RESERVOIR SIMULATION REPORT

ALWYN NORTH PROJECT

GROUP 1

TAMUNOIMAMA AJIENKA G2022/1PS/MSC/PPD/ 395

FELIX CHINOZOM BONI- ORIJI G2022/1PS/MSC/PPD/ 396
AKUCHUKWU EMMANUEL G2022/1PS/MSC/PPD/ 390

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 EXECUTIVE SUMMARY

The southeast corner of the east Shetland basin is home to the Alwyn North Field in the UK North
Sea, which was found in 1974. Stratford Formation is a reservoir for condensate gas, and the first
four oil-bearing panels in the Brent are the Alwyn Field's principal panels, based on seismic
interpretation. A comprehensive evaluation of the many technological and financial options is
necessary to determine the best possible technical and financial solution for the development of
the Alwyn field.

In this reservoir simulation report, the objective is to design a development strategy for the Brent
East reservoir that maximizes hydrocarbon production while minimizing development expenses
per barrel. The Eclipse 100 black oil reservoir model simulator is used to determine the optimal
scenario for developing the Alwyn field. This involves optimizing the number and location of
production and injector wells, as well as considering cost constraints to ensure the lowest costs per
barrel and the highest net gross profit margin. Material balance calculations and numerical
simulations are performed to estimate oil recovery and identify the dominant drive mechanisms
(water drive, rock drive, and fluid expansion) in the Alwyn field. Understanding these mechanisms
is crucial for making informed field development decisions that impact recovery efficiency and
overall project economics.

The Eclipse tool was used to mimic different scenarios of well placement, and performance plots
such as FOPT, FOPR, FOE, FGOR, and FPR were used to compare the outcomes for optimization.
The Alwyn field is proposed to have a field life of 15 years. Optimization would be geared towards
optimizing its life span and sweating the asset at the least possible cost.

Three recovery methods were evaluated, and their economic viability was reviewed to propose a
development scheme for the Alwynn field. These recovery methods are:

1. Natural depletion until 100 bara

2. Water Injection
3. Water-alternating gas injection

Drilling, production, and injection constraints were assigned to wells and the entire field to shut
off production if any of the constraints were offended. These constraints are listed in Chapter 5 of
this report.

Four exploratory wells were drilled to confirm the presence of hydrocarbons in the Tarbert and
Ness formations of the Alwynn field, and these wells were evaluated to access the initial potential
of the reservoirs with a limiting bottom hole pressure of 100 bara. The exploratory wells are A2,
A4, N2, and N3. Simulation results showed a recovery efficiency of 21% with a steady plateau for
4 years. The field life was reported to be 6 years, as the water cut of the field exceeded 90%.

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Further investigation of the wells showed that well A2 was perforated in the water zone, leading
to a high-water influx.

The natural depletion plan was further analyzed by trying different well placements based on the
dynamic sweet spot map of NTG, porosity, oil saturation, and depth. From the simulation results,
an optimal scenario was chosen. Four new wells (W1, W2, W3, and W4) were drilled to aid oil
recovery. The table below shows the location of the optimized wells.

Table 1.Optimized Natural Depletion Well Coordinates

W1 W2 W3 W4
i 19 14 10 12
j 15 21 31 25
K1 3 2 2 2
K2 8 7 7 6

The optimized natural depletion case has a recovery efficiency of 25.10%. cumulative oil
production is 9 000 000 Sm3. A steady plateau of 4000 Sm3 was produced for 5 years and 8
months. The field was shut off after the reservoir pressure had depleted to 100 bara. This proposed
scheme improved the initial well potential by 5%.

As inferred from the natural depletion plan of the Alywyn field, the natural drive provided to the
reservoir depletes over time, and it is imperative to provide pressure support in order to maximize
recovery. Water injection is proposed as a secondary recovery method for the Alwynn field. The
optimum case was derived by optimizing injection time and analyzing the impact of drilling extra
wells to assist the initial four wells in the efficient recovery of crude. Three new production wells
were drilled with five injection wells to enhance voidage replacement. An optimized water
injection scenario is recommended, consisting of 7 producers and 5 injectors. Fig. 1 shows the
optimized well placement. Well, location coordinates are shown in Chapter 5 of this report.

Figure 0-1: Optimized Water Injection Scheme Well Location

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 The optimized water injection plan has a total oil production rate of 17,735,300 Sm3 and a recovery
efficiency of 50%. Filed life also improved to 11 years and 3 months and was shut off due to a
high water cut and a low production rate of 1000 Sm3 per day. A plateau of 8000 Sm3 was
maintained for 4 years.

Water-alternating gas is considered in order to improve the viscosity of oil, thereby improving its
sweep efficiency. Different alternation cycles were simulated, and an optimized scenario was
proposed. The same injection wells are used for both water injection and gas injection. The
optimized cycle involves injecting water for 4 years and alternating with gas for 1 year. Recovery
efficiency was improved to 51% with a total oil production of 18,268,314 Sm3. The field's life
span was also improved by 11 years and 8 months. A steady plateau of 7500 was maintained for 3
years and 7 months.

An economic analysis was conducted to ascertain the profitability of each development plan, and
the economic indexes listed below were analyzed. This is a simplified analysis; certain
assumptions were made, such as the exclusion of labor and refining costs, and a linear depreciation
of the assets was used.

Table 2: Economic Analysis of Optimized well Development Scenarios

NATURAL WATER
WAG
DEPLETION INJECTION
S/N Total oil Production (bbl) 56,372,786.00 111,551,680.00 114,872,790.00
1 Total Investment ($) 998,000,000.00 1,218,000,000.00 1,306,400,000.00
2 Cost/bbl ($) 17.70 10.92 11.37
3 Gross Profit Margin ($) 4,206,899,331.38 9,081,566,614.40 9,299,804,700.70
4 Gross Revenue ($) 5,204,899,331.38 10,299,566,614.40 10,606,204,700.70
Gross Profit Margin (GPM)
5 74.63 81.41 80.96
per barrel
6 IRR 0.91 0.91 0.91
7 Payback Period (years) 1.00 1.00 1.00
8 payback Period (months) 12.00 12.00 10.00
9 PI 2.25 3.13 2.95
10 NPV ($) 2,244,795,071.61 3,814,611,711.57 3,851,258,789.43

From the economic analysis conducted, all development methods are profitable. Water injection
shows the most viability based on the indices. It has the highest profitability index of 3.13 and the
lowest production cost of 10.92 dollars per barrel of oil.

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TABLE OF CONTENTS

Contents
EXECUTIVE SUMMARY .................................................................................................................................. ii
TABLE OF CONTENTS ..................................................................................................................................... v
LIST OF FIGURES .......................................................................................................................................... vii
LIST OF TABLES ........................................................................................................................................... viii
LIST OF ABBREVIATIONS ............................................................................................................................... ix
CHAPTER ONE ............................................................................................................................................... 1
INTRODUCTION ............................................................................................................................................. 1
1.1. Background of the field ................................................................................................................. 1
1.2. Scope 0f the Project ...................................................................................................................... 1
1.3. Aim And Objectives of The Project ............................................................................................... 1
CHAPTER TWO .............................................................................................................................................. 2
GEOLOGIC ENVIRONMENT OF ALWYN NORTH BRENT EAST PANEL ............................................................. 2
2.1. Geological Description ....................................................................................................................... 2
2.2. Sedimentology .............................................................................................................................. 3
CHAPTER THREE ............................................................................................................................................ 4
RESERVOIR MODELLING ................................................................................................................................ 4
3.1. Reservoir Grid System ................................................................................................................... 4
3.2. Initialization of the simulation model ........................................................................................... 4
3.3. Main parameters ........................................................................................................................... 5
3.3.1. PVT Model ............................................................................................................................. 5
3.3.2. Saturation Functions ............................................................................................................. 6
CHAPTER FOUR ............................................................................................................................................. 7
4.1. Production mechanisms ................................................................................................................... 7
4.2. Material Balance Calculations ....................................................................................................... 7
4.2.1. MBE for Natural Depletion (passive Aquifer)......................................................................... 8
4.2.2. MBE for Natural Depletion (Active Aquifer) .......................................................................... 9
4.3. MBE For Water Injection ................................................................................................................. 10
4.4. Production Plateau Estimation.................................................................................................... 11

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CHAPTER FIVE ............................................................................................................................................. 13
PERFORMANCE PREDICTION ...................................................................................................................... 13
5.1. Natural depletion until 100 bars ................................................................................................. 14
5.1.1. Effect of Critical gas saturation ............................................................................................ 16
5.1.2. Optimization Of the Natural Depletion ............................................................................... 17
5.2. Water Injection ........................................................................................................................... 19
5.2.1. Limiting Injection Time ........................................................................................................ 21
5.2.2. Pressure Maintenance & Voidage Replacement ................................................................. 21
5.2.3. Field Production Parameters ............................................................................................... 22
5.2.4. Oil Production Rate/ Water Cut Per Well ............................................................................ 23
5.3. Water Alternating Gas (WAG) ..................................................................................................... 25
5.3.1. Field Production Parameters ............................................................................................... 26
CHAPTER 6................................................................................................................................................... 28
ECONOMIC ANALYSIS .................................................................................................................................. 28
6.1. COST ESTIMATE ................................................................................................................................ 28
6.2. Economic Analysis for Natural Depletion with 4 Producers........................................................ 29
6.3. Economic Analysis for Water Injection with 7 Producers and 5 Injectors................................... 31
6.4. Economic Analysis for Water Alternating Gas Injection with 7 Producers and 5 Injectors ......... 34
CHAPTER 7................................................................................................................................................... 35
Recommendations and Conclusions ........................................................................................................... 35
7.1. Conclusions ................................................................................................................................. 35
7.2. Recommendations ...................................................................................................................... 36

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LIST OF FIGURES
Figure 1-1: Optimized Water Injection Scheme Well Location ................................................................... iii

Figure 2. 1: Brent geological cross section .................................................................................................. 2

Figure 2. 2: Brent well logs cross section .................................................................................................... 2
Figure 2. 3: Tarbert sand exhibit ................................................................................................................... 3

Figure 3. 1:: Brent East Reservoir Model Grid ............................................................................................ 4

Figure 3. 2: Capillary pressures and relative permeability curves ............................................................... 6

Figure 4. 1: Fractional Water Flow Vs Saturation curve for Ness and Tabert............................................. 10

Figure 5. 1: Drive Mechanism for Natural Depletion ................................................................................ 14

Figure 5. 2: FOE, FOPT and FOPR plot against time........................................................................... 15
Figure 5. 3: production from different wells ............................................................................................... 15
Figure 5. 4: Effect Gas Saturation ............................................................................................................... 16
Figure 5. 5: GOR plot for different critical gas saturation .......................................................................... 16
Figure 5. 6:Performance Plot for Different Case ........................................................................................ 18
Figure 5. 7: FOE and FOPT plot for Optimized Case................................................................................. 19
Figure 5. 8: Well Placement for Water Injection ......................................................................................... 20
Figure 5. 9:Limiting Injection Time............................................................................................................ 21
Figure 5. 10 FPR and Voidage Replacement plots (FVIR, FVPR Vs Time ................................................ 22
Figure 5. 11:FOE,FOPT, FOPR Vs Time.................................................................................................... 23
Figure 5. 12:WOPT, WWCT VS Time ....................................................................................................... 23
Figure 5. 13: Well Water Injection rate ....................................................................................................... 25
Figure 5. 14 WAG FOE, FOPR, FOPT Vs Time ........................................................................................ 27

Figure 6. 1: CNPV Vs Time Natural Depletion .......................................................................................... 31

Figure 6. 2: Drilling Platform Selection Strategy ....................................................................................... 32
Figure 6. 3:: Water Injection CNPV Vs Time ............................................................................................. 33

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LIST OF TABLES
Table 1.Optimized Natural Depletion Well Coordinates.............................................................................. iii
Table 2: Economic Analysis of Optimized well Development Scenarios .................................................... iv

Table 3. 1:Fluids Initially in Place ................................................................................................................ 5

Table 3. 2: Composite PVT data for Brent East ............................................................................................ 6

Table 4. 1:Fluids Initially in Place ................................................................................................................ 8

Table 4. 2:Tabert and Ness Reservoir Parameters ......................................................................................... 8
Table 4. 3:Material Balance Calculation for Aquifer Model ......................................................................... 9
Table 4. 4: Drainage Table for Ness and Tabert .......................................................................................... 10
Table 4. 5:Summary of Water Injection Performance ................................................................................. 11
Table 4. 6: Production Plateau for different scenarios ................................................................................ 12
Table 4. 7: Number wells for different scenarios ........................................................................................ 13

Table 5. 1:Recovery Efficiency for the different cases ............................................................................... 18

Table 5. 2:Optimized Natural Depletion Performance ................................................................................ 19
Table 5. 3:Optimized water Injection Scenario. Well Coordinates ............................................................. 20
Table 5. 4:Well Total Oil Production .......................................................................................................... 23
Table 5. 5: Effect of Injector wells on well performance Indices ............................................................... 24
Table 5. 6: WAG Optimization.................................................................................................................... 26

Table 6. 1: CAPEX ..................................................................................................................................... 29

Table 6. 2: OPEX ........................................................................................................................................ 29
Table 6. 3: Natural Depletion Capex ........................................................................................................... 30
Table 6. 4: Natural Depletion Economic Indicators .................................................................................... 30
Table 6. 5: Water Injection Capex ............................................................................................................... 32
Table 6. 6: Water Injection Economic Indicators ........................................................................................ 33
Table 6. 7: WAG CAPEX ........................................................................................................................... 34
Table 6. 8:WAG Economic Indicators ........................................................................................................ 35

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LIST OF ABBREVIATIONS

FGOR: Field Gas-Oil Ratio

FOE: Field Oil Recovery Factor (%)

FOIP: Field Oil In Place

FOPT: Field Oil Production cumulative total

FOPR: Field Oil Production

FPR: Field Pressure

FWCT: Field Water-Cut

FWPR: Field Water production rate

FWPT: Field Water Production cumulative total

ROIP: Regional Oil in Place

WBHP: Well Bottom Hole Pressure

WGOR: Well Gas-Oil Ratio

WOPR: Well Oil Production Rate

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 CHAPTER ONE
INTRODUCTION

1.1. Background of the field

About 140 km east of the nearest Shetland Island and 400 km northeast of Aberdeen, in the south-
eastern portion of the East Shetland Basin in the UK North Sea, lies the Alwyn North Field, which
was discovered in 1974. The Alwyn field is located 10 km north of Dunbar field, 7 km east of
Ninian field, and 4 and 10 km south of Strathspey and Brent fields, respectively.

1.2. Scope 0f the Project

This study was confined to the Brent East section within the Alwyn North Field. Due to the limited
quantity of oil in Ness 1, the reservoir model primarily focused on Ness 2 and Tarbert 1, 2, and 3
units. The study utilized the Black Oil PVT model for representation. Drive mechanisms were
ascertained through material balance calculations. The yearly production was capped at 15% of
the total reserves.
The following scenarios were examined:
i. Natural decline with a maximum flowing well pressure of 260 bars.
ii. Natural decline until reservoir pressure reaches 100 bars.
iii. Implementation of water injection as a secondary recovery process.
iv. Application of water-alternate-gas method.

1.3. Aim And Objectives of The Project

The goal of this study is to recommend an initial development scheme for the Brent East reservoir
that optimizes overall hydrocarbon output while keeping development costs to a minimum in terms
of dollars per barrel.
The objectives of the project include:
i. To identify the main driving mechanism associated with each of the optimized production
mechanisms considered in this project using Eclipse simulation software
ii. To model and select an optimized case for the production mechanism studied for this
project
iii. To ascertain the recovery factor, the number of producers and injectors required using the
material balance equation
iv. To investigate the economical evaluation of each optimized production mechanism case
v. To discuss and recommend best practices to better optimize the overall project

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 CHAPTER TWO
GEOLOGIC ENVIRONMENT OF ALWYN NORTH BRENT EAST PANEL
2.1. Geological Description
This study focuses exclusively on the East panel of the Alwyn North field. The Alwyn Brent East
Block, a eroded monoclinal structure, is bounded by the base Cretaceous Unconformity (BCU) to
the east and south, the Spinal Fault to the west (separating it from adjacent blocks), and a
sometimes minimally displaced fault to the north. Below the BCU, the eastern region exhibits
intricate features known as slumps, linked to Cretaceous erosion, akin to those in the Brent field.
In the Brent East panel, the oil reservoir is located within a stratigraphic trap, as depicted in Figures
2.1 and 2.2. This trap results from the erosional unconformity to the east, a north–south fault to the
west (between A-1 and A-2 wells), and a transverse fault to the north. Figures 2.1 and 2.2 portray
the Brent Geological Cross section and corresponding well section.

Figure 2. 1: Brent geological cross section

Figure 2. 2: Brent well logs cross section

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 2.2. Sedimentology
Three main subdivisions make up the Brent group: Middle Brent (Ness formations), Upper Brent
(Broom, Rannoch, and Etive formations), and Lower Brent (Broom, Rannoch, and Etive
formations) (Tarbert formations). The only oil-containing formations in the Brent East panel are
the last two.
i. The Lower Brent formation was formed in an environment ranging from a shoreface
(Rannoch) to a coastal barrier (Etive). The clastic reservoir is composed of transgressive
and prograding sandstones (Rannoch and Etive). As a result, the petrophysical properties
range between low and medium permeability. The Brent East reservoir contains no oil in
this unit.

ii. The Middle Brent formation was formed in an environment that ranged from deltaic to
alluvial plain (Ness 1) and lagoon to lower delta plain (Ness 2). Sandstones are thus
interbedded with clay and coal. In general, the petrophysical characteristics of the Ness 1
unit are poorer than those of the Ness 2 unit, and its oil-bearing leg is much lower,
particularly to the east of the reservoir.

iii. The Upper Brent reservoir, located in a lower shoreface environment, has three types of
sandstone: massive, mica-rich, and base. The top sandstone, Tarbert 3, is the primary oil-
bearing unit, while Tarbert 2 contains mica-rich sandstone.

Figure 2. 3: Tarbert sand exhibit

Tarbert sands exhibit excellent petrophysical properties, forming well-connected shore face
deposits throughout the field. They may also have regional connectivity, interacting with the upper
Ness fluviatile system, distinct from the lower Ness. Base Brent Etive and Rannoch reservoirs are
of higher quality, but predominantly water-bearing in Brent East Block. Due to low oil content,
Ness 1 is disregarded in the reservoir model. Focus is placed on Ness 2 and Tarbert 1, 2, and 3
units. Data from original vertical appraisal wells (3/9A-2, 3/9A-4) and two new deviated
delineation wells (N1 and N3) characterize the Brent East reservoir. N3 confirms a significant oil
presence in the northern part, primarily in the Tarbert units, while N1, located to the West,
encounters only the aquifer with no oil production.

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 CHAPTER THREE
RESERVOIR MODELLING
3.1. Reservoir Grid System
Based on the previously described Brent East characteristics, a reservoir simulation model was
developed to investigate the reservoir's production capacity. The reservoir model was created using
four appraisal wells: A2, A4, N2, and N3. According to the production scheme, these wells can be
abandoned.
Due to limited knowledge about the Brent East reservoir at the start of the study, a black oil model
with rectangular cells was created, with 36 cells along the x-direction and 51 cells along the y-
direction. The geometry definition is contained in the Petrel file 'MODEL PETREL.GRDECL'.
The Corner Point Geometry's structural framework is based on the Spinal Fault Geometry and the
North Fault Limit. The model's dimensions are 36 𝑥 51 𝑥 18 in geometry but 36 𝑥 51 𝑥 17 in
actuality (since the first layer representing all layers between the Base Cretaceous Unconformity
and the Top Brent is impervious to water).

Figure 3. 1:: Brent East Reservoir Model Grid

3.2. Initialization of the simulation model

Running the simulation with the keyword ‘NOSIM’ initialized the model, only calculating the
initial fluids in place. It can also be used to quality-check the correctness of errors in data files.

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Table 3. 1:Fluids Initially in Place

Currently in place Tarbert Ness Entire Field

Oil (Sm3) 31089458 4575836 35665294

Water (Sm3) 125222197 188542410 313764607

Dissolved Gas (Sm3) 6432103117 946695416 7378798533

As shown in Table 3.1, the Tarbert region has a noteworthy oil-in-place value of 31,089,458 Sm3,
which represents 87.2 percent of the total oil-in-place in the field. By comparison, the Ness region
has poorer production due to its large water volume and low oil-in-place value. As a result, it is
anticipated to have a little effect on the production campaign, possibly resulting in an early water
breakthrough and decreased oil recovery. This informed our choice to focus this study's attention
on the Tarbert formation.

3.3.Main parameters
3.3.1. PVT Model
In the study of the Alwyn North field, a Black Oil PVT model was utilized, encompassing both oil
and water properties. Properties relevant to aquifer water analysis include density, compressibility,
formation volume factor, and viscosity. Hydrocarbon PVT analysis involved obtaining fluid
samples from well 3/9a-N3, crucial for calculating energy inputs. Above saturation pressure,
Constant Composition Expansion (CCE) and Separator tests were employed. Below saturation
pressure, Separator and Differential Vaporization tests were conducted.
Two sets of separator oil and gas samples were received, one recombined for a comprehensive
PVT study. The recombined fluid displayed a saturation pressure of 258.5 bar(a) against a reservoir
pressure of 446.0 bar(a). A Constant Composition Expansion (CCE) study at reservoir temperature
yielded a total G.O.R. of 196.3 Sm3/Sm3, and an oil formation volume factor (FVF) of 1.664 v/v
at saturation pressure. Differential vaporization at reservoir temperature released a total G.O.R. of
264.7 Sm3/Sm3, with a viscosity of 0.269e-3 Pa.s at saturation pressure and temperature.
The PVT data are collected from different experiments conducted in the laboratory. To adequately
represent the fluid characteristics, composite PVT data is generated from the Liberation
Differential, Separator test and constant composition experiments.

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Table 3. 2: Composite PVT data for Brent East

P bar
P(Bara) Rs(Sm3/Sm3) Bo(rm3/Sm3) Bg(rm3/Sm) @(µo(cp µo(cp)
)
446 196.3 1.58912 0 330.6 0.293
421 196.3 1.595776 0 303.8 0.284
401.5 196.3 1.602432 0 272.1 0.273
378 196.3 1.610752 0 257.5 0.269
351.5 196.3 1.620736 0 247.8 0.274
311.5 196.3 1.637376 0 239.5 0.283
266.5 196.3 1.649024 0 204 0.317
258.5 196.3 1.664 0 185.1 0.336
211.5 144.8609959 1.505195021 0.005503 156.3 0.378
169.5 109.4751037 1.400763485 0.00678 136 0.409
128 79.1813278 1.316182573 0.008988 98 0.482
86.5 52.16721992 1.241958506 0.013563 61 0.556

3.3.2. Saturation Functions

Figure 3. 2: Capillary pressures and relative permeability curves

Relative permeability and capillary pressure are functions of the saturation of the fluid (mostly
expressed in water saturation). Figure 3.2. illustrates this relationship.

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 CHAPTER FOUR
4.1. Production mechanisms
Production mechanism refers to the recovery method employed in the extraction of hydrocarbons
from the reservoir to the surface. It also refers to the energy in the reservoir that drives the
production of hydrocarbons. They include:

i. Primary recovery
• Fluid expansion
• Solution gas drive
• Gas cap drive
• Water influx drive
• Rock expansion drive
ii. Secondary recovery
• Water injection and water flooding
• Gas injection and gas flooding
iii. Tertiary recovery
• Miscible gas injection
• Water alternating gas injection
• Thermal recovery
• Chemical recovery

4.2. Material Balance Calculations

Material Balance Equation is the reservoir engineer’s tool for interpreting and predicting reservoir
performance. It is based on the conservation of mass.
The assumptions of the general MBE equation include:
i. The reservoir is considered a tank.
ii. Thermodynamic equilibrium exists.
iii. Pressure, temperature, fluid and rock properties are not space dependent.
iv. Production data are reliable.

The objective of the material balance computation for this study is to evaluate the recovery factors
from natural depletion and water injection. The MBE results will be used to make simple
assumptions and validate the reservoir simulation on Eclipse.
The fluids initially in place were calculated with the NOSIM initialization run of the model on
Eclipse. The table below shows the volume of gas, oil, and water initially in place.

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 Table 4. 1:Fluids Initially in Place

Tabert Ness Total

Dissolved gas (Sm3) 6432103117 946695416 7378798533
Oil (Sm3) 31089458 4575836 35665294
Water (Sm3) 125222197 188542410 313764607

4.2.1. MBE for Natural Depletion (passive Aquifer)

Assumptions

• Fluid expansion
• Pore volume reduction
• No water entry (passive aquifer)

The following equations are used:

𝑁∗𝐵𝑜𝑖 ∗𝐶𝑒 ∗∆𝑃 𝐵𝑜 −𝐵𝑜𝑖
𝑁𝑝 = , 𝐶𝑜 =
𝐵𝑜 𝐵𝑜𝑖 ∆𝑃
𝐶𝑜 𝑆𝑜 ∗𝐶𝑤 𝑆𝑤 ∗𝐶𝑝 𝑁𝑝
𝐶𝑒 = , 𝑅𝐹 =
𝐵𝑜 𝑁

Table 4. 2:Tabert and Ness Reservoir Parameters

Tabert Ness
Parameters Units Value Parameters Units Value
Sm3
N Sm3 4575836 N 31089458
Boi m3 /Sm3 1.6024 Boi m3 /Sm3 1.6024
Bo (@Psat) m3 /Sm3 1.6855 Bo (@Psat) m3 /Sm3 1.6855
Bo (@Pf) m3 /Sm3 1.6629 Bo (@Pf) m3 /Sm3 1.6629
Co bara -1 0.000242 Co bara -1 0.000242025
Ce bara -1 0.000335 Ce bara -1 0.000309672
Np Sm3 230351.8 Np Sm3 1447252.371
RF % 5.034092 RF % 4.655122553
Total
NP (Sm3) 35665294 Np (Sm3) 1677604 RF (%) 4.703744

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 4.2.2. MBE for Natural Depletion (Active Aquifer)
Assumptions

• Oil volume expands.

• Water volume expands.
• Pore volume decreases
• Aquifer expands => Water entry We
• No Water production Wp

Small Pot Aquifer Model

Assumptions
• Time independent
• Aquifer and reservoir pressure are equal.
• Constant pressure outer boundary system.
• Pressure is the same everywhere in the reservoir.
The small pot model was chosen for this study due to small size of the aquifer and its simplicity.
The following equations represents this model:

𝑁∗𝐵𝑜𝑖 ∗𝐶𝑒 ∗∆𝑃 + 𝑊𝑒

𝑊𝑒 = 𝐶𝑎 . 𝑉𝑤 . (𝑃𝑖 − 𝑃) , 𝑁𝑝 = 𝐵𝑜
𝐶𝑎 = 𝐶𝑤 + 𝐶𝑟

Table 4. 3:Material Balance Calculation for Aquifer Model

Tabert Ness Total

units values units Value Par.. units Value
N Sm3 4575836 N Sm3 31089458 N Sm3 35665294
Vw Sm3 184712800 Vw Sm3 113184000 Np Sm3 4472234
Ca bar 0.0001 Ca bar 0.0001 RF % 12.53946
We Sm3 2881519.7 We Sm3 1765670.4
Np Sm3 1963179.8 Np Sm3 2509054.3
RF % 42.9032 RF % 8.0704

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 4.3. MBE For Water Injection
𝑆𝑜𝑖 −𝑆𝑜𝑚
i. Calculate displacement efficiency, 𝐸𝐷 𝐸𝐷 = 1−𝑆𝑤𝑖
𝑆𝑜𝑚 which stands for the movable oil saturation is obtained from the fractional flow curve. The
fractional flow curve is a plot of fractional flow, 𝑓𝑤 against water saturation, 𝑆𝑤 . Fractional flow
is computed using the equation below:
1
𝑓𝑤 = 𝜇 𝑘
(1+ 𝑤 𝑟𝑜 )
𝜇𝑜 𝑘𝑟𝑤

The fractional flow curve for Tabert and Ness is shown below.

Table 4. 4: Drainage Table for Ness and Tabert

Tarbert Ness
SW KRW KRO 𝒇𝒘 SW KRW KROW 𝒇𝒘
0.1500 0.0000 0.8000 0.0000 0.3000 0.0000 0.8000 0.0000
0.2570 0.0080 0.4810 0.0237 0.3680 0.0080 0.4810 0.0237
0.3280 0.0150 0.3190 0.0642 0.4130 0.0150 0.3190 0.0642
0.4000 0.0260 0.1950 0.1629 0.4580 0.0260 0.1950 0.1629
0.4650 0.0340 0.1230 0.2875 0.5000 0.0340 0.1230 0.2875
0.5360 0.0500 0.0620 0.5407 0.5450 0.0500 0.0620 0.5407
0.6020 0.0760 0.0250 0.8161 0.5870 0.0760 0.0250 0.8161
0.6730 0.1160 0.0100 0.9442 0.6320 0.1160 0.0100 0.9442
0.7380 0.1860 0.0050 0.9819 0.6740 0.1860 0.0050 0.9819
0.7800 0.2500 0.0000 1.0000 0.7000 0.2500 0.0000 1.0000
1.0000 1.0000 0.0000 1.0000 1.0000 1.0000 0.0000 1.0000

Figure 4. 1: Fractional Water Flow Vs Saturation curve for Ness and Tabert

10
 ii. Calculate areal efficiency, 𝐸𝐴
Areal efficiency is a function of inverse mobility ratio and fractional flow. The expression
for mobility ratio is shown below:
𝑘𝑟𝑤(𝑠𝑜𝑟𝑤) 𝜇𝑜
𝑀= 𝑘𝑟𝑜(𝑠𝑤𝑐) 𝜇𝑤

iii. Calculate recovery factor

𝑅𝐹 = 𝐸𝐷 ∗ 𝐸𝐴 ∗ 𝐸𝑉

iv. Calculate oil produced by water injection

𝑁𝑝,𝑊𝐼 = (𝑁 − 𝑁𝑝,𝑁𝐷 )𝑅𝐹

The table below shows the result of computation of the oil production by water injection as adopted
by the procedure above.

Table 4. 5:Summary of Water Injection Performance

TARBERT NESS TOTAL

N 31 089 458 𝑆𝑚3 4 575 836 𝑆𝑚3 35 665 294 𝑆𝑚3
𝑵𝒑,𝑵𝑫 2 509 054 𝑆𝑚3 1 963 172 𝑆𝑚3 4 472 226 𝑆𝑚3
𝑺𝒐𝒊 0.85 0.7
𝑺𝒐𝒎 0.3 0.36
𝑬𝑫 0.65 0.5
M 0.46 0.46
𝒇𝒘 at Breakthrough 0.88 0.88
𝑬𝑨 0.97 0.97
𝑬𝑽 0.8 0.65
𝑹𝑭𝑾𝑰 0.5 0.32
𝑵𝒑,𝑾𝑰 14 100 000 𝑆𝑚3 800 109 𝑆𝑚3 14 900 109 𝑆𝑚3
𝑵𝒑,𝑵𝑫 + 𝑵𝒑,𝑾𝑰 19 372 335 𝑆𝑚3
𝑹𝑭𝑻𝒐𝒕𝒂𝒍 54%

4.4. Production Plateau Estimation

Production plateau is the time during the production history of a well where the production is
limited to surface conditions rather than the potential of the reservoir. For the material balance
study, the plateau is limited to 15% of the estimated ultimate recovery (EUR).
0.15∗𝐸𝑈𝑅
𝑃𝑙𝑎𝑡𝑒𝑎𝑢 = 365

11
Based on previously calculated ultimate recovery, the table below shows the plateau for each of
the material balance cases:

Table 4. 6: Production Plateau for different scenarios

Scheme Plateau, Sm3/day

Natural depletion (without influx) 689.4264
Natural depletion (with influx) 1837.9013
Water injection 7957.0434

Number of wells
A. Number of producers
The following procedures are used to calculate the number of producers required in the field.
i. Calculate the productivity index, PI
∝ 𝑘ℎ. 𝑘𝑟𝑜
𝑃𝐼 = 𝑟
𝐵𝑜 . 𝜇𝑜 [ln (𝑟𝑑 ) + 𝑠 − 0.75
𝑤
ii. Calculate the production per well, Q
𝑝𝑟𝑜𝑑𝑢𝑐𝑡𝑖𝑜𝑛 𝑝𝑒𝑟 𝑤𝑒𝑙𝑙 = 𝑃𝐼 ∗ 𝐷𝑟𝑎𝑤𝑑𝑜𝑤𝑛

iii. Calculate the initial number of wells

𝑝𝑟𝑜𝑑𝑢𝑐𝑡𝑖𝑜𝑛 𝑝𝑙𝑎𝑡𝑒𝑎𝑢
𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑤𝑒𝑙𝑙𝑠 =
𝑝𝑟𝑜𝑑𝑢𝑐𝑡𝑖𝑜𝑛 𝑝𝑒𝑟 𝑤𝑒𝑙𝑙
iv. Add spare

B. Number of injectors
Assumptions
i. voidage replacement scheme is adopted
ii. undersaturation conditions exists
iii. no water production
The following steps are taken to calculate the number of injectors:
i. calculate voidage injection rate, 𝑄𝑖𝑛𝑗
𝑄𝑜 . 𝐵𝑜
𝑄𝑖𝑛𝑗 =
𝐵𝑤
ii. calculate injectivity index, II
∝ 𝑘ℎ. 𝑘𝑟𝑜
𝐼𝐼 = 𝑟
𝐵𝑤 . 𝜇𝑜 [ln (𝑟𝑑 ) + 𝑠 − 0.75
𝑤
iii. production per well

12
 𝑝𝑟𝑜𝑑𝑢𝑐𝑡𝑖𝑜𝑛 𝑝𝑒𝑟 𝑤𝑒𝑙𝑙 = 𝐼𝐼 ∗ 𝐷𝑟𝑎𝑤𝑑𝑜𝑤𝑛

iv. number of injectors

𝑣𝑜𝑖𝑑𝑎𝑔𝑒 𝑖𝑛𝑗𝑒𝑐𝑡𝑖𝑜𝑛 𝑟𝑎𝑡𝑒
𝑛𝑢𝑚𝑏𝑒𝑟 𝑜𝑓 𝑤𝑒𝑙𝑙𝑠 =
𝑝𝑟𝑜𝑑𝑢𝑐𝑡𝑖𝑜𝑛 𝑝𝑒𝑟 𝑤𝑒𝑙𝑙
v. add spare

Table 4.7 summarizes the results of the computation for the number of wells for each material
balance case studied.

Table 4. 7: Number wells for different scenarios

Scheme Production Production productivity Number

Sm3/day per well index (Injectivity of wells
Sm3 Index) Sm3/day)
Natural depletion (without 879.6373 67.4163 1+1 spare
influx)
Natural depletion (with 3426.8959 3000 67.4163 1+1 spare
influx)
Water injection 8209.4730 180.2139 4+1 spare

CHAPTER FIVE
PERFORMANCE PREDICTION

13
 5.1. Natural depletion until 100 bars
Assumptions
i. the minimum BHP constraint is 100 bara
ii. production plateau must be 60% of the estimated ultimate recovery (EUR)
iii. production plateau of 4000 Sm3/day
iv. the project and drilling constraints listed above must be obeyed
v.
Natural depletion until 100 bars depicts different production mechanisms responsible for supplying
the energy required for hydrocarbon extraction. The figure below shows the distribution of the
drive for this scenario:

Figure 5. 1: Drive Mechanism for Natural Depletion

From the Figure 5.1, only three mechanisms; rock expansion, fluid expansion and water influx
indices existed for about 4 years before gas expansion drive. This was because the pressure
declined to the saturation pressure about that said period. The dominant drive is the water influx
providing 71.43% of the reservoir energy. Rock expansion was relatively high at the start but
reduces abruptly at the saturated pressure and further aquifer support.

Four exploration wells, A2, A4, N2 and N3 were used to assess the initial production potential of
the reservoir.

The fig below summarizes the field potential for this reservoir.

14
Figure 5. 2: FOE, FOPT and FOPR plot against time

From the figure above, the recovery efficiency is 21%, with a steady plateau for 4 years and
declines for about 2 years before the production terminates. This is due to the production system
offending one of the constraints in about the 6th year of production. Upon investigation of the
performance of the individual wells, it was discovered that A2 produced water above the water cut
limit because most of the perforations were in the water zone.
Well, A2 also performed the least due to a similar reason stated above. The recommendation is to:
• A2 can be a candidate for water injection at a later phase of development.
• Portion of A2 in the water zone be plugged and upper perforation in the oil zone be carried
out

Figure 5. 3: production from different wells

15
 5.1.1. Effect of Critical gas saturation
The critical gas saturation was increased from 0% from the earlier case above to 2.5% to study the
influence it poses on the production potential of the reservoir.

Figure 5. 4: Effect Gas Saturation

The increase in the critical gas saturation has improved the recovery by approximately 3% from
the earlier 21% to 23.7% with a longer plateau extending for 4 years and 10 months. The reason
for the increased efficiency is because of longer constant FGOR thereby providing more energy
for flow as can be shown below.

Figure 5. 5: GOR plot for different critical gas saturation

16
The critical gas saturation of 2.5% is further used for all production scenarios considered as it
better improves the performance of the reservoir.

5.1.2. Optimization Of the Natural Depletion

A maximum of five new wells were considered while sensitizing at different locations, perforation
intervals and well architecture (vertical wells, horizontal wells and combination of both). The
location of the new wells was based on the sweet spot, which is a function of thickness, net-to-
gross (NTG), porosity and oil saturation. The different cases are shown below:
• Case 1: three (3) vertical wells and one (1) horizontal well

W1 W2 W3 W4
i 19 14 10 5
j 15 21 31 29
k1 3 2 2 2,3,3,3
K2 8 7 7 3,3,3,3

• Case 2: four (4) vertical wells

W1 W2 W3 W4
i 19 14 10 12
j 15 21 31 25
K1 3 2 2 2
K2 8 7 7 6

• Case 3: five (5) vertical wells

W1 W2 W3 W4 W5
i 19 14 10 12 14
j 15 21 31 25 2
K1 3 2 2 2 2
K2 8 7 7 6 7

The performance plot for the different cases is shown below.

17
Figure 5. 6:Performance Plot for Different Case

The performance plot for each case summary is shown below in a table:

Table 5. 1:Recovery Efficiency for the different cases

Case Efficiency
Case 1 23.86%
Case 2 25.10%
Case 3 22.39%

Based on the above table, the second case is the optimized natural depletion scenario. The reason
been that it has the highest recovery efficiency. Case 2 is selected.

The performance of the optimized natural depletion scenario is shown below:

18
Figure 5. 7: FOE and FOPT plot for Optimized Case

The table below summarizes the performance of the optimized natural depletion case.

Table 5. 2:Optimized Natural Depletion Performance

Parameter Value
Recovery Efficiency, FOE 25.10%
Cumulative Production, FOPT 9 000 000 Sm3
Plateau Production, FOPR 4000 Sm3/day
Plateau period 5 years and 8 months

5.2. Water Injection

Water injection is an important method that is used to maintain reservoir pressure in undersaturated
conditions and displace hydrocarbons toward producing wells. For field development projects
involving reservoirs with supporting aquifer, water injection / flooding can be essential for
maximizing oil recovery, extending the productive life of the reservoir and improving the
profitability of the reservoir development project.
As hydrocarbon is recovered, the reservoir pressure declines and the ability to extract the
hydrocarbon reduces until the field’s shut-in criteria are met. By injecting water, the pressure can
be maintained at a level that continues to support oil extraction.
In this case, 3 extra producing wells (W4, W5, W7) were drilled to optimize natural recovery and
5 injection wells (I1, I2, I3, I4, I5 were drilled to maintain pressure above 290 bara. Seven
producers and five injectors were selected as the optimal candidates for the water injection case.
This choice was made based on the constraints placed on these field parameters; field gas oil ratio
(FGOR), field water cut (FWCT)Field oil production rate, field pressure and field oil efficiency. A

19
recovery efficiency of 50% was achieved and a production plateau of 8000Sm3 was maintained
and this case used in the economic analysis of the water Injection case
From the analytical material balance calculated, the least number of injector wells required is 5
wells plus one spare, the effect of increasing the number of injector wells was considered until an
optimized number of wells was selected. The injection time was analyzed and March 1, 2016 was
selected.
The reservoir is maintained at undersaturated conditions hence, the drive mechanisms that aid in
the recovery of oil are;
I. Water drive
II. Oil expansion
III. Rock compression

Figure 5. 8: Well Placement for Water Injection

Table 5. 3:Optimized water Injection Scenario. Well Coordinates

WELL GEOMETRY I GEOMETRY J

S/N WELL
TYPE AXIS AXIS
1 W1 Vertical 19 15
2 W2 Vertical 14 21
3 W3 Vertical 10 31
4 W4 Horizontal 5 29
5 W5 Vertical 20 5
6 W6 Vertical 12 25
7 W7 Vertical 8 34
8 I1 Vertical 14 10
9 I2 Vertical 4 18
10 I3 Vertical 8 28
11 I4 Vertical 21 8

20
 12 I5 Vertical 17 17

5.2.1. Limiting Injection Time

The limiting injection time for the beginning of the water injection is selected from a plot of the
field pressure with time based on the optimized natural depletion scheme of 100bara and a plateau
of 4000Sm3. A stable plateau of 8000 Sm3 is proposed from the material balance calculations for
the water Injection case and the limiting pressure is 290 bara above the saturation pressure of the
well which is 258.5 bara. An optimized time was selected to prevent the reservoir pressure
depletion to the 290 bara. All 5 injector wells are opened on the same day

Figure 5. 9:Limiting Injection Time

5.2.2. Pressure Maintenance & Voidage Replacement

The optimized time for water injection is 1 March 2016. This is 14 months after the start of
production (1st January, 2016). The injection of water using 5 injectors is seen to be effective as
the reservoir pressure declines from 446 bara to about 329 bara where it is maintained above the
saturation pressure of the reservoir. GOR remained constant at 206.89 Sm3/Sm3 The water
injection scheme is based on voidage replacement and the simulation show a ratio of one in most
of the field life.

21
Figure 5. 10 FPR and Voidage Replacement plots (FVIR, FVPR Vs Time

5.2.3. Field Production Parameters

The production and injection constraints obeyed for selecting an optimized water injection scheme
are:
I. Maximum water injection rate per well of 3000Sm3 / day
II. Maximum oil production rate per well of 1800 Sm3 / day for vertical well and 2400 Sm3
for horizontal well
III. GOR of 1500 Sm3 / day
IV. Water Cut of 90%
V. 60% of EUR at end of plateau
VI. The minimum economical rate for the field is 1000 Sm3/d of oil.

The Optimized Water injection case improved the recovery efficiency of the Alwynn field from
25.1% to 50 %. The field’s life span was also prolonged to 11 years, 2 months and 12 days. The
field was produced at a plateau of 8000 sm3 which lasted for about 3.9 years, surpassing the
production limitation of 60% of the estimated ultimate recovery. The field was shut in after the
water cut exceeded 89.6%. The cumulative oil produced at the end of the field life is
17,834,600Sm3.

22
Figure 5. 11:FOE,FOPT, FOPR Vs Time

5.2.4. Oil Production Rate/ Water Cut Per Well

Figure 5.15 shows the total oil production of each well at the end of field life. Well, W5 has the
least production as well was shut in 6 years due to high water cut above 90%. The other six wells
(W1, W2, W3, W4, W6, W7) declined in daily production rate until the 11th year due to increasing
water cut. W4 has the highest cumulative total production and it is a horizontal well.

Figure 5. 12:WOPT, WWCT VS Time

Table 5. 4:Well Total Oil Production

Well, W1 W2 W3 W4 W5 W6 W7

23
 Total
3332289. 3197665.
Production 2779399.3 3716839.8 1040735.6 2379357 1289013.8
3 8
(Sm3)

Table.5.4 shows the effect of number of injectors opened at the time of injection on the field
parameters, Scenario 5 is selected as the optimum water injection scheme as it gives the highest
recovery and gives the maximum pressure support to the reservoir. However, Fig. Shows that
injectors I4 and 15 have the lowest injectivity as injection rates decline rapidly after the 5th year.
The wells are shut off when the production constraint of 1000Sm3/day is offended.

Table 5. 5: Effect of Injector wells on well performance Indices

No of vertical No. of Horizontal Number of FOPT

Scenario FOE
Producers Producers injectors (SM3)
1 6 1 1 8,834,900 0.248
2 6 1 2 14561076 0.408
3 6 1 3 16587407 0.465
4 6 1 4 17160942 0.481
5 6 1 5 17735300 0.50

Plateau Duration Field life FGOR (Sm3/

Scenario FWCT FPR(Bara)
(Years) (Years) Sm3)
1 0.46 1.3 7.62 206.89 264.69
2 0.55 1.09 12.57 206.89 272.18
3 0.75 2.2 12.57 206.89 280.12
4 0.83 2.95 11.24 206.89 292.71
5 0.89 3.9 11.24 206.89 329.5

24
Figure 5. 13: Well Water Injection rate

5.3. Water Alternating Gas (WAG)

The process of injecting cycles of gas and water into an oil reservoir is known as a "water-
alternating gas." Water regulates mobility and placement, but gas mobilizes oil more effectively
than water alone. WAG gains 10-15% more oil than waterflooding by maximizing oil recovery
through optimized displacement without viscous fingering, achieved by alternating injections.
The production and injection constraints obeyed for selecting an optimized gas injection scheme
are:
I. Maximum gas injection rate per well of 800,000Sm3 / day
II. Maximum oil production rate per well of 1800 Sm3 / day for vertical well and 2400
Sm3 for horizontal well
III. GOR of 1500 Scf/ day
IV. Water Cut of 90%
V. 60% of EUR at end of plateau
VI. The minimum economical rate for the field is 1000 Sm3/d of oil.

In this case, 7 producers and 5 injection wells were considered, the optimal well locations used in
the water injection case are selected for this case. This is a black oil model, hence only the injection
cycles are varied to optimize recovery using WAG. Table. Shows the recovery efficiency and the
effect of injection time on the field parameters. Scenario 3 gives a recovery efficiency of 51.1% at
8000 Sm3 plateau however, it does not meet the total production constraint of 60% of EUR at the

25
end of the plateau phase. Scenario 4 is selected as the optimum WAG production scheme with a
recovery factor of 51.2% @ 7500 Sm3/ day.

Table 5. 6: WAG Optimization

Platea
WAG Cycle
u FOPT FWCT @ end
Scenario W-G-W FOE
(Sm3/ (Sm3) of field life
(Years)
Day)
1 8-3-4 8000 17620554 0.494 0.85
2 3-1-11 8000 17668084 0.495 0.84
3 4-1-10 8000 18213128 0.511 0.87
4 4-1-10 7500 18263314 0.512 0.87

FGOR @ end of
Field life
Plateau Duration (Years) field life FPR (Bara)
(Years)
(Sm3/Sm3)
1 3.15 10.88 757.64 315.54
2 3.15 10.57 279.32501 303.81
3 3.15 11.57 281.98883 311.6
4 3.57 11.74 277.8 313.5

5.3.1. Field Production Parameters

The Optimized Water alternating gas case improved the recovery efficiency of the Alwynn
field from 50% to 51.2 %. The field’s life span was 11 years, 8 months and 26 days. The field
was produced at a plateau of 7500 sm3 which lasted for approximately 3.2 years, surpassing
the production limitation of 60% of the estimated ultimate recovery. The field was shut when
the total oil production per day offended the 1000Sm3 / day constraint set as minimum oil
production allowed. The cumulative oil produced at the end of the field life is 18,263,314 Sm3.
This optimal scheme was achieved by alternating water and gas in a cycle of 4 years of water
injection, 1 year of gas injection to sweep the residual oil bypassed by the water and 10 years
of water injection.

26
Figure 5. 14 WAG FOE, FOPR, FOPT Vs Time

GAS INJECTIVITY PER WELL

The gas injection cycle for the optimum injection scheme has a duration of 1 year. Fig. Show
the gas injection rate per well. Well, GI5 has the lowest injectivity as less than 400,000 Sm3
of gas is injected daily. Well, GI1 and G13 both have a steady injection rate of 800,000Sm3
throughout gas cycle.

27
 CHAPTER 6
ECONOMIC ANALYSIS

In reservoir simulation studies, economic analysis is essential for assessing the profitability and
financial sustainability of petroleum projects. It entails weighing the advantages and disadvantages
of various reservoir development and production tactics. Economic indicators like net present
value (NPV), internal rate of return (IRR), and payback period are examined in simulation studies
to assess the viability, profitability, and investment appeal of a project. Making educated decisions
about reservoir development plans, production strategies, and investment decisions is possible
when economic factors are incorporated into reservoir simulation models. When conducting
reservoir simulation studies, economic analysis aids in maximizing the value of hydrocarbon
reserves, prioritizing investments, and optimizing project economics.

The economic analysis and evaluation of different possible concepts for the development of Alwyn
North Field are considered. This analysis is conducted with the aim of proposing the development
scenario that is most economically viable. This chapter will evaluate the economics of the optimal
scenarios selected in each case considered in the previous chapters. Three cases were simulated
and optimal well placement and perforation depths were selected. The three cases analyzed in this
project are;
i. Natural depletion
ii. Water Injection
iii. Water alternating gas injection

The economic indicators used for this analysis to determine the most economic development
scheme include;

i. Gross Profit Margin

ii. Profitability Index

iii. Cumulative Net Present Value

iv. Internal Rate of Return

v. Payback Period

6.1. COST ESTIMATE

Brent oil barrel: 92.33 US$ (October 2023)

28
Labor and cost of refining is not considered

Table 6. 1: CAPEX

S/No ITEM AMOUNT (US$)

Treatment and production
1 700000000
facilities platform
Drilling and
2 Accommodation Platform 250000000
with 40 slots
3 Secondary platform 250000000
4 Drilling costs per well:
deviated from a platform 12000000
horizontal from a platform 16000000
vertical sub-sea well +
36000000
piping
horizontal sub-sea well +
40000000
piping
5 Gas Compressor 44200000

Table 6. 2: OPEX

S/No ITEM AMOUNT

Lifting, Production and
1 10.5 $/bbl
Transportation
2 Discounted factor, i = 10%
3 Tax income = 40%

6.2. Economic Analysis for Natural Depletion with 4 Producers

The Optimal scenario selected for the natural depletion scheme involves drilling four new wells
with a recovery efficiency of 25.0%. The total oil production is 8949871 Sm3. The production

29
plateau was achieved in approximately 6 months from start date of January, 2015 and maintained
for over 5years. The field is closed off after 6.5 years due to reservoir pressure depletion to 100bar.
Table. shows the total capital and operational costs to be incurred throughout the life of the field.

Table 6. 3: Natural Depletion Capex

CAPEX
EQUIPMENT QUANTITY COST ($) PRICE ($)
Treatment and
production 1 700,000,000 700,000,000
facilities platform
Drilling &
accommodation
1 250,000,000 250,000,000
platform with 40
platform slots:
Vertical well
deviated from a 4 12,000,000 48,000,000
platform

TOTAL CAPEX
998,000,000
($)

Table 6. 4: Natural Depletion Economic Indicators

PARAMETERS
S/N Total oil Production (bbl) 56,372,786.00
1 Total Investment ($) 998,000,000.00
2 Cost/bbl ($) 17.70
3 Gross Profit Margin ($) 4,206,899,331.38
4 Gross Revenue ($) 5,204,899,331.38
5 Gross Profit Margin (GPM) per barrel 74.63
6 IRR 0.909090909
7 Payback Period (years) 1

30
 8 payback Period (months) 12
9 PI 2.249293659
10 NPV ($) 2,244,795,071.61

CNPV VS DATE
2.5E+09
2E+09
1.5E+09
1E+09
CNPV

500000000
0
2010 2015 2020 2025 2030
-5E+08
-1E+09
-1.5E+09
YEARS

Figure 6. 1: CNPV Vs Time Natural Depletion

From Table 6.4. The optimum natural depletion scheme has a profitability index of 2.2 and an NPV
of 2,244,795,071. This shows that the production scheme is economically viable and has good
returns on investment.

6.3. Economic Analysis for Water Injection with 7 Producers and 5 Injectors

In the optimal production scheme selected for water injection, 3 new production wells and 5
injectors were drilled. This improved the recovery efficiency of the natural depletion scheme to
50%. More than 60% of EUR was recovered during the plateau phase with a rate of 8000m3 per
barrel. The total production during the field life using water injection recovery mechanism is
17,735,300Sm3.
Table. shows the total capital and operational cost to be incurred throughout the life of the field.

31
Figure 6. 2: Drilling Platform Selection Strategy

In Fig6.2. One drilling platform with a reach radius of 2200m is used. 7 vertical wells are drilled
on the platform and 5 subsea wells father than platform reach are also drilled.

Table 6. 5: Water Injection Capex

CAPEX
EQUIPMENT QUANTITY COST ($) PRICE ($)
Treatment and
production facilities 1 700,000,000 700,000,000
platform
Drilling &
accommodation
1 250,000,000 250,000,000
platform with 40
platform slots:

Vertical well deviated

7 84,000,000 48,000,000
from a platform

vertical sub-sea well +

4 36,000,000 144,000,000
piping

Horizontal subsea well

1 40,000,000 40,000,000
+ piping

TOTAL CAPEX ($) 1,218,000,000

32
Table 6. 6: Water Injection Economic Indicators
PARAMETERS
S/N Total oil Production (bbl) 111,551,680.00
1 Total Investment ($) 1,218,000,000.00
2 Cost/bbl 10.92
3 Gross Profit Margin ($) 9,081,566,614.40
4 Gross Revenue ($) 10,299,566,614.40
5 Gross Profit Margin (GPM) per barrel 81.41
6 IRR 0.91
7 Payback Period (years) 1.00
8 payback Period (months) 12.00
9 PI 3.13
10 NPV 3,814,611,711.57

As seen in table 6. 6 Based on the economic indicators, the proposed water injection development.
plan for the Alwyn field is economically viable with a profitability index of 3.13 and an NPV of $
3,814,611,711.57 and a payback period of 1 year .

CNPV VS YEARS
5E+09
4E+09
3E+09
CNPV

2E+09
1E+09
0
-2 -1E+09 0 2 4 6 8 10 12 14
-2E+09
YEARS

Figure 6. 3:: Water Injection CNPV Vs Time

33
 6.4.Economic Analysis for Water Alternating Gas Injection with 7 Producers and 5
Injectors
In the optimal production scheme selected for water alternating gas recovery method, 3 new
production wells and 5 injectors were drilled. This improved the recovery efficiency of the water
injection scheme to 51.2%. More than 60% of EUR was recovered during the plateau phase with
a rate of 7500m3 per barrel. The total production during the field life using WAG injection recovery
mechanism is 18,263,314 Sm3. The cost of gas during the gas injection cycle year is included in
the OPEX calculated.
Table. shows the total capital and operational cost to be incurred throughout the life of the field.

Assumptions

Brent oil barrel: 92.33 US$ (October 2023)

Injection Gas price :2.5 US$

Table 6. 7: WAG CAPEX

CAPEX
QUANTIT
EQUIPMENT COST ($) PRICE ($)
Y
Treatment and
production facilities 1 700,000,000 700,000,000
platform
Drilling &
accommodation
1 250,000,000 250,000,000
platform with 40
platform slots:
Vertical well deviated
7 84,000,000 48,000,000
from a platform

vertical sub-sea well +

4 36,000,000 144,000,000
piping

Horizontal subsea well

1 40,000,000 40,000,000
+ piping

TOTAL CAPEX ($) 1,218,000,000

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Table 6. 8:WAG Economic Indicators

PARAMETERS
S/N Total oil Production (bbl) 114,872,790.00
1 Total Investment ($) 1,306,400,000.00
2 Cost/bbl 11.37
3 Gross Profit Margin ($) 9,299,804,700.70
4 Gross Revenue ($) 10,606,204,700.70
5 Gross Profit Margin (GPM) per barrel 80.96
6 IRR 0.91
7 Payback Period (years) 1.00
8 payback Period (months) 10.00
9 PI 2.95
10 NPV 3,851,258,789.43

As seen in table. Based on the economic indicators, the proposed water injection development plan
for the Alwyn field is economically viable with a profitability index of 2.95 and an NPV of $
3,851,258,789.43 and a payback period of in the first year and a recovery efficiency of 25.10 %

CHAPTER 7
Recommendations and Conclusions
7.1. Conclusions
The following inferences can be drawn from the analytical material balance calculations,
simulation, optimization of the three recovery methods covered, and economic analysis of the
optimized cases.

1. All proposed development schemes are economically viable.

2. The water injection case offers the best economic yield based on the economic indices used. It
showed the highest profitability index, gross profit margin, and lowest cost of producing a barrel
of oil.

While the Natural depletion recovery method has a life span of 6 years, it’s plateau lasted for about
5 years yielding more than two times of its investment with a gross profit margin of
$4,206,899,331.38.

35
The Water injection recovery method has been seen to be the most profitable with a profitability
index of 3.13 and a recovery efficiency of 50% yielding a gross profit margin of $9,081,566,614.40
on an investment worth 1,218,000,000.00.

While the WAG alternative is economically viable, there is only a 1.2% improvement in the
recovery efficiency from 50% TO 51%. Total oil production of the field was also improved from
17,735,300 Sm3 to 18,268,314 Sm3

7.2. Recommendations
Water injection field development should be used to recover hydrocarbon from the ALWYN field.

Some recommendations based on the scope of this work are;

i. The field should be properly monitored for water influx and water coning. This involves
developing a schedule for well performance analysis
ii. Compositional model should be used to simulate the water Alternating gas scenario for
optimal findings and results
iii. Simulation models should constantly be coupled with field production data in order to
create dynamic outcomes that best reflect the true development procedure.
iv. This model should be refined as more information is derived from the field.
v. A more realistic and robust economic model should be utilized in conducting analysis. The
economic analysis reported here is subject to time and prevailing socio-political conditions.

36