Lecture 1:

Introduction to Reservoir
Engineering (RE)
Learning Outcomes
• Understand the integration of reservoir engineering with other petroleum
engineering and other subjects.
• Define the SPE definitions of reserves; proven reserves, unproved reserves;
probable reserves and possible reserves.
• Calculate given the prerequisite data proved, probable and possible
reserves.
• Describe in general terms reserve estimation.
• Sketch a diagram showing the probability versus recoverable reserves
indicating, proven, proven + probable and proven + probable + possible
reserves.
• Present a simple equation for volumes of oil and gas in-place
History of Reservoir Engineering
• Traced to mid 1930’s
• 1994 Dake in ‘Practise of Reservoir Engineering.’
• ‘Reservoir Enginering shares the distinction with geology in being one of the ‘underground sciences’ of
the oil industry, attempting to describe what occurs in the wide open spaces of the reservoir between
the sparse points of observation - the wells’
1) Integration of Reservoir Engineering
2) Roles of the Reservoir Engineer
• Contributing with geologists and petrophysicists in estimation of oil-
in-place
• Determining fraction of oil-in -place that can be recovered.
• Attach a time scale to the recovery.
• Day-to-day operational reservoir engineering throughout the project
lifetime.
3) Activities of Reservoir Engineering
• Reserve Estimation
• Development Planning
• Production Operations Optimisation
3a) Reserve Estimation
• The reserves are the main assets of an oil company.
• Quantifying reserves and recovery factor is an ongoing role of the
reservoir engineer.
• Basic data not always straightforward.
• Reserves can be affected by the development process
Reserve Estimation
• Geophysical estimates
from seismic
interpretation
Reserve Estimation

• Log Analysis estimates

of porosity and fluid
saturation
Reserve Estimation
• Laboratory measurements to measure recoverable
oil
Reserve Estimating
• Not exclusive to reservoir engineers
• Volumetric estimates of reserves obtained at various stages
• STOIIP - stock tank oil initially in place
• GIIP – Gas initially in place
3b) Optimal Development Planning
• Large up-front investment
Optimal Development Planning
• Requires detailed understanding of the reservoir characteristics
Optimal Development Planning
• Various development options to be considered
3c) Production Operations Optimisation
• Rarely do reservoirs perform as predicted
• The reservoir engineering model has to be
updated in line with the production behaviour.
4) Reservoir Engineering Techniques
• Traditional reservoir engineering tools were designed
around slide rule and graph paper.
• Increasingly advanced computing capability is enabling
large ‘simulations’ to be carried out
Available data
• Geophysical surveys
• Well logs
• penetration
• cuttings
• electrical
• sonic
• nuclear
• Pressure data
• Formation fluid content data
Tools of the Trade
• Seismic maps • Structural maps
• Well logs • Porosity maps
• Sections • Understanding the geological
• Pressure model
measurements • Imagination.
• Isopach maps
Geological model
5) Petroleum Reserves Definitions
• Subject of study for some time.
• Agreed definitions by SPE and WPC in 1996.
• Recognises that not practical to have precise classification because of
different forms of occurrence, wide characteristics, uncertainties of
geological environment, and evolution of technologies.
Petroleum Reserves Definitions
• Essential that governments and industry have a clear assessment of
quantities available and anticipated within practical time frame
through additional field development, technological advances, or
exploration.
• Important that a consistent nomenclature be used by industry to
define reserves.
Reserves Definitions
• Reserves are those quantities which are
anticipated to be commercially recovered from
known accumulations from a given date forward.
• Reserve estimates involve some degree of
uncertainty.
• Uncertainty depends on reliable geological and
engineering data available at the time of estimate
and its interpretation.
Reserve Uncertainty
• Relative uncertainty expressed by placing reserves
into two classifications.
a) Proved/Proven
b) Unproved-less certain than proved. Further
subdived to express increasing uncertainty.
• Probable
• Possible
Methods of Estimation
• Deterministic
• A single best estimate of reserves bases on known
geological, engineering, and economic data.
• Probabilistic
• Known geological, engineering and economic data are
used to generate a range of estimates and their
associated probabilities.
Proved/Proven Reserves
• Those reserves which by analysis of geological and
engineering data , can be estimated with
reasonable accuracy to be commercially
recoverable from a given date forward from
known reservoirs and under current economic
conditions, operating methods and government
regulations.
• Developed and Undeveloped
Proved Reserves
• Deterministic methods
• reasonable certainty to express a high degree of confidence that quantities
will be recovered.
• Probabilistic methods
• at least 90% probability that the quantities actually will equal or exceed the
estimate.
Proved/Proven Reserves
• Reserves are considered proved if commercial
producibility is supported by actual production or
formation tests.
• In certain cases proved reserves may be allocated
on the basis of well logs and/or core analysis that
indicate that the reservoir is hydrocarbon bearing
and analogous to reservoirs in the same area that
are producing or have demonstrated the ability to
produce on formation tests.
Proved/Proven Reserves
The area of the reservoir includes:
! the area delineated by drilling and defined by
contacts, if any.
! The undrilled portions of the reservoir that can be
reasonably judged as commercially productive on the
basis of available geological and engineering data.
! If no fluid contacts, lowest occurrence of
hydrocarbons controls the proved limit unless
indicated by definite geological, engineering or
performance data.
Test 1
• There are 950 MMstb of oil initially in place in a reservoir. It is
estimated that 500 MMstb can be produced. Already 100MMstb
have been produced. What are the reserves?

STOIIP is: 950 500 400 MMstb

The reserves are:

450 400 500 MMstb

Test 1
• There are 950 MMstb of oil initially in place in a reservoir. It is
estimated that 500 MMstb can be produced. Already 100MMstb
have been produced. What are the reserves?

STOIIP is: 950 Ö 500 x 400 x MMstb

The reserves are:

450 x 400 Ö 500 x MMstb

Test 3
• What is wrong with the following statement ?
• Reserves are those quantities which are anticipated to be recovered from a
petroleum accumulation
Economics

• Oil and gas price ?

• Inflation?
• Future economic trends?
• Discount factors etc?
• Answer-
• The current economic conditions are the basis re;
- prices
• costs
• contracts
• government regulations
Test 4.
• We have a structure in an area which we expect to
explore. We anticipate it to contain a STOIIP of
2000MMstb, and a recovery factor of 65% using primary
recovery (30%), secondary (25%) and tertiary (10%)
recovery methods. What are the reserves?
Requirements for proved reserves
• Maps
• from seismic and geological data.
• Petrophysical logs
• Well test results and rock properties from
recovered core.
• Facilities
• Necessary facilities for processing and transport either
in place or will be installed as backed up by formal
contract
 Contributions to the Proved Reservoir Area

• This comes from the drilled and produced

hydrocarbons
• the definition of the gas and oil and water contacts
• or the highest and lowest observed level of
hydrocarbons.
• Also the undrilled area adjacent to the drilled can be
used.
Reserves - progression with time
Probabilistic Representation of Reserves

• In the deterministic approach volumes are

determined by calculation of values determined
for the various parameters.
• With the probabilistic approach statistical
analysis is used. e.g. Monte Carlo methods
Probabilistic Representation of Reserves
Probabilistic Representation of Reserves
• Some measure of subjectivity. For each element there is a
probability function.
Probabilistic Representation of Reserves
Probabilistic Representation of Reserves
• As field is produced the shape of the curve changes. Probability
converted to recovery leaving less uncertainty in reserves.
6) Volume in-place calculations
• Volume of oil and gas in-place, V, depends on:
! aerial coverage of reservoir , A.
! Thickness of the reservoir, hn.
! Pore volume, expressed by porosity,f.
! Proportion of pore space occupied by hydrocarbon, ( the
saturation ), 1-Sw

When expressed as stock tank volumes

equation divided by Bo or Bg
Volume in-place calculations & Reserves

Where RF is the recovery factor

A - will vary according to category:

proven
probable
possible
Evolution of the reserve estimate
Evolution of the reserve estimate
Evolution of the reserve estimate
Evolution of the reserve estimate
Evolution of the reserve estimate
Evolution of the reserve estimate
 Evolution of the reserve estimate
Deterministic perspective as indicated by top structure map
Formation Volume Factors Oil, Bo and Gas, Bg

• Formation volume factors convert reservoir

volumes to surface volumes.
• They do not vary significantly across the reservoir
compared to other rock related properties.
• In some reservoirs there is a compositional
gradient which results in variations in the oil
formation volume factor
• In this case average or values measured at depth
would be preferred
 Recovery Factor
• Proportion of hydrocarbons recovered called
recovery factor.
• Influenced by a range of properties.
• Rock and fluid properties.
• Drive mechanisms.
• Formation characteristics & heterogeneity
• Development process
• Geometry and location of wells
6) Other Appraisal Tool - Production Test
• One of the most powerful tools for reservoir
engineer.
• Used to evaluate the characteristics of the
reservoir under realistic conditions.
• Exploration well is turned temporally into a
producing well and downhole pressure recorded.
Production test - Well Test
Well Test
2 rate test
Initial downhole
pressure
Pressure declines
in relation to flow 1

Pressure declines
in relation to increased
flow 2

Well shut in
and pressure
builds up
Draw down and
build up curves
analysed to give kh
 Other Appraisal Tools
• Nature of the Fluids - PVT
" important for reservoir behaviour and processing.
• Pressure profile in a well.
" powerful measurements to aid in reservoir structure and
dynamic continuity.
• Core analysis
" a cross check for downhole measurements and unique
measurements.
7) Development Planning
• An evaluation of alternative plans
• Well data and Test Results
• Reservoir maps
• Material Balance
• Drive mechanisms
• Reservoir models
• Techno economics (impact of technology on economics;
feasibility study)
!Land developments higher degree of flexibility
!Offshore developments limited flexibility after production system ordered
Reservoir maps
An evaluation of alternative plans
 Development Planning
• Drive mechanisms
• Simple and complex models
• Displacement models for injection processes
• Recently, integration of geological and geophysical
perspectives providing greater confidence in
simulation models
 Drive mechanisms

Water Drive Gas Drive

1 1
1

2
2

3
3
Development Planning
• Production profiles
! oil, gas and water
• Well requirements
• Topside facilities
 Uncertainty
• Reducing uncertainty is the key issue of the
decade and not least in reservoir engineering and
its related disciplines.
• More information gives less uncertainty.
• Collecting data costs money
• Greater cost the delay on the project.
• Tension between reservoir engineers and project
engineers.
Uncertainty - Reservoir
• Static properties
# Reservoir structure
# Reservoir properties, k, h etc
# Reservoir connectivity
# Impact of faults
# ‘thief’ sands
Uncertainty - Reservoir
• Dynamic properties
# Relative permeabilities etc.
# Fluid properties
# Aquifer behaviour
# Well productivity ( fractures, well type, condensate drop-
out etc.
Uncertainty - Reservoir
7) Material Balance Equation

Pi
Production

Water Influx

Pt
Material Balance Equation
• Examines the pressure -volume behavior of an
entire field
• Tank model of the reservoir
• Engineer fits a simple model to the data and
predicts future performance
• Model gets updated to match production -history
matching.
• Reservoir simulation models comprise many
aspects of material balance
Material Balance Equation

Known : Production data Np, Rp, Wp

HISTORY MATCHING Hydrocarbon Properties Bt, Bti, Bg, Bgi
Reservoir Properties Sw, cw, cf, m
Pressure drop Dp
Unknown : Reserves N
Water Influx We

PREDICTION Known : Reserves,Water influx, Hydrocarbon properties,

Reservoir properties.

Unknown : Oil & Gas production as a function of pressure drop

Production Operations Optimisation
• The development phase
#covers period from continuous production to
abandonment.
#When to stop a techno-economic decision.
#Best reservoir engineering data during production stage.
#Through production the reservoir yields its secrets.
#Hydrodynamic continuity revealed by post production
pressure surveys.
#Rise of fluid contacts needs monitoring
History Matching
• Throughout production the comparison of the actual
performance with that predicted during appraisal stage is
monitored. It is during this stage that the reservoir
simulation model is under examination.
• History Matching. - The update of the model to fit
actual performance.
• Clearly a model that cannot predict the past is no good for
predicting the future!
• Computing power is enabling integration of geological
input with physics of flow etc. - Integrated reservoir
simulation.
Production Operations Optimisation
• Good production records required.
• History Matching
• The update of the model in line with actual
performance
• Reservoir simulation success depends on detail of
reservoir description and complexity of reservoir.
Reserve Estimating
• When production data available reserves
estimates can be refined.
• Historically
• Decline curve analysis
• Material Balance Equation
• Computer based reservoir simulation
 Decline curve analysis
• Plots of production rate versus
time, or production, on a variety of
co-ordinate scales
• Straight line is considered to
characterize behavior and is
extrapolated to predict future
performance.
Phases of Development
• During development a number of
phases
• the build up phase
• with predrilling may not happen
• the plateau phase
• the reservoir is producing at design
capacity for the facilities.
• The decline phase
• the reservoir no longer able to
produce at capacity.
• Plateau phase can be extended, eg
use of artificial lift, downhole pumps
or gas lift. Economic limit - will vary
according to project type
and size
 Improving Recovery
Three phases of recovery
• Primary recovery
• recovery obtained through natural energy of the reservoir
• Secondary Recovery
• energy is supplemented by injection of fluids, gas or water. To maintain or
partially maintain pressure.
• Two types of oil left.
• High saturation in un-swept part- by passed oil
• Lower saturation in swept part - residual oil saturation
• Enhanced oil recovery, EOR.
• The target for by-passed and residual oil
Enhanced or Tertiary Recovery
Improved Oil Recovery,
IOR -
covers all approaches to
improve hydrocarbon
recovery
The Uniqueness of the Reservoir
Leman Gas Field UK after first exploration well
Leman Gas Field UK 10years after first exploration well
 Reservoir Engineering
• A broad fundamental background of basic sciences
and engineering.
• The behavior of the reservoir rocks.
• The properties of the contained fluids
• Fluid through through reservoir rocks
• Reservoir drive mechanisms
How things have changed !!