulation models in rectangular
coordinates (x,y, z) can be used for full-field applications. Two-dimensional (2D) models in
rectangular coordinates can be used for areal (x,y) applications or for cross-sectional (x,z)
applications. Two-dimensional models in cylindrical coordinates (r,z) can be used for single-
well coning applications. Finally, one-dimensional models can be used for applications
involving laboratory core floods.

Although the geometry and dimensionality of simulation models and their traditional
applications are listed earlier, no single flow geometry can adequately describe fluid flow in a
hydrocarbon reservoir. Away from the well, fluid flow is nearly linear and rectangular flow is
prevalent. As fluids move near a wellbore, the flow geometry distorts to cylindrical flow, so
cylindrical coordinates are appropriate. Finally, as the fluids move near individual perforations,
spherical flow dominates and spherical coordinates are appropriate. Therefore, whenever a
single coordinate system is used, the results will always be approximate.

The use of geometry and dimensionality to classify simulators is not as common as it once was.
This is because as the power of computers increased in the late 1960's and early 1970's, most
numerical simulation programs added the capability for 3D problems. Today, all commercial
simulators have this capability.

SUMMARY
Correctly applied, reservoir simulation can be a powerful tool. It is extremely dangerous if
misused. It is a similar to riding a high-performance sailboat in a big wind. If you don’t respect
it, you will likely get hurt. If you fear it, or are overawed by it, you will not be able to control it,
and you will end up in the drink. You can never take your eyes off what is happening and where
you are going, because something unpredictable will happen when you do. It takes time and
practice to become good. Sailing is not for everyone but is addictive to others.