Fundamentals of Applied Reservoir Engineering

Appraisal, Economics and Optimization

Richard Wheaton

• Publisher: Gulf Professional Publishing
• Year: 2016
• Print ISBN: 9780081010198
• eBook ISBN: 9780081019009
• Topic: Technology & Engineering
• Subtopic: Chemical & Biochemical Engineering
• Index: Technology & Engineering

Fundamentals of Applied Reservoir Engineering introduces early career reservoir engineers and those in other oil and gas disciplines to the fundamentals of reservoir engineering. Given that modern reservoir engineering is largely centered on numerical computer simulation and that reservoir engineers in the industry will likely spend much of their professional career building and running such simulators, the book aims to encourage the use of simulated models in an appropriate way and exercising good engineering judgment to start the process for any field by using all available methods, both modern simulators and simple numerical models, to gain an understanding of the basic 'dynamics' of the reservoir –namely what are the major factors that will determine its performance. With the valuable addition of questions and exercises, including online spreadsheets to utilize day-to-day application and bring together the basics of reservoir engineering, coupled with petroleum economics and appraisal and development optimization, Fundamentals of Applied Reservoir Engineering will be an invaluable reference to the industry professional who wishes to understand how reservoirs fundamentally work and to how a reservoir engineer starts the performance process.- Covers reservoir appraisal, economics, development planning, and optimization to assist reservoir engineers in their decision-making.- Provides appendices on enhanced oil recovery, gas well testing, basic fluid thermodynamics, and mathematical operators to enhance comprehension of the book's main topics.- Offers online spreadsheets covering well test analysis, material balance, field aggregation and economic indicators to help today's engineer apply reservoir concepts to practical field data applications.- Includes coverage on unconventional resources and heavy oil making it relevant for today's worldwide reservoir activity.

Chapter 1

Introduction

Abstract

Reservoir engineering has a central role in petroleum engineering, pulling together geological, petrophysical, laboratory, field, and well-test data to build numerical models predicting production on which future cash flow can be estimated. Decisions on developing a field will ultimately depend on economics. Reservoir engineers need to understand the economic indicators used to judge the value of a particular field development, how they are calculated and how they are used. Spreadsheet software is provided with this publication that will estimate production profiles and input these, along with expected gas or oil prices, discount rates, inflation rates, and taxation rates, to give values for all the main economic indicators. It is intended that this software will be used in answering exercise questions.

Keywords

Central role of reservoir engineering; Combination of geological; Laboratory and field data; Petrophysical; Spreadsheet software available; Understanding petroleum economics

 

The role of a reservoir engineer is a key and central one in petroleum engineering (Fig. 1.1). He/she pulls together all the available geological, petrophysical, laboratory, field, and well-test data to understand the physical potential of the reservoir. The engineer then covers the following aspects.

1. Reservoir evaluation.

2. Development planning and optimization.

3. Production forecasting.

4. Reserves estimation.

5. Building numerical reservoir models.

6. Well testing and analysis.

7. Field management.

To do this he/she also needs to understand the facilities and economic and commercial constraints, so as to provide and optimize a viable and economic development plan.

Figure 1.1 Central role of reservoir engineering.

To fulfill this role effectively, it is necessary for a reservoir engineer firstly to understand the basic physical properties relevant to reservoirs: the concepts of porosity, absolute permeability, wettability, capillary pressure, and relative permeability must be covered. Fluid properties then need to be understood: what hydrocarbon mixtures are typically found in fields, how these can split into oil and gas phases and how these phases behave with pressure and temperature. The reservoir engineer also needs to have a basic understanding of how all these properties are measured so that he/she can critically access the data he/she receives from the laboratory and the field. Chapter “Basic Rock and Fluid Properties” covers these fundamental issues.

Chapter “Well-Test Analysis” introduces well-test analysis, which, before production, provides our best insight into reservoir properties away from the very immediate vicinity of exploration and appraisal wells. The standard equations used are derived, and their interpretation explained. Software is provided to help in gaining experience on using these equations to interpret field-test data and also to answer exercises.

Analytical methods using simplified equations and models in the early evaluation of potential reservoir behavior are an important tool, covered in chapter “Analytical Methods for Prediction of Reservoir Performance”. Material balance, mainly used for depletion-type developments, and Buckley-Leverett/Welge analysis for water-flood developments are discussed in some detail here. Again, software is available to aid in understanding these topics and in answering exercise questions.

Chapter “Numerical Simulation Methods for Predicting Reservoir Performance” gives an introduction to numerical simulation. The fundamental equations of mass balance, conservation of momentum (giving the Darcy equation), and thermodynamic relationships are combined to give the “diffusion equations,” which are then solved across the grid cells of the simulator. The theory behind the use of finite difference methods is covered. The input data that will be required in any simulator are explained, and there is emphasis on the best use of numerical simulators. Use of production data as they become available in “history matching” to improve our model is discussed.

Once we understand the physical properties in the reservoir we need to consider the dynamics of the field when we drill wells and produce hydrocarbons. Pressure drops around the wells, and reservoir fluids move toward the well. Depending on the nature of the reservoir fluids, there will be some form of “drive mechanism” that maintains well production. Production profiles and recovery of hydrocarbons will depend on the efficiency of this drive mechanism. In chapter “Estimation of Reserves and Drive Mechanisms” we consider the estimation of hydrocarbons in place and the drive mechanisms for all type of reservoir, and give the ranges of recovery factors that are typically achieved.

Chapter “Fundamentals of Petroleum Economics” gives the basics of petroleum economics. Decisions on developing a field will ultimately depend on economics. Reservoir engineers need to understand the economic indicators used to judge the value of a particular field development, how they are calculated and how they are used.

Spreadsheet software is provided with this publication that will input production profiles, expected gas or oil prices, discount rates, inflation rates, and taxation rates to give values for all the main economic indicators. It is intended that this software will be used in answering exercise questions.

Once fundamental reservoir properties, production drive mechanisms, and basic economic indicators are covered, we can look at reservoir appraisal and development planning – which is the topic of chapter “Field Appraisal and Development Planning”. The appraisal and development planning stage is absolutely critical in obtaining value from an asset, and it is where reservoir engineers can have most influence on key decisions. Early decisions have the greatest financial impact on a project. This is known as “front-end loading.” The appraisal and development planning process involves determining the critical sensitivities for a given reservoir (sensitivity analysis), what further data are needed to reduce uncertainty and risk (value of information analysis) and optimizing the development in terms of reservoir and necessary facilities. Software is provided to help in understanding this process and for use in exercise questions. Tools for use in early predictions, Analogue data and decline curve analysis are discussed in this chapter.

Unconventional resources are becoming increasingly important with the development of coal-bed methane and shale gas and oil. Initially exploited in the United States, they are now being developed worldwide. Chapter “Unconventional Resources” covers this topic, explaining the basic physics of these sources of hydrocarbons and the estimation of potential production profiles and reserves. In Chapter “Producing Field Management” we discuss the role of the reservoir engineer in production field management.

Companies, other than national oil companies, need to declare the reserves and resources that they hold so that investors can value them and their company shares. One responsibility of reservoir engineers is to provide reserves estimates for the fields they are working on. The final chapter (see chapter: Uncertainty and the Right to Claim Reserves) in this textbook examines the international rules of Society of Petroleum Engineers and Security and Exchange Commission (SPE and SEC) for levels of certainty on economically recoverable field reserves and resources. Probabilistic methods for estimating reserves are discussed.

Four supporting sections—fluid thermodynamics, gas well testing, enhanced oil recovery, and mathematical notes—are covered in appendices.

An understanding of the thermodynamics of multicomponent hydrocarbons, of why some mixtures split into gas and oil phases at certain pressure and temperature conditions, and how the volumes of these phases vary with pressure and temperature is useful in understanding the section on reservoir fluid behavior.

The use of mathematical calculus has been deliberately kept to a minimum in this text, and where it is necessary an attempt is made to explain the meaning of equations in the text. Such equations are not popular with some students, but they are the basis of the behavior of reservoirs and give a concise representation of the physical relationships involved. It is therefore worth to have a mathematical note (Appendix 2), where an attempt is made to clarify the significance of the various mathematical operators used in this and other reservoir engineering texts.

Chapter 2

Basic Rock and Fluid Properties

Abstract

There are four fundamental properties of a hydrocarbon reservoir that control its initial contents, behavior, production potential, and hence its reserves.

1. The rock properties of porosity, permeability, and compressibility, which are all dependent on solid grain/particle arrangements and packing.

2. The we...

Table of contents

• Cover image
• Title page
• Table of Contents
• Copyright
• List of Figures
• Foreword
• Chapter 1. Introduction
• Chapter 2. Basic Rock and Fluid Properties
• Chapter 3. Well-Test Analysis
• Chapter 4. Analytical Methods for Prediction of Reservoir Performance
• Chapter 5. Numerical Simulation Methods for Predicting Reservoir Performance
• Chapter 6. Estimation of Reserves and Drive Mechanisms
• Chapter 7. Fundamentals of Petroleum Economics
• Chapter 8. Field Appraisal and Development Planning
• Chapter 9. Unconventional Resources
• Chapter 10. Producing Field Management
• Chapter 11. Uncertainty and the Right to Claim Reserves
• Appendix 1. Basic Fluid Thermodynamics
• Appendix 2. Mathematical Note
• Appendix 3. Gas Well Testing
• Appendix 4. Enhanced Oil Recovery
• Appendix 5. Simple Oil Material Balance for Rate as a Function of Time
• Appendix 6. Conversion Factors
• Appendix 7. Answers to Questions and Exercises
• Appendix 8. Nomenclature
• Appendix 9. Accompanying Spreadsheets
• Glossary
• Index