SPE 118840

Field Development Optimization Applied to Giant Oil Fields

Litvak, Michael L (BP) and Angert, Patrick F (BP)

Copyright 2009, Society of Petroleum Engineers

This paper was prepared for presentation at the 2009 SPE Reservoir Simulation Symposium held in The Woodlands, Texas, USA, 24 February 2009.
This paper was selected for presentation by an SPE program committee following review of information contained in an abstract submitted by the author(s). Contents of the paper have not been
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Abstract
A new optimization technology has been demonstrated for giant oil and gas-condensate fields. Because of the very large
number of wells involved, optimization is carried out on well patterns, well spacing in patterns, order of drilling different
zones, etc. Earlier developed technology for the optimization of well placement, drilling schedule, well trajectories, and
injection strategy has been extended for the optimization of field development schemes involving a very large numbers of
wells.
The powerful optimization procedure is based on a global optimization technique such as the Genetic Algorithm and other
mixed integer optimizers. Potential field development schemes that match field development constraints are identified. A
global optimizer is then applied to determine the optimum field development scheme relative to pre-defined economic criteria
and analysis. A statistical proxy procedure is utilized to reduce the number of optimization iterations and computing time
required to solve this difficult optimization problem.
Economic indicators (e.g. net present value, incremental rate of return, capital efficiency, discounted payback, etc.) or oil/gas
recovery are maximized subject to field development constraints. The multiple reservoir models representing uncertainties in
reservoir geology are handled within the workflow and are represented in predicted results.
The applications of this optimization technology is clearly demonstrated to be a powerful and sufficiently general tool for
analysis of most real world field development planning issues. Significant improvements (3-13 %) in oil/gas recovery and
net present value are demonstrated in the optimum cases when compared with the best manually achieved reference field
development case.
Introduction
One of the critical issues facing an owner, investor or operator of an oil or gas accumulation is the definition of the optimal
development plan to maximize the expected recovery of hydrocarbons or financial profits from production of their
hydrocarbon accumulation.
The choices associated with development are great, including items such as: the well type, horizontal or vertical, wellbore
length within any given interval, wellbore trajectory, completion technology, e.g., (cased and perforated, slotted linear, gravel
packed), well placement, well spacing, producer to injector ratio, drilling order, production and injection rate limits, pattern
type, oil, water and gas production and facility limits, type and amount of artificial lift, etc..
These choices when coupled with the uncertainty in the subsurface characterization such as: structural depth of pay,
compartmentalization via faults or stratigraphic discontinuity, variability in the distribution of porosity, permeability, rock
type and saturation, etc very quickly lead to a daunting number of potential development designs that require evaluation in
order to determining an optimum development plan.
Even with advances in todays reservoir and facility simulation technologies and computer hardware, most investigators
when faced with such a large number of complex possibilities adopt a manual or semi-manual method of analysis and
selection of the design which they then assert is optimum. Typically tens, rather than hundreds of designs are actually fully
simulated and investigated. From these results a final design is selected.

SPE 118840

With the now documented and field tested method (Williams et al., 2004), known as Top-Down Reservoir Modeling,
TDRM, for obtaining multiple, diverse, and history matched dynamic flow simulation models of a given reservoir, we
embarked upon the development of optimization technologies that would extend the usefulness of this technology to the
problem of field development optimization.
This new technology, which is based upon similar global optimization techniques to those employed within TDRM, is
directed at obtaining an optimized development plan from a selection of the previously obtained multiple, diverse, yet history
matched dynamic flow simulation models of a particular oil / gas field.
The field development optimization technology has now been field trialed on a multitude of cases (Litvak et al., 2007a,
2007b and Volz et al., 2008). In each instance, this technology was able to obtain a development plan that yielded results that
were superior to manual or semi-manual efforts achieved by conventional multi-disciplinary development teams. This paper
discusses in detail, the application of this new technology to the optimization of giant oil fields.
Applications of the field development optimization methodology in giant oil fields with thousands new wells has been
limited in the past, because of the very large number of control variables for example (new well locations and drilling
schedule) involved in the optimization process. In addition, a true understanding of subsurface uncertainty dictates that
rigorous analysis include reservoir models covering of the range of sub-surface uncertainties.
Our earlier optimization methodology (Litvak, et al., 2007a) has been extended to the selection of an optimized field
development from a pre-defined set of potential options covering pattern type, well spacing and facility designs, etc. For
example, optimized well pattern, distance between wells in patterns, well type (horizontal or vertical well), and facility option
can be selected from a set of potential options. In this example, the set of potential well patterns (five-spot, seven-spot, linedrive, etc.), distances between wells, and facility designs is defined before the optimization procedure is initiated.
The described extension of the field development optimization methodology allows for its effective application to giant oil
fields, because the number of control variables is tremendously reduced. The optimization technology is flexible enough,
however, to allow for optimization via patterns and spacing criteria in one part of a field, whilst in another portion of the oil
field, optimization via individual specific well locations, trajectories, drilling strategies and injection strategies still continues
and is incorporated.
Below, we discuss the demonstration of the extended development plan optimization technology in a giant oil field with
thousand new wells. Well patterns for waterflood, distance between wells in patterns, well types (high angle wells versus
vertical wells), lengths of high angle wells, number of required rigs, order of development zones and well pad development
have been optimized, over six equally probably history matched reservoir models The example clearly demonstrates the high
effectiveness of the optimization procedure.
Formulation of Extended Field Development Optimization Procedure.
The following field development optimization problems for an existing (or new) oil (or gas) field are addressed (Litvak et al.,
2007a): a) identify an optimized field development option matching certain field development constraints, whilst
maximizing optimization criteria such as overall project (or field) economic indicator (for example, Net Present Value); b)
multiple reservoir models representing uncertainties in the reservoir description are used for the evaluation of uncertainties in
field production predictions; c) probabilities are assigned to these models.
Potential options for locations of new/sidetrack wells, well drilling schedule, well trajectories, perforated intervals, facility
capacities, well equipment, well production/injection rates, well gas-lift rates, etc. are considered as discrete or continuous
control variables in the optimization problem as described in (Litvak et al., 2007a).In the extended formulation discussed
within this article, well patterns, well spacing, facility designs, etc are added as new discrete control variables.
A large set of field development constraints (field development rules) should be honored during the optimization process.
Some of these constraints are: a) constraint of drilling wells only in geologically predefined areas; b) drilling rig constraints
such as drilling time, costs, and distance to targets; c) constraints on the oil in place in a particular drainage area of potential
wells and on their oil/gas recovery; d) constraints on the recovery from the field and risk factor; e) constraints on the
minimum distance between wells; f) constraint on the minimum distance from a production well to an aquifer and or a gas
cap, g) constraint on the minimum values of KH or pore volume of a potential well location, etc. (Litvak et al., 2007a). In the
extended formulation, well patterns, well spacing, facility designs, etc are selected from specified sets of potential field
development options.
A specified percentile of economic indicator or oil/gas recovery (for example, P50) is considered as the optimization criteria.
The cumulative probability distribution functions (CDFs) of the economic indicator or oil/gas recovery are determined for all

SPE 118840

field development options considered in the optimization procedure. These CDFs are determined from simulation runs of the
multiple reservoir models. The percentile is then calculated based on the CDF.
In addition to the definition and acceptance of the new discrete control variables, the original procedure outlined in (Litvak et
al., 2007a) is modified to utilize a statistical proxy procedure (Onwunalu, et al., 2008) to reduce the number of required
reservoir simulation runs to achieve a particular optimized solution. These two enhancements, in conjunction with porting
the procedure to the next generation reservoir simulator, NEXUS, has significantly reduced the actual time and computational
intensity of the procedure, making it suitable for application to giant oil fields with thousands of wells.
The enhanced algorithm is presented in Figure 1. The algorithm is based on multiple reservoir models representing the
diversity of sub-surface uncertainties. Field development rules (constraints) are specified at the start of the optimization
procedure.
Potential field development options matching these field development rules incorporating various well patterns, spacings,
drilling, and injection constraints are determined. The following operations are executed in every iteration of the
optimization loop. A search procedure is applied for the selection of field development options from the complete set of
potential options. Several powerful mixed-integer optimizers have been implemented as the search procedure.
If the set of the potential field development options is discrete and reasonably small, all potential field development options
can be evaluated directly. In the case of large problems the statistical proxy procedure is applied in order to decide which
reservoir models should be run with the selected field development option. Application of the statistical proxy is based on
the requirement that the correct CDF (cumulative probability distribution) of the economic indicator or oil/gas recovery
obtained by the proxy procedure should be able to reproduce the results obtained via complete simulation.
The input decks of the selected reservoir models are automatically updated for the selected field development options. The
selected reservoir models are executed. Economic analyses of the runs are completed and the economic indicators are
calculated. A CDF of the optimized economic indicator or oil/gas recovery is determined. If the number of iterations does
not exceed the specified limit, the next iteration of the optimization loop is executed. Upon completion of the procedure the
results are provided via a traceable case manager that allows easy examination of the results and selection of an optimized
development plan.
Optimization of a Giant Oil Field Development
Below, we will discuss the application of the extended field development optimization methodology to a giant oil field.
Reservoir models, upscaling, model calibrations, and field development evaluations are described in (Volz et al., 2008)4.
Oil Field Background
A fluvial sandstone reservoir with very large areal extension of about 2,000 km2 (21,528 Million ft2) and average gross
thickness of 30 m (98 ft) is considered. Average net-to-gross ratio is 50%, average permeability is 115 md. The reservoir is
very laminated but with small spots of very productive sand. More than 100 appraisal wells have been drilled in the reservoir
with an average distance of 4 km (13 Mft).
Reservoir Model and Calibration
Pressure measurements via pressure build-up tests in 48 wells and in two interference tests are available as history matching
data. Multiple reservoir models reflecting sub-surface uncertainties have been built and successfully history matched using
TDRM. Statistical analysis has been conducted to determine the impacts of identified sub-surface uncertainties on future
predicted recoveries for the base case development plan. From these results, six reservoir models matching available
historical data and representing major sub-surface uncertainties have been selected to cover the potential spread of predicted
recoveries associated with the base development plan. (Volz et al., 2008). These six reservoir models are assumed to be
equally probable.
The number of grid cells in every reservoir model is NX*NY*NZ = 143 * 123 * 35 = 615,615, where NX, NY, and NZ are
the number of grid cells in the three coordinate directions. The total number of active grid cells with non-zero pore volume is
275,574, per model.
Specific Objectives of the Giant Oil Field Optimization
Our objectives relative to the giant oil field described in (Volz et al., 2008)4 were to provide answers to the following
questions: a) What is the optimum water injection pattern type? b) What is the optimum distance between wells for this
particular field and pattern type? c) How many wells are required to be drilled and what is the optimized pace of drilling?
(how many drilling rigs do we need) d) What artificial lift method should be used (gas-lift, or electric submersible pumps

SPE 118840

(ESP)? and e) In what order should we develop the different parts of the reservoir via a predefined number of drilling pad
surface locations.
We required that the optimization procedure, identify a field development plan that maximized overall Net Present Value
(NPV) for the project, but at the same time, delivered higher oil recovery than the base case. Achieving both of these criteria
was necessary in order to meet both company and governmental goals for the development.
Finally, we required that whatever field development plan was selected, the plan should be robust relative to the range of
subsurface uncertainties understood to exist within the field via the initial TDRM runs and the statistical analysis of the
history matched solutions. Six calibrated reservoir models representing major sub-surface uncertainties have been run for
every evaluated field development option. Only field development options with risk factor less than specified threshold have
been considered. The risk factor for any selected field development option is defined as the difference between maximum
and minimum estimations of oil recovery from six reservoir models.
The manually derived field development plan which we call the base plan was applied as the initial guess in the
optimization procedure. Our objective was to deliver a better plan with better economics and higher oil recovery.
A listing of the complete set of field development options considered is provided below:
well patterns (Inverted 5-Spot, Inverted 7-Spot, Special Staggered line-drive),
well spacing in well patterns (600m, 800m, 1040m, 1500m, 1800m) or
well types (vertical vs. high angle wells),
lengths of high angle wells (300m, 500m, 800m, 1000m),
artificial lift methods (gas-lift, Electric Submersible Pumps (ESP), no artificial lift),
maximum number of drilling rigs of 8 or 10,
schedule for developing reservoir Zones 4-8 (see Figure 2),
order of drilling 16 well pads in Zones 1, 2 and 3.
The oil field was divided into the 8 development zones shown in Figure 2. It is assumed that Zones 1, 2, and 3 would be
developed first. The optimization procedure was allowed to determine the optimum order of the remaining 4 8 zones. The
locations of drilling pads and well connections to these pads were determined for each well pattern and well spacing
investigated. Well drilling/completion time and cost were calculated as a function of pre-defined variables such as distance
to the well pad, the well type, and the length of the well horizontal section.
Execution of the Field Development Optimization Procedure
As described, the following field development options have been evaluated in the optimization procedure: well patterns, well
distance in the patterns, well length, artificial lift method, maximum number of drilling rigs, order of reservoir development,
and order of drilling well pads.
All field development options considered can be represented by discrete control variables. The total number of combinations
of potential variables considered was 3 (pattern type) * 5 (well spacing) * 5 (well length) * 3 (artificial lift type) * 2 (drilling
rigs) * 120 (zone development order) * 16! (pad drilling order). Of course, it is impossible to run 6 reservoir models for
trillions of potential combinations of the field development options. For this reason, an intelligent search procedure has
been applied to reduce the number of evaluated combinations to thousands and still determine the optimized development.
The schedule for development of zones 4-8 and the order of drilling 16 well pads in Zones 1-3 was shown to have a
significantly smaller impact on oil recovery and NPV than the other listed field development options being investigated. For
this reason, the following two step procedure was adopted. In Step 1, all potential combinations of 3 (pattern type) * 5 (well
spacing) * 5 (well length) * 3 (artificial lift method) * 2 (drilling rigs) = 450 combinations of the major field development
options were run and evaluated assuming that schedules for the zones and pad development from the base plan were applied.
Each of the six reservoir models were run for every potential combination of the major field development option to estimate
uncertainties in production predictions, risk factor, cumulative probability distribution function of NPV, and the P50
percentile of NPV. Only combinations of the major field development options matching the two major constraints (oil
recovery is larger than in the current plan and the risk factor was sufficiently small) were considered feasible and accepted.
All feasible combinations were ranked based on the P50 percentile of NPV. As a result, the optimized major field
development options with the maximum P50 percentile of NPV were determined. In Step 2, the schedules for zone and pad
development were optimized using a Genetic Algorithm (with statistical proxy) as the search procedure. The optimized
major field development options found in Step 1 were passed into Step 2.

SPE 118840

The total number of the combinations of the field development options evaluated in Step 1 and 2 are ~2,300. Therefore, the
maximum number of reservoir simulation runs required was ~2,300 * 6 = ~13,800 (six reservoir models have been run for
every combination). Each full reservoir simulation run takes ~2.5 hours. If a distributed computer network with two hundred
CPUs was used to accomplish all the required runs ~7 days would be required. We would expect that application of the
statistical proxy would reduce the actual computational time on this same network by 50%, 3.5 days (Onwunalu, et al., 2008).
Optimization Results
Details of the optimization results are presented in (Volz et al., 2008). The cross plot of the normalized incremental NPV
versus normalized incremental oil recovery for all feasible major field development options evaluated in Step 1 of the
optimization procedure are presented in Figure 3. Normalized incremental NPV is defined as the difference of NPVs
predicted with the evaluated option and the base plan divided by a normalization factor. Normalized incremental oil recovery
is defined in a similar manner.
On the coordinate system of Figure 3, the base plan corresponds to the origin of the coordinate system. Results presented in
this figure are based on predictions from the reservoir model corresponding to the P50 NPV. Only feasible field development
options with positive incremental recovery and low risk factor are presented in Figure 3. Labels represent the numbers of
wells for each case. Cases with different well spacing are shown by color. For example, cases with 600m, 800m, 1040m,
1500m, and 1800m well spacing are presented by red, blue, yellow, dark, and light blue colors, correspondingly. Cases with
five-spot, seven-spot, and TDS patterns are shown by cubes, circles and stars, correspondingly. Well lengths are represented
by the size of points in the plot, whilst vertical wells are presented by the smallest points. High angle wells with length of
1000m are presented by the largest points.
The following conclusions can be drawn from the results. A significantly larger P50 NPV and larger oil recovery are
predicted with the optimized field development scheme made up of an inverted 7-spot pattern, 1040m well spacing, utilizing
high angle wells with length of 500m, a maximum of 8 rigs, and ESPs as the artificial lift mechanism as compared to the base
development (a staggered line-drive, 600m well spacing, vertical wells, maximum 8 rigs, ESP artificial lift).
The primary reasons for increased NPV and recovery in the optimized plan can be attributed to the following:
1.
2.

the application of high angle wells instead of vertical wells;

the selection of an optimized well spacing and well pattern type resulting in a significant reduction in the total
number of wells required for development.

A large effort has been expended to understanding these conclusions. Complete results of these incremental studies are
outside the scope of this current paper. However, as an example please consider the analysis of the well spacing results for
an inverted 7-spot, utilizing high angle wells with an average length of 500m. A cross plot of the normalized incremental
NPV versus normalized incremental oil recovery for the results with a well spacing of 600m, 800m, 1040m, and 1800m is
presented in Figure 4 for the reservoir model corresponding to the P50, P10 and P90 NPV.
We can conclude from this figure that NPV is significantly larger at 1040m well spacing than at 600m or 800m spacing for
all considered reservoir models. Further analysis showed that the primary reason for the significant increase in NPV was the
acceleration of oil production into the earlier years of the field development. The instantaneous and cumulative oil optimized
production rates for all reservoir descriptions considered are compared against the profiles for the base case development in
Figure 5. The optimized development plan for the P50 NPV case is shown by the star symbols. It achieves significant rate
acceleration as well as incremental oil recovery over the base case development.
With the application of the field development optimization technology, an exceptionally wide range of criteria has been
brought into the optimization process. Because of the speed of the optimization procedure, Nexus simulator, statistical proxy
and the case management capabilities of the software, an integrated subsurface team spends its time analyzing the calculated
results rather than attempting to explore the solution space in a manual or semi-manual approach and to determine an
asserted optimum development plan.
Summary
1. A previously reported general field development optimization methodology has been extended to cover a range of
new optimization variables such as pattern type, well spacing, well type (horizontal or vertical well) within a pattern,
and facility designs in order to allow evaluation of giant oil fields containing thousands of potential wells.
2. The effectiveness of the extended field development optimization procedure has been demonstrated via a real world
application to giant oil field.

SPE 118840

3.

4.

Well patterns, well spacing, well type (horizontal or vertical), artificial lift method, maximum number of drilling
rigs, order of developing reservoir zones and well pads have been optimized resulting in a maximized P50 NPV
development, whilst maintaining high overall field recovery in comparison to the base case development.
Uncertainty in field development production profiles have been assessed as a function of NPV and risk factors
associated with the subsurface reservoir description.

Acknowledgments
We thank the management of BP for their support in granting permission to publish this paper. In addition we would like to
thank the BP ARPP R&D program for sponsoring the development of the field development optimization technology, an
extension of our already existing and globally field trialed TDRM technology. Specifically we would also like to thank
Richard Volz, Karam Burn, Subhash Thakur and Sergey Skvortsov for their huge contributions to the field development
optimization study of a giant oil field.
References
1.

2.

3.

4.

5.

Litvak, M.L., Gane, B., Williams, G., Mansfield, M., Angert, P., Macdonald, C., McMurray, L., Skinner, R., and Walker, G.J.
2007a: Field development optimization technology. Paper SPE 106426 presented at the 2007 SPE Reservoir Simulation
Symposium, Houston, 26-28 February 2007
Litvak, M.L., Gane, B., McMurray, L. 2007b: Field development optimization in a giant oil field in Azerbaijan and a mature oil
field in the North Sea. Paper OTC 18526 presented at the 2007 Offshore Technology Conference, Houston, 30 April-3 May
2007
Onwunalu, J., Litvak, M.L., Durlofsky, L.,J., and Aziz, K., 2008: Application of Statistical Proxies to Speed Up Field
Development Optimization Procedures. Paper SPE 117323 presented at the 2008 Abu Dhabi International Petroleum Exhibition
and Conference held in Abu Dhabi, UAE, 36 November 2008
Volz, R., Burn, K., Litvak, M., Thakur, S., and Skvortsov, S., 2008: Field Development Optimization of Siberian Giant Oil Field
Under Uncertainties. Paper SPE 116831 presented at the 2008 SPE Russian Oil & Gas Technical Conference and Exhibition
held in Moscow, Russia, 2830 October 2008
Williams, G., Mansfield, M., MacDonald, D.G., Bush, M.D. 2004. Top-Down Reservoir Modeling. Paper SPE 89974
presented at the 2004 SPE Annual Technical Conference and Exhibition, Houston, 26-29 September 2004

Figure 1: Field Development Optimization Procedure

TDRM
Multiple History Matched Reservoir Models

Field Development Optimization

Field Development Rules

Objective: Select Field Development

Option Optimizing

Some economic indicator (NPV, IRR, etc.)

OR

Recoverable oil/gas reserves

Matching field development constraints

Potential Field Development Options &

Specified Set of Potential Options
No
Search Procedure
Select Field Development Option

Proxy Procedure
Select Reservoir Models to Run

Yes
Converge

Optimized Field Development

Options
Economic Model Runs

Determine CDF of Economic Indicator/Recovery

Define Optimization Criteria as Percentile

Reservoir Model Runs

Build Input and Run Selected Reservoir Models

SPE 118840

Figure 2: Reservoir Zones

5
2 3

7
4

Figure 3: Normalized incremental NPV versus normalized incremental oil recovery for all feasible field development options.
Simulation results of P50 reservoir models

Optimize
1

408
579

0.8

579

408

408

408

579
635

0.6

635

635

954
955
0.4

Base

0.2

1,207

1,208

1,127
1,049

1,205

0
0

0.2

0.4

0.6

0.8

Normalized Incremental Oil Recover y

SPE 118840

Figure 4: Normalized incremental NPV versus normalized incremental oil recovery with different well spacing. Simulation results of
P10, P50, and P90 reservoir models with high angle wells of length 500m in inverted 7-spot pattern

The labels show number of wells

1

408
408

149
149

0.8

408

149

1800m Spacing

635

1040 m Spacing

0.6

635
635

800m Spacing

P10

P50

0.4

P90
1,208
0.2
1,208

600m Spacing1,208
0
-1

-0.5

0.5

Normalized Incremental Oil Recovery

Figure 5: Uncertainties in production predictions with base and optimized field development plans

Normalized Field Oil Recoveries

Normalized Field Production Rates

P50

1.2

P10
0.8

P90
Others

0.8

0.6

Optimized
Base

0.6
0.4

0.4

0.2

0.2

0
2,010

2,015

2,020

2,025

Years

2,030

2,035

2,040

2,045

2,050

2,010

2,015

2,020

2,025

Years

2,030

2,035

2,040

2,045

2,050