Reservoir Management

A Practical Guide

Steve Cannon

• Publisher: Wiley-Blackwell
• Year: 2020
• ISBN:
  9781119619437
• Edition: 1
• Topic: Ciencias físicas
• Subtopic: Sismología y vulcanismo

Reservoir management is fundamental to the efficient and responsible means of extracting hydrocarbons, and maximising the economic benefit to the operator, licence holders and central government.? All stakeholders have a social responsibility to protect the local population and environment. The process of managing an oil or gas reservoir begins after discovery and continues through appraisal, development, production and abandonment; there is cost associated with each phase and a series of decision gates should be in place to ensure that an economic benefit exists before progress is made. To correctly establish potential value at each stage it is necessary to acquire and analyse data from the subsurface, the planned surface facilities and the contractual obligations to the end-user of the hydrocarbons produced. This is especially true of any improved recovery methods proposed or plans to extend field life. To achieve all the above requires a multi-skilled team of professionals working together with a clear set of objectives and associated rewards. The team's make-up will change over time, as different skills are required, as will the management of the team, with geoscientists, engineers and commercial analysts needed to address the issues as they arise.?

This book is designed as a guide for non-specialists involved in the process of reservoir management, which is often treated as a task for reservoir engineers alone: it is a task for all the disciplines involved in turning a exploration success into a commercial asset. Most explorers earn their bonus based on the initial estimates of in-place hydrocarbons, regardless of the ultimate cost of production; the explorers have usually moved on to a new basin before the first oil or gas is produced! This book is not a deeply academic tome, rather the description of a process enlivened by a number of stories and case studies from the author's forty years of experience in the oil-patch.

1
Introduction

Reservoir management is fundamental to the efficient and responsible means of extracting hydrocarbons, and maximizing the economic benefit to the operator, license holders, and central government. All stakeholders have a social responsibility to protect the local population and environment. The process of managing an oil or gas reservoir begins after discovery and continues through appraisal, development, production, and abandonment (Figure 1.1); there is cost associated with each phase and a series of decision gates should be in place to ensure that an economic benefit exists before progress is made. To correctly establish potential value at each stage it is necessary to acquire and analyze data from the subsurface, the planned surface facilities, and the contractual obligations to the end‐user of the hydrocarbons produced. This is especially true of any improved recovery methods proposed or plans to extend field life. To achieve all the above requires a multiskilled team of professionals working together with a clear set of objectives and associated rewards. The team’s make‐up will change over time as different skills are required, as well as the management of the team, with geoscientists, engineers, and commercial analysts needed to address the issues as they arise.

This book is designed as a guide for nonspecialists involved in the process of reservoir management, which is often treated as a task for reservoir engineers alone. It is a task for all the disciplines involved in turning an exploration success into a commercial asset. Most explorers earn their bonus based on the initial estimates of in‐place hydrocarbons, regardless of the ultimate cost of production; the explorers have usually moved on to a new basin before the first oil or gas is produced!

Figure 1.1 Oilfield life cycle from discovery to abandonment with a typical primary production profile in red. The period from discovery to first oil may be short or long depending on economic conditions and infrastructure limitations.

This chapter will look at the basics of reservoir management introducing the main terms and jargon, while subsequent chapters will go into more detail.

• Chapter 2 reviews the life cycle of an oil or gas field after discovery, looks at field development plans, monitoring and data acquisition requirements, and discusses these issues in the light of a number of case studies.
• Chapter 3 looks at the static and dynamic reservoir description around which the initial plans are built.
• Chapter 4 reviews the construction of the integrated reservoir model.
• Chapter 5 addresses reservoir performance and production forecasting, reviewing the dynamic estimation and uncertainty in future resources and reserves.
• Chapter 6 discusses some of the ways to improve or enhance hydrocarbon recovery with examples used to describe the methods.
• Chapter 7 focuses on the economic aspects of a successful field development and how active reservoir management through the field life can improve the returns on investment.
• Chapter 8 considers the way in which the reservoir management plan evolves with time from project sanction to abandonment. We will look at some of these issues in the real world of field development and secondary recovery projects through a series of case studies.

Throughout the book there are relevant examples from real reservoir management projects and field developments across the major hydrocarbon basins of the world. I have also included an Appendix that covers the basics of dynamic reservoir simulation, which is the main tool used by those involved in reservoir management studies.

1.1 The Basics

The main objectives of reservoir management may be summarized as follows:

• Maximizing the ultimate recovery of reserves from an oil or gas field
• Reducing the commercial risk associated with development plans
• Minimizing operating expenditure (OPEX) and capital expenditure (CAPEX)
• Increasing hydrocarbon production from wells
• Increasing the value of reserves through time (net present value – NPV)

To maximize the economic recovery of hydrocarbons requires the identification and characterization of all potential reservoirs in a field so that the optimum development plan can be proposed. This requires a reservoir management plan designed on the basis of location and size of the field, the geological complexity of the reservoir, the type and distribution of the reservoir rock and fluids, the drive mechanism, regulatory controls and contractual limitations, and economics. Different management plans are required for onshore and offshore locations, and also for gas‐filled ‘tanks of sand’ and poorly connected oil reservoirs, especially when natural depletion results in economically low recovery.

To achieve these objectives requires the integration of static and dynamic models of the reservoir together with gross uncertainties associated with a complex natural system, as well as models of surface facilities designed to optimize production from the field, economic models of OPEX, CAPEX, and price fluctuations throughout field life. The uncertainty associated with each of these inputs leads to a range of potential rewards; determining the relative value of these outcomes is the task of the whole team at the time of evaluation and prior to any investment being made.

The life cycle of an oil or gas field begins after discovery with a clear appraisal plan, to delineate the field, upon which the development program is designed, costed, and approved. Inevitably, surprises will occur during development drilling that require a change to the plan, but these should have been considered and included in the budget. An oil or gas field only begins to make money once production has started: most oil companies expect a return on investment within three to five years of this date. Thereafter, the thoughts move toward improving overall returns through innovative secondary recovery techniques or increasing ultimate recovery using more esoteric tertiary methods. Effective reservoir management should always be proactive, anticipating decline, and investing to maintain production and improve recovery through to abandonment (Figure 1.2). Reacting to decline after it has started may limit the solutions available and ultimately cost more. Both of these phases are often invoked to delay the ultimate stage of the life cycle, cessation of production and then abandonment, the c...