INTRODUCTION TO

RESERVOIR MANAGEMENT
Salvatore Zammito
Introduction to Reservoir Management
Presentation Summary

Introduction

Course objectives

Field development projects: New Fields

New Fields: Drainage Mechanisms

Field development projects: IOR/EOR

Economic Aspects

Well Drilling and Completion

Uncertainties in Reservoir Characterization

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Reservoir Management Plan
Introduction to Reservoir Management 2
 Introduction: some history on petroleum technology

1859-1914:
Production by natural depletion
Ingenuity, empirism, intuition
The age of drillers and wildcatters

1914-1925:
More rational production technology
Better well placement,
The age of geologists

1925-1940:
Better equipment and safety (well & surface)
The age of producers

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Introduction to Reservoir Management 3
Introduction: some history on petroleum technology

1940-1990:
Multiphase flow in porous media
Optimization of recovery factor
Assisted and improved oil recovery
The age of Reservoir Engineers

1990.:
synergies
Reservoir management,
Asset teams
The age of integrated projects

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Introduction to Reservoir Management 4
 Introduction: oil business is changing

Oil companies:
Activity transfers
Re-organization: multidisciplinary teams, project teams
Borderless careers

Service companies:
Project management with wider scope of work,
Integrated services,
Borderless careers
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Introduction to Reservoir Management 5
Introduction

RESERVOIR MANAGEMENT IS NOT RESERVOIR ENGINEERING

BUT RESERVOIR ENGINEERING IS PART OF IT

AND RESERVOIR MONITORING IS AN IMPORTANT COMPONENT

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Introduction to Reservoir Management 6
 Introduction

Definition of Reservoir Management :
It varies, depending on companies and people
It could be:
The application of the state of the art technology to a known reservoir system
with a given management environment

Objective of Reservoir Management :
It could be:
To maximize the economic value of a hydrocarbon reservoir
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Introduction to Reservoir Management 7
Reservoir Management Process
Set up objectives
RM activities:
Development Plan
- Data acquisition
- Data integration into models
Iterate
- Strategy formulation and
implementation
Plan Evaluation:
- Field behavior Further
- Surveillance, monitoring Development

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- Analysis
- New data acquisition End of Life
Introduction to Reservoir Management 8
 Responsibilities

Multi-disciplinary teams from
Geology, Geophysics, Reservoir Engineering,
Planning, Economists
Drilling Engineering, Production and Operation Engineering,
Research and Development

Each team member should be responsible
for adherence with the standards within his
area of expertise.
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Introduction to Reservoir Management 9
Objectives of this course

To develop an awareness of the Fundamentals of Reservoir Management, from
Geology to hydrocarbon recovery

To promote techniques and best practices relating to the development of Oil
and gas fields, in order to optimize Company resources and create additional
value

To develop professionals capable of leading multi disciplinary teams in
Reservoir Development, Operations and Planning

To provide an exposure to a range of reservoir conditions through case studies

Participants will leave the course understanding that reservoir management is
used:
Throughout the full cycle of hydrocarbon reservoirs

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To determine the most cost effective way to manage the
development of a new field or extend the plateau of an older field
Introduction to Reservoir Management 10
 Field Development Projects
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Introduction to Reservoir Management 11
Oil & Gas Field Development Phases
Field
Development
Exploration Any additional development follows
Appraisal the initial development process
Development Studies
3y
Preliminary >20 y
Conceptual
Pre-project
Project
Production profile
INVESTMENT
DECISION Field
1-3 y 3-4 y 3-4 y Field operations abandonment
Time
Discovery First Oil End of Restored

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production Site
New business
Technical evaluation - preliminary / conceptual 15 days 9 months
Introduction to Reservoir Management 12
 FDP: a multi-disciplinary team
Reservoir Production
Engineering Engineering
Geology
Geophysics Chemical
Engineering
Design Environmental
Reservoir Management
Construction Legal
Drilling
Engineering Economics
Management
Production Reasearch

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Operations Labs
Introduction to Reservoir Management 13
Field Development Projects
DATA STUDIES DISCIPLINES
Seismic Models: structural, stratigraphy, Geophysics
sedimentology, geomodel
Regional, analog fields, Geology
Maps
Wells, cores Petrophysics
Res Management
Wells Log Interpretation Petrophyscics
Cores K, , SCAL synthesis Geology
K modeling Res Management

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Well Tests Res Management
Fluid analyses (O,G,W)
Fluid Sampling Geophysics
Well test interpretation:
Cores Geology
Pi, K, S, boundaries, faults
Petrophysics
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 Field Development Projects
DATA STUDIES DISCIPLINES
maps Hydrocarbon in place Geology
Petrophysics
Res Management
Well Tests, cores Material balance Res Management
Analog fields Drainage Mechanisms Geomechanics
Prod history (if any) Geology 2010 - IFP Training
Synthesized data Geomodel Res Management
Upscaling Geology
Res Model
Petrophysics
History Match Geophysics
Introduction to Reservoir Management 15
Field Development Projects
DATA STUDIES DISCIPLINES
Well performance
Well Tests Pet Engineering
Well Architecture(drilling,
completion) Drilling
Artificial lift Res Management
Intelligent completions
Model studies results Development scenarios
Res Management
Economic Models Production forecasts
Economists

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Fluid Studies Prod Engineering
Surface facilities, platforms,
Topographic surveys pipes, . Construction Engineering
Soil surveys Res Management
Soil Mechanics
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 Data Acquisition
Seismic: Geological data:
2D, 3D
-Stratigraphic
-sedimentology
-maps
Work overs
Data Base Well Data:
-exploration, appraisal,
development
Surveillance:
-Cores
-Production, injection
-Logs
-Monitoring

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-Fluids
-Field Behavior
-Tests
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Model Building

Building the geo-models:
Geophysical modeling: structural model and maps, including faults.
Geological modeling:
stratigraphic and sedimentological models
and related maps.
Populate the models with properties such as facies, Rock Types, PHI, K, Pcs.
This will lead to the Geological Model(s).

Reservoir modeling:
the Geological Model(s), after up-scaling, will yield the Reservoir Simulation
Model(s).
After initialization of the RSM, there will be interaction with geophysics and geology
to fine tune the models.
This interaction will continue during the history matching process.
Using the RSM for development optimization

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Introduction to Reservoir Management 20
 New Fields

Other studies include :
Petroleum and drilling engineering; to design well architectures and
completions.
Process engineering: to design surface facilities and pipes.

The reservoir engineer will also investigate the alternative drainage
mechanisms by analytical methods to size up the project.
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Introduction to Reservoir Management 21
Evaluation of Drainage Mechanisms

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 Evaluation of Drainage Mechanisms

We need to evaluate, from the onset, what could be the possible drainage
mechanisms:
natural depletion
or do we need assisted drainage (water or gas injection).

However, assisted drainage is seldom implemented right from the beginning.

It is preferable to start producing the field by natural depletion, even for a very
short period,
in order to monitor and observe the field behavior
and decide on the nature of the drainage mechanism from the dynamic
data.
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Uncertainties will remain.
Introduction to Reservoir Management 23
Evaluation of Drainage Mechanisms

If the option is to start producing by natural depletion, details of the
mechanism must be known:
Monophasic expansion: when will the bubble point pressure be reached?
Solution Gas Drive: will there be any gas gravity segregation?
Aquifer activity:
will it be strong or weak?
And for a fractured reservoir, would imbibition be an important factor?
Gas cap expansion:
how strong?
And for a fractured reservoir, how will gas in the fractures (fissures)
interact with oil in the matrix?

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Can there be any reservoir compaction and subsequent subsidence at
surface?
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 IOR/EOR Planning

Due to the complex nature of reservoirs and recovery mechanisms, IOR/EOR
not only requires careful planning

but also continuous:
follow-up and efficiency monitoring,
programs adjustments,
continuous optimization of subsurface and surface facilities.
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IOR/EOR Planning
Production
level
Phase 1:
Phase 0:
Implement IOR
Studies with new data
Prepare EOR
Final MDP EOR Pilot EOR full field
3 years 5 years 5 years 3 years
Durations are only indicative and depend on field size,
corporate strategy and government guidelines

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 Master Development Plan to be finalized during Phase 0, at latest
 EOR option and concept to be finalized during Phase 1
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 IOR /EOR Planning

IOR implementation has a positive impact on field performance within a few
years (typically 1 or 2).

Field response to EOR is usually longer (3 - 5 years to detect a visible impact of
injected fluids on the production figures).
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IOR /EOR Planning

In addition, EOR may require several years lead time to :
determine the EOR mechanism to be implemented,
run the appropriate tests (lab work, field pilot),
secure the source of fluids to be injected (CO2, hydrocarbon gas, others),
possibly restore the reservoir pressure back to the appropriate level.

EOR should therefore be planned early in field life
The sooner, the better

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 Economic Aspects

Main criteria
Net Present Value (10) [ NPV 10 ]
Internal Rate of Return [ IRR ]
Capital Profitability Index (10) [ CPI 10 ]
Breakeven oil price (Oil price at which Project NPV (10) = 0)

Other criteria
Pay-Out Time [ POT ]
Maximum Capital Exposure [ MCE ]
Technical cost per barrel

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Introduction to Reservoir Management 29
Economic criteria

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 Economic criteria
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Well drilling and completions

Well engineering has evolved tremendously and may have a great impact on
flow insurance and improved oil recovery.

A good example would be the extended reach wells in Tierra del Fuego
(Argentina) to tap oil reserves which otherwise could not be economically
produced.
ASM-2 - 1998 CN-1 - 1999
Argentina CS-1 Argentina
L. drain = 2 554 m Argentina - 1998 Departure = 10 585 m
1000 Departure = 8 108 m Length = 11 184 m
HNP-10 - 1990
2000 Argentina HNP-7 - 1996 AS3 - 1996
Vertical depth (m)

Argentina Argentina
AK-9 - 1975
Abu Dhabi
N-28 - 1990
TM-38 - 1997 North Sea
3000 Indonesia
TVD = 3 850 m D-08 - 1995
North Sea
4000

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Defense P. Maillot
0 1000 2000 3000 4000 5000 6000 7000 8000 9000 10000
Horizontal departure (m )
Introduction to Reservoir Management 32
 Well drilling and completions

Another good example of the complexity of drilling is given in a field case in
Colombia:
the most advanced techniques were used to drill in a tectonically complex
environment (in-situ stress field, variations in rock resistance and pore
pressure).
Problems of stability or fracturation by invasion, well collapse, cementation
problems.
20 to 30 million US$ per well,
more than 100 wells.
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Introduction to Reservoir Management 33
Oseberg Case
 Horizontal Wells
OSEBERG 3D WELL

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Introduction to Reservoir Management 34
 Evolution of Horizontal Drilling
1998 2000 2002
3 MBD 5 MBD 12 MBD
1 km 3 km 9 km
Horizontal Horizontal (ER) MRC (Multi-lateral)
Maximum Reservoir Contact (MRC)

A well with an aggregate reservoir contact in excess of 5 kilometers via a
single or multi-lateral configuration.

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Uncertainties in reservoir characterization

A great number of uncertainties can be identified in this process. These can be
grouped into three main categories:
Geophysical uncertainties that affect the reservoir envelope.
Geological, sedimentary and petro physical uncertainties that impacts on
the content of envelope and the HC volume in-place.
Dynamic uncertainties that impact on the reserves and production profiles.

For each case, all potential uncertainties
must be identified
and assessed in terms of their impact
and then ranked so that only major uncertainties will be kept and integrated
into the whole process.

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Introduction to Reservoir Management 36
 GRV Probabilistic Distribution

Results of Structural Uncertainties
Distribution of Gross Rock Volume
Ranking of Uncertainties
Structural Maps
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HIIP Probabilistic Distribution - G&G

Results of Geological and Structural
Uncertainties
Distribution of Hydrocarbons in
Place
Ranking of Uncertainties
Reservoir Models

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Hrz permeability
Introduction to Reservoir Management 38
 Global Workflow

Static Uncertainties: HCIP
distribution

Combine Static and Dynamic
Uncertainties

Reserves distribution
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Reservoir Management

Reservoir Management requires an integrated multi-disciplinary team

Before RM: sequential approach
Different hierarchies and objectives, poor communication
Geophysics Geology Reservoir

After RM:
common hierarchy and objectives, good communication
Geology

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Geophysics Reservoir
Introduction to Reservoir Management 40
 Reservoir Management Plan

The RMP is a Road Map for the Asset team

It is a synthetic document:
On all main aspects related to the geosciences and reservoir engineering
It pinpoints:
The project objectives
The project status and uncertainties
The future actions and planning (data acquisition, development
strategy, monitoring, )

It should be approved by Management at headquarters and be used as a law
enforcement document within the subsidiary.
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Reservoir Management Plan: example (1)

Executive summary
Objectives Field RMP
Strategies
Summary of development plan
Field description and data base
Uncertainties and main development risks (OIIP, reserves, oil rate, other
uncertainties,)
Well recommendations
Data acquisition and studies
Production management
Human resources

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 Reservoir Management Plan: example (2)

General data
Geographical location
Association
Field A history

Main constraints
Economic environment
Legal and ecological constraints
Production and reservoir constraints
Drilling and completion constraints
Lay out constraints
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Reservoir Management Plan: example (3)

Field reservoir description
Geology and geophysics
Reservoir model
Reservoir fluids
Petrophysics
OIIP and reserves: proven, probable and possible

Subsurface development key points
Development strategy
Pressure maintenance
Well architecture and artificial lift

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Water and gas injection
Production profiles
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 Reservoir Management Plan: example (4)
Drilling and completion methods
Drilling rigs
Well and completion architecture
Sand control
Phasing of development drilling
Lay out flexibility
Potential upsides
Enhanced oil recovery

Detailed well pattern and sequence
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Reservoir Management Plan: example (5)

Data acquisition and field monitoring:
Drilling fluids
Measurements while drilling
Coring
Wireline logging
Cased hole logging
Interference testing
4D seismic
Production monitoring and well allocation
Injected water tracers

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 Reservoir Management Plan: example (6)

Subsurface risk management
Uncertainty study
Well robustness study
Main development risks

Human resources
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