Introduction To Reservoir Engineering

CONTENTS

1 INTRODUCTION 8. PRODUCTION OPERATIONS OPTIMISATION

1.1 Reserves Estimation 8.1 Development Phase
1.2 Development Planning 8.2 History Matching
1.3 Production Operations Optimsation 8.3 Phases of Development

2 RESERVOIR ENGINEERING TECHNIQUES 9. THE UNIQUENESS OF THE RESERVOIR

3 RESERVE ESTIMATING 10. CONCLUSIONS

3.1 Definitions
3.2 Proven Reserves
3.2.1 Exercises - Reserve Definitions
3.3 Unproved Reserves
3.3.1 Probable Reserves
3.3.2 Possiible Reserves
3.4 Reserve Status Categories
3.4.1 Developed:
3.4.1.1 Producing
3.4.1.2 Non-producing:
3.4.2 Undeveloped Reserves:

4 PROBABILISTIC REPRESENTATION OF
RESERVES

5 VOLUME IN - PLACE CALCULATIONS

5.1 Volume of Oil and Gas in-Place
5.2 Evolution of Reserve Estimate
5.3 Reservoir Area
5.4 Reservoir Thickness
5.5 Reservoir Porosity
5.6 Water Saturation
5.7 Formation Volume Factors
5.8 Recovery Factors
5.9 Production Capacity
5.10 Hydrocarbon Pore Volume Map

6 OTHER APPRAISAL ROLES

7 DEVELOPMENT PLANNING
7.1 Reservoir Modelling
7.2 Technoconomics
7.3 Coping with Uncertainty
LEARNING OBJECTIVES

Having worked through this chapter the Student will be able to:

• Show using a block diagram 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.

• Describe in general terms the evolution of reserves through successive

exploration wells.

• Describe briefly with the aid of a sketch the various maps used to represent
reservoir; area, thickness porosity, saturation.

• Describe briefly the use of the production (well0 test to determine reservoir
flowability and properties.

• Describe briefly the various elements of development planning: reservoir

modeling technoeconomics and uncertainty.

• Illustrate with a sketch the impact of different technical parameters on the

associated uncertainties on a project.

• Describe in general terms in the context of production operations, optimization

in history matching.

• Draw a sketch showing the various phases of production from build up to

economic limit.

• Draw a sketch illustrating the various recovery scenarios from primary to

tertiary recovery.


 Introduction To Reservoir Engineering

1 INTRODUCTION

With the petroleum industry’s desire to conserve and produce oil and gas more efficiently
a field of specialisation has developed called Petroleum Reservoir Engineering. This
new science which can be traced back only to the mid 1930’s has been built up on a
wealth of scientific and practical experience from field and laboratory. In the 1959
text of Craft & Hawkins1 on Applied Reservoir Engineering it is commented that “as
early as 1928 petroleum engineers were giving serious consideration to gas-energy
relationships and recognised the need for more precise information concerning
physical conditions as they exist in wells and underground reservoirs. Early progress
in oil recovery methods made it obvious that computations made from wellhead or
surface data were generally misleading.” Dake2, in his text "The Practise of Reservoir
Engineering", comments that “Reservoir Engineering 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”

The reservoir engineer in the multi-disciplinary perspective of modern oil and gas
field management is located at the heart of many of the activities acting as a central
co-ordinating role in relation to receiving information processing it and passing it on
to others. This perspective presented by Dake2 is shown in the figure below.

Exploration
Geophysics/ Petrophysics
Geology

Reservoir Engineering

Economics Production
(Project viability) Process Egineering

General Engineering
Platform Topsides Design

2
Figure 1 Reservoir Engineering in Relation to Other Activities (adapted Dake )

Dake2 has usefully specified the distinct technical responsibilities of reservoir

engineers as:

• Contributing, with the geologists and petrophysicists , to the estimation of

hydrocarbons in place.

• Determining the fraction of discovered hydrocarbons that can be recovered.

• Attaching a time scale to the recovery.

Insitute of Petroleum Engineering, Heriot-Watt University 

 • Day-to-day operational reservoir engineering throughout the project lifetime.

The responsibility of the first is shared with other disciplines whereas the second is
primarily the responsibility of the reservoir engineer. Attaching a time scale to recovery
is the development of a production profile and again is not an exclusive activity. The
day-to-day operational role is on going through the duration of the project.

A project can be conveniently divided into two stages and within these the above
activities take place, the appraisal stage and the development phase. The appraisal
phase is essentially a data collection and processing phase with the one objective of
determining the ‘viability’ of a project. The development phase covers the remaining
period if the project is considered viable from the time continuous production com-
mences to the time the field is abandoned. Reservoir engineering activity in various
forms takes place during both of these stages.

The activities of reservoir engineering fall into the following three general catego-
ries:

(i) Reserves Estimation

(ii) Development Planning
(iii) Production Operations Optimisation

1.1 Reserves Estimation

The underground reserves of oil and gas form the oil company’s main assets. Quan-
tifying such reserves forms therefore a very important objective of the practising
reservoir engineer but it is also a very complex problem, for the basic data is usually
subject to widely varying interpretations and on top of that, reserves may be affected
significantly by the field development plan and operating practice. It is an on-go-
ing activity during, exploration, development planning and during production. It is
clearly a key task of the appraisal phase for it is at the heart of determining project
viability.

Before any production has been obtained, the so-called ‘volumetric estimate of
reserves’ is usually made. Geological and geophysical data are combined to obtain
a range of contour maps with the help of a planimeter and other tools the hydrocar-
bon bearing rock volumes can be estimated. From well log petrophysical analysis,
estimates of an average porosity and water saturation can be made and when applied
to the hydrocarbon rock volume yield an estimate of oil in place (STOIIP). Since
it is well known that only a fraction of this oil may in fact be ‘recoverable’, labora-
tory tests on cores may be carried out to estimate movable oil. The reserve estimate
finally arrived at is little more than an educated guess but a very important one for
it determines company policy.

In 1987 the Society of Petroleum Engineers in collaboration with the World Petroleum
Congress published definitions with respect to reserves and these are now accepted
world-wide 3. These definitions have been used in the summary of reserve defini-
tions which follow.


 Introduction To Reservoir Engineering

1.2 Development Planning

Oilfield development, particularly in the offshore environment, is a ‘front loaded’
investment. Finance has to be committed far in advance not only of income guaran-
teed by the investment, but frequently also of good definitive data on the character
of the field. Much of the responsibility for this type of activity falls on the reservoir
engineers because of their appreciation for the complex character of sub-surface fluid
behaviour under various proposed development schemes.

1.3 Production Operations Optimisation

Producing fields will seldom behave as anticipated and, of course, by the very nature
of this sort of activity, the balance of forces in the reservoir rock gets severely upset by
oil and gas production. The reservoir engineer is frequently called upon to ‘explain’
a certain aspect of well performance, such as increasing gas-oil ratio, sand and/or
water production and more importantly will be asked to propose a remedy. The actual
performance of the reservoir as compared to the various model predictions is another
ongoing perspective during this phase.

2 RESERVOIR ENGINEERING TECHNIQUES

In the past the traditionally available reservoir engineering tools were mainly
designed to give satisfactory results for a slide rule and graph paper approach. For
many problems encountered by reservoir engineers today this remains a perfectly
valid approach where the slide rule has been replaced by the calculator. Increasingly,
however, the advance of computing capability is enabling reservoir engineering
modelling methods (‘simulations’) to be carried out at the engineers desk, previously
considered impossible.

The basis of the development of the 'model' of the reservoir are the various data
sources. As the appraisal develops the uncertainty reduces in relation to the quality
of the forecasts predicted by the model. Building up this ‘geological’ model of the
reservoir progresses from the early interpretation of the geophysical surveys, through
various well derived data sets, which include drilling information, indirect wireline
measurements, recovered core data, recovered fluid analysis, pressure depth surveys,
to information generated during production.

3. RESERVE ESTIMATING

The Society of Petroleum Engineers SPE and World Petroleum Congress WPO1987
agreed classification of reserves3 provides a valuable standard by which to define
reserves, the section below is based on this classification document.

3.1 Definitions
Reserves are those quantities of petroleum which are anticipated to be commercially
recovered from known accumulations from a given date forward.

All reserve estimates involve some degree of uncertainty. The uncertainty depends
chiefly on the amount of reliable geologic and engineering data available at the time

Insitute of Petroleum Engineering, Heriot-Watt University 

of the estimate and the interpretation of these data. The relative degree of uncertainty
may be conveyed by placing reserves into one of two principal classifications, either
proved or unproved.

Unproved reserves are less certain to be recovered than proved reserves and may
be further sub-classified as probable and possible reserves to denote progressively
increasing uncertainty in their recoverability.

Estimation of reserves is carried out under conditions of uncertainty. The method of

estimation is called deterministic if a single best estimate of reserves is made based
on known geological, engineering, and economic data. The method of estimation is
called probabilistic when the known geological, engineering, and economic data are
used to generate a range of estimates and their associated probabilities. Identifying
reserves as proved, probable, and possible has been the most frequent classification
method and gives an indication of the probability of recovery. Because of potential
differences in uncertainty, caution should be exercised when aggregating reserves
of different classifications.

Reserves estimates will generally be revised as additional geologic or engineering

data becomes available or as economic conditions change. Reserves do not include
quantities of petroleum being held in an inventory, and may be reduced for usage or
processing losses if required for financial reporting.

Reserves may be attributed to either natural energy or improved recovery methods.
Improved recovery methods include all methods for supplementing natural energy
or altering natural forces in the reservoir to increase ultimate recovery. Examples of
such methods are pressure maintenance, gas cycling, waterflooding, thermal methods,
chemical flooding, and the use of miscible and immiscible displacement fluids. Other
improved recovery methods may be developed in the future as petroleum technology
continues to evolve.

3.2 Proven Reserves

Proven reserves are those quantities of petroleum which, by analysis of geological
and engineering data, can be estimated with reasonable certainty to be commercially
recoverable, from a given date forward, from known reservoirs and under current
economic conditions, operating methods, and government regulations.

Proved reserves can be categorised as developed or undeveloped.

If deterministic methods are used, the term reasonable certainty is intended to express
a high degree of confidence that the quantities will be recovered. If probabilistic
methods are used, there should be at least a 90% probability that the quantities actu-
ally recovered will equal or exceed the estimate.

Establishment of current economic conditions should include relevant historical

petroleum prices and associated costs and may involve an averaging period that is
consistent with the purpose of the reserve estimate, appropriate contract obligations,
corporate procedures, and government regulations involved in reporting these
reserves. In general, reserves are considered proved if the commercial producibility
of the reservoir is supported by actual production or formation tests. In this context,


 Introduction To Reservoir Engineering

the term proved refers to the actual quantities of petroleum reserves and not just
the productivity of the well or reservoir. In certain cases, proved reserves may
be assigned on the basis of well logs and/or core analysis that indicate the subject
reservoir is hydrocarbon bearing and is analogous to reservoirs in the same area that
are producing or have demonstrated the ability to produce on formation tests.

The area of the reservoir considered as proved includes (1) the area delineated by
drilling and defined by fluid contacts, if any, and (2) the undrilled portions of the
reservoir that can reasonably be judged as commercially productive on the basis of
available geological and engineering data. In the absence of data on fluid contacts, the
lowest known occurrence of hydrocarbons controls the proved limit unless otherwise
indicated by definitive geological, engineering or performance data. Reserves may be
classified as proved if facilities to process and transport those reserves to market are
operational at the time of the estimate or there is a reasonable expectation that such
facilities will be installed. Reserves in undeveloped locations may be classified as
proved undeveloped provided (1) the locations are direct offsets to wells that have
indicated commercial production in the objective formation, (2) it is reasonably
certain such locations are within the known proved productive limits of the objective
formation, (3) the locations conform to existing well spacing regulations where
applicable, and (4) it is reasonably certain the locations will be developed. Reserves
from other locations are categorised as proved undeveloped only where interpretations
of geological and engineering data from wells indicate with reasonable certainty that
the objective formation is laterally continuous and contains commercially recoverable
petroleum at locations beyond direct offsets.

Before looking at further detail we will carry out some tests to help emphasise the
above definition.

3.2.1 Exercises - Reserve Definitions

The section on Reserve Definitions as put together by the SPE and the World Petro-
leum Congress, defines the various aspects of reserve definitions. These definitions,
are important both to companies and countries, and they can have very significant
commercial impact. The following tests are presented to help understand the work-
ing of these earlier definitions.

Test 1

There are 950 MM stb ( million stock tank barrels) of oil initially in place in a res-
ervoir. It is estimated that 500 MM stb can be produced. Already 100 MM stb have
been produced. In the boxes below, identify the correct answer.

STOIIP is: 950 500 400 MM stb

The Reserves are: 450 400 500 MM stb

Turn to page 9 for answers

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Test 2

Before starting production it was estimated that there was a 90% chance of produc-
ing at least 100 MM stb, 50% chance of producing 500 MM stb and 10% chance of
producing 700MM stb. That is we are sure we can produce at least 100MM stb, and
we will probably produce as much as 500 MM stb, and we will possibly produce as
much as 700 MM stb.

Tick the correct answers.

Proved reserves (MM stb):

100 200 400 500 600 700
Probable reserves
100 200 400 500 600 700
Possible reserves
100 200 400 500 600 700

Turn to page 9 for answers

Test 3

What is wrong with the following definitions?

1. Reserves are those quantities of petroleum which are anticipated to be recovered

from a petroleum accumulation.

Test 4

1. We have a structure in our licence area which we intend to explore. We anticipate

it to contain a STO IIP of 2000 MM stb, and recovery factor of 65% using primary
methods (30%), secondary (25%) and tertiary (10%) recovery methods. What are
the reserves?

Test 5

A reservoir has been discovered by drilling a successful exploration well, and drilling
a number of producing wells. We have even produced some 200 MM stb of oil.

STOIIP = 2000MM stb Recovery factor = 35%

What are the reserves?


 Introduction To Reservoir Engineering

Test 1 answer

There are 950 MM stock tank boards in place. It is estimated that 500 MM stb can
be produced and 100 MM stb have been produced then 400 recoverable reserves
remain.

STOIIP is: 950 √ 500 X 400 X MM stb

The Reserves are: 450 X 400 √ 500 X MM stb

Test 2 answer

Proved : 100 MM stb

Probable : 500 - 100 = 400 MM stb
Possible : 700 - 500 = 200 MM stb
Proved : 100 MM stb
Proved & Possible 500 MM stb
Proved & Probable & Possible : 700 MM stb

Test 3 answer

Reserves are those quantities of petroleum which are anticipated to be commercially

recovered from a petroleum accumulation.
Clearly economics is a very important aspect of the definition.

Economic Variables

What economic factors are used in the calculations? What oil and gas price do we
use for proved reserve estimates? Is inflation taken into account? Do we predict
future price trends? Do we apply discount factors to calculate present value of the
project? Are all these used in proved reserve calculations? The current economic
conditions are used for the calculations, with respect to prices, costs, contracts and
government regulations.

Test 4 answer

1. Answer is zero by SPC/WPC definition.

2. Intentions and anticipations are not the basis for reserves. In this case no well
has yet been drilled.
Note: Some companies allocate potential reserves for internal use but these cannot
be used for public and government figures.
Reserves are those quantities of petroleum which are anticipated to be commercially
recovered from a known accumulation.

Requirements for “Proved” include

The following sources are required for proved reserves. Maps (from seismic and/
geological data). Petrophysical logs. Well test results and rock properties from core
analysis tests on recovered core.

Insitute of Petroleum Engineering, Heriot-Watt University 

Facilities

An important perspective which might be forgotten by the reservoir engineer, is that

for reserves to be classified as “proven”, all the necessary facilities for processing
and the infrastructure for transport must either be in place or that such facilities will
be installed in the future, as backed up by a formal commitment.

Contribution to the Proved Reservoir Area

This comes from 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.

Test 5 answer

Ultimate recovery = 2 000 x 0.35 = 700 MM stb

Minus production to date = 200
Reserves = 500 MM stb

Reserves are those quantities of petroleum which are anticipated to be commercially

recovered from known accumulations from a given date forward.
i.e. Reserves refer to what can be produced in the future.

Figure 2 gives a schematic of reserves showing the progression with time.

Potential SPE / WPC Definitions

P10
RESERVE CATEGORIES

Possible Possible
Probability Levels

P50

Probable Probable

P90 Provan Cumulative Production

Provan

Time
Seismic Discovery of Start of Dev Start of Abandonment
Data Well Planning Production

Before Drilling Prior and During Delineation, Evaluation,

PERIOD Production
Exploration Well Appraisal Development
Geophysical Geophysical, Geophysical, Reservoir Performance
TYPE OF Geological, Geological,
and Geological and Production Data
DATA Petrophysical Petrophysical
and Well Test Data and Well Tests and Production Data
METHOD
Mostly Probabilistic Deterministic and Probabilistic

Figure 2 Variations of Reserves During Field Life

What are the amounts termed that are not recoverable? The quantity of hydrocar-
bons that remains in the reservoir are called remaining hydrocarbons in place, NOT
remaining reserves!

Reserves which are to be produced through the application of established improved

recovery methods are included in the proved classification when :

10
 Introduction To Reservoir Engineering

(i) Successful testing by a pilot project or favourable response of an installed

program in the same or an analogous reservoir with similar rock and fluid
properties provides support for the analysis on which the project was based,
and,

(ii) It is reasonably certain that the project will proceed. Reserves to be recovered
by improved recovery methods that have yet to be established through
commercially successful applications are included in the proved classification
only:

(i) After a favourable production response from the subject reservoir from either

(a) A representative pilot or

(b) An installed program where the response provides support for the analysis
on which the project is based and

(ii) It is reasonably certain the project will proceed.

3.3 Unproved Reserves

Unproved reserves are based on geologic and/or engineering data similar to that
used in estimates of proved reserves; but technical, contractual, economic, or
regulatory uncertainties preclude such reserves being classified as proved.
Unproved reserves may be further classified as probable reserves and possible re-
serves. Unproved reserves may be estimated assuming future economic conditions
different from those prevailing at the time of the estimate. The effect of possible
future improvements in economic conditions and technological developments can
be expressed by allocating appropriate quantities of reserves to the probable and
possible classifications.

3.3.1. Probable Reserves

Probable reserves are those unproved reserves which analysis of geological and
engineering data suggests are more likely than not to be recoverable. In this context,
when probabilistic methods are used, there should be at least a 50% probability that
the quantities actually recovered will equal or exceed the sum of estimated proved
plus probable reserves. In general, probable reserves may include :

(1) Reserves anticipated to be proved by normal step-out drilling where subsurface

control is inadequate to classify these reserves as proved,

(2) Reserves in formations that appear to be productive based on well log

characteristics but lack core data or definitive tests and which are not analogous
to producing or proved reservoirs in the area,

(3) Incremental reserves attributable to infill drilling that could have been classified
as proved if closer statutory spacing had been approved at the time of the
estimate,

Insitute of Petroleum Engineering, Heriot-Watt University 11

 (4) Reserves attributable to improved recovery methods that have been established
by repeated commercially successful applications when;

(a) a project or pilot is planned but not in operation and

(b) rock, fluid, and reservoir characteristics appear favourable for commercial
application,

(5) Reserves in an area of the formation that appears to be separated from the
proved area by faulting and the geologic interpretation indicates the subject
area is structurally higher than the proved area,

(6) Reserves attributable to a future workover, treatment, re-treatment, change of

equipment, or other mechanical procedures, where such procedure has not been
proved successful in wells which exhibit similar behaviour in analogous
reservoirs, and

(7) Incremental reserves in proved reservoirs where an alternative interpretation of

performance or volumetric data indicates more reserves than can be classified
as proved.

3.3.2. Possible Reserves

Possible reserves are those unproved reserves which analysis of geological and en-
gineering data suggests are less likely to be recoverable than probable reserves.
In this context, when probabilistic methods are used, there should be at least a 10%
probability that the quantities actually recovered will equal or exceed the sum of
estimated proved plus probable plus possible reserves. In general, possible reserves
may include:

(1) reserves which, based on geological interpretations, could possibly exist

beyond areas classified as probable,

(2) reserves in formations that appear to be petroleum bearing based on log and
core analysis but may not be productive at commercial rates,

(3) incremental reserves attributed to infill drilling that are subject to technical
uncertainty,

(4) reserves attributed to improved recovery methods when

(a) a project or pilot is planned but not in operation and

(b) rock, fluid, and reservoir characteristics are such that a reasonable doubt
exists that the project will be commercial, and

(5) reserves in an area of the formation that appears to be separated from the
proved area by faulting and geological interpretation indicates the subject area
is structurally lower than the proved area.

12
 Introduction To Reservoir Engineering

3.4 Reserve Status Categories

Reserve status categories define the development and producing status of wells and
reservoirs.

3.4.1. Developed:
Developed reserves are expected to be recovered from existing wells including reserves
behind pipe. Improved recovery reserves are considered developed only after the
necessary equipment has been installed, or when the costs to do so are relatively minor.
Developed reserves may be sub-categorised as producing or non-producing.

3.4.1.1 Producing:
Reserves subcategorised as producing are expected to be recovered from comple-
tion intervals which are open and producing at the time of the estimate. Improved
recovery reserves are considered producing only after the improved recovery project
is in operation.

3.4.1.2. Non-producing:
Reserves subcategorised as non-producing include shut-in and behind-pipe reserves.
Shut-in reserves are expected to be recovered from (1) completion intervals which
are open at the time of the estimate but which have not started producing, (2) wells
which were shut-in for market conditions or pipeline connections, or (3) wells not
capable of production for mechanical reasons. Behind-pipe reserves are expected to
be recovered from zones in existing wells, which will require additional completion
work or future recompletion prior to the start of production.

3.4.2. Undeveloped Reserves:

Undeveloped reserves are expected to be recovered:

(1) From new wells on undrilled acreage,

(2) From deepening existing wells to a different reservoir, or
(3) Where a relatively large expenditure is required to

(a) Recomplete an existing well or

(b) Install production or transportation facilities for primary or improved
recovery projects.

4. PROBABILISTIC REPRESENTATION OF RESERVES

Whereas in the deterministic approach the volumes are determined by the calculation
of values determined for the various parameters, with the probalistic statistical analysis
is used, using tools like Monte Carlo methods. The curve as shown in the figure 3
below presents the probability that the reserves will have a volume greater or equal
to the chosen value.

Insitute of Petroleum Engineering, Heriot-Watt University 13

 Probability that the reserve is at least

1.0
0.9 'Proven'
as large as indicated.

0.5 'Proven + Probable'

'Proven + Proable
0.1 + Possible'
0

Recoverable Reserve

Figure 3 Probabilistic Representation of Recoverable Reserves.

On this curve:

The proven reserves represent the reserves volume corresponding to 90% probability
on the distribution curve.

The probable reserves represent the reserves volume corresponding to the difference
between 50 and 90% probability on the distribution curve.

The possible reserves represent the reserves volume corresponding to the difference
between 10 and 50% probability on the distribution curve.

As with the deterministic approach there is also some measure of subjectivity in the
probalistic approach. For each of the elements in the following equation, there is a
probability function expression in low, medium and high probabilities for the particular
values. A schematic of a possible distribution scenario for each of the elements and
the final result is given below in the figure 4.

Net rock Net rock Connate Formation Estimated

volume. average water volume recovery
porosity saturation factor factor

[ Vnr x φ x (1 - Swc) / Bo ] x RF = Reserves

Uniform Triangular Gaussian Uniform p90

P = p50
p10

Figure 4 Probablistic Reserve Estimates.

14
 Introduction To Reservoir Engineering

The resulting calculations result in a probability function for a field as shown in

the figure 5 below, where the values for the three elements are shown

Proven = 500 MM stb the P90 figure.

Probable = 240 MM stb which together with the proven makes up the P50 figure.
of 740MMstb

Possible = 120 MM stb which together with the proven and probable makes up the
P10 value of 860MMstb

Reserves distribution for a new field.

100
90 P90
P10 = 860 MMstb
80 P50 = 740 MMstb
70 P90 = 500 MMstb
Probability / %

60
Proven 500 MMstb P50
50
Probable 240 M
40
30
P+P+P = 860 MMstb
20
120 P10
10
Proven Probable Possible
0
0 200 400 600 800 1000
Reserves / MMstb

Figure 5 Reserves Cummulative Probability Distribution.

As a field is developed and the fluids are produced the shape of the probability curve
changes. Probability figures for reserves are gradually converted into recovery leav-
ing less uncertainty with respect to the reserves. This is illustrated in figure 6.

Insitute of Petroleum Engineering, Heriot-Watt University 15

 100
90 P90

80
70
Probability / %

60
50 P50

40
Proved ultimate recovery.
30
20
10 P10
Production Proved reserves
0
0 200 400 600 800 1000
Reserves / MMstb

Figure 6 Ultimate Recovery and Reserves Distribution For a Mature Field.

5. VOLUME IN-PLACE CALCULATIONS

5.1 The volume of oil and gas in-place depends on a number of parameters :
The aerial coverage of the reservoir. A
The thickness of the reservoir rock contributing to the hydrocarbon volume. hn
The pore volume, as expressed by the porosity ,φ , the reservoir quality rock.
The proportion of pore space occupied by the hydrocarbon ( the saturation ).
1-Sw

The simple equation used in calculation of the volume of fluids in the reservoir, V,
is

V=Ahnφ(1-Sw): (1)

where:
A= average area
hn = nett thickness. nett thickness = gross thickness x nett: gross ratio
φ = average porosity
Sw = average water saturation.

When expressed as stock tank or standard gas volumes, equation above is divided
by the formation volume factor Bo or Bg.

V = Ahnφ (1 − Sw ) / Bo (2)

To convert volumes at reservoir conditions to stock tank conditions formation volume

factors are required where Bo and Bg are the oil and gas formation volume factors.
These are defined in subsequent chapters. The expression of original oil in place is
termed the STOIIP.

16
 Introduction To Reservoir Engineering

The recovery factor, RF, indicates the proportion of the in-place hydrocarbons ex-
pected to be recovered. To convert in place volumes to reserves we need to multiply
the STOIIP by the recovery factor so that:

Reserves = STOIIP x RF (3)

The line over the various terms indicates the average value for these spatial
parameters.

The reservoir area A, will vary according to the category; proven, probable or pos-
sible, that is being used to define the reserves.

Before examining the contributions of the various parameters it is worthwhile to

give consideration of the evolution of the reserve estimate during the exploration
and development stage.

5.2 Evolution of the Reserve Estimate

Figure 7 gives a cross section view of a reservoir structure as suggested from seismic
and geological data.

Oil

Suggested 0il and water contact

Figure 7 Cross Section Interpretation From Seismic and Geological Data.

Using this data and possible suggested structure we can carry out some oil in place
calculations and estimate reserves. These figures however are not admissible in public
reserve estimates. They are useful inside the company to justify project expenditure!
The question is where do we locate the first exploration well and get involved in large
exploration expenditure costs. Figure 8 suggest three alternatives

Insitute of Petroleum Engineering, Heriot-Watt University 17

 Suggest this location.

Oil

Suggested oil and water contact

Figure 8 Alternative locations of Exploration Wells

In figure 9 an exploration well has been drilled and a core recovered and the struc-
ture of the field with respect to formations and contacts redefined. The redefined
structure can now be used to provide an estimate of reserves according to the
three, proven, probable and possible perspectives. Figure 10

Oil

Oil and water contact Cored interval

Figure 9 Interpretation After Exploration Well Drilled and Cored.

18
 Introduction To Reservoir Engineering

Proved

e
l
ab
ble

bl
si Oil ible

ba
ob
os s
Pos

o
Pr
P

Pr
Figure 10 After The Exploration Well Was Drilled.

Subsequent appraisal wells are now drilled to give better definition of the reserves
of the field. Well 2 aimed at defining the field to the left identifies some additional
isolated hydrocarbon structure with its own oil water contact. Figure 11. The well, as
well as increasing the proven reserves, further identifies previous unknown reserves.
The next appraisal well is aimed at defining the reserves in the other direction. Dur-
ing well testing on wells 1or 2 indications of faulting are also helping to define the
flowing nature of the accumulation. Figure 12 for the further appraisal well confirms
the accumulation to the right and also identifies the impact of the fault with a new
oil water contact. Subsequent appraisal wells and early development give greater
definition to the field description. Figure 13

Well 2. Well 1. Proposed

delineation
well 3.

ven
Pro Proven
Oil

Initial appraisal stage.

Figure 11 Further Delineation Well.

Insitute of Petroleum Engineering, Heriot-Watt University 19

 Well 2. Well 1. Well 3.

Gas

ven
Pro Proven
Oil

New oil water contact.

Figure 12 After Further Appraisal.

Well 2. Well 1. Well 4. Well 3.

Gas

ven
Pro Proven
Oil

New oil water contact.

Figure 13 Final Appraisal Well.

From a deterministic perspective the various reserve estimates, that is, proven,
probable and possible can be further determined. The indication of the various
elements based on the top structure map are shown. Figure 14

20
 Introduction To Reservoir Engineering

Probable
1

Proved
3
4
2

Possible

Figure 14 Reserves Uncertainties by Deterministic Method.

5.3 Reservoir Area

The reservoir area can be obtained by separately evaluating the individual units
making up the reservoir as obtained from various reservoir maps. These maps are
derived from the evidence given from seismic and subsequent drilled wells. The maps
generally indicate the upper and lower extent of the reservoir section or sections and
the aerial extent as defined by faults or hydrocarbon contacts. Figure 15 shows an
aerial section with the defined limits. The contour lines are lines of constant subsea
depths. Figure 16 gives a cross section of a reservoir unit. The combination of the
two representations of the unit(s) can be used to calculate the gross rock volume.

Fault B
ounda
ry

Porosity
Fluid Boundary
Contact

ry
Bo unda
Fault

7
Figure 15 Structure Contour Map.

Insitute of Petroleum Engineering, Heriot-Watt University 21

 Heighest Elevation
on Top Structure
To
Heighest Elevation p
R St
Ro ese uctu
on Base Structure r
ck rvo re
Ba Vo ir
Contour Elevation

se lu
St m
ru e
ctu
re
(units ss)

Hydrocarbon Water
Contact Elevation

o
Area Contained by Contour

7
Figure 16 Reservoir cross section.

Figures 17 & 18 show an example of a top structure map and cross section of the
Rough Gas field in the North Sea.

47/2 47/3
Completed Producers
Gw

Proposed Well Locations

C

x Abandoned Wells
9
95500
00 C.I. = 50ft.
C
w
G
0

955000
960

95 50 8
94 00 8
94 50 8
93 00 8 8
8 93 8
B 250 8 A
9 A2 00
A
8 92
47/7 47/8 8 A A4
47/8-1x A5
A
8 A Platform A

A3
9100 A6
50
91 93
9200

50
92
93 50
00

x 47/8-2

5
Figure 17 Top Sand Structure Map Rough Gas Field.

22
 Introduction To Reservoir Engineering

Depth (ft) A3 A1 A4
subsea
9000 A2 A5
Unc
onf
9200 orm
Rot ity
lieg

Fault
end

Fault
Unc es
onfo
9400 rmit
y
Tentative
9600 hydrocarbon/
water contact
9800

Carboniferous
Sands

5
Figure 18 Schematic Cross Section of The Rough Field.

5.4 Reservoir Thickness

Another representation of the reservoir formations is the reservoir thickness map.
Where the areal contour maps show the thickness normal to the plane of the reservoir
the contours are called isopachs. When the thickness is mapped as a vertical thickness
then the contour is called an isochore. Not all the reservoir thickness will contrib-
ute to fluid recovery and will include non-productive strata. Those contours which
include these non-productive material are called gross reservoir isopach and those
where non-productive material is excluded are called net reservoir isopach maps.
Those intervals contributing to flow are termed pay. The ratio of net to gross, hn/ht ,
is an important aspect in reservoir evaluation. Figure 19 shows a net pay thickness
isopach and the isopach map for the Rough field is shown in figure 20

Isopach C I
25 Units
75
100
125
150
0

7
Figure 19 Net Pay Thickness Isopach.

Insitute of Petroleum Engineering, Heriot-Watt University 23

 47/2 47/3
140
GwC

130
C
Gw

120
0
11 0
10

A2
47/7 47/8 A4
47/8-1 x A5
80
A1
70

11
6
A3
11
100

0
90

A6

x 47/8-2

5
Figure 20 Rough Field Isopach.

The isopach map can also be used to calculate reservoir volume. For example in figure
21 the area under a plot of net pay thickness vs. area contained within the contour
provides a net pay volume. These plots can be generated for each section or rock
type. The thickness plots for each section are called isoliths.

40
Area Enclosed = Net Rock Volume
Net Pay Isopach Value

80

120

140

OWC
180
Area Contained by Contour

7
Figure 21 Hydrocarbon Volume From Net Pay Isopach.

5.5 Reservoir Porosity

The variation of porosity can also be represented . The average porosity, φ, in a well
can be calculated from the thickness-weighted mean of the porosities 4 .

24
 Introduction To Reservoir Engineering

∑φ h k n, k
φw = k =1

hn (4)

where φk is the average porosity derived from the log over a small thickness hn,k
within the net pay thickness, hn.

These values of porosity can then be plotted to generate an isoporosity map as il-
lustrated in figure 22. The example of an isoporosity map for the Rough Field is
shown in figure 23.

Porosity C I
5%
25
20
15
5 10

7
Figure 22 Iso Porosity Map.

47/2 47/3
Gw
C

C
w
G

A2

47/7 47/8 47/8-1 A4

14%

x A5
A
A1
12%

%
10

A3
8%

A6
6%

47/8-2
x

7
Figure 23 Rough Field Iso Porosity Map.

Insitute of Petroleum Engineering, Heriot-Watt University 25

5.6 Water Saturation, Sw
The water saturation in a reservoir is influenced by the characteristics of the reservoir
rock and the location with respect to the position above the free water level near
the oil-water or gas-oil contact (see section Reservoir Rock Properties Chapter 7).
The average water saturation Sw,w , can be calculated in a similar way to porosity by
calculating the volume weighted mean across the producing elements of the forma-
tion, the pay.
m

∑S w, k φ k h n,k
Sw,w = k =1

φwh n (5)

The values of Sw,w can be plotted and contours of constant saturation (isosaturation)
presented. Figure 24.

Shale

15 20
25
30 35
40

WOC

4
Figure 24 Iso Saturation (sw) Map.

A more detailed description together with exercises are given in the mapping section
of the geology module.

5.7 Formation Volume Factors Oil, Bo and Gas, Bg

These properties of the oil and gas which convert reservoir volumes to surface volumes,
are generated from measurements made on fluid samples from the reservoir. They do
not vary significantly across the reservoir when compared to the other rock related
parameters. These parameters are covered in the gas properties and oil properties
chapters. In some reservoirs where the formations are thick there is a compositional
gradient over the depth. This variation in composition from heavier (less volatile
components) to lighter components at the top results in a variation of the oil forma-
tion volume factor, Bo over the thickness. In such cases an average value based on
values measured or calculated at depth would be a preferred value.

26
 Introduction To Reservoir Engineering

5.8 The Recovery Factor, ER

The proportion of hydrocarbons recovered is called the recovery factor. This fac-
tor is influenced by a whole range of factors including the rock and fluid properties
and the drive mechanisms. The variability of the formation characteristics, the het-
erogeneity can have a large influence on recovery. The development process being
implemented and the geometries and location of wells again will also have a large
influence. Calculating recovery therefore in the early stages is not feasible and many
assumptions have to be included in such calculations. It is in this area that reservoir
simulation can give indications but the quality of the calculated figure is limited by
the sparse amount of quality data on which the simulation is based.

The American Petroleum Institute6 has analysed the recoveries of different fields and
correlations have been presented for different reservoir types and drive mechanisms.
Figures 25 and 26 give the residual saturations and oil recovery efficiences for dif-
ferent drive mechanisms. The API also presents correlations for recoveries,ER,

For sandstone and carbonate reservoirs with solution gas drive

 φ (1 − Sw ) 
0.1611 0.0979 0.1741
 k   pb 
ER, o = 0.4185    (Sw ) 0.3722
 
 Bob   µob   pa 
(6)

For sandstone reservoirs with water drive

 φ (1 − Sw ) 
0.0422 0.0770
 k µ wi  p
ER, o = 0.54898    (Sw )− o.1903  pi  − 0.2159
 Boi   µoi   a
(7)

b refers to bubble point conditions, i is the initial condition and a, refers to abandonment
pressure.

Insitute of Petroleum Engineering, Heriot-Watt University 27

 2 5 10 20 30 40 50 60 70 80 95 98

RESIDUAL SATURATIONS

1.00 1.00

Sor In Water Drive

Sor (OR Sgr) as Fraction of Total Pore Space

Reservoirs
0.50 0.50

Sgr In Solution Gas Drive

Reservoirs
0.10 0.10

0.05 0.05

−σ +σ
MEDIAN

0 0
2 5 10 20 30 40 50 60 70 80 95 98

PERCENTAGE OF CASES LARGER THAN

Figure 25 Log - Probability Residual Oil Saturation For Water Drive and Solution Gas
6
Drive Reservoirs. (API )

2 5 10 20 30 40 50 60 70 80 95 98
OIL RECOVERY EFFICIENCY AT FIELD ABANDONMENT

RESIDUAL SATURATIONS

1.00 1.00
Water Drive
IN PERCENT OF OIL PLACE

Gas Cap Drive

0.50 0.50

Gas Cap Drive +

Water Injection
0.10 0.10
Solution Gas Drive

0.05 0.05

−σ +σ
MEDIAN

0 0
2 5 10 20 30 40 50 60 70 80 95 98

PERCENTAGE OF CASES LARGER THAN

6
Figure 26 Log - Probability of Oil Recovery For Various Drive Mechanisms. (API )

28
 Introduction To Reservoir Engineering

5.9 Production Capability

Another concept, isocapacity, is used to signify production capability. Isocapacity
denotes equal values of permeability-net thickness product. This product can be
mapped instead of permeability. The figure 27 shows an isocapacity map where the
absolute permeability has been obtained as an arithmetic average in the zone.

4 5 4 3 2 1

0.5
123
0.25

7
Figure 27 Isocapacity Map.

The permeability map for the Rough Field is given in figure 28

47/2
Gw
C

C
w
G

120 A2
47/7 47/8 100 A4
80 A5
47/8-1 x
60 Platform B
40
A3
0
A6

x 47/8-2
Contour Intervals 20 millidarcies

5
Figure 28 Rough Field Permeability Map.

Insitute of Petroleum Engineering, Heriot-Watt University 29

5.10 The Hydrocarbon Pore Volume Map
The hydrocarbon pore volume can be obtained by combining the net rock volume with
a mean porosity and a mean hydrocarbon saturation. An alternative is the mapping of
hydrocarbon thickness (HPT) at each well. HPT at a well in a given zone is:
_ _

HPT = φ .hn . Sh (8)

where:
_ _

Sh = 1 − Sw

Figure 29 gives an HPT map and the Rough Field HPT map is given in figure 30

12
15
11
0
14 10

14
13
13
12

11
10

9
0

7
Figure 29 Hydrocarbon Pore Thickness Map.

10

A2
9
8
A4
A5 7
A1 6

A3 5
A6
4

5
Figure 30 Rough Field Hydrocarbon Pore Thickness.

30
 Introduction To Reservoir Engineering

6. OTHER APPRAISAL ROLES

In building up the ‘picture’ to enable the reserves estimates and recoveries to be

determined the reservoir engineer will be involved in an number of aspects. One of
the most powerful tools is the production test.

In a well test an exploration or appraisal well is converted to a short term producing

well, with all the associated facilities put in place to handle the produced fluids and
monitor fluid rates. A downhole pressure monitoring device is also located in the
well. Figure 31. The well is flowed at a constant rate , and sometimes two rates as
illustrated in figure 32a, a two rate test. The downhole pressure device responds to
the production and pressure declines. After a short or longer time period depending
on the nature of the test, the well is “shut in”, i.e. the flow is stopped. In the well the
pressure builds up and eventually as monitored by the downhole pressure device,
recovers to the original pressure. Figure 32b. It is in the analysis of the pressure
drawn down and build up curves and the rates that the reservoir engineer is able to
determine the flowability of the reservoir. If the flowing interval thickness is known,
the permeability can be calculated. The presence of faults can also be detected.

A considerable amount of reservoir data can be obtained from these well tests
sometimes called DST’s ( drill stem tests). It has been the practise over recent years
for the produced fluids to be flared since there is unlikely to be an infrastructure to
collect these fluids. Now that companies are moving to a zero or reduced hydrocarbon
emission policy the nature and facilities required for these tests are changing. A
feature of the flaring approach is a public demonstration of the productivity of the
well being tested.

Insitute of Petroleum Engineering, Heriot-Watt University 31

 Surface casing

Production casing

Production tubing

Cement

Packer

Perforations

Down hole
pressure monitor

Figure 31 Production Test Assembly.

32
 Introduction To Reservoir Engineering

q bbls / day
Flow 1 Flow 2 Well shut in

Pi

Pressure draw down

Pf. psig

Pressure build up

Figure 32 Production Test Analysis. Two Rate Test.

Well test analysis is a powerful reservoir engineering tool and is treated in depth in
a subsequent module of the Petroleum Engineering course.

The nature of the fluids is key to reservoir behaviour and also subsequent processing
in any development. The collection and analysis of these fluids is an important
role and is at the focus of PVT analysis. This topic is covered in Chapter 14 PVT
Analysis. The pressure profile in a well is another important aspect of reservoir
characterisation and can be used to identify fluid contacts. When used during the
early stages of production it can be a powerful means of refining the structure and
hydrodynamic continuity characteristics of the reservoir. This is covered in the next
chapter. Like PVT analysis where the information is based on samples removed
from the reservoir, core analysis is based on recovered core from the formation.
Various tests on this material and its reaction to various fluids provides many of the
reservoir engineering parameters important in determining the viability of a project.
Core analysis also provides a cross check for indirect measurements made downhole.
These core analysis perspectives are covered in chapters 7 and 8.

It is clear from what we have discussed that reservoir engineering is an important

function in the appraisal of the reservoir. The focus for this appraisal so far has con-
centrated on determining the characteristics and potential flow behaviour of a reservoir
under development. Clearly there could be a whole range of possibilities with respect
to the plan that could be used to develop the field. This development planning per-
spective is an important part of the reservoir engineers role. Again it is a team effort

Insitute of Petroleum Engineering, Heriot-Watt University 33

involving the geological community who understand the ‘reservoir’ and the various
engineers who have the responsibilities of designing and operating the hardware to
enable production. An important part of any future development are the facilities that
would be required for sustained production and its is therefore an important part of
the appraisal stage to provide data for those who would have responsibility for good
quality data predictions which will enable optimised facility design.

In any project new data is always being generated. Indeed for a reservoir, its
characteristics are unlocked over the whole lifetime of the project. The duration of
the appraisal stage clearly is a techno economic decision related to the confidence
to go ahead based on a good foundation of quality data and forecasts. Fine tuning
can always be carried out but this is costly if this delays the development stage. It
is important to identify and fill the gaps for the largest uncertainties, and having
sufficient information to design a system which is safe and cost effective. The
difficulty is making the decision on the data under which a line is drawn which
defines the basis for field development design. In reservoir development the reservoir
is always revealing its properties, indeed it is in the production phase that the true
characteristics are revealed.

7 DEVELOPMENT PLANNING

7.1 Reservoir Modelling

Given appraisal well data, and test results the reservoir engineer can consider some
alternative development plans, relying heavily on experience and insight. Since the
80’s computer based reservoir simulation has played a major role.

The starting point will invariably be a reservoir map used to calculate reserves, but
in addition use will be made of the material balance equation (chapter 15), together
with some drive concepts (chapter 11), to predict reservoir behaviour. One of the
problems faced in making predictions is to adequately take into account knowledge
about geological trends and, although individual well models can be adjusted to reflect
local conditions, there is no practical ‘desk calculator’ technique for using say, the
material balance equation and well models to come up with a predictive reservoir
performance. Displacement models such as those derived by Buckley and Leverett
(chapter 18), mainly from observations in the laboratory, give some insight into
reservoir behaviour but again do not significantly assist in allowing the engineer to
study the effect of alternative development plans on a heterogeneous reservoir.

With insight and ingenuity, the reservoir can be divided into a number of simple
units that can be analysed by the traditionally available techniques but such an
approach remains unsatisfactory. Over recent years the integration of geological and
geophysical perspectives is contributing considerably to the ‘confidence’ in reservoir
modelling.

7.2 Technoeconomics
For hydrocarbon accumulations found on dry land the traditional reservoir engineering
techniques available for field development planning were, in fact, quite adequate. This
is mainly so because land development operations offer a high degree of planning

34
 Introduction To Reservoir Engineering

flexibility to oil companies and hence allow them to make optimal use of the latest
information. In an offshore environment this is not the case; once platforms have
been ordered most development options are closed. It is with respect to offshore field
development planning that reservoir simulation models have found their greatest
application potential.

7.3 Coping with Uncertainty

The challenge to the exploration & production business of the oil & gas industry is
considerable. The looking for the “needle in the haystack” scenario is not too far from
the truth, when compared to other industrial sectors. With the challenge of reserves
being found in technically challenging areas and the oil price moving in response
to political as well as demand scenarios, there is the need to define more accurately
forecasts of production and recovery. Reducing uncertainty is the message of the
current decade and not least in reservoir engineering and its related disciplines.

It is clear from what we have overviewed in this chapter and the topics which will be
covered in the subsequent chapters that there are many parameters which contribute
to the viability of the various aspects of successful oil and gas production. It is also
clear that the various forms of data required, the confidence in the absolute values
vary according to the type, and therefore the final impact on the final result will vary
according to the particular parameter.

The following list summarises some of the principal uncertainties associated with
the performance of the overall reservoir model. The type of data can for example
be subdivided into two aspects “static” and “dynamic” data .

Static Properties
• Reservoir structure
• Reservoir properties
• Reservoir sand connectivity
• Impact of faults
• “thief” sands

Dynamic Properties
• Relative permeability etc
• Fluid properties
• Aquifer behaviour
• Well productivity (fractures, welltype, condensate drop out etc.)

The impact of each of these parameters will vary according to the particular field but
it is important that the company is not ignorant of the magnitude of the contributing
uncertainties, so that resources can be directed at cost effectively reducing specific
uncertainties. Figure 33 illustrates an outcome which might arise from an analysis
of various uncertainties for a particular field. It demonstrates for this particular field
and at the time of analysis the impact of the various data has on the final project cost.
Clearly in this case the aquifer behaviour uncertainties has the least impact whereas
reservoir structure and well productivity uncertainties had the most significant. An-
other field would result in different impact perspectives, and therefore a different
strategy to reduce overall project uncertainty would be required.

Insitute of Petroleum Engineering, Heriot-Watt University 35

 Q Well
Reservoir P production
area Project
Cost
Reservoir
structure

Sand
conectives

Aquifer
behaviour

Fluid properties
Relative
permeabilities etc.

Thief zones
Faults

- Changes +

Figure 33 Impact on a Project of Different Uncertainties

8 PRODUCTION OPERATIONS OPTIMISATION

8.1 The Development Phase

The development phase covers the period from the time continuous production
starts until the production from the field stops i.e. abandonment. The decision when
to stop production clearly is a techno-economic decision based to a large extent on
the costs of the development. Low volume producers can be allowed to continue in
an onshore development where well operating costs might be low but the high costs
associated with for example in an expensive offshore operation sets a much higher
economic limit for the decision to abandon a field.

During the development phase Dake2 has identified a number of roles for the Reservoir
Engineering which are targeted at optimising production. It is an irony that some
of the best data is generated during the production phase. Through production the
reservoir unveils more of its secrets. Some of these may cause modifications to the
development, perhaps in defining new well locations. The nature of the hydrodynamic
continuity of the reservoir is mainly revealed through pressure surveys run after a period
of production. This may define zones not being drained and therefore modifications
to the well completions might result.

As production progresses fluid contacts rise and therefore these contacts need to
be monitored and the results used to decide, for example, to recomplete a well as a
result of, for example excessive water production. As is pointed out in the chapter on
reservoir pressure, development wells before they are completed provide a valuable
resource to the reservoir engineer to enable surveys of pressure to be run to provide
a dynamic pressure-depth profile.

36
 Introduction To Reservoir Engineering

8.2 History Matching

Throughout the production phase the comparison of the actual performance with that
predicted during the appraisal stage and more recent predictions is made. It is during
this stage that the quality of the reservoir simulation model comes under examina-
tion. The production pressure decline is compared to that predicted and the reservoir
simulation model adjusted to match. This process is called history matching. Clearly
if the simulation cannot ‘predict’ what has happened over the recent past it cannot
be used with much confidence to forecast the future!

More simple approaches not requiring the resources of a complex simulator can also
be used to up date early predictions, for example material balance studies.

Once production has been obtained, the additional data becomes available and makes
an important contribution to the refining of the initial reserves estimates. Two tech-
niques historically used are decline curve analysis and material balance studies.

In material balance studies, the pressure-volume behaviour of the entire field is
studied assuming an infinite permeability for the reservoir. By assuming an initial
oil-in-place from volumetric calculations, the pressure is allowed to decline following
fluid withdrawal. This decline is matched against the observed pressure behaviour
and, if necessary, the original oil-in-place figure is modified until a match is obtained.
In the presence of a water drive, additional variables are included by allowing water
influx into the ‘tank’. Water influx is governed by mathematical relationships such
as van Everdingen and Hurst (These concepts are covered in Chapters 11, 12, and
13 MB/MB Applications and Water Influx).

Decline curves are plots of rate of withdrawal versus time or cumulative withdrawal
on a variety of co-ordinate scales. Usually a straight line is sought through these ob-
servations and extrapolated to give ultimate recovery and rates of recovery. Decline
curves only use rates of withdrawal and pay relatively little attention to the reservoir
and flowing pressures. A change in the mode of operation of the field could change the
slope of the decline curve; hence, this is one of the weaknesses of this technique.

A noteworthy feature of these two approaches is that the engineer in fact ‘fits’ a sim-
ple model to observe data and uses this model to predict the future by extrapolation.
As more data becomes available the model gets ‘updated’ and predicted results are
adjusted. Decline curve analysis has not been used to the same extent as in the 60’s
and 70’s. With the power of computing and the efforts made to integrate geological
understanding , the physics of the flow and behaviour of rock and fluid systems into
reservoir simulation, the ‘fitting” and the uncertainty of earlier methods are being
superseded by integrated reservoir simulation modelling.

The routine company function will generate the need for on going production pro-
file updates. The generation of these is generally the responsibility of the reservoir
engineer, who might chose simple analytical approaches to the more costly reservoir
simulation methods.

8.3 Phases of Development

During the development there are a number of phases. Not all of these phases may
be part of the plan. There is the initial production build up to the capacity of the facil-

Insitute of Petroleum Engineering, Heriot-Watt University 37

ity as wells are brought on stream. There is the plateau phase where the reservoir is
produced at a capacity limited by the associated production and processing facilities.
Different companies work with different lengths of the plateau phase and each project
will have its own duration. There comes a point when the reservoir is no longer able
to deliver fluids at this capacity and the reservoir goes into the decline phase. The
decline phase can be delayed by assisting the reservoir to produce the fluids by the
use of for example ‘lifting’ techniques such as down-hole pumps and gas lift. The
decline phase is often a difficult period to model and yet it can represent a significant
amount of the reserves. These phases are illustrated in figure 34

Plateau phase
Production rate

Artificial lift

Build up phase Decline phase

Economic limit

Time - years

Figure 34 Phases of Production.

The challenge facing the industry is the issue of the proportion of hydrocarbons left
behind. The ability to extract a greater proportion of the in-place fluids is obviously
a target to be aimed at and over recent years recoveries have increased through the
application of innovative technology. Historically there have been three phases of
recovery considered. Primary recovery, which is that recovery obtained through the
natural energy of the reservoir.

Secondary recovery is considered when the energy is supplemented by injection of

fluids, for example gas or water, to maintain the pressure or partially maintain the
pressure. The injected fluid also acts as a displacing fluid sweeping the oil to the
producing wells. After sweeping the reservoir with water or gas there will still be
remaining oil; oil at a high saturation where the water for a range of reasons, for
example; well spacing, viscosity, reservoir characteristics to name just a few, has
by-passed the oil. The oil which has been contacted by the injected fluid will not be
completely displaced from the porous media. Because of characteristics of the rock
and the fluids a residual saturation of fluid is held within the rock. Both of these
unrecovered amounts, the by-passed oil and the residual oil are a target for enhanced
recovery methods, EOR.

Much effort was put into enhanced oil recovery (EOR) research up until the mid
seventies. Sometimes it is termed tertiary recovery. When the oil price has dropped
the economics of many of the proposed methods are not viable. Many are based on
38
 Introduction To Reservoir Engineering

the injection of chemicals which are often oil based. The subject of EOR has not been
forgotten and innovative methods are being investigated within the more volatile
oil price arena. Figure 35 gives a schematic representation of the various phases of
development and includes the various improved recovery methods. More recently
a new term has been introduced called Improved Oil Recovery (IOR). IOR is more
loosely defined and covers all approaches which might be used to improve the recov-
ery of hydrocarbons in place. Clearly it is not as specific as EOR but provides more
of an achievable target than perhaps some of the more sophisticated EOR methods.

As we have entered into the next millennium it is interesting to note that a number
of major improved recovery initiatives are being considered particularly with respect
to gas injection. One perspective which make a project more viable is that of the
disposal of gas for example which is an environmental challenge in one field can
be the source of gas for another field requiring gas for a gas injection improved oil
recovery process.

Primary
Recovery

C
Natural Artifical Lift O
Pump gas lift etc. N
Flow V
E
N
Secondary T
Recovery I
O
N
A
Natural Pressure L
Flow Maintenance
Water, gas injection

Tertiary
Recovery

E
O
R Thermal Gas Chemical Microbial

Steam In-situ Hydrocarbon Polymer

combustion. miscible, CO2 surfactant/
N2 immiscible polymer
gas

Figure 35 Oil Recovery Mechanisms.

9. THE UNIQUENESS OF THE RESERVOIR

As we have discussed the role of the reservoir engineer in combination with other
disciplines is to predict the behaviour of the reservoir. Whereas in the early years of
oil exploration little attention was paid to understanding the detailed characteristics
of the reservoir, it is now recognized that detailed reservoir properties associated with
often complex physical and chemical laws determine field behaviour. The unlocking
of these characteristics and understanding the laws enable engineering plans to be
put in place to ensure optimised developments are implemented. This is schemati-
cally illustrated in figure 36.

Insitute of Petroleum Engineering, Heriot-Watt University 39

 Reservoir
Behaviour

Development
Plan

Reservoir Description
Unique
Dynamic and Static

Figure 36 Relationship between Reservoir Description, and Reservoir Behaviour.

At one extreme for example in a blow - out situation, a reservoir produces in an un-
controlled manner only restricted by the size of the well through which is producing.
Optmised development however based on a thorough understanding of the reservoir
enables the reservoir to be produced in a controlled, optimised manner.

In many other industries the effort expended on one project can be utilised in engi-
neering a duplicate or a similar size unit elsewhere. Such opportunities are not pos-
sible in the engineering of a reservoir. Reservoirs are unique in many aspects. The
composition of the fluids are unique, the rock characteristics and related properties
are unique, the size and shape are unique and so on. From our perspective this reser-
voir description is dynamic as the reservoir over a period of time gives up its secrets.
From the reservoir’s perspective however the description is static, except with the
changes resulting from the impact of fluid production or injection. The challenge
to those involved is reducing the time it takes for our dynamic description to match,
our static description known only to the reservoir or whoever was responsible for
its formation! The answer perhaps is more of a philosophical nature. The reality is
shown in figure 37 where the top structure map for a North Sea gas field with a ten
year gap shows the impact of knowledge gained from a number of wells as against
that interpreted from the one well. Considerable faulting is shown not as a result of
major geological a activity over the ten years but knowledge gained from the data
associated with the new wells.

40
 Introduction To Reservoir Engineering

2°00 2°10 2°20

21
00
0

0
200

100
53°10 53°10
SHELL/ESSO 49/26 AMOCO 49/27
20

2200
00

Gas /water contact

Depths in metres
scale 1 100,000
00

21
21

49/26.1 00
53°05 53°05

12
00
100
80 0
0
20

10
00

00
20 100
10
20

100
20

00 0
00

0
00

00

0
210

2000
2°00 2°20

Present interpretation of Leman Gas-field, showing contours on top of Rotliegendes in feet below sea-level
Figure 37 (a) The Leman Field as it Appeared to be When The Exploration Well Was
The Leman field as it appeared to be when the exploration well was drilled
Drilled.

2°00 2°10 2°20 2°30

53°10 SHELL/ESSO 49/26 AMOCO 49/27

53°10

Depth in feet
0 1 Miles
0 1 2 KMS
70

Gas /water contact

00

A permanent platform
63
00 63
00

53°05 53°05
620
0 6400
6300
69
00
610
6900 0
6300 6
90 0
690
0 64
69

0
00

0
6300
70 69 6400
00 00
53°00 53°00

2°00 2°10 2°20 2°30

Present interpretation of Leman Gas-field, showing contours on top of Rotliegendes in feet below sea level.

Figure 37b Leman

Leman Field
field ten Tenafter
years Years After Discovery
discovery

The coverage of the reservoir has also changed effecting the equity associated with
the blocks. This illustrates the early benefits to be gained from drilling a number of
exploration wells. These equity agreements, are called unitisation agreements and such
agreements are shortened when good quality and comprehensive reservoir descrip-
tion data is available. Clearly there can never be sufficient description, however the

Insitute of Petroleum Engineering, Heriot-Watt University 41

economics of project management will determine when decisions have to be taken
based on description to date. The value of extra information has to be balanced by
the cost of delay in going ahead with a project.

10. CONCLUSION

In order to accomplish these objectives the Petroleum Reservoir Engineer should

have a broad fundamental background both theoretically and practically in the basic
sciences and engineering. The basic areas are:

(i) The properties of petroleum reservoir rocks
(ii) The properties of petroleum reservoir fluids
(iii) The flow of reservoir fluids through reservoir rock
(iv) Petroleum reservoir drive mechanisms

It is also important that the Petroleum Reservoir Engineer has a thorough basic
understanding in general, historical and petroleum geology. The influence of geological
history on the structural conditions existing in a reservoir should be known and
considered in making a reservoir engineering study. Such a study may also help to
identify and characterise the reservoir as to its aerial extent, thickness and stratification
and the chemical composition, size distribution and texture of the rock materials.

In his latest text, Dake2 comments on some of the philosophy of approach to reser-
voir engineering, and identifies the importance of pinning down interpretation and
prediction of reservoir behaviour to well grounded laws of physics.

Reservoir forecasting has moved on considerably since wells were drilled with little
interest and concern into the production and forecasting of what was happening in
the reservoirs thousands of feet below. The approach to coping with uncertainty as
jokingly reflected in the cartoon below, (Figure 38) is no longer the case as sophisti-
cated computational tools enable predictions to be made with confidence and where
uncertainty exists the degree of uncertainty can be defined.

42
 Introduction To Reservoir Engineering

"We feed the geological data for the area, the computer produces a schematic topological
overview designating high probability key points, then we stick the printout on the wall and
Lever throws darts at it."

Figure 38 A Past Approach to Uncertainty!

REFERENCES

1. Craft, B.C. and Hawkins, M.F. Applied Reservoir Engineering, Prentice-Hall

Inc. 1959
2. Dake, L.P., The Practise of Reservoir Engineering. Elsevier. 1994
3. Society Of Petroleum Engineers. Reserves Definitions 1995.
4. Chierici,G.L. Principles of Petroleum Reservoir Engineering. Vol 1 Springer
Verlag 1994
5. Hollois,A.P. Some petroleum engineering considerations in the change over of
the Rough Gas field to the storage mode. Paper EUR 295 Proc Europec. 1982,
pg 175
6. API. A Statistical Study of the Recovery Efficiency. American Petroleum Institute.
Bull D14, 1st Edition ,1967
7. Archer,J.S. and Wall,C.G. Petroleum Engineering Principles and Practise, Graham
and Trotman ,1986.

Insitute of Petroleum Engineering, Heriot-Watt University 43