Chapter 9

Oil/Gas Well Completions

Reservoir Drive mechanisms
Estimating reserves

Completion
..is the assembly of downhole tubulars and equipment
required to enable safe and efficient production from an oil
or gas well. This may range from nothing but a packer on tubing
above an openhole completion ( barefoot" completion), to
perforated cemented casing, to a fully automated measurement
and control system that optimizes reservoir economics without
human intervention (an "intelligent" completion).
The main types are open hole and cased hole completions
Completion design is complex and is a whole engineering
discipline

Open hole completion

A range of completions where no casing or liner is cemented in place across the
production zone. In strong and competent formations the zone might be left entirely
bare, but usually some sort of sand-control and/or flow-control means are
incorporated.
pre-holed or pre-drilled liner. The liner is prepared with multiple small drilled
holes, then set across the production zone to provide wellbore stability, some basic
control of solids production and a means of intervention in the well. It is often
combined with openhole packers, such as swelling elastomers, mechanical packers
or external casing packers, to provide zonal segregation and isolation.

Slotted liner, which is machined with multiple longitudinal slots, can be

selected as an alternative to pre-holed liner as it can provide a low cost
means of controlling sand/solids production. Commonly used in horizontal
holes, with competent rock.
Openhole sand control is selected where the liner is required to
mechanically hold-back the movement of formation sand. The most common
products are stand-alone screens, openhole gravel packs (also known as
external gravel packs, where a sized sand 'gravel' is placed as an annulus
around the sand control screen) and expandable screens. These screens
can also be used in cased hole completions

Cased hole completion

Is the most common form of completion
and involves running casing or a liner down
through the production zone and cementing
it in place. Connection between the well
bore and the formation is made
by perforating. Because perforation
intervals can be precisely positioned, this
type of completion affords good control of
fluid flow, although it relies on the quality of
the cement to prevent fluid flow behind the
liner. Cement bond logs are commonly run
to make sure the cement bond is good.
Perforating is done by by firing shaped
charges to punch holes through the casing
and some distance, commonly 30-50cm,
into the formation, past the zone around the
wellbore that may have been damaged
during the drilling and cementing process

Perforating
Should penetrate past any damage zone caused by drilling and cementing
Prefer to perforate underbalance (ie pressure in wellbore is less than formation
pressure) so that initial flow is out of the formation and not into it. This will help
remove debris (charge liner residue slugs and mud solids & crushed/compacted
rock particles) formed in the formation during perforating and will prevent the initial
flow of wellbore fluids into the formation
Completion fluids in the wellbore must be clean. They are usually solutions of
CaCl2 or KCl, depending on density required
Recent advances in perforating techniques create an almost instantaneous
dynamic underbalance that is more effective than a static underbalance achieved
through the control of the density of wellbore fluids
The shaped charge is the most critical gun system component. They are made
by assembling four components: case, main explosive pellet, primer and liner and
must be manufactured to exact tolerances to ensure that the liner collapses to form
the jet according to the design of the charge

Shaped charge
Very effective and a huge improvement on
old techniques such as bullets
Perforating charges consist of 4 elements
a primer, the main explosive, a metal or
powdered metal liner and a steel case
connected to a detonating cord.
A conical cavity shape maximises depth of
penetration through steel casing, cement
and rock. As explosive shaped charges
detonate, the liner collapses to form a high
pressure, high velocity jet of fluidised
particles.

Shaped charges accomplish penetration by creating a jet of high-pressure, highvelocity gas. The charges are arranged in a tool (gun) that is either conveyed on
tubing or lowered on wireline into the well opposite the producing zone. When the
gun is in position, the charges are fired by mechanical or electrical means.

It is an advertisement, but is an interesting illustration

http://www.youtube.com/watch?v=nrM4rrKhopY

Dynamic Underbalance achieves clean perforations and

minimises damage

Perforating Gun Systems and Charges

Hollow Carrier Guns
Hollow carrier guns are pressure-tight steel tubes in which shaped charges are positioned to
protect the charges and gun components from the well environment . For gun Outside
Diameters of 2 7/8 and larger, hollow carrier guns perform better than exposed guns because
they use larger charges, optimized phasing, and increased shot density. Hollow carrier guns are
also used when debris is unacceptable and in hostile conditions that preclude using exposed
guns.
Capsule Gun Perforating Systems
are exposed gun systems, with the individual shaped charges sealed in pressure-tight protective
capsules mounted on a carrier strip or links that are exposed to the well environment.
Capsule guns are typically used in wireline through-tubing perforation applications and generate
superior performance compared with hollow carrier guns of the same diameter (<2 7/8). They
are comprised of carrier strips or links, charges, and detonating cords.
There are two designs of capsule guns: expendable (the charges and mounting assembly are
left as debris after firing) and retrievable (debris is left, but the mounting is recovered). The latter
design is also called semi-expendable. Some capsule gun systems have a selectivity option that
allows shooting more than one zone per run.

Perforating guns can be run on wireline or on the end of

tubing
Tubing-Conveyed Perforating
Tubing-conveyed perforating (TCP) completion techniques
enable perforating long intervals in one runsome TCP
strings have exceeded 8,000 ft [2,440 m] in lengthand in
highly deviated and horizontal wells TCP is the only means
of accessing to the perforating depth. TCP also facilitates
running large guns and using high underbalance

Single zone completion

packer

Two zone
completion
eg with one tubing
string
- Single-tubing,
two-packer dual
selective completion
allows production
from either or both
of the two zones
through the tubing.
Risk is sliding
sleeve may not
open or close

Two zone
completion with two
tubing strings
Parallel-tubing dual
completions can be
completed with either
one packer (A) or two
packers (B). Use of
two packers permits
gas-lifting both zones
from a common gas
source in the annulus
or pumping both
zones individually

Ability to control
production from individual
zones
eg Casing bridge plug to
isolate zones
- For example to shut off production
from deeper water zone

22

Intelligent (smart) Completions

Intelligent well completions collect downhole data such as pressure, temperature
and mass flow that allow the operator to selectively control individual completion
intervals where several different zones have been completed. Performance can be
monitored real-time and operations can be adjusted (hydraulically or
electromechanically) remotely using downhole equipment.
Intelligent completions use gauges, valves, packers, and other equipment to effect
zonal isolation, flow control, artificial lift, and sand control.
Production/injection can be optimized without physical intervention in the well.

Intelligent completions can greatly enhance a wells net present value through realtime management of downhole controls.
Benefits include:
increased production/ ultimate recovery
reduced intervention costs
reduced safety and environmental risks
less wells produce multiple zones in a single well
better control of water breakthrough in oil and gas producers
better control of vertical conformance in water and gas injectors
zonal isolation in sand-controlled intervals
improved sweep efficiency and reserves recovery and extending field life

This well drains a heterogeneous

carbonate reservoir and has two
multilateral junctions on the mother bore.
The ability to control flow in each of 3
boreholes has reduced water cut and
increased oil recovery

Geosteering drill high angle/ horizontal wells interactively (on the

fly) based on LWD log response compared to pre-drill model

Completions; isolate heel (left hand side of slide) in case of too much
water influx at lowest point of well inhibiting oil flow from further out

Colour represents resistivity, the boundary between

brown and yellow is the position of the top reservoir
calculated from the LWD

Hydraulic Fracturing in low perm reservoirs.

PROPPANT SAND USED TO KEEP HYDRAULIC

FRACTURES OPEN

16

Sand production
Sand production in unconsolidated low strength reservoirs can cause production
problems such as erosion of hardware, creation of cavities which may result in
formation subsidence and casing collapse, disposal issues and reduction of
production efficiencies.
Most common solution is gravel
packing
Other approaches include
-Resin injection to bind rock particles
together
- slotted liners and prepacked
screens
- resin coated gravel without screens
either inside casing or open
hole

Well intervention various tools and methods used to fix downhole

problems such as unseating stuck packers, sliding sleeves, removing
obstructions etc.

Christmas tree surface (as this picture) or subsea installation

to control flow of produced fluids
Other functions include chemical injection points, well intervention means,
pressure relief means, monitoring points (such as pressure, temperature,
corrosion, erosion, sand detection, flow rate, flow composition etc) and connection
points for devices such as down hole pressure and temperature transducers. It
also contains controls to operate the downhole safety valve

15

Development
Fluid and rock properties

Types of Reservoir Hydrocarbon Systems

Dry Gas (no liquid condenses when brought to surface)- mainly Methane and
Inerts
Wet Gas (some liquid condenses at surface but not in the reservoir)
Gas Condensate (liquid condenses in reservoir when pressure reduced)
Volatile Oil (light oil with very large volumes of dissolved gas)
Oil
Heavy Oil (mainly long hydrocarbon chains)
Dead oil (oil with very low gas content)

Hydrocarbon Phase Behaviour

From Bradleys Petroleum Engineering Handbook (available from SPE)

Oil PVT (Pressure Volume Temperature) Properties (Black

Oil Model) required for simulation model
API Gravity: A measure of the density of stock tank oil
Depends on how oil is processed
Bo: Oil Formation Volume Factor
Ratio of Reservoir to Stock Tank Volume (Res bbl/STB)
Depends on amount of dissolved gas, temperature and pressure
Rs: Solution Gas/Oil Ratio
(standard volume of gas dissolved in stock tank oil at reservoir conditions)
Solution Gas Gravity: Density of evolved solution gas relative to air
Co: Oil compressibility (change in volume as pressure changes)
Mu: Oil Viscosity at reservoir conditions
Pb: Bubble Point Pressure

Typical Oil PVT Properties

xxx Field - Oil PVT Properties
1.4

100

1.3

90
80

Pb

1.1

70

1.0

60
Bo

0.9

50

Muo
Rs

0.8

40

0.7

30

0.6

20

0.5

10

0.4
0

25

50

75

100

125

Pressure (barsa)

150

175

200

0
225

Rs (m^3/m^3)

Bo and Oil Viscosity (cp)

1.2

Gas PVT Properties required for simulation model

Bg: Gas Formation Volume Factor (ratio of Reservoir to Surface Volume)

Rv: Condensate content of the reservoir gas
Cg: Gas compressibility (much higher than for oil)
z:

Gas supercompressibility factor (PV=nzRT)

(z=1 for an ideal gas)

Gas Viscosity
Gas Gravity: Density relative to air of gas at surface
Gas Composition: Proportion of each molecular species
Gas Molecular Weight (average)

Potential Reservoir Fluid Problems

High Pour Point Crudes (contain waxes which solidify in tubing/at surface)
Asphaltenes - Also can deposit solids in reservoir, tubing or at surface
CO2: Corrosive (with water), suffocation risk
H2S: Corrosive, metal embrittlement, deadly poisonous, environmental
Mercury (Hg): Problems gas processing e.g. aluminium heat exchangers
Scale: Can block equipment, also can be highly radioactive
NORM = Naturally Occurring Radioactive Minerals
Emulsions and Foams
Gas Hydrates: A solid ice formed by water and natural gas at temperatures
well above 0 deg C (hydrate formation temperature increases with pressure can be as high as 15 deg C). Can plug well bores and pipelines.

Reservoir Rock Properties

As previously covered, key parameters for the petroleum engineer are:
Effective Porosity and Water Saturation
Permeability - Matrix and Fracture components (directional permeability)
-Varies over 7 orders of magnitude in commercial reservoirs
-No logging tool can reliably measure (despite vendor promotions)
The major issue re predicting flow through the reservoir is describing the
permeability distribution. Extreme variation between rock layers and areally,
and the possible presence of sealing faults, provides the major challenge for
Geoscientists and Reservoir Engineers
Rock pore compressibility: pore volume increases with pore pressure
- Usually minor - but high for chalks and unconsolidated sands which
may lead to potential compaction and subsidence problems

Reservoir Rock Properties (Continued)

Rock Strength and In-Situ Stresses
- Impact on sand production, hole stability, closing fractures
Formation Damage (decrease in permeability) can also be a major issue:
- Numerous causes during drilling and other operations
- Interaction between drilling mud and rock (particularly clay
destabilisation)
e.g. Mud solids invasion, emulsion formation, water block
Migrating fines can block permeability (e.g. if flow rates are excessive)
Problems overcome by perforating procedure or stimulation treatments e.g.
- Acid injection (particularly for carbonate reservoirs)
- Fracturing of the rock by high pressure water injection then injecting
proppants (e.g. coarse sand) to hold the fracture open

Typical Oil-Water Relative Permeability Curves (Mixed Wettability)

Oil/Water Relative P ermeability for xxx
Rescaled to Common Endpoints
1.10

Krw 78B 50.6md SS M20

Kro 78B 50.6 md SS M20
Krw 59B 1520md USS@RC M20

1.00

Kro 59B 1520md USS@RC M20

Krw 12B 3900md SS M30
Kro 12B 3900md SS M30

0.90

Merged Krw
Merged Kro

0.80

Kro, Krw

0.70

0.60

0.50

0.40

0.30

0.20

0.10

0.00
0

10

20

30

40

50

60

Sw, % P ore volume

70

80

90

100

Figure 6

Combined Rock and Fluid Properties

Relative Permeability and Capillary Pressure
Reservoir flow usually involves more than one fluid
e.g. often Oil, Gas and Water flow simultaneously
The fluids interfere with each other leading to complex 3-dimensional
distribution of fluids in the rock pore spaces
A major controlling factor is surface tension - the mutual affinity of the
rock and fluid surfaces
This affinity is described by wettability - the preference for the rock
surface to be wetted by water or oil
When one fluid is flowing in the presence of others, the ratio of the flow of
that fluid to what it would be flowing alone is the relative permeability (kr)
The rock acts as a sponge, sucking the wetting fluid against the force of
gravity, as if there was an extra pressure called...
Capillary Pressure (Pc)

Reservoir Drive Mechanisms

As oil and gas is produced, reservoir pressure falls and the energy available to
drive the hydrocarbons to the well and then to surface diminishes. The proportion
of the OOIP and/or OGIP recovered (Recovery Efficiency (RE)) during primary
recovery is largely dependent on the drive mechanism, which is affected by the
reservoir facies and geometry
Most reservoirs have more than one drive mechanism operating, and therefore
has a ...
Combination Drive

Note: Water and/or gas injection (commonly known as secondary

recovery) can change the drive mechanism to one more favourable,
thereby increasing RE
RE may also be increased by higher well density/ infill wells/working over wells.
This may be justified by detailed economics assessing the worth of additional
production vs the increased costs

Reservoir Drive Mechanisms oil

Depletion Drive
End member of solution gas drive reservoirs
Nil to very little water influx, low GOR (Gas Oil Ratio) oil
Energy comes from expansion of the oil, compaction of
pore space (and from the expansion of the little gas that
comes out of solution when pressure falls below the Bubble
Point)
Worst case: A dead (low GOR) oil typically will expand only
2% before zero pressure reached
No solution gas liberated
Well will need to be pumped when pressure is too low
(nodding donkeys)
Pressure falls until the well can no longer be produced
(after recovering only 1-2% of the oil (RE 2%) - but recovery
can be higher if the rock compresses e.g. in chalk reservoirs
and highly overpressured unconsolidated sands)

solution gas drive

Reservoir Drive Mechanisms - oil (Continued)

Solution Gas Drive:
Pressure is maintained by gas coming out of solution and expanding. Minor
support from oil and rock expansion
Gas is much more compressible than oil so expands more
Pressure will drop as oil is produced. Oil rate will decrease and GOR (Gas
Oil Ratio) will increase with time as gas moves quicker to the wells
Reservoir energy is lost as gas is produced and performance declines
rapidly
Oil becomes denser and more viscous as the gas is liberated
Recovery Efficiency (RE) normally ranges from 5-30%, depending on
GOR, permeability and the number of wells and their location
Try to minimise volume of produced gas if possible, to preserve energy in
the system
Formation of a secondary gas cap can increase recovery. Keep wells low in
column, away from potential gas cap

Reservoir Drive Mechanisms - oil (Continued)

Solution Gas Drive (contd)
Best case:
RE (Recovery Efficiency) can be as high as 70% in fields with large columns,
high permeability and high GOR oil (eg some reefs in Canada) enhanced by
Gravity Drainage drive (where oil sinks downward from the gas cap due to
higher density).
Energy and effective sweep comes from the formation of a secondary gas
cap
This particular case is actually a combination of three drive mechanisms
Wells/perforations must be positioned low in the oil column, to stay away from
any secondary gas cap

Solution Gas Drive:

Typical primary production

history

Mechanisms of improving
recovery water and/or gas
injection

Reservoir Drive Mechanisms

- oil (Continued)
Gas Cap Drive 1
Near closed system with very little or no
permeable aquifer (water drive)
Energy is provided by expansion of the gas cap
Tendency for gas to be preferentially produced
during the latter stages

Reservoir Drive Mechanisms - oil (Continued)

Gas Cap Drive 2

Typical primary RE 25-35%, depending on size of gas cap

Can be a very efficient mechanism (RE up to 60-80%) if gas production is
controlled, especially if the wells/perforations are structurally low and
permeability is high - resulting in gravity stable displacement eg previously
quoted Canadian reefs and Iagifu-Hedinia Fields in PNG, which had large gas
caps into which gas was also reinjected
If no natural Gas Cap, gas injection can often achieve a similar effect

Reservoir Drive Mechanisms oil (Continued)

Water Drive:
Natural aquifer provides pressure support and pushes oil towards the wells
Energy comes from expansion of water and rock as pressure decreases
due to production. Compressibility of both is low, so requires large aquifer.
(volume of a moderate sized aquifer is > 100 x hydrocarbon reservoir)
Wells start producing water and will usually need to be pumped eventually
Speed at which water arrives depends on:
Distance from the perforations to the aquifer
Mobility ratio of water and oil (Muoil/Muwater x krw/kro) (if greater
than 1, the flow is unstable and water fingers through the oil)
Degree of reservoir heterogeneity (water invades permeable
streaks first- fingering)
Gravity stable displacement (gravity slows water advance at
low rates)

Reservoir Drive Mechanisms oil (Continued)

Water Drive:
Usually an efficient drive mechanism - recovery 25 - 75% depending on oil viscosity,
reservoir quality and degree of heterogeneity and strength of aquifer.
If the aquifer is weak (ie small or low permeability), water injection can often achieve a
similar effect (a waterflood) and allow higher production rates
Wells/perfs should be as far up from the OWC as possible (but away from any GOC)
In fields with relatively small oil columns and/or adverse mobility ratios (viscous oil), the
proportion of water (water cut) being produced will rise rapidly
Water cut may quickly rise to >90%
In high permeability reservoirs with a strong water drive it is not usually best to try and
limit production rate to keep the water cut from increasing unless you have water
handling/disposal constraints
Usually keeping the total fluid offtake as high as possible will increase recovery (RE),
as the higher oil rate will postpone abandonment due to economics
In a waterflood, consider the effect of the temperature of the injected water on the oil
mobility

Water Drive

OWC will move up to base of

perforations through
continued production and will
start to produce water.
Water may be produced
earlier if coning or cusping
(fingering of water along
higher permeabilty streaks)
occurs
NOTE Gas coning or
cusping can also occur

27

Typical water drive

production
performance

water fingering along

higher k streaks/beds

21

Reservoir Drive Mechanisms - Gas

Depletion drive gas reservoirs (also known as volumetric
reservoirs) usually achieve the best recovery efficiency
But gas pressure and rate continuously decline
Compression equipment needs to be installed at the surface to get good recovery.
Compressors lower the flowing tubing pressure at the surface, which allows the reservoir to
produce to a lower abandonment pressure
RE 80 -95% possible with good permeability. If tight (k <1 md) RE ~ 50% due to earlier
economic cutoff due to low rate
RE not sensitive to structural elevation of perforations

Water drive gas reservoirs have a lower recovery efficiency (45 -75%)
RE increases with increasing column height and increasing permeability, and decreases in
heterogeneous reservoirs due to water fingering. May be fairly low in low relief structures.
High well rates are maintained until water breakthrough
Compression sometimes needed when gas and water are produced together
Usually end to production comes rapidly after water breakthrough
Perforate as high as possible, away from GWC

Retrograde gas/condensate
If drive is weak and pressure falls with production, liquid (condensate) will form in
the reservoir
This condensate is immobile and will not be recovered.
It may hinder reservoir performance, especially in low permeability reservoirs
CGR (Condensate Gas Ratio) declines with production
Re-injecting and recycling gas will maintain pressure and increase the amount of
condensate recovered

Most reservoirs have more than one drive mechanism operating, that is, they have
a ..Combination Drive

Note: Water and/or gas injection can change the drive

mechanism to one more favourable, thereby increasing RE

Thin areally limited

fluvial sands most
likely to have
depletion drives and
- low primary
recovery for oil
- high recovery for
gas

Thick areally
extensive marine
sands most likely to
have water drive and
- high recovery of oil
- moderate recovery
of gas

Improved Recovery Operations (IOR)

Gas and/or Water Injection (Secondary Recovery)
To maintain reservoir pressure, improve displacement efficiency
Fracturing, Stimulation, Pumping are sometimes called IOR
Enhanced Oil Recovery - special chemical and thermal processes
- Steam or hot water injection (reduce heavy oil viscosity by heating)
- CO2 injection - often results in Miscible displacement
Injectant and reservoir oil combine into a single phase
Reduces residual oil saturation
- Rich Hydrocarbon gases and N2 sometimes also give miscibility
- Polymer flooding (increases water viscosity for better sweep)
- Surfactant flooding (like washing the oil off with soap)
Alkaline flooding can give similar results (make your own soap)
- In-situ combustion (make your own heat, CO2), etc...

Petroleum Reserves - Estimation Methods

Volumetric (geological mapping OOIP, OGIP) with recovery efficiency by using
analogue of similar field
Reservoir simulation study (using volumetric hydrocarbon-in-place)
After production startup additional methods are available:
- Material Balance (used mainly for gas in Australia)
- History matched simulation (dynamic data improves estimates)
- Decline Curve analysis (best for very mature fields ie significant proportion of
reserves produced), which is essentially fitting type curves to well production
data

The economic cut-off is critical to defining reserves

Should use all applicable methods as a cross-check and apply best technical
judgment regarding the accuracy and degree of confidence in each method

Volumetric: Deterministic and probabilistic

Deterministic approach uses chosen single values/data/maps for a particular case or
realisation
Probabilistic approach uses distributions of input variables. A random sample of each
distribution is multiplied together to give one realisation in a Monte Carlo simulation.
Commonly use > 1000 realisations to produce an OIP distribution
Several deterministic cases should always be run to provide input to and ground-truth
probabilistic estimates

Eg here 25% +/- 3

Eg here 70% +/- 5

Estimating Reserves
Material Balance Methods
By recording oil, gas and water production (and injection) and monitoring reservoir
pressures carefully (and accurately ie sufficient buildup during measurement),
inferences can often be made about the amount and type of hydrocarbon present
in the reservoir, after sufficient production. Generally, a minimum of 10 to 20% of
the in-place volume must be produced before there is sufficient data to identify a
trend and reliably extrapolate to the original in-place volume through material
balance.
The hydrocarbons reveal themselves by virtue of their compressibility (therefore
gas, if present, dominates the pressure behaviour)
Very approximately, rock and water compressibilities are similar, oil is somewhat
greater (up to 10x) and gas is several orders of magnitude greater
The method treats the entire reservoir as a single tank
Together with geoscience data, it may be used to better plan development

Estimating Reserves
Material Balance Methods
Best applications are in reservoirs with:
No or weak water drive,
Preferably only one hydrocarbon phase present originally,
Gas
Reasonable well coverage and permeability to allow estimation of average
reservoir pressure
Formulae available in texts but usually done with software packages
The simplest and commonest method is the P/Z method for gas reservoirs

decreasing

P/Z plot

(Depletion drive)

0
increasing

P/Z plot for a gas well

No further reserves assigned to Pool, as it is depleted

P/Z plot for a gas well

- Sudden increase in pressure due to fault seal breaking down
and gas bleeding from adjacent gas pool
- Shut in Well Head Pressure increasing (tight gas bleeding in to
permeable reservoir)

Fault seal
breaks down

60

Eg Gas Reservoir With Possible Oil Leg - Material Balance

XXX Reservoir P/Z plot
3100

Increased
pressure support
oil leg?

3000

P/Z (psia

2900

2800
M30 &M3
M30

2700

M3
Calc P/Z
2600

2500

2400
0

Cum Raw Gas Production (BCF)

10

12

Estimating Reserves
Reservoir Simulation
The best method of forecasting reservoir performance for various
development scenarios:
-Start with a geological reservoir description or geocellular model
-Build a simulation cellular grid (or upscale the geocellular model)
Typical cells are 80m x 80m x 4m thick
-Import estimated properties for each cell - porosity, permeability, net sand
-Create tables of fluid PVT properties, relative perm. and cap. pressure
-Define initial conditions - Pressure, Fluid Contacts, Solution gas
-Define actual/proposed well locations
-Create tables of wellbore pressure drops for various pump types, if used
-Describe production facilities limitations (e.g. maximum water rate)
Simulate!!!!! Various models and simulations will allow engineer to pick best
arrangement of development well locations, including later infill if required

Map view of grid cells

Cross section, next slide

So

Cross section view of grid cells

0 days

884 days

So 100

So 0

5267 days

Map view of grid cells

Reservoir Simulation (Continued)

The simulator calculates the flow of each phase in and out of each cell during a
time step and uses material balance to calculate the pressure at the end of the
time step. This repeats for each time step.
If reservoir production history is available, it is usual to calibrate the model by
adjusting uncertain parameters till the model output is history matched to
production.
The outputs are the well flow rates for each phase, the well and reservoir
pressures and fluid saturations versus time
Undoubtedly it is the most accurate method of calculating reservoir behaviour,
however it is only as good as the input reservoir description
The main problem is that people trust the output too much!!!!
Simulators are available to model virtually any reservoir phenomenon or process
such as fractured reservoirs, pressure dependent permeability, compositional
simulators, thermal simulators, enhanced oil recovery processes, coal bed
methane, etc

Production Forecasting
The first step is to estimate well productivity and rates from:
Sand thickness, reservoir pressure, water cut and GOR, perforation procedure,
formation damage, turbulent flow, available wellbore and pumping equipment,
surface conditions
Use specialised wellbore and flowline pressure drop programs
Production forecasts can be generated from (in order of preference):
- Reservoir simulation
- Material balance calculations, which are best suited for depletion
drive/weak water drive gas reservoirs
- Decline curve analysis, for mature fields with established well production
trends
- Analogy (if little information is available other than neighbouring fields)
Important to include equipment downtime
Production forecast/profile is used in economic analysis

Typical net cash flow profile for a development

Gross Revenue

Cash flow

Operating Costs

State
Take

Abandonment
Costs

Net Cash
Flow

Capital Expenditure

Years

Finding Net Present Value (NPV) Note Disc. Pres. V=Future V/(1+i)n
Time
= 0

Net cash flow ($MM)

-200

Discount rate i (%)

End Yr (n):

Discount factor (No)

Present values ($MM)

Time = end year 2

3
4

100

90

80

70

60

50

40

100

10%

10%

10%

10%

10%

10%

10%

10% 10%-

1.000

0.91

0.83

0.75

0.68

0.62

0.56

0.51 0.47

-200
91
74
60
48
37
28
21

Net or Total Value

-47
+112

(This project beats the alternative investment (yielding 10%) by $112MM)

Petroleum Reserves
Reserves definitions (PRMS) are jointly published by the Society of Petroleum
Engineers (SPE - see www.spe.org), World Petroleum Congress (WPC), AAPG
(Geologists), SPEE (Reserves Evaluators)
Reserves by definition are discovered and anticipated to be commercially
recoverable from a given date forward.
Everything else are called Resources
Reserves estimates are categorised by degree of confidence
Proved - Reasonably Certain (>90%) at Current Economic Conditions
Probable - Additional reserves more likely to be recovered than not (ie
probability >50%)
Possible - Higher risk (P10)
Proved Reserves are subcategorised by development status
- Proved Developed Producing (PDP)
- Proved Developed (only minor costs needed to start production)
- Proved Undeveloped - geologically/commercially proved - need investment

The Petroleum Industry

The Upstream (includes Petroleum Engineering):Exploration and Appraisal
Planning and Development
Crude Oil and Gas Marketing
Production
Workovers, infill drilling, artificial lift, production optimisation
Field abandonment

The Downstream (includes Chemical Engineering):Shipping

Refining
Petrochemicals
Product Marketing
Oil Spills!

The Role of the Reservoir Engineer

Exploration:

- Prospect Review and Risked Economics

- Discovery Well Testing and Evaluation

Appraisal:

- Objectives, Location, Evaluation Plans, Value of Information

Development Plan: - Reserves, Well Requirements, Oil/Gas/Water Rates, Pressures

- Reservoir Simulation
Development:

- Well Locations, Data Gathering, Completion Intervals/Types

Production:

- Data gathering, Production Forecasts, Reservoir Management

Re-Activation:

- Infill Drilling, Workover Requirements

Field Abandonment:- Review Opportunities and Economics prior to decision

Acquisitions:

- All the above, Risks, Economics