A Note on Hand-Drawn Diagrams A Note on Hand-Drawn Diagrams A significant proportion of the diagrams in this text have been hand-drawn. From an efficiency perspective, there is a tradeoff on time spent on engineering ‘and time spent on presentation work. Abstractly, there is some ideal balance. Interms of workflow, most field developments involve the continual addition ‘of new data (from new wells and as lab data is received). The author uses con- ceptual diagrams on the fly"to describe what is being done and how approach- es are being applied. I a diagram is sufficient to make the point, it has served its purpose. The diagrams have been deliberately left in sketch format to demon- strate this as a realistic and timeefficient working approach. Formal diagrams involve considerable preparation and, in the authors opinion, are bes eft to final formal presentations and reports. In actual practice, the ideal balance is not very clear, and diagram usage depends on the culture of the company. The author has worked in companies where hand-drawn and colored working diagrams, sometimes postersized, can be used in meetings up to the vice-president level. Such companies are often characterized by a high degree of participation and technical interest by senior ‘management with an emphasis on getting work done. However, other companies develop a culture in which formal PC graphics are required for any discussion above the group leader level. Such an approach is often preferred where management time is in short supply, management is high- lyconfident in technical staf, the management siyle is more formel, or where the agenda of the company is driven by financial issues. It is usually left to individu- als to figure out the culture and adapt tothe style of the organization, Regardless of the company culture, the author strongly encourages personal working diagramsPart 1 Bread and Butter (Black Oil) SimulationIntroduction The Mystique of Reservoir Simulation During the 1970s and early 1980s, reservoir simula- tion developed quite a mystique because it was the newest reservoir tool. Much of this has worn off, and reservoir simulation has become quite commonplace. Simulators are very elegant creations. Its easy for some- one with a technical inclination to become entranced with using this tool Despite the power of reservoir simulation, it can be a dangerous tool. It will calculate meaningless results with incredible precision. Many individuals and companies have been burned when inappropriate use was made of this tool. As a result, some managers became disenchant- ed with simulation, and they were no longer interested in being fooled by this technique. With significant improve- ments in simulation techniques, this attitude has dimin- ished gradually In reality failures occurred because the people applying the technology either did not under- stand or properly communicate their assumptions and corresponding limitations ofthe result. takes discipline to realize numerical modeling has both strengths and ‘weaknesses and is only one of many tools available. Screening Most reservoir engineering textbooks do not have a section dealing with how to screen the input data, There are no examples of bad data. The point is that doing a reservoir simulation probably will put most practicing engineers into new territory Breadth of technology A certain number of students who have attended classes taught by the author—normally those who are just out of university—are quite offended by an apparently established technique being regarded with suspicion, Furthermore, the author regards most data as potentially ‘wrong. Probably the worst offense is the implication that ignorance is a major barrier in reservoir engineering.Practical Reservoir Simulation With experience, it becomes painfully obvious— many reservoir engineering estimates, plans, and schemes have fundamental flaws. In some cases, it is possible to identify a wrong assumption as the central cause of the problem. Unfortunately, this is not the norm, Most often, it will be attributed to a combination of things: some could never be known, and some could have been better estimated. On a philosophical note, the essence of Buddhism is ignorance is our sole enemy: In simplistic terms, it replaces sin. This general concept is sometimes coined filelong learning, The iruth is that the oil industry encompasses a large span of technology. At present, the Society of Petroleum Engineers (SPE) paper count is more than 75,000 articles, and papers, which does not include the works from sim ilar Canadian, British, Australian, and other European countries. Nor does it include the combined works in chemical engineering, mathematics, geological, and geophysical literature. Itis difficult, and probably impos- sible, to know everything contained in the literature, It would take a lifetime to go through all of this material and digest it The state of knowledge is not complete. The improve: ments made in the last 20 years are staggering, A favorite example of this is in pressure transient analysis (PTA). In the past, junior engineers did PTA (Homer plots) by hand, and type curves didn't reveal much information, ‘These days no one does PTA by hand; itis all done with computers and a derivative analysis. There is more cer- tainty in interpretations now; the state of the art has improved vastly ur profession involves considerable uncertainty Consequently, we make educated guesses. Perhaps the most telling indication of this can be found in the salary policies for geologists. Cleary if certain individuals could be identified as the individuals who could be classified as, the oil or gas finders, they would attract a huge premium, As yet, no one has been able to make this identification, and the evaluation of geological performance is based on the assessment of supervisors. If this were directly quan- tifiable, perhaps geologists, and possibly engineers, ‘would work on commission for discoveries. ter performing a number of reservoir simulations and reviewing many more, i is the author’ opinion that the proportion of successful simulations could be greatly improved. Although it is impossible to contain the unknowable in our lifetime, significant improvernents can be made to the parts individuals can know and contro. Going through life trying to avoid mistakes, ie, avoiding the negative, is not the best approach. A proactive approach can help, such as reading the liter ature when one gets into a new area. Learn from the mistakes of other people, and take appropriate steps to avoid them, Take the time to think through the prob- lem, and get help if needed. Join the appropriate tech nical societies as well Value of simulation In general, reservoir engineering is dificult. Since oil and ges are buried deep underground, itis not possible to see a reservoir or to touch it. Unlike production equip- rent, such as a gas plant, it is not possible to control physical conditions. A reservoir engineers job is 0 understand and predict what cannot be seen ot touched. A number of indirect tools and measurements are required. In this regard, a reservoir simulator is superb. It allows one to test quantitatively how different processes affect production results. It allows complex geometries to be evaluated that cannot be solved easily if at all, by analytical equations. Although the simulator allows evaluation of complex problems, its a passive tool. It can evaluate input, but it is not capable of determining input that should have been entered. Pattern recognition [cis appropriate to put reservoir simulation in its prop- er context. The att of reservoir engineering involves pat- tern recognition. The results from many different tech- niques must be integrated to develop a correct interpre tation of reservoir behavior Different types of data vary in accuracy. Therefore, input screening is required Different sources of information can conflict. Frequently, not all of the data desired or required is available. In this, case, properties will have to be estimated from other sources. All of this must be weighed mentally, and a best estimate made. To make matters worse, many of the sophisticated techniques used by reservoir engineers pro- vvide interpretations that are not unique. Multiple sol- tions often exist Asa consequence, the science gets a litle fuzzy and becomes an art. Experience counts heavily in reservoir engineering. This leaves the new reservoir engineer in a catch-22 position, He or she needs experience to do the job, and one cant get it without the experience of having done itConceptual model Certain approaches in different disciplines give a per- spective that makes success either easier or more likely. A successful approach to reservoir simulation isto maintain ‘ conceptual model of the reservoir. This must include: + the shape and location the type of reservoir fluid + fluid flow properties of the rocks + drive mechanisms + visualization of flow patterns Armed with this model, itis possible to proceed, to understand, and to predict performance with reasonable accuracy: Geological models First, successful reservoir simulation requires detailed knowledge of geological models. This will immediately put a number of reservoir engineers out of their comfort zone. They will point out they are not geologists. In fact, itis not necessary to develop the model—the job of the seologist—but itis a reservoir engineer’ responsibility to understand the model. Geology, to a greater or lesser extent, affects all five of the critical elements of reservoir description listed previously. Two examples are shown in Figures 1-1 and 1-2. ‘The Keg River Reet is thick and limited in areal extent, somewhat like an office building, Vertical floods ‘work very well in this type of reservoir The Cardium Bar is long and thin, not very thick, and not very wide. It is, normally impossible to implement a pattern waterflood Keg River Pinnacle Reef high rele imited area Fig. 1-1 Depiction of Keg River Pinnacle Introduction in such a reservoit. Although these are simplified exam ples, the geological models obviously have immediate implications In many respects, a reservoir simulator is nothing ‘mote than an ultrasophisticated mental model, The model grid and input will be generated to correspond with this mental model, One of the most powerful aspects of simulation is the ability to propagate these assumptions through the production cycle of a reservoir Reservoirs have many features that can be categorized into a number of geological models, An understanding of geological principles is essential to a reservoir simulation engineer. Accordingly; chapter 3 is dedicated to integrat- ing geology. ‘Model changes with time As a resenoir matures and more wells are drilled. more pieces of the puzzle are available. The conceptual model of the reservoir will change with time, In most cases, the model will be refined continually. In some instances, accepted ideas will have to be discarded and a newer model developed. Dangers in application The consistent use of a mental image, a reservoir model, has one serious danger; the model can become reality to the reservoir engineer. Sophisticated reservoir calculations, particularly mathematical models, have an almost hypnotic quality. For this reason, some reservoir engineers eam a reputation for being out of touch. It is necessary to ask if the answers are relevant to developing cash flow for a producing company Cardium Bar Vin, Mi tie ; Heal ~ Fig. 1-2 Depiction of Cardium BarPractical Reservoir Simulation At the other extreme, some petroleum engineers are convinced reservoir engineering analysis is so theoreti- cal as to be of no practical application. Do not believe this. Most senior engineering managers, vice presidents, and quite a few presidents have a reservoir engineering background. Background experience Some engineers, particularly those with an opera- tional background, are intimidated by the hightech nature of reservoir simulation. They do a disservice to themselves. A narrow simulation specialist is as danger ous, or pethaps more dangerous, than someone who has the experience to tell if results are right or wrong based con gut instinct. One of the most important skills is the ability to recognize good and bad input data. Ifengineers have operational experience, they have an advantage compared to those who become simulation “experts” via postgraduate studies. Errors and failures In some cases, anecdotes are made of errors or fail: ures. This can be a very touchy subject. Some consider it dangerous to the profession to admit error. In the authors opinion, this is rather silly It is painfully obvious, for example, after a building has fallen down, someone has made an error In more philosophical terms, Otto Von Bismarck remarked, “Only fools leatn from their mistakes, I prefer to learn from others’ mistakes” Although he probably made mistakes, no doubt he avoided a large number of traps using this maxim. A litle fear of doing and saying something stupid can be constructive. The process of learning often involves failure. The cases are presented for a positive purpose. Errors in the oil and gas industry are rarely as dra- matic as bridge failures, but the financial implications are huge. Risk control Risk control is an important aspect of the oil industry. Most of this analysis concentrates on exploration per- spective. This is not the only risk in the oil business. There are significant risks on the technical side. One example is the oil sands. The industry knows where it is. Getting it out economically and without plant failures is a com- pletely different matter In this case, the issue is opera: tional risk not exploration risk. One successful operating strategy involves working specific areas of concentration and controlling gas plant facilities. The successful application of this strategy requires a sound knowledge of the distribution of well results, ie, the number of dry and abandoned wells (D&As), how many high-rate wells, and how many mar- ginal rate wells should be expected. In effect, a statistical profile of well successes can be made and economics run on this distribution. Normally, this is derived empiri- cally from offsets. Companies using this strategy do not do wellby-well economics often. Instead, the staff con- centrates on the geological and reservoir engineering input. The mechanics of economics programs and simu- lation code, while certainly important in some cases, is normally of secondary importance to the input data. ‘The author has consulted for companies using such an approach. A number of comments have been made to the effect that this strategy is not strong technically In the author’ view, this couldn't be more incorrect. The eco- ‘nomics of individual wells are not very accurate in com- parison to a welldefined statistical distribution. With this strategy, a higher percentage of time is actually spent on. technical issues. The author performed a simulation on a reservoir that did not fit into the empirical experience base. Under these circumstances, the company did not hesitate to use a technical approach, ‘A number of companies have used this approach and have been highly successful. There is an important lesson to derive here. Since input data is not unique in all cases, the answer required may not be a single estimate or eco- nomic run but rather a risk-weighted calculation (distri bution) of where the correct solution lies. Industry demographics The industry is currently in an interesting position. Most operating companies severely curtailed their hiring after the price collapse of 1986. Immediately prior to this, ‘most companies were staffing up for what was anticipat- ed to be a major industry expansion—so much for strate gic planning. The net result is a very large group of engi- neers hired prior to 1985 with almost no one behind them. It appears, in the immediate future, hiring is going to increase dramatically in order to fill junior positions in an industry embarking on an up cycle.Introduction Objectives of the Book ‘The purpose of this text was originally for a course on reservoir simulation. The objectives are to provide the background necessary to correctly develop, man- age, apply, or use simulation results. Simulation tech- niques are complex and require time to master. This book has been tailored to provide the minimum amount of theory necessary, give pragmatic advice on how to cary outa study, and determine if study results are use- ful. Understanding of all these techniques in detail takes years of development and experience, No single text book can teach all of the techniques available, A more realistic objective is to teach how to approach reservoir problems, provide the basic concepts required, and point to more comprehensive references. Case histories and actual data have been provided to give readers a base of experience to build upon, The objective of this book is to outline a system of how to approach the understanding and simulation of a reservoir. Concrete objectives + Understand the background skills helpful in performing simulation. + Recognize the differences in mathematical development commonly used in simulator development Recognize the critical role geology plays in reservoir simulation. It is a reservoir engineers responsibility to understand the model given (geologists interpret and supply the model) +Learn data sereening techniques for: © Capillary pressure © Relative permeability © Pressure-volume-temperature (PVT) data Thoroughly understand pseudo relative permeability. Learn how to generate a grid, in particular the use of flow net and streamline visualization Envisage an appropriate approach (game plan) for a complete reservoir study + Develop an organized approach to history matching. + Be familiar with a systematic program {or predictions. Learn about some advanced topics. Be aware of the dangers with gas injection Be able to assess simulation results, Lear the realities of managing a study. Understand some criteria for evaluating software. Text outline The basics will be developed in a logical sequence. Introductory chapters on practicalities are followed by basic data set generation, data screening, geological models, model construction, history matching, predic- tions, special simulations, and prototypical problem sets. Some of the tools used are presented in an academic style, which is typical of most reservoir engineering text books. Understanding the theoretical development is important, It is necessary to use judgment to decide which data is best. The limitations of how data is derived must be understood to do this. Some of the material is presented as stories or case histories. This will provide a base from which to build your own inventory of experi- ence, This book has been prepared in a conversational style. In many cases, there are a number of observations the author has made and not attempted to prove scientifical ly Inthe author’ opinion, a significant aspect of reservoir engineering is the thought process or approach. One of the objectives is to prepare reports to outline this think- ing. This has been recognized lately and is often called an expert system, which is coincidentally associated with arificial intelligence (AI). This indicates the thought process has been recognized asa significant determinant of success, Many engineers find expressing their thought process is difficult. However, the process requires one to “close oops” and clarify one’s thinking in a logical manner. Some clients have expressed reluctance when the author takes time to prepare a report, but, once they have it, the feedback is very positive. There are good reasons for this. Its easy to have con- fidence if the approach has been outlined thoroughly. Conversely, trying to guess what has been done is unset- tling, With the limited time available in today’s lean and mean environment, operating company staff are not given time to write any reports. At the same time, relying on contractors and consultants disrupts continuity. APractical Reservoir Simulation written report is the only way the subsequent contract personnel will ever know what happened previously. Reports are now more important than ever. Issues Relatively few books discuss approaches or even issues. An exception is Dake’ book, The Practice of Reservoir Engineering.! He does not like reservoir simula- tion since he feels it contributes to overlooking the under- lying physics. A numerical model is an inanimate object and, in the author’ view, cannot be held responsible for ‘what people do or fail to do, Dake definitely has a knack for getting to the nub of a problem. Whether one uses analytical or numerical techniques to get to the bottom line technically is probably not important. The author recommends his book. Dake isa critical thinker, and this, is a theme stressed in his book. Simulation in the Overall Reservoir Life Cycle Before proceeding to a detailed discussion, an overview of the reservoir life cycle is worthwhile. Geological review ‘The first thing requited to perform a reservoir simula- tion study is an understanding of the geology. From an ‘engineering point of view, the key is the physical arrange- ment of the reservoir and connectivity (or continuity) of the reservoir. The flow properties of different parts of the reservoir will also correspond to parts of the geological model. Normally, petrophysical or log analysis properties are reviewed at this stage. Reservoir performance review In the next tage, the reservoir engineer must become familiar with production performance. Normally, this includes such things as water cut, reservoir pressure, and gasto-il ratio (GOR) trends. Combined with some PVT. data, the potential drive mechanisms should be identi- fied at this stage. The objectives of the study should be determined also. It is important the required results be stated in concrete terms. Often, a material balance study is done. There is alot of overlap on the input for a mate- rial balance study and reservoir simulation input, so this ‘may not involve too much extra time. Data gathering. Relative permeability and capillary pres- sure data are normally screened. PVT data is similarly screened. Very often, multiple sets of data must be corre- lated and differences resolved (if possible). This must be checked for consistency and then put into the data set, ‘This also means digitizing reservoir maps of structure, net pay, porosity and permeability Initialization. The basic data deck is built. (Note this ter- rminology is a remnant of the days when cards were used for reservoir simulation.) An initial run is made in which the model calculates original oil, gas, and water in place (OOIR OGIP and OWIR respectively). These numbers are ‘cross-checked against other results, History matching. The input to the simulator is tuned. The model is run with the historical base product production specified—usually oll.The idea is to match GORs, water ccuts,and pressures predicted by the model to actual per formance. This part of the study is usually the most time- consuming, normally averaging onethird of total study time. The permeability x height (Kf) or bottomhole pres- sure (bhp) of the wels is then adjusted so base product production matches actual field performance. Predictions. At the end of the history-matching phase, the results are stored in a special restart file. With this,it is pos- sible for the reservoir simulation to be continued without rerunning the problem through the history match. After completing the history match, various predictions are made using different production, wel, and injection sce- narios.The results can be interpreted and ranked accord ing to acceptability.Reporting/presentation. In the final stage, the results are presented and documented for posterity Simulation gen- ‘erates an enormous amount of input and output data, so this takes considerable time and ingenuity to appropri- ately condense the results in a meaningful way (graphs, in many cases). The assumptions on which a simulation is based are extremely important. Therefore, properly docu- menting the procedures and results is important. Reservoir life cycle history ‘The exact details of how much and what kind of detail will be included in a reservoir simulation will depend strongly on where the poo! is in its production life cycle. ‘The next section isa quick review of the life of an ofl and 425 pool as seen through the eyes ofa reservoir engineer. Exploration stage. Most pools are originated as a concept by an exploration geologist This concept describes a par- ticular size, location, and trapping mechanism for an oil and/or gas pool: The exploration geologist sells his idea or concept to his management. The appropriate land is obtained. Usually, more detailed analysis is done using tools such as seismic to confirm structure. ‘The next step is to convince management to drill a well and test the concept. Geologists are similar to reservoir engineers in that they must maintain concep- tual models of their plays. Remember, for every seven. or eight exploration wells drilled, only one will be suc- cessful on average. A reservoir engineer normally becomes involved on. the minority of successful exploration wells. Typically this happens after the well has been drilled and logged but not yet tested or cased. At this stage of development, the objective will be to understand as much as possible about the potential new reservoir: + What does the reservoir look like? Initially, our knowledge of the shape and size of the reser- voir is governed by the exploration geologists exploration concept What are the fluids in the reservoir? One of the reservoir engineer’ key objectives is to deter- mine the fluids present. Some information may bbe known from logs, such as whether it is a a8 oF il reservoir. + What are the fluid flow properties? This involves either specifying or interpreting data from rock samples (core), well tests, and/or logs. Introduction + What are the flow patterns in the reservoir? This information may not be known completely However, the perforations in some wells need to be located to take advantage of the perceived flow patterns Armed with this understanding, management will ask the reservoir engineer to: + tell them what data needs to be obtained + locate the initial completion (perforations) + design appropriate reservoir tests + assess the significance of the discovery, i.e, reserves Likely, several wells will be drilled to delineate a field As each well is drilled, completed, and tested, the process will be repeated. ‘The analytical approaches and tools used at this stage include test planning and interpretation, core analysis, PVT fluid tests, log calculations, and volumet- ric reserves determination, Exploitation stage. Eventually the field will be turned over to an exploitation team, which normally consists of development geologist(s) and reservoir engineer(s). The basic objective is to finish drilling up the field and com- pleting development. The geological model will become considerably more detailed, since there is much more data now available. Using your understanding of the reser- voir the objectives become: + Todetermine the optimum development of the field with regard to: © number of wells + spacing of wells + placement of wells This normally involves a great deal of optimiza: tion. Each well will likely be justified with detailed economic calculations. + To identify the best long-term method of deplet ing the reserves. Is enhanced recovery appropri- ate? If there is a gas cap, when should it be pro- duced? If there is a nonassociated gas accumnula- tion, is there an underlying aquifer in communica- tion with it that will affect the depletion strategy? + To determine the amount of oil and gas. This information is normally needed to plan sur- face facilities such as gas plants, batteries, and offshore platforms,Practical Reservoir Simulation ‘To maintain this information for corporate report- ing. Management monitors performance and reports the results to shareholders. ‘The oil industry at least in Canada, is heavily regula ed. The effects of ths frst become apparent to the reser- voir engineer during the exploitation stage. Itmay be nec- essary to make an application and get permission from the government for: + surface facility design + GOR penalty relief + water/oil ratio (WOR) penalty relief + wellspacing designations producing an associated gas cap If the reservoir being developed contains gas, a sale contract will be required. ‘Typically, a gas marketing department gets the contract. However, a reservoir engi- neer will be called upon to determine reserves and deliverability ‘The tools used include PTA test interpretation, eco- nomic evaluation packages, reservoir simulation, con- ing correlations, material balance, and production decline analysis. Enhanced recovery design. In many cases, this is an extension of the exploitation phase. However, waterflood- ing may be delayed until more production data is obtained. Enhanced oil recovery (EOR) is often imple- mented much later than the majority of well develop- ment. The calculations involved are different from those used in the other stages, and, therefore, this is covered in a separate section. Tools and concepts used in the imple- mentation of EOR include calculations for: + Displacement or Volumetric Efficiency (E): fractional flow, Buckley-Leverett theory + Horizontal Sweep Efficiency (E,): correlations for various patterns are used + Vertical Sweep Efficiency (E,): layering calcula- tions include those of Stiles and Dykstra-Parsons + Reservoir Simulation: if properly applied, numeri- cal simulation can take all of the previous factors into account,as well as more detailed accounting {or ateal variations in reservoir properties + Economics: for these projects, the economics can get quite sophisticated, particulatiy those involving tertiary schemes such as carbon dioxide (CO,) and hydrocarbon miscible flooding (HCMF) Government applications, which are the most demanding applications for a reservoir engineer, usually are made at this time, On some very large projects, such as the Swan Hills, Mitsue, or Judy Creek miscible floods, there were objections from offset operators. In Canada, a quasijudicial process, which involves hearings before ne of the provincial government conservation boards or the federal National Energy Board, is used to resolve these disputes. The time requirements for this process can exceed the amount of time spent doing the original technical calculations. Normally, a reservoir engineer is, responsible for administering the application process, sending out data packages, answering questions, and appearing before various panels. Performance monitoring/optimization. Information is normally limited during the planning stages. ery often, therefore it is necessary to make many’ assumptions. If these assumptions are correct, then the field should pro- duce as planned. In general, our knowledge is never that good,and some previously unknown aspects ofthe reser- voir will become apparent by the analysis of production performance.The objective is to determine why the reser- voir performance is not matching our prediction. Thi knowledge is used to correct our conceptual model of the reservoir and devise plans to improve reservoir pet- formance. Usually it is possible to improve performance compared to existing levels, ifthe field is not performing as expected. Typically, the following are monitored: + GORs water breakthroughs pressure in the reservoir production response (hump or no hump) Ii everything is as expected, it is likely little else needs to be done. Small, wellefined fields are more likely to perform as expected, but this is rarely the case on large fields. Some companies formalize this process with a reserves review at regular intervals, Typically, this ison the order of every four years for a large pool. For small pools, which deplete rapidly, this may be required annually Enhanced recovery projects require an annual report to the government. This consists of WOR, GOR, and pres- sure contour maps. A voidage replacement ratio (VRR) calculation is also stipulated. Finally a summary of workovers for injector/producer conversions is requited.‘Tools used at this stage include contour plots of GORS, water breakthrough time, and pressures. VRRs are also useful to monitor the effectiveness of injection. For more detailed studies, material balance calculations will be required and reservoir simulations performed. Typical reservoir simulation study. Most simulation stud- ies follow a similar format and basic procedure. What comprises a typical reservoir simulation study? The process has been summarized in Figure 1-3. The major components are described as follows: + Data Gathering. A reservoir simulation involves a considerable amount of data input In the first stage, ll data are screened for quality For most simulations, lab data is not available forall of the input. Correlations or data from offsetting or analo- gous pools must be used. Geological maps of porosity net pay. and permeability must be devel: oped and translated into the grid format. Initialization. In this stage, preliminary calculations are made for running the simulator Gric-block water saturations are calculated based on capil: lary pressure data.The importance of water satura- tions is indirect; the correct determination of OOIP is the main objective. Most programs feature data-checking routines at this stage. History Match. The numerical model is run through time with the base product production (cil or gas) specified in the model input. The idea is to match the rest of the production behavior, such as the GOR, water production, or condensate rates,to the actual behavior that has occurred in. the reservoir History matching consumes roughly onethird of total study time, making it the largest single component, + Tuning Phase, In order to make predictions, the hor bottombole pressure, of all wells must be adjusted to match actual production perform ance. This involves a series of trial and error runs to obtain the correct values Predictive Stage. At the end of the tuning phase the ‘model is usually terminated with a restart. This input data file contains all of the information nec- essary to continue a simulation at a later time. Several different production scenarios or alterna: tives are run from the same timestep and com pared. With different runs, various injector pat tems, changes in rates, and producerinjector loca- tions can be studied. Introduction Report. The assumptions on which a simulation is based should be outlined.Simulation also gener- ates an enormous amount of paper output. It takes considerable time and ingenuity to reduce this data to an understandable form from a common sense perspective. { Geological Review Reservoir Performance Review Production Review Data Gathering Screening Approach Single Wel or Pattern History Match Predictions Tuning Predictions Report and Presentation Fig. 1-3 Reservoir Simulation Process Most simulation reports are written as a variation on the previous outline.Practical Reservoir Simulation Canadian content Readers may notice a large number of the examples are taken from the Western Canadian Sedimentary Basin This reflects a number of things. Fist, almost all reservoir data is in the public domain in Canada. Second, almost all of the data on overseas reservoirs known to the author is not in the public domain, with some excep- tions with respect to securities reporting. In other words, there are few confidentiality concerns with respect to Canadian reservoirs. ‘The author has spent a great deal of time in Western Canada and has experience on reservoirs in Peru, Bangladesh, India, Australia, Indonesia, and the Former Soviet Union (FSU) as well. The conditions in Western Canada cover a very wide range and are broadly appli- cable, for the most part. Some Gulf Coast reservoirsiin the United States have varying degrees of applicability to Canadian conditions. Unfortunately, it is not possible to cover all of these areas in a single book. 3 : x z i 3 3 Public data ‘Some expanded comments on public data are appro- priate, Canadian policy in this matter is a significant departure from the practices virtually everywhere else in the world. In Canada, all lab data is, with a limited num- ber of exceptions, in the public domain within one year. This also applies to all production data and well logs. Most recovery schemes require a public application, which includes considerable technical content. Clearly there are pros and cons to such an approach. Figure 1-4 is taken from The Dynamics of Oil and Gas ‘Accumulations by A. Perrodon.? The diagram shows Alberta has a relatively high efficiency in exploration. A number of factors, such as basin maturity and geological controls, were considered in preparing this figure; how: ever, it is logical to extrapolate exploration success with increased information. This was—and is—the purpose o! making the data public. Exploration Percent Success 10 100 1,000 Exploration Potential and intensity E6MB cl discovered per successful wildcat ig. I-4 Graph of Exploration Efficiency‘There are a number of other implications. From a joint operation perspective, working interest partners with sig- nificant interests have and will engineer many aspects of reservoir performance independently. In one, a giant oil field in Alberta had four partners with approximately the same working interests ranging from 16-17%. In essence, four companies controlled two-thirds of the unit, Three of these companies were major multinational companies. ‘The operator was a senior independent. Needless to say there were some interesting working interest meetings and substantial technical discussions. The field was suffi ciently large to be a major cash flow for all four compa- nies, While itis true some time was wasted in politics, it isfairto point out considerable improvements were made to the plans proposed by the operator and major joint interest owners. Interestingly, many of the smaller com panies offered considerable technical insight, Smaller ‘companies have focused objectives and usually have ‘experienced personnel. Frequently this has been a great surprise to employees of multinational companies. Ingeneral, the Canadian oil industry has run at a high- er level of technical expertise because of the availability of raw technical data. Introduction ‘Summary Correctly applied, reservoir simulation can be a pow- erful tool, Its extremely dangerous if applied incorrectly. Its a similar to riding a high-performance sailboat in a big wind. If you don't respect it, you will likely get hurt. If you fear it (or are overawed by it), you will not be able to control it, and you will end up in the drink. You can never take your eyes off what is happening and where you are going, because something unpredictable will happen ‘when you do. It takes time and practice to become good Sailing is not for everyone but is addictive to others. Each study will be a variation on a common theme. However, the emphasis on the various components in dif {erent studies will change with individual reservoirs and the stage of the reservoir in its production life cycle. References I Dake, LP, The Practice of Reservoir Engineering, Developments in Petroleum Science 36, Elsevier, 1994. 2. Perrodon,A., The Dynamics of Oil and Gas Accumulations, Elf Aquitane,Pau, France, 1983.