1 Introduction Oil and gas are essential sources of energy in the modern world. They are found in subsurface reservoirs in many challenging environments. Modern reservoir man- agement relies on asset management teams composed of people from a variety of scientific and engineering backgrounds to produce oil and gas. The purpose of this book is to introduce people with diverse technical backgrounds to reservoir manage- ment. The book is a reference to topics that are often encountered by members of multidisciplinary reservoir asset management teams and professionals with an inter- est in managing subsurface resources. These topics are encountered in many applications, including oil and gas production, coalbed methane production, uncon- ventional hydrocarbon production, geothermal energy production, and greenhouse gas sequestration. This chapter presents an overview of reservoir management. 1.1 Life Cycle of a Reservoir The analysis of the costs associated with the development of an energy source should take into account the initial capital expenditures and annual operating expenses for the life of the system. This analysis is life cycle analysis, and the costs are life cycle costs. Life cycle costing requires the analysis of all direct and indirect costs associated with the system for the entire expected life of the system. In the case of a reservoir, the life cycle begins when the field becomes an exploration prospect, and it does not end until the field is properly abandoned. The first well in the field is the discovery well. Reservoir boundaries are established by seismic surveys and delineation wells. Delineation wells are originally drilled to define the size of the reservoir, but they can also be used for production or injection later in the life of the reservoir. The production life of the reservoir begins when fluid is withdrawn from the reservoir. Production can begin immediately after the discovery well is drilled or years later after several delineation wells have been drilled. The number of wells used to develop the field, the location of the wells, and their flow characteristics are among the many issues that must be addressed by reservoir management. 1.1.1 History of Drilling Methods The first method of drilling for oil in the modern era was introduced by Edwin Drake in the 1850s and is known as cable-tool drilling. In this method, a rope connected to a wood beam had a drill bit attached to the end. The beam was raised Integrated Reservoir Asset Management. DOI: 10.1016/B978-0-12-382088-4.00001-3 Copyright # 2010 Elsevier Inc. All rights reserved.
1 Introduction - ElsevierChapter_1.pdf · collapse. Cable-tool drilling has been largely replaced by rotary drilling. Developed in France in the 1860s, rotary drilling was first used
The advantages of operating a field with prudent consideration of environmental
issues can pay economic dividends. In addition to improved public relations, sensi-
tivity to environmental issues can minimize adverse environmental effects that may
require costly remediation and financial penalties. Remediation often takes the form
of cleanup, such as the cleanup required after the oil spill from the Exxon Valdezoil tanker in Alaska. Technologies are being developed to improve our ability to
clean up environmental pollutants. For example, bioremediation uses living
microorganisms or their enzymes to accelerate the rate of degradation of environ-
mental pollutants (Westlake, 1999).
It becomes a question of business ethics whether a practice that is legal but can
lead to an adverse environmental consequence should nonetheless be pursued
because a cost-benefit analysis showed that economic benefits exceeded economic
liabilities. Typically, arguments to pursue an environmentally undesirable practice
based on cost-benefit analyses do not adequately account for intangible costs. For
example, the decision by Shell to dispose of the Brent Spar platform by sinking it
in the Atlantic Ocean led to public outrage in Europe in 1995. Reversing the deci-
sion and disassembling the platform for use as a quay in Norway resolved
the resulting public relations problem, but the damage had been done. The failure
to anticipate the public’s reaction reinforced a lack of public confidence in the
oil and gas industry, and it helped motivate government action to regulate the
decommissioning of offshore platforms in northwestern Europe (Wilkinson, 1997;
Offshore Staff, 1998).
1.5.1 Sustainable Development
The concept of sustainable development was introduced in 1987 in a report prepared
by the United Nations’ World Commission on Environment and Development
(Brundtland, 1987). The commission, known as the Brundtland Commission, after
chairwoman Gro Harlem Brundtland of Norway, said that societies should adopt a
12 Integrated Reservoir Asset Management
policy of sustainable development that allows them to meet their present needs
while preserving the ability of future generations to meet their own needs. The three
components of sustainable development are economic prosperity, social equity, and
Sustainable development is intended to preserve the rights of future generations.
It is possible to argue that future generations have no legal rights to current natural
resources and are not entitled to any. From this perspective, each generation must do
the best it can with available resources. On the other hand, many societies are
choosing to adopt the value of preserving natural resources for future generations.
National parks are examples of natural resources that are being preserved.
1.5.2 Global Climate Change
One environmental concern that is facing society currently is global climate change.
Measurements of ambient air temperature show a global warming effect that corre-
sponds to an increase in the average temperature of the earth’s atmosphere. The
increase in atmospheric temperature has been linked to the combustion of fossil
fuels (Wigley et al., 1996).
When a carbon-based fuel burns, carbon can react with oxygen and nitrogen in
the atmosphere to produce carbon dioxide (CO2), carbon monoxide, and nitrogen
oxides (often abbreviated as NOx). The combustion by-products, including water
vapor, are emitted into the atmosphere in gaseous form. Some of the gaseous
byproducts are called greenhouse gases because they contribute to the greenhouse
effect, illustrated in Figure 1.5 (Fanchi, 2004). Some of the incident solar radiation
from the Sun is absorbed by the earth, some is reflected into space, and some is
captured by greenhouse gases in the atmosphere and reradiated as infrared radia-
tion (heat). The reradiated energy would escape the earth as reflected sunlight if
“Greenhouse”Gas Absorbs and
Figure 1.5 The greenhouse effect.
greenhouse gases were not present in the atmosphere. Greenhouse gases include car-
bon dioxide, methane, and nitrous oxide, as well as other gases such as volatile
organic compounds and hydrofluorocarbons.
Carbon dioxide (CO2) is approximately 83 percent of the greenhouse gases emit-
ted by the United States as a percent of the mass of carbon or carbon equivalent.
Wigley and colleagues (1996) projected ambient CO2 concentration through the
twenty-first century. Pre-industrial atmospheric CO2 concentration was approxi-
mately 288 parts per million, and the current atmospheric CO2 concentration is
340 parts per million. The concentration of CO2 that would establish an accept-
able energy balance is considered to be 550 parts per million. To achieve the
acceptable concentration of CO2 through the next century, societies would have to
reduce the volume of greenhouse gases entering the atmosphere.
Many scientists attribute global climate change to the greenhouse effect. The
Kyoto Protocol is an international treaty that was negotiated in Kyoto, Japan, in
1997 to establish limits on the amount of greenhouse gases a country can emit into
the atmosphere. The Kyoto Protocol has not been accepted worldwide. Some
countries believe the greenhouse gas emission limits are too low and would
adversely impact national and world economies without solving the problem of
global warming. Another criticism of the Kyoto Protocol is that it does not apply
to all nations. For example, China is exempt from greenhouse gas emission
limitations in the Kyoto Protocol even though it has one of the world’s fastest-
growing economies and the world’s largest population.
Concern about global climate change has motivated a change in the definition of
pollution. For example, it used to be an acceptable practice to release natural gas
into the atmosphere by flaring the gas. This practice is now prohibited in many parts
of the world as an undesirable practice because natural gas is a greenhouse gas. One
proposed method for reducing the climatic greenhouse effect is to collect and store
carbon dioxide in geologic formations as part of a process known as CO2 sequestra-
tion. The sequestration of CO2 in subsurface formations is a gas storage process that
must satisfy the three primary objectives in designing and operating natural gas stor-
age reservoirs: verification of injected gas volume, monitoring of injected gas
migration, and determination of gas injectivity. The goal of geologic carbon seques-
tration and similar programs is to provide economically competitive and environ-
mentally safe options to offset all of the projected growth in baseline emissions of
CS.1 Valley Fill Case Study: Introduction
The primary purpose of the Valley Fill case study from a pedagogical perspective is to showhow to apply reservoir management concepts using a realistic example. The incised valleymodel is useful for describing reservoirs in both mature and frontier basins around theworld (e.g., Bowen et al., 1993; Peijs-van Hilten et al., 1998). Each chapter presents infor-mation that is integrated into the reservoir management example. The reservoir of interestis an oil reservoir that has been producing for a year. Wells in the field are shown inFigure CS.1A.
14 Integrated Reservoir Asset Management
1-1. List several questions you would want to have answered if you were trying to decide
how to manage the Valley Fill reservoir.
1-2. Suppose displacement efficiency is 27 percent, areal sweep efficiency is 60 percent, and
vertical sweep efficiency is 75 percent. Estimate recovery efficiency.
1-3. We want to drill a 5,000-foot-deep vertical well. We know from previous experience in the
area that the drill bit will be effective for 36 hours before it has to be replaced. The average
drill bit will penetrate 20 feet of rock in the area for each hour of drilling. Again, based on
previous experience, we expect the average trip to replace the drill bit to take about 8 hours.
A “trip” is the act of withdrawing the drill pipe, replacing the drill bit, and then returning the
new drill bit to the bottom of the hole. Given this information, estimate how long it will take
to drill the 5,000-foot-deep vertical well. Hint: Prepare a table like the following.
1-4. Complete the following table and estimate the proved, the probable, and the possible
reserves. Assume the reserves are normally distributed.Hint:Reserves¼OOIP�Recovery
Model OOIP (MMSTB) Recovery Factor Reserves (MMSTB)
1 700 0.42
2 650 0.39
3 900 0.45
4 450 0.25
5 725 0.43
● 8 ¤
Protective well Dry hole
● ¤ ●¤ 4 11 6 ¤
7 ● 12
Figure CS.1A Well locations in an area that is 6,000 feet long by 3,000 feet wide.
1-5. Any reader interested in participating in the Valley Fill case study should complete Exer-
cises 1-5 through 1-8.
A three-dimensional, three-phase reservoir simulator (IFLO) is included with this
book. Prepare a folder on your hard drive for running IFLO using the following
procedure.l Make a directory on your computer called RMSE/VALLEY.l Go to the website http://www.bh.com/companions/0750675225 and copy the zip file
to RMSE/VALLEY.l Extract all of the files to RMSE/VALLEY.l Some of the files may be labeled “Read Only” when you copy the files to RMSE/
VALLEY. To remove this restriction, select the file(s) and change the properties
of the file(s) by removing the check symbol adjacent to the “Read Only” attribute.
What is the size of the executable file IFLO.EXE in megabytes (MB)?
1-6. Several example data files are provided with IFLO. Make a list of the data files (files
with the extension “DAT”). Unless stated otherwise, all exercises assume that IFLO
and its data files reside in the RMSE/VALLEY directory.
1-7. The program IFLO runs the file called “ITEMP.DAT”. To run a new data file, such as
NEWDATA.DAT, copy NEWDATA.DAT to ITEMP.DAT. In this exercise, copy
VFILL1_HM.DAT to ITEMP.DAT, and run IFLO by double clicking on the IFLO.
EXE file on your hard drive. Select option “Y” to write the run output to files. When
the program ends, it will print “STOP”. Close the IFLO window. You do not need to
save any changes. Open run output file ITEMP.ROF, and find the line reading “MAX
# OF AUTHORIZED GRID BLOCKS”. How many grid blocks are you authorized to
use with the simulator provided with this book?
1-8. The program 3DVIEW may be used to view the reservoir structure associated with IFLO
data files. 3DVIEW is a visualization program that reads IFLO output files with the
extension “ARR”. To view a reservoir structure, proceed as follows:l Use your file manager to open your folder containing the IFLO files. Unless stated
otherwise, all mouse clicks use the left mouse button.
a. Start 3DVIEW (double click on the application entitled 3DVIEW.EXE).
b. Click on the button “File”.
c. Click on “Open Array File”.
d. Click on “ITEMP.ARR” in the file list.
e. Click on “OK”.l At this point you should see a structure in the middle of the screen. The structure is
an oil-filled channel sand. To see the channel, use the left mouse button to select
Model/Select Active Attribute/SO. This displays oil saturation in the channel.l To view different perspectives of the structure, hold the left mouse button down and
move the mouse. With practice, you can learn to control the orientation of the struc-
ture on the screen.l The grid block display may be able to be smoothed by selecting Project/Smooth
To exit 3DVIEW, click on the “File” button and then click “Exit”.