Modern reservoir management applications
Posted by D Nathan Meehan July 7, 2010

Reservoir management is the application of earth sciences and engineering to safely optimize the recovery of hydrocarbons and associated materials from subsurface reservoirs. These reservoirs are rock formations that trap hydrocarbons and are primarily accessed by wellbores drilled from the surface. While crude oil and natural gas with its associated natural gas liquids are the primary commercial products, non-hydrocarbon gases such as nitrogen, carbon dioxide, and hydrogen sulfide are also produced in many reservoirs. Helium and other gases are less frequent; however essentially all of the world’s helium supply comes from subsurface reservoirs. Crude oil and natural gas liquids have enormously broad applications, the largest of which include transportation fuels and fuel oils. Crude oils and natural gas liquids are converted into plastics, solvents, pharmaceuticals and many other products. Natural gas is used primarily for space heating and electric power generation with many secondary uses. CO2 may be sold or used locally for EOR applications or it may have to be injected for long-term storage. H2S is a poisonous and highly corrosive gas that must be handled carefully; elemental sulfur is one potential commercial product that can be developed from H2S.

Almost all oil and gas reservoirs eventually produce some water. Natural gas is typically saturated with small amounts of water at reservoir conditions and much of that (nearly fresh) water drops out of solution at surface conditions. Much larger volumes of water can be obtained from production of the (primarily) saline aquifers that accompany many hydrocarbon bearing reservoirs, the production of water that coexists in the pores containing the hydrocarbons or production of injected water used for pressure maintenance or waterflooding. Produced water must be disposed of properly and rarely is the source of any commercial value .

Crude oil and natural gas must flow through the naturally occurring interconnected pore spaces or fractures in the rocks to the wellbore and up to the surface. Manmade processes such as hydraulic fracturing can create high permeability paths and improve the rate of this process. The driving forces for the recovery of hydrocarbons include simple potential gradients such as pressure depletion or gravity drainage as well as fluid displacement processes that are complex in nature. Optimization of recovery is both an economic and technical endeavor. The technical endeavor requires a thorough understanding of the hydrocarbons in place, the properties of the formation in which they occur and the dynamic flow behavior over time under a wide variety of scenarios.

Reservoir monitoring means many things to different people. The word monitor is from the Latin word meaning to warn; in our context it means to measure and analyze certain properties for the purposes of safely optimizing recovery. “Warning” remains a significant aspect of monitoring. Some monitoring is for the safe operation of wells and facilities and to prevent or detect leaks of hydrocarbons outside of the design environment. Monitoring also serves to warn of changes in rates or pressures allowing the engineer to understand the causes of those changes and to act as necessary to take corrective actions.

Recovery in the sense we are using it can mean both ultimate recovery and rate of recovery. At its simplest level, tracking the production from individual wells or groups of wells is monitoring. More complex examples of reservoir monitoring include 4-D seismic, distributed temperature measurements along horizontal wellbores and near real time reservoir simulation updates. Monitoring itself has no intrinsic value except as to how it is used or potentially used to make changes in how a field is operated. The term “operating instructions” for a field encompasses all of the active decisions operators make. These can include how many wells to drill, their location and completion type, production rate constraints imposed, use of intelligent completions, injection of fluids, workovers, stimulations, etc.

We track injected volumes in a waterflood along with produced volumes by pattern, fault block and field to detect and understand where and when voidage replacement is a problem. This allows us to evaluate the actions to remedy the problem and decide if they are cost effective. Without tracking these volumes and performing voidage replacement calculations, we eliminate the option of performing this remedy. We will see that most reservoir monitoring decisions are actually options and we can use the principals of Real Options Value (ROV) to quantify the value of reservoir monitoring decisions.

In many cases the measurements and tests performed in reservoir monitoring result in information that is not 100% definitive. An intelligent well may not precisely quantify changing produced fluids along a multi-lateral horizontal wellbore; however, there may well be enough of an indicator to justify selectively changing the flux by means of inflow control devices. We can use decision trees or Monte Carlo simulations and perhaps the concepts of purchase of uncertain information to value such data.

In most cases operators do not specifically quantify reservoir monitoring value. However, this is possible and when oil and gas operators fully quantify the value of monitoring in reservoir management, it is almost always the case that the monitoring investments add a great deal of value. The value of reservoir monitoring in minimizing operating costs pales in comparison to the ability to increase oil and gas recovery and production rates and minimizing unnecessary capital costs.

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Bryson Wolfe says:

Thank you for the very informative discussion about reservoir management. I believe that you have hit a very important point on the reservoir monitoring being undervalued. It is extremely difficult to show the operator the importance of monitoring the reservoir with respect to injectors and artificial lift. Using real-time monitoring you can decrease the cost of premature artificial lift failures and also make adjustments to injection patterns based on the performance of the equipment and production rates. In recent articles in JPT they have touched on value of monitoring offshore fields, do you think that this is something that will be more prevalent in mature fields or green fields?

D Nathan Meehan says:

A lot of emphasis has been placed on offshore fields, particularly in deep water. Intellignet well applications are particularly useful there due to the relatively small number of very high cost wells and the need to optimize rates and recoveries, shut off water or excess gas, etc. Offshore recoveries can be significantly less than onshore analogs for a variety of reasons. However, I am most hopeful for both mature and greenfield applications onshore in fluid displacement projects. I will add more details on this in future posts; however I think the top of the reservoir monitoring value chain is increasing recovery. The potential applications seem very high in mature fields undergoing fluid displacement, whether waterflooding or EOR.

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D Nathan Meehan