Petroleum Reservoir Management Handbook (Dr. Jawad R. Rustum Al-Assal)

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Petroleum Reservoir Management handbook (Dr. Jawad R. Rustum Al-Assal)
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MISSOURI UNIVERSITY OF SCENCIE & TECNOLOGY
Petroleum Reservoir
Management
Dr. Jawad R. Rustum Al-Assal
2011
Table of Contents
 Definition of Reservoir Management.
 Types of recovery Mechanisms.
 Objectives of Reservoir Management.
 Synergy and team.
 Integration of Geosciences and engineering.
 Integration Exploration and development Technology.
 The Reservoir Management process.
 Technology and Technological Toolbox.
 Development plan and Economic.
 Development Depletion strategy.
 Data Acquisition and Analysis.
 Geological and Numerical Studies.
 Production and Reserves Forecast.
 Facilities Requirement.
 Economic Evaluation.
 Management Approval.
 Implementation.
 Surveillance and Monitoring.
 Evaluation.
 Revision Plan and strategy.
 Reasons for Failure of reservoir management.
 Lack of management.
M U of S & T/ Dr. Jawad Rustum 2

 Data acquisition and management.
 Data Validation.
 Data Storing and Retrieval.
 Reservoir Model.
 Role of reservoir model.
 Reservoir Performance analysis and Forecast.
 Natural Production Mechanisms.
 Reserves Definition.
 Methods of Resources / Reserves Estimation.
 Reservoir Management Economic.
 Case Study.
 Reservoir Management Plan
 Draft Tender Document Form To Conduct an Integrated Geological &

Reservoir Engineering Simulation Study.
 Technical Proposal of Reservoir Simulation study.
 References.

Reservoir Management
As we know the reservoir‟s life begins with exploration that leads to
discovery, which is followed by delineation of reservoir,
development of the field, production by primary, secondary, and
tertiary means, and finally to abandonment as shown in figure(1)
DISCOVERY
EXPLORATION DELINATION
ABANDONEMENT Reservoir DEVELOPMEN

Management T
TERTIARY PRIMARY
SECONDARY
Figure (1) Reservoir Life Process
So integrated, sound reservoir management is the key to a successful

operation throughout the reservoir life.

Even with tertiary means a vast amount of hydrocarbon remains
unrecoverable, and the reserves being declined, but due to sound
reservoir management a significant additional amount being added to
the US reserves.
Primary Recovery
Natural Flow: Artificial Lift

he se of available
Liquid and rock expansion,
e Agas
solution reservoir's
drive, gas caplife begins with exploration that
drive, natural water influx and
leads to discovery, which is followed by
combination drive
delineation of the reservoir, development of theGas Lift
field, production by primary, secondary,
Pump and
tertiary means, and

Secondary Recovery
Water Flood Pressure Maintenance
Water Injection Gas Injection

Tertiary Recovery
THERMAL Gas Miscible/immiscible Chemical:

Steam flooding, hot ( CO2 , N2) Alkaline
water flooding and
Polymer
insitue combustion
Foam
Definition of Reservoir Management:
There are many definitions for Reservoir Management one of

them is: using all available resources (human, technological and
financial) to maximize profits from a reservoir by optimizing
recovery while minimizing capital investments and operating
expenses.
Reservoir Management involves making certain choices. Either let

it happen or make it happen, we leave it to chance to generate some
profit from a reservoir operation without doing deliberate planning,

or we can enhance recovery and maximize profit from the same
reservoir through sound management practice.
OBGECTIVE OF RESEVOIR MANAGEMENT
The prime objective of Reservoir Management is the economic

optimization of oil and gas recovery, which can be obtained by the
following steps:
1. Identify and define all individual reservoirs in a particular field

and their physical properties.
2. Deduce past and predict future reservoir performance.
3. Minimize drilling of unnecessary wells.
4. Define and modify (if necessary) well and surface systems.
5. Initiate operating controls at the proper time.
6. Consider all pertinent economic and legal factors.
Thus the basic purpose of Reservoir Management is to control

operations to obtain the maximum possible economic recovery from
a reservoir based on facts, information, and knowledge.
The following questions – and – answer provides Reservoir

Management philosophies.
1. When Reservoir Management should starts?
The ideal time to start managing a reservoir is at its discovery.
 Provides a better monitoring and evaluation tool, but also

costs less in the long term run. For example, a few early drill

stem (DST) and logs that can indicate the size of a reservoir,
if it is of limited size, drilling of unnecessary wells can be
prevented.
2. What, How and When to collect data?
To answer this question, we must follow an integrated approach of

data collection involving all functions from the beginning. Before
collecting any data, we should asked the following questions:
 Are the data necessary, and what are we going to do with

these data? What decisions will be made based on the results
of these data collection?
 What are the benefits of these data, and how do we devise
plan to obtain the necessary data at the minimum cost?
The reservoir team should prepare a coordinated reservoir

evaluation program to show the need for data requirements, along
with costs and benefits.
3. What kinds of questions should be asked if we want to answer

the answer in the process of Reservoir Management?
Some example questions follow:
 What does the answer mean?

 Does the answer fit all the facts; why or why not?
 Are there other possible interpretations of the data?
 Where the assumptions reasonable?
 Are the data reliable?

 Are additional data necessary?
 Has there been an adequate geological study?
 Has the reservoir been adequately defined?
SYNERGY AND TEAM
Successful Reservoir Management requires synergy and team

efforts. Reservoir Management is not synonymous with reservoir
engineering and /or reservoir geology. Success requires
multidisciplinary team efforts. The team must work together to
ensure development and execution of the management plan. Figure
(2) show the team of Reservoir Management.
Figure (2) Reservoir Management Team

All development and operating decisions should be made by the
Reservoir Management team. It is not necessary that all decisions
be made by a reservoir engineer, in fact, a team members who
considers the entire system, rather than just the reservoir aspect, will
be a more effective decision maker.
A team approach Reservoir Management can be enhanced by the

following:
 Facilitate communication among various engineering

disciplines, geology, and operation staff by :
a. Meeting periodically.
b. Interdisciplinary cooperation in teaching each other‟s functional
objectives.
c. Building trust and mutual respect.
 To some degree, the engineers must develop the geologist‟s
knowledge of rock characteristics and depositional
environment, and geologist must cultivate knowledge in well
completion and other engineering tasks, as they relate to the
project at hand.
 Each team member must maintain a high level of technical
competence.
 The team members must work as a well – coordinated “ basket
ball team” rather than “relay team”. Reservoir engineer should
not wait on geologist to complete their work and then start the
reservoir engineering work.

Today, it is becoming a common for large reservoir studies to be
integrated through a team does not guarantee an integration that leads
to success. Team skills, team authority, team compatibility with line
management structure, and overall understanding of the Reservoir
Management process by all the team members are essential for the
success of the project.
So “synergy means that geologists, geophysicists, petroleum

engineers and others work together on a project must effectively and
efficiently as a team than working as individual “
Team members prepare Reservoir Management plan and define

their goals and objectives by involving all functional groups.
The plan is then presented to production manager; and after receiving

the manager‟s feedback, appropriate changes are made, next the plan
is published and all members follow the plan.
 The team members performance evaluation is conducted by

their functional heads with input from the team leader and the
production manager.
 Teams are rewarded recognition / cash award upon timely and
effective completion of their tasks.

INTEGRATION OF GEOSCIENCE &
ENGINEERING
Synergy and team concepts are the essential elements for

integration of geosciences and engineering. It involves people,
technology, tools, and data see figure (3). Success for integration
depends on:
 Overall understanding of the reservoir management process,

technology, and tools through integrated training and
integrated job assignments.
 Openness, flexibility, communication, and coordination.
 Working as a team.
 Persistence.

DATA
 Geological
 Geophysical
 Engineering
 Financial
Technology Tools
 Seismic  Seismic
 Geologic Interpretation
 Geostatistics  Tomography
 Engineering  Data Acquisition
 Drilling &  Logging /coring
INTEGRATION
Completion  Completion &
 Enhance oil facilities
recovery  Geologic Modeling
 Environmental  Pressure Transient
People
 Computer  Fracturing
 Management  Reservoir
 Geoscientists Simulation
 Engineers  Enhanced Oil
 Land/Legal recovery
 Field  Computer
 Financial Software &
Hardware
Figure (3)

INTEGRATION EXPLORATION AND DEVELOPMENT
TECHNOLOGY
New development in computer hardware, technology, and software

are enhancing integration of multidisciplinary skills and activities;
this development change the way of oil companies works.
For example advancements in 3-D seismic acquisition and processing

are credited to the massive number – crushing super computer.
3-D seismic data along with computer- processed logs and core
analysis characterize or describe more realistically and accurately the
reservoir maps along with rock and fluid properties and production /
injection data to simulate reservoir performance and to design
depletion and development strategies for new and old fields.

THE RESERVOIR MANAGEMENT PROCESS
The modern Reservoir Management process involves establishing a

purpose or strategy and developing a plan, implementing and
monitoring the plan, and evaluating the results. Figure (4). None of
the components of the reservoir management is independent of the
others. Integration of all these are essential for successful reservoir
management.
Figure (4) Reservoir Management Process

Setting a Reservoir Management strategy requires knowledge of
the reservoir, availability of technology, and knowledge of the
business, political and environmental climate.
Formulating a comprehensive management plan involves depletion

and development strategies, data acquisition and analysis, geological
and numerical model studies, production and reserves forecast,
facilities requirements, economic optimization, and management
approval.
Implementing the plan requires management support, field personal

commitment, and multidisciplinary integrated teamwork. Success of
the project depends upon careful monitoring / surveillance and
through,, ongoing evaluation of its performance.
If the actual behavior of the project does not agree with the expected
performance, the original plan needs to be revised and the cycle (i.e.
implementing, monitoring, and evaluating) reactivated.

SETTING GOALS:
Recognizing the specific need and setting a realistic and achievable

purpose is the first step in reservoir management.
The key elements for setting a reservoir management goal are :
1. Reservoir characteristics
2. Total Environment.
3. Available Technology
Understanding of each of these elements is the pre requisite to

establish short – and – long – term strategies for managing reservoir.
Reservoir characteristics:
The nature of the reservoir being managed is vitally important in

setting the management strategy. Understanding the nature of the
reservoir requires a knowledge of the geology, rock and fluid
properties, fluid flow and recovery mechanisms, drilling and well
completions and past production performance . see figure(5)

Geology Recovery Mechanisms
Rock Fluid
Bo
Fluid Flow Performance
Figure (5)

Total Environment:
Understanding of the following environments is essential in

developing management strategy and effectiveness:
 Corporate – goal, financial strength, culture, and attitude.

 Economic – business climate, oil/gas price, inflation, capital,
and personnel availability.
 Xial – conservation, safety, and environmental regulations.
Technology and Technological Toolbox
The success of reservoir management depends upon the reliability

and proper utilization of the technology being applied concerning
exploration, drilling and completions, recovery process and
production. See Table (1)

Geophysics Geology Production Reservoir
Engineering Engineering
2 D Seismic Core Economics Management
Description
3 D Seismic Thin Section
Data Acquisition Log Analysis
& Management
Cross –Hole Microscopic Well stimulation Transient Well
tests
Tomography Image Pipe Flow Conventional
Analysis Simulation Core Analysis
Vertical Seismic X- ray Well bore CT. Scan.
stimulation NMR
Profile Stable Isotope Nodal Analysis Fluid Analysis
Analysis
Multicomponent Depositional Decline Curve
Seismic Models analysis
Shear Wave Map, Cross Material
sections balance
Logging Remote Waterflood
Sensing
Reservoir
Simulation
Geostatistics
EOR Screening
EOR
Technology
Expert System
Table (1)

DEVELOPING PLAN AND ECONMICS:
Formulating a comprehensive reservoir management plan is

essential for the success of project see figure (6)
Developing Plan
Development &Depletion Strategies
Environmental Considerations
Data Acquisition & Analysis
Geological & Numerical Model Studies
Production & Reserves Forecast
Facilities Requirements
Economic Optimization
Management Approval
Figure (6): Developing Plan

Development and Depletion Strategy:
The most important aspect of reservoir management deals with the

strategies for depletion the reservoir to recover petroleum by primary
and applicable secondary and enhanced oil recovery methods.
Development and depletion strategies will depends upon the

reservoir‟s life stage. In case of new discovery, we need to address
the question of how to best develop the field (i.e. well spacing,
number of wells, recovery schemes, primary, and subsequently
secondary and tertiary), if the reservoir has been depleted by primary
means, secondary and even tertiary recovery schemes need to be
investigated.
Data Acquisition and Analysis:
Reservoir management starting from developing a plan,

implementing the plan, monitoring and evaluating the performance of
the reservoir, requires a knowledge of the reservoir that should be
gained through an integrated data acquisition and analysis program ,
figure (7) shows a list of data needed before and during production.
Data analysis require a great deal of effort, scrutiny and innovation.
The key steps are :
1. Plan, justify, time, and prioritize.

2. Collect and analyze
3. Validate / store ( data base)

Plan, Justify, Time, Prioritize
Collect & Analyze

Before During
Production Validate / Store – Data Base Production
Seismic
Well Test
Geologic
Logging Production
Coring
Injection
Fluid
Well Test Special
Figure (7) Data Acquisition & Analysis

Geological and Numerical Model Studies:
The geological model is derived by extending localized Core and Log

measurements to full reservoir using many technologies, such as
geophysics, mineralogy, depositional environment and digenesis. The
geological model, particularly the definition of geological units and
their continuity and compartmentalization, is an integral part of
geostatistical and ultimate reservoir simulation models. Figure (8)
shows a sample of geological model

Figure (8) Geological Model
Production and Reserves Forecast:
The economic viability of a petroleum recovery project is greatly

influenced by the reservoir production performance under the current
and future operating conditions. Therefore, the evaluation of past and
present reservoir performance and forecast of its future behavior is an
essential aspect of the reservoir management process (figure
9).classic volumetric, material balance, and decline – curve analysis

methods, and high technology black oil, compositional and enhanced
oil recovery,
Figure (9) Production history
numerical simulator are used for analyzing reservoir performance and

estimating reserves. Reservoir simulators play a very important role
in formulating initial development plans, history matching and
optimizing future production and planning and designing enhanced
oil recovery.

( Reservoir simulation is the process of mimicking or inferring the
behavior of fluid flow in a petroleum reservoir system through the
use of either physical or mathematical models)
Figure (10) shows different type of modeling
Figure (10) Type of Modeling
Figure (11) shows the reservoir system, (reservoir system include the
reservoir rock and fluids, aquifer, .. )

Figure (11) Petroleum Reservoir System

Facilities Requirements:
Facilities are the physical link to the reservoir. Everything we do to

the reservoir, we do through the facilities. These include drilling,
completion, pumping, injecting, processing, storing. Proper design
and maintenance of facilities has a profound effect on profitability.
The facilities must be capable of carrying out the reservoir
management plan, but they cannot be wastefully designed
Economic Optimization:
Economic optimization is the ultimate goal selected for reservoir

management. Figure (12) presents the key steps involved in economic
optimization.
Management Approval:
Many support and field personnel commitment are essential for the
success of a project.

Economic Optimization
Payout
Set Economic Objective PWI
DCFRO
Formulate Scenario PWNP
Collect data Production
Investments
Make Economic Analysis Operating
Expenses
Make Risk Analysis Oil/Gas Price
Choose Optimum Operation
Figure (12) Economic Optimization

IMPLEMENTATION:
Once the goals and objectives have been set and integrated reservoir
management plan has been developed, the next step is to implement
the plan. Table (2) describes a step – by- step procedure on how to
improve success in implementing a reservoir management program
Table (2)
 Start with a plan of action, involving all functions.

 Flexibility.
 Management support.
 Commitment of field personnel.
 Periodic review meetings, involving all team members.
1. The first involves starting with a plan of action, including all

functions. It is common for many reservoir management efforts
to devise a plan.
If a plan is to be developed and implemented in the best way, it

must have commitment from all disciplines, including
management.
2. The plan must be flexible. Even if the reservoir management

team members prepare plans by involving all functional groups,
it does not guarantee success if it cannot be adapted to

surrounding circumstances (e.g. economic, legal, and
environmental)
3. The plan must have management support, it must have local and
higher level management blessing.
4. No reservoir management plan can be implemented properly
without the support of the field personnel. Time and time a gain
we have seen reservoir management plans fail because either
they are imposed on field personnel without through
explanations or they are prepared without their involvement.
5. It is critical to have periodic review meeting, involving all team
members. Most, if not all, of these meetings should be held in
the field offices. The success of these meeting will depend upon
the ability of each team member to treat their functional
objectives.
The important reasons for failure to successfully implement a plan

are:
1. Lack of overall knowledge of the project on the part of all team

members.
2. Failure to interact and coordinate the various functional groups.
3. Delay in initiating the management process.

SURVELLANCE AND MONNITORING:
Sound reservoir management requires constant monitoring and

surveillance of the reservoir performance as whole in order to
determine if the reservoir performance is conforming to the
management plan. In order to carry out the monitoring and
surveillance program successfully, coordinated efforts of the various
functional groups working on the project are needed.
An integrated and comprehensive program needs to be developed for

successful monitoring and surveillance of the management project.
The engineers, geologists, and operation personnel should work

together on the program with management support. The program will
depend upon the nature of the project. Ordinarily, the, major areas of
the monitoring and surveillance involving data acquisition and
management include :
1. Oil, water and gas production.

2. Gas and water injection.
3. Static and following bottom hole pressure.
4. Production and injection tests.
5. Injection and production profiles and any others adding
surveillance.
In case of enhanced oil recovery projects, the monitoring and

surveillance program is program is particularly critical because of the
inherent uncertainties.

Evaluation:
The plan must be reviewed periodically to ensure that it is being

followed, that it is working and that it is still the best plan. The
success of the plan needs to be evaluated by checking the actual
reservoir performance against the anticipated behavior. Therefore,
certain technical and economic criteria need to be established by the
functional groups working on the project to determine the success of
the project. The criteria will depend on the nature of the project. A
project may be a technical success but an economic failure.
How well is the reservoir management plan working ?. The answer

lies in the careful evaluation of the project performance. The actual
performance needs to be compared routinely with expected . see
figure (13a &13b).
In the final analysis, the economic yardsticks will determine the

success on failure of the project.

Geology Recovery Mechanisms
Rock Fluid
Bo
Fluid Flow Performance
Figure (13a)

P
time
time
Actual
q
Plane
time
Figure (13b) Evaluation

REVISION OF PLANS AND STRATEGIES:
Revision of plan and strategies is need when the reservoir

performance does not confirm to the management plan or when
conditions change. The answers to questions such as is it working,
what needs to be done to make it work, what would work better, must
be asked and answered on an ongoing basis in order for us to say we
are practicing sound reservoir management
REASONS FOR FALIURE OF RESERVOIR MANAGEMENT:
There are numerous reasons why reservoir management programs

have failed. Some of the reasons listed below:
1. Un integrated System:
Perhaps the most important reasons why a reservoir management

program is developed and implemented poorly is an un integrated
group efforts. Sometimes the operating decisions are made by people
who do not recognize the dependence of one system on the other.
Also the people may not have the required background knowledge in
critical area (e.g. reservoir engineering, geology, and geophysics,
production and drilling engineering, and surface facilities).
The team approach to reservoir management involving interaction

between various functions has been recently emphasized. See figure
(14)

2. Starting Too late:
Reservoir management was not started early enough. Early initiation

of a coordinated reservoir management program could have provided
a better monitoring and evaluating tool, and it could have cost less in
the long run.
Lack of Maintenance:
Calhoun draws an analogy between reservoir and health management.

According to his concept, it is not sufficient for the reservoir
management team to determine the state of a reservoir‟s health and
then attempt to improve it. One reason for reservoir management
ineffectiveness is that the reservoir and its attached system‟s ( wells
and surface facilities) health (condition) is not maintained from the
start.

In general the problem – solving approach is based upon the
following:
1. An action plan for evaluating and increasing the net worth of

reservoir is prepared by involving a selected group of personnel
and it is based upon the best available dat.
2. In the problem – solving sessions, an informat exchange of
ideas takes place, and problems associated with current
operating practices are defined. Next, specific recommendations
aimed at enhancing reservoir performance are suggested, and
pros and cones for each recommendation are evaluated. If the
required relevant data are not available, then either they are
assumed or collected in the field, keeping the cost- benefit
analysis in mind.

DATA ACQUISITION, ANALYSIS AND
MANAGEMENT
Throughout the life of a reservoir, from exploration to abandonment,

an enormous amount of data are collected. An efficient data
management program consisting of acquisition, analysis, validating,
storing, and retrieving plays a key role in reservoir management. It
requires planning , justifying, prioritizing, and timing.
Multidisciplinary groups (i.e. geophysicists, geologists,

petorphysicists, drilling, reservoir, production and facilities engineers
are involved in collecting various types of data throughout the life of
a reservoir. Table (3) lists the data under the various broad
classifications including the timing of acquisition and the
professionals responsible for acquisition and analyses, land and legal
professionals also contribute to the data collection process. Most of
the data except for the production and injection data are collected
during delineation and development of the fields.
Justification, priority, timelines, quality and cost effectiveness should

be the guiding factors in data acquisition and analysis. It will be more
effective to justify to management data collection if the need for the
data, the costs, and the benefits are clearly defined.
Normally, all wells are logged, however, an adequate number of

wells should be cored to validate the log data. Initial bottom hole
pressure measurements should be made, preferably at each well and

at selected “ Key wells” periodically, key wells represent 25% of the
total wells. It beneficial to measure pressures in all wells at least
every two to three years to aid in calibrating reservoir models.
Table (3)
Classification Data Acquisition Responsibility

Timing
Seismic Structure, Exploration Seismologists

stratigraphy, ,Geophysicists
faults, bed
thickness,
fluids, interwell
heterogeneity
Geological Depositional Exploration, Exploration,

environment discovery and and
diagenesis, development development
lithology, geologists
structure, faults,
and fracture
Logging Depth, Drilling geologists

lithology, petrophysicists
thickness, & engineering
porosity, fluid
saturation,

gas/oil,
water/oil
contacts and
well to well
correlations
Coring Drilling Geologists,

drilling and
reservoir
engineering and
laboratory
analysts
Basic Depth,
lithology,
thickness,
porosity,
permeability,
and residual
fluid saturation
Special Relative
permeability,
capillary
pressure, pore
compressibility,

grain size and
pore size
distribution
Fluid Formation Discovery, Reservoir

volume factors, delineation, engineering and
viscosities, gas development & laboratory
solubilities, Production analysts
chemical
composition,
phase behavior,
& specific
gravities
Well Test Reservoir Discovery, Reservoir

pressure, delineation, engineering and
effective development, laboratory
permeability, Production & analysts
thickness, injection
stratification,
reservoir
continuity,
presence of
fracture or
faults,
productivity &

injectivity
indices &
residual oil
saturation
Production& Oil, water & gas Production & Production &

injection production rate, Injection Reservoir
and cumulative engineers
productions,gas
& water
injection rates,
and cumulative
injections, and
injection and
production
profiles
Table (3) Reservoir Data
It is essential to establish the specification of what and how much

data need to be gathered and the procedure and frequency to be
followed. Table(4) shows an efficient Data Flow Diagram.

Data PLANNING DATA COLLECTION
1. Why needed and Who 1. When to be Collected?
Are the users? 2. How Often ?
2. Type and quantity of data 3. Correct Procedure?
And What Costs 4. Data Audit for Accuracy
3. When required?
4. Who is Responsible? 5. Data base and Maintenance
DATA ANALYSIS AND REDUCTION DATA

SYNTHESIS
1. Select “trustworthy” Data 1. Integration of Data

2. Assessing Dat impect on solution 2. Synergsm of Data
3. Knowing data confidence Range
4. Understanding Multiple Source Data
Table (4) An efficient Data Flow Diagram

DATA VALIDATION
Field data are subjected to many errors (i.e. sampling, systematic,

random, etc.). Therefore the collected data need to be carefully
reviewed and checked for accuracy as well as for consistency.
In order to assess validity, core and log analysis data should be

carefully calibrated using core data for porosity and saturation
distributions, net sand determination, and geological zonation of the
reservoir. Reservoir fluid properties can be validated by using the
equation of state calculations and by empirical correlations. The
reasonableness of geological maps should be established by using the
knowledge of depositional environment. The presence of faults and
flow discontinuities as evidenced in geological study can be
investigated and validated by pressure interference and plus and trace
tests.
The reservoir performance should be closely monitored while

collecting routine production and injection data including reservoir
pressures. If past production and pressures data are available,
classical material balance equation and reservoir modeling can be
very useful to validate the volumetric original hydrocarbon – in-place
and aquifer size and strength.
Laboratory rock properties, such as oil- water and gas – oil relative
permeabilities, and fluid properties, such as PVT data, are not always
available. Empirical correlations can be used to generate these data.

DATA STORING AND RETRIVAL:
The reconciled and validated from the various sources need to be

stored in a common computer Data Base accessible to all
interdisciplinary and users, this data base should be updated.
DATA APPLICATION:
A better representation of the reservoir is made from 3-D seismic

information.
Geological maps such as gross and net pay thickness, porosity,

permeability, saturation, structure and cross- section are prepared
from seismic, core and log analysis data. These maps are used for
reservoir delineation, reservoir characterization, well location and
estimates of original oil and gas –in-place.
The well log data that provide the basic information needed for
reservoir characterization are used for mapping, perforation s,
estimation of original oil and gas in-place, and evaluation of reservoir
perforation. Production logs can be used to identify remaining oil
saturation in undeveloped zones in existing production and injection
wells. Figures 14 and 15 show some logs.

Figure (14) Log Sample

Figure (15) Log Sample

Core analysis is classified into conventional, whole – core, and side
wall analysis.
Core analysis gives direct measurement of the formation properties

and the core data are used for calibrating well log data. These data
can have a major on the estimates of hydrocarbon –in-place,
production rates, and ultimate recovery.
The properties are determined in the laboratories using equilibrium

flash or differential tests. Figure (16) shows an example of the
experiment.
Figure (16a) Determination of Fluid Properties.

.
Figure (16b) Determination of Fluid Properties.
The fluid data are used for volumetric estimates of reservoir oil and
gas –in-place, reservoir type (i.e. oil, gas or gas condensate) and
reservoir performance analysis. Figure (17) shows reservoir types
Figure (17) Reservoir Types

Figure (18) shows some properties versus pressure
The well test data are very useful for reservoir characterization
and reservoir performance evaluation. Pressure build up or falloff
tests provide the best estimate of the effective permeability- thickness

of the reservoir, in addition to reservoir pressure, stratification, and
presence of the faults and fracture. Figure (19) shows such diagnosis.
Figure (19) Reservoir Characterization From well Test

RESERVOIR MODEL
This subject presents an approach to building an integrated reservoir

model based upon geological, geophysical, petrophysical, and
engineering data.
The integrated reservoir model requires a thorough knowledge of the

geology, rock and fluid properties, fluid flow and recovery
mechanisms, drilling and well completion, and past production
performance.
ROLE OF RESERVOIR MODEL:
The simulation can simulate many life‟s of the reservoir under

different scenarios and thus provide a very powerful tool to optimize
the reservoir operation.
Historically, reservoir simulations have been used for studying large

fields and those undergoing complex recovery processes. Figure (20)
presents key steps involved in reservoir simulation.
The process of developing a sound reservoir because :
 It requires integration among geoscientists and engineers.

 It allows geoscientists interpretations and assumptions as to be
compared to actual reservoir performance as documented by
production and pressure tests.

 It provides a means of understanding the current performance
and predicts the future performance of a reservoir under various
“ What if” conditions so that better reservoir management
decisions can be made.
Figure(20) Reservoir Simulation Steps

In addition, the reservoir model should be developed jointly by
geoscientists and engineers because:
 An inter play of effort results in better description of the

reservoir and minimize the uncertainties description of a
model. The geoscientists‟ data assist in engineering
interpretations, where the engineering data sheds new light on
geoscientists‟ assumptions.
 The geoscientists – engineers team can correct contradictions as

they arise, preventing costly errors later in the field‟s life.
 In a fragmented effort (i.e. when engineers and geoscientists do

not communicate), each discipline may study only a fraction of
the available data, thus, the quality of the reservoir management
can suffer and adversely affect drilling decisions and depletion
plans throughout the life of the reservoir.
 Utilizing reservoir models developed by multidisciplinary

teams can provide practical technique of accurate field
descriptions to achieve optimal production.
Thus, it is important that we prepare a simulation model that takes

into account realistic geology and other rock – fluid characteristics,

with a realistic simulation model; we can do or obtain guidance on
the following;
 Determine the performance an oil field under water injectionor

gas injection, or under natural depletion.
 Judge the advisability of flank waterflooding as opposed to

pattern waterflooding.
 Calculate the total gas field deliverability for a given number of

wells at certain specified locations.
 Estimate the lease-line drainage in heterogeneous oil or gas

fields.
There are many educational values of simulation models:

1. Too often we tend to demand accurate determination of all
types of input data before we accept the computed results as
meaningful or reliable. On the other hand, interest in accuracy
of input data should be proportional to the sensitivity of
computed results to variations in those data.
2. Sensitivity to errors in reservoir description data can be
determined by performing simulation runs with variations in
those data covering a reasonable range of all uncertainty.

A general guide for developing a model is to “select the least
complicated model and grossest reservoir description that will allow
the desired estimation of reservoir performance.
Incorporation of geologic model into a simulation requires
recognition and capture of detailed reservoir heterogeneities. With
the advent of advanced simulation and the understanding of complex
subsurface structure, these heterogeneities can be recognized early in
the life of a field and incorporated into the simulation model.
Geoscientists and engineers need feedback from each other
throughout their work.
Core analysis provide data for identifying reservoir rock types,
whereas well tests studies assist in recognizing flow barriers and
fracture. Simulation studies can be utilized to validate the geologic
model against pressure - production performance. Often adjustments
are required in the model to history match to actual performance.
Figure (21) shows results of a simulation case.

Figure (21) Simulation case

As a conclusion; constructing the reservoir model includes:
 Zoning the geological model.

 Layering the zone.
 Making local grid refinement.
 Model the attached aquifer to reservoir.
 Model the faults.
 Model the wells and add in wells data.
Figure (22) shows how to construct the geologic model
Figure (22) constructing the reservoir Model

RESERVOIR PERFORMANCE ANALYSIS AND
FORECAST
A major reservoir management activity involves:
 Estimation of the original hydrocarbon in-place in the in the

reservoir.
 Prediction of the future performance under the prevailing
reservoir conditions.
 Additionally, estimation of the reserves and recovery rates
under various other producing methods that are presently
known, or that may become practical and economical in the
future.
 Periodic updating of the previous items as the quality and
quantity of the data improve during the life of the reservoir.
This subject presents:
1. A brief reviewing of natural producing mechanisms which

influence reservoir performance.
2. Technique used for reservoir performance analysis and reserves
forecast.

NATURAL PRODUCING MECHANISMS:
Primary reservoir performance of oil and gas is dictated by natural

viscous, gravity, and capillary forces. It is characterized by variations
in reservoir pressure, production rates, gas- oil and water – oil ratios,
aquifer influx, and gas cap expansion. Factors influencing the
reservoir performance are geological characters, rock and fluid
properties, fluid flow mechanisms, and production facilities.
The natural producing mechanisms influencing the primary reservoir

performance are listed as follow:
OIL RESEVOIR (see figure 23)
1. Liquid and rock expansions ( A – B)

2. Solution gas drive ( B – C)
3. Gas cap drive.
4. Aquifer water influx.
5. Gravity segregation.
6. Combination drive.
GAS RESEVOIR
1. Gas depletion or expansion (D – E – F)

2. Aquifer water influx.
3. Combination drives.
Figure (24) shows the influence of primary producing mechanisms

on reservoir pressure and recovery efficiency.

Figure (23) Hydrocarbon phase behavior
Figure (24) Natural producing Mechanisms
Figures 25 trough 32 show the type of reservoir and its performance

Figure(25) Solution Gas Drive Reservoir

Figure (26) performance of Depletion Drive Reservoir

Figure(27) Gas Cap Drive Reservoir

Figure (28) performance of Gas cap Drive reservoir

Figure (29) Water Drive Reservoir

Figure (30) performance of Water Drive Reservoir

Secondary gas
cap
Gas
OIL
OIL ZONE Producing well located
Low on Structure
Figure (31) Gravity Drainage Reservoir
Figure (32) Combination Drive Reservoir

RESERVES
Reserves are estimated volumes of crude oil, condensate, natural gas,

natural gas liquids, and associated substances anticipated to be
commercially recoverable from known accumulations from a given
date forward, under existing economic conditions, by established
operating practices, and under current government regulations
Reserve estimates are based on geologic and/or engineering data
available at the time of estimate.
The relative degree of an estimated uncertainty is reflected by the

categorization of reserves as either "proved" or "unproved"
Proved Reserves can be estimated with reasonable certainty to be

recoverable under current economic conditions. Current economic
conditions include prices and costs prevailing at the time of the
estimate.
Reserves are considered proved is commercial producibility of the

reservoir is supported by actual engineering tests.
Unproved Reserves are based on geological and/or engineering data

similar to those used in the estimates of proved reserves, but when
technical, contractual, economic or regulatory uncertainties preclude
such reserves being classified as proved. They may be estimated
assuming future economic conditions different from those prevailing
at the time of the estimate.
Unproved reserves may further be classified to probable and possible,

Probable Reserves are less certain than proved reserves and can be
estimated with a degree of certainty sufficient to indicate they are
more likely to be recovered than not.
Possible Reserves are less certain than proved reserves and can be
estimated with a low degree of certainty, insufficient to indicate
whether they are more likely to be recovered than not.
The estimation of reserves will depend upon the actual model of

petroleum recovery, which may involve either a natural-drive
mechanism improved by water or gas injection, or some may involve
either a natural-drive mechanism improved by water or gas injection,
or some special technique of enhanced oil recovery (EOR).
In general, "possible" reserves may include:
• Reserves suggested by structural and/or stratigraphic extrapolation

beyond areas classified as probable, based on geological and/or
geophysical interpretation
• Reserves in rock formations that appear to be hydrocarbon-bearing

based on logs or cores, but may not be productive at a commercial
level.
• Incremental reserves based on infill drilling are subject to technical

uncertainty.

• Reserves attributable to an improved or enhanced recovery method
when a pilot project is planned (but not in operation) and the rock,
fluid and reservoir characteristics are such that a reasonable doubt
exists whether the estimated reserves will be commercial.
• Reserves in a rock formation that has proved to be productive in

other areas of the field, but appears to be separated from those areas
by faults and the geological interpretation indicates a relatively low
structurally position. Figure (33) shows this classification

Total Oil & Gas Resources
Discovered Undiscovered
Non Recoverable Recoverable

Resources Resources
Reserves Cumulative Production
Proved reserves Unproved reserves
Probable reserves Possible reserves
Fig (33) Conceptual scheme for oil and gas resources and reserves.

Methods for Resources/Reserve Estimation
1-Analogy-Based Approach
Another producing reservoir with comparable characteristics can be

used as a possible analogue for the reservoir under consideration,
either by a direct well-to-well comparison or on a unit recovery basis.
This can be done by determining an average oil or gas recovery per

well in the analogue reservoir (e.g., 100,000 bbl/well) and applying a
similar or adjusted recovery factor to the wells in the reservoir
considered. The unit-recovery approach refers to a recovery
calculated in barrels per acre-foot or Mcf per acre-foot.
In an analogue approach, one has to consider similarities of well

spacing, reservoir rock lithofacies, rock and fluid properties, reservoir
depth, pressure, temperature, pay thickness and drive mechanism. All
possible differences between the analogue reservoir and the reservoir
in question need to be considered to make a realistic adjustment of
the recovery estimates. where there are no solid data on well
performance or reservoir characteristics. However, the use of an
analogue may be the only method available to estimate the reserves in
a situation an analogue-based approach is also the least accurate and
little reliable method of petroleum reserve estimation, simply because
perfect analogues can seldom be found.

2. Volumetric Estimates
The methods of reserve estimation based on reservoir data are

volumetric and can be divided into deterministic and probabilistic
(stochastic) estimates. The main difficulty in a volumetric estimate of
resources/reserves is in the transfer of data obtained at a small scale

(core analysis, lithofacies data, well logs, etc.) into a much larger
scale ( i.e. data "upscaling" for interwell space).
Deterministic Methods
The principle of a deterministic approach to resources/reserve

estimates is to "upscale" the information derived from the wells and
supported by seismic survey, into the interwell space by using an
interpolation technique.
The main parameters used for a volumetric estimate in this approach

are:
• The reservoir "gross" isopach map”, which means the bulk

thickness of the reservoir rocks (formation).
• The reservoir "net" isopach map, which means the cumulative

thickness of the permeable rock units only. The Net-to-Gross ratio
(N/G) is an important parameter indicating the productive portion of
the reservoir
• The reservoir rock porosity (as a volume-based weighed average):

Where ϕ is the local porosity, Ai is a subarea and hi is a subthickness
(of permeable rock).
• The permeability and net-thickness product (khN) is important for

the estimation of well production capacity:
where ki is the local permeability (other symbols as above).
• Volume-based average saturation of water, gas and oil. For example

water saturation:
Plotting these parameters as contoured maps (isopachs, isoporosity,

isopermeability, etc.) provides the crucial information on their
variation and distribution in the reservoir and makes it possible to
evaluate the reservoir pore volume and its fractions saturated with oil
and gas
(hydrocarbon volume). The numerical value of hydrocarbon

resources/reserve estimate their represents an outcome of "integrated"
map analysis.

Stochastic Methods
An alternative approach is a probabilistic estimation of

resources/reserves, which takes more account of the estimate
uncertainty. Stochastic reservoir description is usually based on the
procedure of random-number generator. This numerical technique
assumes that the main reservoir properties (porosity, permeability,
N/G, ect.) all have random, possibly normal, frequency distributions,
with the range of values included by core and well-log data. The
maximum and minimum values are specified for each of the reservoir
parameters and the random number generator then "drowns data", so
to speak, and then simulates their actual density distribution in the
whole reservoir.
In practice, it is necessary to repeat the stochastic simulation for

different "seeds" (initial boundary values) in order to asses and
quantify the actual variation of a given parameter. Each numerical
realization bears an uncertainty for the reservoir characterization,
where the probabilistic rather than deterministic, is an estimate of
resources/reserves. Different realizations lead to different volumetric
estimates, with different probabilities attached. The cumulative
frequency distributions of these estimates, that is used to asses their

likelihood will be a very unclear formulation. See Figure. 34.
In common usage , we have:

– An estimate with 90 % or higher probability is the level regarded as
a proven value.
– An estimate with 50 % or higher probability is the level regarded as

a proven + probable value.
Figure(34) Example of stochastic volumetric estimate based on a

series of random – number simulation
– An estimate with 10 % or higher probability is the level regarded

as a proven +probable + possible value
As more information on the reservoir becomes available, the

cumulative frequency graph may change its shape and the uncertainty
of our resource/reserve estimates may decrease, see Figure (35).

Figure (35) Changes in the uncertainty resources estimate with
increasing data acquisition.
More generally, the problem of certainty can be considered in

terms of "fuzzy" probabilistic and deterministic estimates based on
the data available at a particular time, as seen in Figure (36). A

comparison of these estimates may be more revealing that each of
them is in isolation.
At the very early stages of field appraisal, the data are usually too
limited for using statistical analysis and, hence, a fuzzy estimate of
the resources/reserves may be best or only option
The lack or scarcity of data in such cases is compensated by a

subjective assessment of the reservoir characteristics (i.e. the shape of
the distribution and the maximum and minimum values of a given
reservoir parameter), Based on the knowledge from other reservoirs
or simply a theoretical guess. A rectangular distribution means no

preference and a triangular distribution means that strong preference
distributions are used. When more data have been collected and
statistical analysis becomes possible, a probabilistic estimate can be
made. The range in the possible values of the reservoir parameters
would then be narrower, compared to a fuzzy assessment. When the
data available are abadundant, a deterministic estimate can be made
based on a well- specified value of a particular parameter for a
particular part (zone, subunit or layer) of the reservoir.

Figure(36): The concept of uncertainty in resources/reserves
estimation illustrated by fuzzy, probabilistic and deterministic
approach (data set)

Performance Analysis
The methods of performance analysis presently used include:
• Analysis based on Material Balance Equation (MBE) .
• Reservoir Simulation Models (RSM).
• Decline Curve Analysis (DCA).
The aim of all of these methods is to obtain the best reservoir

performance prediction on the basis of available data.
The MBE method is based on the data obtained from previous

reservoir performance and PVT analysis, but involves some
assumptions for the reservoir driving mechanism in order to
minimize the range of possible predictions from the dataset. The
method is thus adjusted differently to reservoirs containing oil, gas or
oil with a gas cap (primary or secondary).
The RSM method involves a numerical simulation technique, with

the matching of the production and the reservoir‟s previous
performance (history). The discrepancy between the simulation
results (prediction) and the available data is minimized by adjusting
the reservoir parameters and taking into account the most likely
reservoir drive mechanism (history match)

The DCA method is to predict future performance of the reservoir by
matching the observed trend of the production decline with one or
several standard mathematical methods of the production rate-time
(hyperbolic, harmonic, exponential, ect.). If successful, such a
performance analysis allows estimating both the reserves and the
future performance of the reservoir.
The following "decline curves" from production wells are commonly

used in the DCA:
– Production rate vs. time.
– Production rate vs. cumulative oil production.
– Water cut vs. cumulative oil production
Some of these decline curves are shown in Figure (37)

Figure (37) Different ways of data representation for a decline curve

RESERVOIR MANAGEMENT ECONOMIC
Reservoir management economic evaluation and analysis of the

property and associated projects throughout the life of the reservoir,
making a sound business decision requires that a project will be
economically viable (i.e., it will produce profits satisfying the
economic yardsticks of the company).
This subject provides a working knowledge of project economics and

not of property evaluation. Since companies operating in various
countries have their own particular situations for calculating income
taxes, this discussion will be limited to economic evaluation before
taxes.
The tasks in project economic analysis require team efforts consisting

of :
1. Setting an economic objective based on the company‟s

economic criteria. Production and/or reservoir engineers are
responsible for developing economic justification with the input
from management.
2. Formulating scenarios for project development. Engineers and
geologists are the primary contributors with management
guidance.
3. Collecting production, operation and economic ( Table 5).

4. Making economic calculations. Engineers and geologists are
primarily responsible.
5. Making risk analysis and choosing optimum project, Engineers,
geologists, operations staff and management work together to
decide on the optimum project.
DATA SOURCE/COMMENT
Oil and gas production rate vs. Reservoir and production
time engineers. Unique to each project
Finance and economic
Oil and gas prices professionals. Strategic planning
interpretation.
Capital investment (tangible, Facilities, operation and
intangible ) and operating costs engineering professional
Royalty / production sharing. Unique to each project.
Finance and economics
Discount and inflation rates. professionals. Strategic planning
interpretation
Federal income taxes,
depletion and amortization Accounts
schedules.
Table (5) Economic Data

ECONOMIC CRITERIA:
The commonly used criteria are:
PAYOUT TIME:
The time needed to cover the investment is defined as the payout time
It is the time when the cumulative undiscounted or discounted cash

flow
(CF = Revenue – Capital investment – Operating expenses) is equal

zero.
The shorter the payout time (2 to 5 years), is the more attractive

project. Although it is an easy and simple criterion, it does not give
the ultimate lifetime profitability of a project, and it should not be
used solely for assessing the economic viability of a project.
Discount cash flow means that a deferment or discount factor is used

to account for the time value of money by converting the future value
or worth of money to the present worth (PW) in accordance to the
specified discount rate. The time value of money is not recognized in
case of undiscounted cash flow.
Considering that revenues are received once a year at the midpoint of

the year, the discount factor is given by :
Where : t is the time and i is the discount rate in fraction.

PROFIT – TO – INVESTMENT RATIO:
Profit – to investment – ratio is the total undiscounted cash flow

without capital investment divided by the total investment. Unlike the
payout time, it reflects total profitability; however, it does not
recognize the time value of money.
PRESENT WORTH NET PROFIT (PWNP):
Present worth net profit is the percent value of the entire cash flow
discounted at a specified discount rate.
INVESTMENT EFFICIENCY or PRESENT WORTH INDEX

or
PROFITABILITY INDEX:
Investment efficiency or present worth index or profitability index is

the total discounted cash flow divided by the total discounted
investment. The value of this parameter in the range of 0.5 to 0.75 is
considered favorable.

DISCOUNTED CASH FLOW RERTURN ON INVESTMENT
or INTERNAL RATE OF RETURN:
Discounted cash flow return on investment is the maximum discount

rate that needs to be charged for investment capital to produce a
break – even venture (i.e. the discount rate at which the present worth
net profit is equal to zero.)
SCENARIOS:
Economic optimization is the ultimate goal of sound reservoir

management. It involves more than one scenario or alternative
approaches to picking the best solution.
For example, possible choices and questions concerning the recovery

scheme and development plan for a newly discover off shore
reservoir are :
1. Recovery scheme – natural depletion, fluid injection, or natural

depletion augmented by fluid (water or gas injection)
2. Well spacing – number of wells and platforms.
The economic analysis and comparison of the results of the various

choices can provide the answer to make the best business decision to
maximize profits.

ECONOMIC EVALUATION:
Procedure for economic calculation before income tax (BIT) is

outlined below:
1. Calculate annual revenues using oil and gas sales from

productions and unit sales prices.
2. Calculate year- by year total costs including capital, drilling /

completion, operating, and production taxes.
3. Calculate annual undiscounted cash flow by subtracting total

costs from the total revenues.
4. Calculate annual undiscounted cash flow by multiplying the

undiscounted cash flow by the discounted factor at specified
discount rate.

CASE STUDY
There are many cases showed that the well organized plans and an
integrated team resulted with increasing the production rates, reserves
and decreased the drilling costs and predict the future performance od
the reservoirs.
Here a redeveloped pan of 30 years old gas field by a cross-

functional team. The makeup of the team is given below:
Engineers ( reservoir, production, petrophysics, and facilities).
Geologists.
Geophysicists.
Field operations personnel.
Land, permitting, Business/ Regulatory Affairs Staff.
Tax and Legal staff.
The concept of cross- functional team management in this case

became necessary; because of declining production and concerns a
bout substantial non contributing reserves.
At the initiation of study in early 1989, the engineering function was

organized along specialty lines that followed separate drilling
facilities, petrophysical, production, and reservoir activities. A group
of engineers of similar discipline (e.g. drilling) formed a section and
reported to a division engineer. The various division engineers did

not always report to the same manager and each had their own
specific goals in mind. For example, the reservoir engineers targeted
reserves additions, whereas the production engineers concentrated on
production increase through recompletion and reconditioning, and
drilling engineers concentrated on reduced trouble costs.
The following goals were identified:
 Develop a technique to allow accelerated production of existing

reserves.
 Add reserves profitability.
 Incorporate 3- D seismic into the planned drilling program.
 Identify potential for commingling similar pay sand and obtain
regulatory approval to commingle them.
Team members focused on these overall goals rather than on those

functions.
The team memberships included:

Specialists NO Job
Geophysicist 1 3-D seismic information
Drilling Engineer 1
Drilling Forman 1
Geological Engineer 1 High level of drilling activity.
Petrophysical
1
engineer
Land man 1
Reservoir Engineer 1
Commingling efforts & remedial work
Production Engineer 1
Operation Forman 1 Development & commingling
Facilities engineer 1 activities
Regulatory Staff 1
Attorney 1
Chosen from amongst the team
Team Leader
members
Based upon the overall goals defined, the team developed the
following specific targets to be achieved in a two year (1990 – 1991)
time frame:
 Increased total field gas production rate to above 100

MMSCF/D.
 Complete 3-D seismic interpretation and mapping, and
identifying at least 10 new drilling locations.

 Reduce drilling costs by at least 10%.
 Commingle production from various zones.
At the end of this time period, the team achieved the following:
1. Field gas production rate increased from 50 MMSCF/D to over

130 MMSCF/D.
2. Application of fine – grid 3-D seismic and synergistic
subsurface work resulted in a success of 93% for drilling 15
new wells. These wells added over 100 BSCF of gas reserves.
3. Time to drill new wells was cut to half and overall drilling costs
were reduced by 25%.
4. The concept of commingling several massive hydraulic
fractured intervals proved successful.
This case study shows that the effective cross- functional team
work can indeed produce exemplary results for complex oil and
gas operations.

RESERVOIR MANAGEMENT PLANS
This material presents several reservoir management plans to

illustrate the following reservoir management concepts and
processes:
 Newly discovered field.

 Secondary and EOR operated field.
NEWLY DISCOVERED FIELD:
An x field was recently discovered, well NO.1, 2, 3, 4, 5 were drilled

to delineate the field. A dillstem test (DST) was performed to at the
discovery well and the results indicated two producing zones, 4000 ft
and 4500 ft sands with 875 STBOPD and 1456 STBOPD production
respectively.
The available data indicated that this field had a significant amount of
potential reserves. It was essential to form a multidisciplinary,
integrated team that was charged by the management to develop an
economically viable plan for the reservoir within 60 days.
The team consisted of the following professionals:
 A geologist responsible for geological and petrophysical works.

 A reservoir engineer responsible for providing production
reserves forecasts and economic evaluation.
 A drilling and completion engineers responsible for drilling and
completing wells, respectively.

 An equipment engineer responsible for designing surface
process facilities.
 A structural engineer responsible for designing platforms and
production decks.
 Other professional, if needed, such as pipe line engineer, land
manager, etc.
The reservoir engineer with an overall knowledge of reservoir

management was elected as team leader by the team members.
This case illustrate the application of the reservoir process/

methodology.
Development And Depletion Strategy:
The input of all disciplines, mutual understanding and inter

discipline communication was the key to developing a successful
optimum plan.
The team needed to address the following main questions in order to

come up with an economically viable development and depletion
strategy:
1. Recovery scheme – natural depletion or natural depletion

augmented by fluid (water or gas) injection.
2. Well spacing – number of wells, platforms, reservoir, and
economic

Preliminary data indicated that the reservoir was undersaturated and
had the initial pressure several hundred psi above the bubble point.
The regional geological data and production experience in this area
suggested moderate water drive as potential recovery mechanism in
addition to rock and fluid expansion and solution gas drive.
However, the possibility of secondary gas cap drive may exist
because of relatively thick pays with high porosity and permeability.
Production from the reservoir by primary depletion, as well as water

– flooding, was considered, it was also decided that all the wells
would be completed in the lower sands with plug back potential in
the upper sands where the lower sands were depleted. It was
recognized that selective perforation intervals in both sands would
maximize the oil recovery and prevent early high GOR production.
In order to realistically forecast oil production rates and reserves, a

full field reservoir simulation study was necessary. Considering
several well spacing for the field development, the simulated
production performance results were used to economically optimize
the number of wells and plat forms.

RESERVOIR DATA
DATA SOURCE
Seismic surveys, revised with well
Structural & Isopach Maps
logs information.
Reservoir pressure &
Drill stem Test & well Tests
Temperature
Well Logs ( sonic, FDC/ CNL, GR,
Porosity ILD…..) and conventional core
analysis
Permeability Conventional Core Analysis
Fluid saturation Well Logs
Correlation Parameter or from
PVT Properties
Laboratory
Relative Permeability Correlation or SCAL
LAYER DATA
 Sand Tops, Subsurface

 Net Sand Thickness.
 Porosity.
 Permeability
 Relative Permeability.

RESEVOIR MODELING
Construct a full reservoir simulation. The following should be

included in the simulator:
1. Economic rate per well.

2. Minimum flowing bottom hole pressure.
3. Maximum gas oil ratio.
4. Maximum Water cut.
Facilities Planning:
The simulation production performance results were used to size plat

forms, production decks, and surface facilities, etc. Also, drilling,
well completion practices requirements were established.
Subsequently, estimates of capital requirements and operating
expenses were made for economic analysis.
Economic Optimization:
Using estimated production, capital, operating expenses, and other

financial data, economic analysis of the primary development plans
were made depending on the different scenarios.

Implementation:
After management approval of the project, the next major

assignment would be to implement the development plan in order to
get the production on stream as soon as possible. A project manager
with the full authority would be needed to manage the various
activities as follows:
1. Design, fabricate, and install production plat form and surface

facilities.
2. Develop a drilling program.
3. Develop a completion program.
4. Acquire and analysis necessary logging, coring and initial well
test data from development wells to better define reservoir
characterization
5. Upgrade the reservoir data base to make simulation runs using
the latest to update the depletion strategy and predict reservoir
performance.
6. Drill and complete additional production, water injection and
water sources wells and warranted.

Monitoring, Surveillance, and Evaluation
An integrated and comprehensive monitoring and surveillance

program needs to be initiated at the start of production from the field.
Dedicated and coordinated efforts of the various functional groups
working on the project are essential.
The performance of the reservoir would be monitored as follows:
1. Accounting for daily oil, gas and water production and water
injection by well.
2. Tracing the water –oil contacts at the well in the vicinity of the
aquifer.
3. Systematic and periodic bottom hole pressure testing of selected
field.
4. Periodic measurements of static and flowing casing and tubing
pressure.
5. Recording of workovers and results.
The reservoir performance needs to be reviewed periodically to

ensure that the plan is working. This can be done effectively by
comparing the actual well/ reservoir and pressure behavior with the
simulated performance.

DRAFT TENDER DOCUMENT FORM
TO CONDUCT:
AN INTEGREATED GEOLOGICAL AND RESERVOIR

ENGINEERING SIMULATION STUDY
For X Field
Company Location
Date Issued

CONTRACT AGREEMENT
CLUASE NO. 1 - Scope of Work:
CONTRACTOR hereafter named “ X company” shall conduct

complete and integrated geological and engineering reservoir
simulation study based on the CLIENT hereafter referred to “ Y
company‟ scope of work and study objectives. “Y Company” shall
provide “X Company” with all the available data and information
pertinent to Reservoir Field X. The contractor shall review, analyze
and validate the provided data upon which additional information or
data might be requested and added in the technical proposal.
Results of these analyses will be used to construct 3-D static and

dynamic reservoir models to represent the subject reservoir. The
models shall be validated by history matching main actual reservoir
and well- by- well performance such as reservoir pressure, water cut ,
oil, water and gas production rates ..etc. Once, the models are
validated and accepted by the Company Y , prediction phase will be
started and through which all production scenario are studied to adopt
the optimum depletion strategy for reservoir development and
maximizing oil recovery based on present and future operating
conditions.
Additionally, the contractor shall investigate and screen enhanced oil

recovery (EOR) methods to enhance the ultimate recoverable oil

reserves determined by the primary and secondary recovery methods.
The provisions to implementing EOR application will be documented
separately with all the details and requirements of Laboratory tests,
EOR application design, recommended pilot project, economic
constrains... etc. is required.
CLUASE NO. 2 - Technical Specifications:
CONTRACTOR shall comply with the Company Y Specifications

as per the attached details shown in Exhibit „B‟.
CLUASE NO. 3 - Equipment, Materials, Supervision and Labor:
(a) CONTRACTOR shall furnish and incharge for all equipment;

materials, supervision and labor necessary to complete the Work
contemplated herein, with the following exceptions:
None
(b) In particular, and without limiting the obligations provided in (a)

above, CONTRACTOR shall furnish the following materials:
 Bi-weekly progress reports.

 Interim Reports (Exhibit B - 1.4).
 Final Reports (5 copies).

 Basic data, cross-sections, maps and plots, including
computer printouts, maps and plots, digitized files for
future in-house updates.
 Installing Simulation models on Company”Y” PC
infrastructures for future updates
CLUASE NO. 4 - Obligation of COMPANY “Y”:
COMPANY shall provide Geophysical, Geological, PVT, Core Data

( Routine) and analysis (SCAL), Field and well-by- well production
data history ( monthly oil, gas, water production) , wells test data,
and events ( drilling , completion and rate) , wells tests Data. These
data shall be returned to the COMPANY after the completion of the
study.
CLUASE NO. 5 – Terms of Conditions :
The terms of this Agreement shall commence on the day first written
above and shall continue until the work, which is the subject of this
Agreement, is completed, unless sooner terminated, as provided
under the terms of this Agreement.

CLUASE NO. 6 – Method of Payment:
COMPANY shall pay CONTRACTOR within _ _Thirty

(30)__________ days after receipt of CONTRACTOR‟S invoice
as stated in Exhibit „C‟.
CLUASE NO. 7 – Contractor Home Address :
CONTRACTOR‟S Home Address under this Agreement is

___________________.
CLUASE NO. 8 - Notice and Representatives:
(a) Any notices required, to be given or for sending of invoices or

charges or payments stipulated, hereunder, shall be deemed to
have been properly given and dispatched if airmailed or
telegraphed. Charges prepaid, to the address of the other party set
out below or to such other address as may be hereafter
designated in writing:
COMPANY „Y”: CONTRACTOR “X”:
Attention: Controller‟s Department

(b) (1) CONTRACTOR hereby designates
_________________________ or his appointee designated by him in
writing as the person who will have supervisory authority over the
services and equipment provided by CONTRACTOR. Notices
concerning operations, which are transmitted to CONTRACTOR
through such designated representative, shall be deemed, for purposes
of this Agreement, to have been sufficiently given.
(b) (2) COMPANY „Y‟ hereby designates Mr. as the Contract

Administrator or his appointee designated by him in writing, to
whom CONTRACTOR‟S representative may consult in the
planning and coordination of the services. Instructions given
by COMPANY‟S Contract Administrator shall be deemed
those of COMPANY and shall be complied with by
CONTRACTOR.
CLUASE NO. 9 - Exhibits:
The Exhibits attached hereto, including but not necessarily limited to

Exhibit „A‟ - General Provisions, Exhibit „B‟ - Specifications, and
Exhibit „C‟ - Study Cost, shall be considered a part of this Agreement
to the same extent as if incorporated in the body hereof.
IN WITNESS WHEREOF the parties have cause this Agreement to

be executed as of the date first written above.

CONTRACTOR “X” COMPANY”Y”
EXHIBIT „A‟ - GENERAL PROVISION
Section 1 - Relationship:
In the performance of the services herein contemplated,

CONTRACTOR is an independent CONTRACTOR, with
authority to control and direct the performance of the details of the
Work required. COMPANY, being interested only in the results
obtained, provided however, that such services and results shall at
all times meet the approval of COMPANY.
Section 2 - Performance:
Subject to the terms of this Agreement, CONTRACTOR shall

perform the Work hereunder in a satisfactory and workmanlike
manner, failing which COMPANY shall have the right to require
Work to be re-done at CONTRACTOR‟S expense or to terminate
the Agreement on written notice.

Section 3 - Force Majeure:
Neither party shall be liable for failure to perform the terms of this
Agreement when performance is prevented by force majeure, which
shall be defined as labour disturbances, riots, war (declared or
undeclared), military action, acts of God, insurrection, fire, acts of
government or military agency acting under actual or assumed
authority, or any cause beyond the control of such party, whether or
not similar to the matters herein specifically enumerated, but not
including financial distress. The party prevented from performing for
any such cause shall promptly notify the other and shall do all things
reasonably possible to remove such cause and shall resume
performance hereunder as soon as such cause is removed.
Section 4 - Insurance and Indemnification:
CONTRACTOR shall maintain at its own expense an insurance

applicable to its operations, and shall be solely responsible for any
damage of COMPANY properties, including bodily injury or death
caused in connection with and/or resulting from the performance of
this Contract and shall hold COMPANY harmless from any and all
claims, demands and causes asserted by COMPANY, employees,
agents, sub-contractors or third parties including but not limited to
CONTRACTOR‟S employees, agents, and sub-contractors.

Section 5 - Fees and Commissions:
CONTRACTOR shall not pay any fee, commission, rebate or other

thing of value for the benefit of an employee of COMPANY, nor
will CONTRACTOR do business with any company from which the
results thereof will benefit an employee of COMPANY
Section 6 - Confidential Nature of Records:
All records, data, reports and other information used in or obtained

from operations hereunder shall belong to COMPANY.
CONTRACTOR shall treat same as confidential and shall adopt and
follow such precautionary measures in handling such items as may be
necessary to prevent any third party from obtaining any information
concerning the Work done hereunder or the results hereof.
CONTRACTOR agrees that it will continue to maintain the
confidentiality of information derived from the performance of
services hereunder after the termination of operations hereunder.
Section 7 - Sub-contracting and Assignment:
CONTRACTOR may not sub-contract or assign this Agreement or

any services or Work to be performed hereunder without the written
consent of COMPANY.

Section 8 - Waiver:
No failure or delay on the part of either COMPANY or

CONTRACTOR in exercising the right hereunder shall operate as a
waiver thereof.
Section 9 - Entire Agreement:
This Agreement, including the Exhibits, constitutes the entire

Agreement of the parties. No other writing or conversations shall be
considered a part of this Agreement unless evidenced by written
agreement of both parties subsequent to the date of this Agreement.
Section 10 - Arbitration Clause:
Any dispute between the parties arising out of or in connection with

this Contract, shall if the parties are unable to mutually resolve such
dispute, be finally settled by arbitration in the Chamber of Commerce
in -------------

EXHIBIT „B‟ – SPECIFICATIONS
1. Study Objectives
The main objective of the study is to develop a numerical reservoir
model that represents the X resrvoir in X field. The model should
match satisfactorily production and pressure history of the field and
wells ( Existing and previous) and subsequently be used to predict
the field and wells performance under variety of depletion schemes.
Additionally, the study is expected to achieve the following
objectives:
- Develop a geological model utilizing all available geophysical,

geological and engineering information.
- Determine reservoir geometry and rock and fluid characteristics
based on available data.
- Determine the hydrocarbon in place and remaining recoverable
oil reserves.
- Determine the aquifer size, level and direction of aquifer
support. Attempt to quantify lateral and bottom water
encroachment.
- Evaluate optimum development and exploitation strategy.
In order to accomplish the study objectives, the main activities will
include and not limited to:-
- Data collection, initial reviews, and interpretation of all
pertinent data.
- Geological and geophysical interpretations.

- Basic engineering data preparation and analysis of well test data
and laboratory data to support reservoir description.
- Reservoir characterization by integrating all available
geological, geophysical, petrophysical, and reservoir
engineering data and interpretations.
- Simulation studies for well by well basis, cross sectional or
sector studies.
- Providing final coarse girded 3 D reservoir modeling
- History matched and predicted plots
- Economic analysis
Study Phases
1-Data Gathering and Review
All geophysical, geological and engineering data pertinent to the

detailed study of X reservoir will be collected from Company
office. At the end of the data collection, a written report will be
prepared by the Contractor and discussed with the Company. A
meeting will be held at the Company‟s office to finalize scope of
work, guidelines, and schedule of the study.
2-Geological Model and Seismic Interpretation
The Contractor will examine and collect all the required

geophysical and geological data in company Y location. The

Contractor will then undertake a complete review and
interpretation of all available data to achieve the following:
- Construct structure maps of all hydrocarbon bearing

zones.
- Locate all faults and associated fracture zones.
- Locate possible additional development areas.
- Make comments about data quality and recommendations.
The Contractor will conduct a detailed description and

interpretation of all the available cores data of X reservoir. The
Contractor will integrate the core interpretations with
petrographic and petrophysical analyses and display the results in
written form, as well as on graphic logs.
A detailed petrophysical evaluation will be conducted on all
available wireline logs using log software. Logs evaluation will be
performed using software package with proven performance and
accepted by the industry. Log data will be quality checked and
normalized against core data where available. The petrophysical
analyses will provide the following data:
- lithology
- porosity (total, effective, matrix, secondary/fracture)
- fluid saturations
- Oil-water contact(s)
- Fractured intervals and fracture parameters, when feasible
- bedding dip and orientation, when feasible

- Estimate of permeability
- Net and gross pays maps
The results from the petrophysical analyses will be provided in
both digital and hard copy. These will include numerical listings
and colored graphic logs on 1:200 and/or 1:500 scales.
A full suite of maps and cross-sections will be prepared. These
will include structure maps of regional markers and all
hydrocarbon-water contacts. The Contractor will incorporate the
data into facies isopach maps of each of the main reservoir
intervals. Stratigraphic cross-sections will be prepared to illustrate
the vertical and lateral distributions of various intervals within X
Field.
An interim report is required to cover the work performed in this

phase.
3-Engineering and Data Preparation
This phase will include data preparation to support reservoir

description. It includes:
- routine core analysis data review and correlations.

- reservoir hydrocarbon characteristics and representie suit
of PVT properties.
- interpretation of transient DST‟s, other tests data to derive
reservoir properties.
- analysis and interpretation of PLT runs.
- analysis of well completion and workover histories.

- analysis of reservoir pressure data.
- analysis of production data.
- reservoir layering, rock types definition, reservoir
properties mapping and aquifer chracterization.
An interim report should be prepared to cover the work
performed, results and conclusions pertaining to phase one 1
4- Reservoir Description, Volumetric & Material Balance
Results and information obtained from engineering, geological,

geophysical and perophysical analyses will be used to map the
reservoir according to structure, faulting, net and gross pay
thicknesses (by facies, layers and/or rock types if applicable),
porosities, permeabilities, fluid contacts and saturations.
The original volumetric hydrocarbon in place (OHIP) will be

determined for the X reservoir in total and for each porosity
system and for each layer/rock type by constructing hydrocarbon
pore volume maps from the previously described maps.
Prior to the use of material balance, the available geophysical,

geological and reservoir engineering interpretations of probable
aquifer size and strength will be addressed. Comparison of the
material balance OHIP and aquifer parameters with the
volumetric estimates will be used to refine the model and define
reservoir and aquifer continuities.

An interim report is required to cover the work performed in
phase
5- Reservoir Simulation
This phase will include:
- Single well studies

- Cross-sectional and/or sector studies
- Model intialiaztion
- 3-D modeling and history matching
- Predictions under different senarios and adopt optimum
depletion strategy
5.1 Simulation Studies of Single Wells & Cross-section Studies
Single well models will be run to match production history of

wells prior to full field simulation. Reservoir pressure, well
drainage area, skin damage, boundary conditions, and other
relevant properties should be determined from the available
transient pressure tests data using a commercial software package.
Representative cross section model and/or sector studies (if

appropriate) will be designed to provide further contributions to
interwell interference evaluations and full field modeling.
Cross section models and/or sector studies are required. These

will be selected in consultation with the Company. The
conclusions drawn from this phase will be applied to the phase of
the study. Grid sensitivity study should be also conducted.

5.2 Full Field 3-D Reservoir Modeling and History Matching
A full field reservoir description derived from the geological,

petrophysical, geophysical and engineering reviews will be
constructed. The number and size of active blocks will be decided
based on the study results obtained up to this stage. The historical
production of the existing wells will be applied. The simulator will
be run to match production and pressures data. Fluid and rock
properties and types could be modified within realistic tolerance
limits until matching has been achieved.
An interim report is required to cover the modeling work

performed in sections 5.1 and 5.2 and should include:
- the main results and conclusions of the phase,

- the model description and the corresponding grid maps,
- the initialization parameters and maps on grid basis,
- plots of actual and simualted parameters of the history
matched results,
- colored grid maps of gas and water saturation distribution
and pressure distribution maps for initial and final
conditions,
- input parameters and modifications made to the initial
reservoir description.
A meeting will be required to review the results of the study up to
this stage before proceeding with performance predictions phase.

5.3 Predictions & Number of Cases runs
A minimum of ten prediction cases will be performed. The end of

forecast time should not be less than 20 years from last date of
production history ” if feasible”
Prediction runs are required to cover the followings:
 Base case (continuation of current operations).

 Reactivation, workovers and recompletion of shut-in
wells “ if feasible”
 Water shut-off
 ESP optimizations or pump upgrading
 Infill drilling cases for production optimization and/
increasing IOR.
 Evaluation of horizontal and/ or slanted wells.
A meeting will be required in Contractor office to review results
of prediction cases and recommend subsequent program. Further
to this meeting the attractive cases will be selected for further
refinements.
State of the art display of the input-output data and simulation
results to facilitate the decision making process is required (e.g.
graphical capabilities on hardcopy output including gridded
displays of initial and simulated reservoir conditions through 3-
dimensional model display, horizontal and vertical sections, etc).
An interim report is required for the 3-D prediction cases.

6- Database Transfer
In addition to the final study report, the Contractor will provide

the final X Reservoir database in digital format for future
updating by the Company. The Contractor will assist the
Company in database transfer and installation on the available
system.
Interim Reporting / Project Management

1 Interim and Progress Reports
Interim Reports will be issued by Contractor and presented to the

Company after finalizing each of the following stages:
Interim Report 1 Data Gathering and Review
Interim Report 2 Geological and Petrophysical Interpretation
Interim Report 3 Engineering Data Analysis
Interim Report 4 Reservoir Description, Volumetric, Material

Balance

Interim Report 5 Initialization reservoir Simulation Study for
full field and Single Wells, Cross-sectional and/or
Sector and Full Field 3-D Reservoir Modeling
and History Matching
Interim Report 6 Three-D Performance

Predictions/Optimization
Each report will include all project tasks completed at that stage,
as well as Contractor's recommendations for the following phase
of the project. Details regarding the interim reports are presented
at Item 1
In addition, the Contractor will forward to the Company progress

reports on a bi-weekly basis. The progress reports will contain a
summary of the project status and main findings, technical and
financial summaries, work items for the next period. The
progress reports will be forwarded by the Contractor via fax.
Final Report & Presentations

The final report will address all the aspects of the study. The
report will present conclusions and recommendations derived
from the study regarding reservoir, production and operating
aspects. The recommendations should address immediate
practical application(s) for exploration and recovery optimization.

The final report will include summary table and synthesis maps.
In addition, technical appendices will contain all the relevant
detailed documents produced during the course of the study. The
contractor will present the draft copy of the final report, the final
reports and number of hard and digital copies will be decided
after the outcome of the presentation and discussions with the
Meetings
Meeting 1 To review geological and petrophysical interpretations

and finalize scope of work guidelines and schedule of
study
Meeting 2 To review results of 3-D history match and set up and

define prediction cases
Meeting 3 To review preliminary results of prediction cases and

define optimization/refinement prediction cases
Meeting 4 To present final report and review conclusions and

recommendations of the study
Meetings 1 and 4 will take place in X company location .

Meetings 2 and 3 will take place at Consultant's home office.

Participation of Representatives and Training
At least two representatives from the Company will participate

directly on all phases of the study at Contractor's offices.
Training will also provided by contractor for the two Company
engineers at no additional cost to the Company.
Study Location
The study will be performed at the offices of the Contractor.
INFORMATION PERTINENT TO OFFERS
The offer submitted by bidder will be deemed to take into account

all information of whatsoever nature, which is required or
necessary to permit the due and proper performance of the
WORKS under the Contract.
QUERIES BY BIDDERS.
Bidder is requested to submit all commercial, legal and
technical queries pertaining to the Tender Documents by telex
or telefax to:
X Company address
ANSWERS TO BIDDERS QUESTIONS.

The answers to any such questions will be notified to all
bidders simultaneously, together with the text of the question.

TERMS of BID Conditions
 Bidder is requested to acknowledge the receipt of the
Tender Documents within three days of receipt thereof by
telex or telefax to X Company.
 Bidder is requested to confirm by telefax to X Company at
the its intention or decline to bid.
 Bids are required to be valid for 150 (one hundred and fifty)
days after the closing date.
 Bidder is requested to provide all the information stipulated
in the present Instruction to Bidders.
 Any bid, which does not include all the requested
information, may be rejected.
QUALIFICATION TO BID
Bidder is required not to entrust the preparation of its bid or

any part thereof to another company or companies without the
prior consent of COMPANY.
COST OF BIDDING TO BE BORNE BY BIDDER.
The whole of the costs, incurred in preparation and submission

of the bid, visits to the site, negotiations in connection with the
bid and any other costs of whatsoever nature, incurred by
bidder in connection with the present tender enquiry, shall be
borne by bidder.

BIDS NOT BINDING.
The issue of the present tender enquiry by COMPANY to

bidder shall in no way bind COMPANY to enter into any
contract with bidder, neither shall it involve COMPANY in
any financial commitment whatsoever towards bidder.
TENDER DOCUMENTS.
The present tender documents shall remain the property of

COMPANY.
Unsuccessful bidders or bidders who decline to submit a bid

are required to return the tender documents to COMPANY.
LANGUAGE
The offer, submitted by bidder, shall be in the English

language.
BID FORMAT
The bid shall be prepared and submitted according to
information supplied in this document. Bidders experience in
technical expertise and services similar to those requested in
this tender documents.

SUBMISSION PROCEDURE
Bidder shall submit tender strictly in accordance with the
instructions contained in the cover letter.
Any tender, submitted out of conformity with the stipulations

contained herein, may be disqualified.
X RESERVOIR SIMULATION COSTS
1.0 COMPANY will pay CONTRACTOR for performing the work

described in Exhibit above - Specification, a Lump Sum Price of
U.S. Dollars.
Payment of the Lump Sum amount stated in item 1.0 above
shall be made based on invoice(s) submitted with interim report
for that specific item as follow:

Description Cost in U.S.
Dollars
Item 1 - Data Gathering and Review.
Item 2 - Geophysical, Geological and

Petrophysical Interpretation
Engineering Data Analysis.
Item 3 - Reservoir Description, Volumetric,

Material Balance,
Simulation Studies and History Matching
Item 4 - Performance Predictions
Item 5 - Final Presentation
Item 6 - Final Report
TOTAL COST
1.1.1.CONTRACTOR shall submit to COMPANY an interim

report for each work activity according to the Breakdown of
Contract Price accepted and approved by COMPANY.

INVOICING
For the purpose of payment of the Contract Price, contractor

shall submit proper Commercial Invoice(s) for COMPANY
approval accompanied by approved summary report of work
performed.
COMPANY will pay CONTRACTOR within thirty (30) days after

receipt by COMPANY, of proper Commercial Invoice(s), accepted
and approved by Contract Administrator.
In the event of any error or discrepancies in the invoice(s), the

invoice(s) will be returned to CONTRACTOR for correction,
COMPANY will approve for proper/corrected invoice within ten
(10) working days of receipt from CONTRACTOR.

Technical Proposal of Reservoir
Simulation
Study for the X Field

Introduction
Phase 1 - Data Gathering
Phase 2 - Geophysical, Geological & Petrophysical Interpretation
Phase 3 - Reservoir Description, Volumetric, Material Balance
Phase 4 - Engineering Data Analysis
Phase 5 - Simulation Studies for single wells, 3-D Full Field

&History Matching.
Phase 6 - 3-D Performance Predictions.
Phase 7 - Final Presentation and Report
Software Models
The following software will be used for the study
 Geophyiscs: xx
 Geology. xxx
 Petrophysics: xxxx
 Reservoir Simulation: xxxxx
Names of Project Team & their CV
 Project Management
M U of S &T / Dr. Jawad Rustum 131
 Geophysics
 Sedimentology / Core description
 Geology
 Petrophysics
 Reservoir Engineering
 Reservoir Simulation
 Project Duration
Introduction
This section outlines the scope of work that X company would

undertake to complete the study.
The project will consist of seven Phases in total taking the

following approximate duration of x weeks.
These estimates are provisional and are based upon the limited
information currently available. After review of the data a more
definitive timing and work schedule will be prepared.
Upon completion of the study a final report will be produced as

described in the following sections. Copies of digital data (seismic
interpretation, log CPI's, xxx and xxxx models) will be provided
as described below.
Phase 1: Data Gathering

X company will visit the offices of client to collect and review the
data. A minimum team of a Geophysicist, a Geologist and a
Reservoir Engineer will make the visit. X company will endeavor
to commence the data-gathering visit within x month of contract
execution.
All data will be made available to X company in digital form at

the start of the study. Additional charges will apply for any
required digitization of paper data, in particular seismic data, log
data and production data.
All geological, geophysical, drilling, production testing, well logs,

core and fluid analysis data required for study of the X reservoir
will be available to X company free of charge. Such material will
be the property of client, X company will treat all data and
information supplied by client during the study with utmost
confidentiality. All such material will be returned to client at the
completion of the study.
Once significant milestones have been reached in the study, no

work will be repeated due to acquisition of new data, unless a
new work order is raised.
A data review will be conducted to check data quality,

consistency and high-grading data that would be used for further
analysis. At this point X company will provide a written report

commenting on the available data and showing a data inventory
(Interim Report 1).
Phase 2: Geophysical, Geological and Petrophysical

Analysis
Seismic Interpretation and Structural Modeling
Seismic interpretation will be undertaken using a Landmark

geophysical workstation.
For this proposal it is assumed that a thorough review of the

existing 2-D seismic interpretation and structural modeling is
carried out. It is further assumed that all data is available in digital
format (SEGY) at the start of the study. If some of the data is
available only in paper format, we will digitize the data at
additional cost. Digital data will be loaded on the seismic
workstation, and combined with velocity data to pick the main
horizons in the field and the faults. These will provide key input
to the building of a static model in Petrel.
The following steps will be taken:
a)Load seismic data and all relevant well data into Landmark
Supereis works 3D or Kingdom Suite 3D interpretation software;
b) Prepare synthetic seismograms from the well data (assuming

the data are of sufficient quality) and verify main horizons of
interest using all available information (geological data,
information from synthetics, stratigraphic picks, velocity data at
wells etc.);
c ) Interpret the 4 main horizons and faults;
d ) Depth convert time horizons using all available velocity

information. Ideally this would include stacking velocities to
provide better coverage of the area than well data alone;
e) Produce a set of top structure maps in (two-way time and)

depth grids and fault polygons would be required input for any
static modeling to be undertaken;
f) In addition to the revised top structure maps for the main

horizons, a set of maps illustrating the distribution of the
hydrocarbon bearing reservoir sands will also be produced.
Geological Analysis
X company will conduct a detailed description and

interpretation of all the available core data
a) A core description and facies analysis study will be carried

out on available core material from the x reservoir. These
studies include the integration and interpretation of data
obtained from detailed description of cores together with
wireline log data and core analysis. The core descriptions will be
depth matched to wireline logs for facies calibration.
b) A facies and diagenesis model is to be constructed for the

reservoir with the help of the above-mentioned core study and
petrophysical analysis. The identified lithofacies will be
arranged into a facies scheme and a series of facies associations,
relating directly to the process and environmental setting during
deposition. The relationship between lithofacies, facies and
facies associations will be defined. Extrapolation of facies into
uncored intervals will make use of all available data. The model
will address the vertical and lateral distribution of different
facies. A relationship between facies and reservoir
quality/performance should also be established, as should any
relevance to fracturing if any.
c) The facies scheme will be used to subdivide the reservoir

intervals into meaningful units or layers, which directly relate to
both the depositional setting and are associated with variations
in reservoir performance. The vertical and lateral dimensions of
various formation units will be delineated independently by X
company
d) X company will prepare structure and stratigraphic cross

sections using the logs and other data and will determine the
current and original fluid contacts, the transition zone, faults and
lateral facies changes.
e) For the purpose of reservoir description, each reservoir/zone
will be subdivided into a number of layers as per the geological
model.
Petrophysical Analysis
The petrophysical properties of the reservoir will be determined

by the analysis of the production, core and quantitative well log
data. The objective of this analysis will be to determine the best
possible evaluation of porosity, permeability, capillary pressure,
relative permeability, irreducible water and residual hydrocarbon
saturation and the initial fluids saturation.
a) AA wells of the X reservoir will be analyzed independently

with a full CPI study using Interactive Petrophysics (IP,
Schlumberger). The basic data for all wells will be processed and
interpreted independently. Normalization of the logs will be
attempted wherever required.
b) Clay Parameter Selection: Log data will be cross-plotted to

establish various clay parameters. Statistical techniques will be
employed in an attempt to establish clay types, and will be
compared to any clay analyses that have been carried out in the
laboratories.
c) Shale Volume: Shale volumes will be calculated using SP,

Gamma Ray and CNL-FDC cross-plot methods as minimum

requirements besides other indicators and as is applicable. If
spectral gamma ray data is available, it will also be used. Core
data should be used wherever available.
d) Porosity Calculation: Porosity will be calculated using

multiple porosity log analysis. Total and effective porosities will
be determined. Typically, density, sonic and neutron logs are
used to calculate porosity. Cross plotting techniques are used
whenever possible. Porosity is calculated after applying
appropriate environmental corrections to the log curves, and
using appropriate values for matrix density and water specific
gravity. Whenever possible, porosity is calculated and compared
from a variety of sources. This enables the selection of the most
representative porosity to be used for further evaluation.
e) Core data will be calibrated against log data by performing

depth and resolution matching.
f) Bedding dip and orientation will be determined if feasible, e.g.

from cores and/or dipmeter logs.
g) Apparent fracture density logs will be prepared for key wells,

if relevant, using the conventional logging suites available,
characterized from available core data and any FMI logs, if
available. The exact methodology used will depend on which
log traces are available and which traces are most responsive to
the presence of fractures in the reservoir(s) being studied.

Lithofacies can exert a rheological control on fracture
development, and therefore fracture interpretation from logs will
be done in conjunction with the lithofacies/rock type
interpretation of the reservoir(s). In this particular study,
integration with well test data will also be undertaken to help
select the appropriate methodology to use and also to guide the
log interpretation process itself. The final methodology used will
be documented in the study report.
h) Porosity Permeability. Cross-plots of K-Max and K-Horizontal
of core permeability versus core porosity will be created to
establish relationships between permeability and porosity. X
company will identify different rock types and produce
correlations for each rock w e if necessary. These relationships
will then be used to generate permeability logs from the porosity
logs for the zones of interest in all the wells evaluated.
i) Water Saturation: True formation resistivity (Rt) will be

determined from dual laterolog (LI.D) or induction log (1W) after
correction for environmental effects. The fluid saturation
parameters (a, m and n) are normally obtained from core and rock
electric analysis. Should these input parameters be unavailable, a
set of parameters with industry standard values will be used. Based
on field data and borehole conditions, a most appropriate
saturation model will be selected to calculate Sw and Sxo.

J) The interpreted results will be used to determine original
hydrocarbon-water contact. The transition zone will be correlated
with capillary pressure results.
k) Outputs of graphical plot will be in standard format. The plots

will include produced formation analysis by volume (clay, matrix
porosity and fluid analysis) and average grain density meter by
meter in a scale of 1200. Five copies of each plot will be prepared.
l) Computer processed interpretation tabular output will include

Sx, Vsh, moveable hydrocarbon, grain density and cumulative of
(1-Sw)/Boi meter by meter.
m) Optimum values for porosity, Sw and clay volume cut-offs

will be determined by testing data at various sensitivities.
n) Summary Tables: A set of summary values for each zone in

each well, listing net pay, average porosity, water saturation,
porosity thickness, hydrocarbon thickness and permeability
thickness will be generated, based on a series of cut-offs as
supplied by the client. A maximum of three sets of summary
values will be generated and included in the final report. Oil/water
contacts will be established if possible.
At the end of this phase an interim report will be written on the

geophysical, geological and petrophysical analysis (Interim
Report 2). A meeting will be held in X Company's office to
review the results (Meeting 1).

Phase 3: Engineering Data Analysis
The following reservoir engineering analysis will be undertaken

prior to reservoir simulation modeling:
a)The PVT laboratory analysis reports on fluid samples from the

reservoir will be reviewed to derive key PVT properties for input
into the material balance and simulation model. It will be
investigated if there are any variations in PVT properties, e.g.
with depth, and if there are, whether and how to represent these
in a simulation model.
b) The rock properties data, in particular special core analysis

data, if available on the field, will be reviewed to define relative
permeability and capillary pressure curves required for the
simulation model, if necessary for each identified rock w e . Data
will be normalized, averaged and then de-normalized using
averaged endpoints for each rock w e , if necessary.
c) Well test data obtained from the wells will be

reviewed/analyzed by X company for reservoir parameter
estimations (kh, skin from buildup surveys) and model
validation. The procedures to analyze the pressure build-up data
will include both Horner and MDH or derivative techniques. The
permeabilities estimated from the short and long-term pressure
transient analysis will be correlated with the data obtained from
core analysis.

d) Production data by well and by reservoir will be compiled
and reviewed for their completeness and accuracy to be used for
simulation history matching and material balance calculations.
The success of work over and other remedial actions in the past
will be evaluated through evidence of incremental recovery
based on the production data.
e) The production data review will also be used to identify the

main drive mechanisms in the reservoir. To this end, a material
balance tank model computation of initial Hydrocarbons-in-
Place will be performed using the available pressure and
production data, rock and fluid properties and unsteady state and
steady-state water influx from aquifers.

reservoir engineering data analysis (Interim Report 3).
Phase 4: Reservoir description, Volumetric & Material

Balance
A 3-D geological model will be constructed, in Petrel Software,

to combine the results of geophysical, geological, petrophysical
and reservoir engineering analysis. This model will include the
pertinent geological features and geometry of the reservoirs in
sufficient detail to allow an adequate description of the reservoir
for reservoir simulation purposes. colors-coded maps can be
generated from the Petrel model for every reservoir layer or
formation, based on the geophysical and petrophysical
interpretation.
 Depth structure incl. faulting.

 Isopach maps of gross thickness.
 Net to Gross Ratio (or Net Pay thickness)
 Effective porosity
 Permeability
 Water saturation
Porosity and permeability maps may be constructed separately for

matrix and fractures, if relevant.
Apart from the above 2-D maps, any part and property of the
reservoir can be displayed in 3-D.
The 3D Petrel model will be used to calculate initial volumetric

gas & oil in place for the reservoir, and if required for
subdivisions of the reservoirs.
The Petrel model will also be used in conjunction with reservoir

engineering analyses to assess aquifer size, continuity and
strength.

The production data review will be used to identify the main drive
mechanisms in the reservoir. To this end, a material balance tank
model computation of initial Gas-in-Place will be performed
using the available pressure and production data, rock and fluid
properties and unsteady state and steady state water influx from
aquifers. This will be compared with the estimate from the
volumetric method applied in Petrel.

reservoir description, volumetric and material balance (Interim
Report 4).
Phase 5: Reservoir Simulations
Model Constriction
a) A 3-D reservoir simulation model will be constructed in

ECLIPSE (Schlumberger) based on the Petrel 3D geological
model, which has captured the reservoir structure as well as the
internal architecture of the geological layering and the
petrophysical properties.
b) A 3-phase reservoir simulation model will be constructed. The

location of hydrocarbon interfaces, and the variation in reservoir
fluid properties, if any, will be investigated and included if
possible.

c) The simulation model will be initialized using a gravity
capillary pressure initialization procedure based on observed
initial hydrocarbon contacts and reservoir pressures. Endpoint
scaling will be used to match water saturation data from the
petrophysical analysis.
d) Recurrent data will be imported, i.e. well deviation surveys and

completion data, as well as historical production data. Perforation
data will be checked with the original logs to verify that
completions occur in the correct reservoir layers, and the effect of
work ovens will be included.
e) Well p ro du ct will be modeled based on existing DST and

extended well test/PI data.
f) Pressure data will be compiled for display against simulated

pressures. The Peaceman correction is applied to build-up or fall
off data if necessary.
Single-well and Sector Model Studies
Single-well models may be required to better understand typical

individual well behavior using kh, skin, and drainage area data
from analytical well test interpretations. Cross-sectional or sector
models may be required to better understand prior to full field
modeling. Grid sensitivity, i.e. number and size of active grid
blocks will also need to be considered

Full Field History Match
a) History matching runs will be carried out using the most

appropriate time steps to maintain the necessary accuracy and
model stability. Fully implicit model techniques available in
ECLIPSE will be used.
b) The reservoir parameters will be adjusted as necessary

(within acceptable limits) in conjunction with feedback from the
geoscientists to get a reasonable reservoir and well-by-well
history match
c) Layer wise pressure and hydrocarbon saturation maps initially,

in between and at the end of history match will be provided to
client if required.
At the end of this phase a report will be written on the reservoir

simulations (Interim Report 5) and a meeting will be held in X
company's office to review the history match and results of the
study obtained so far and to define the prediction cases (Meeting
2).
Phase 6: 3-D FFM Performance Predictions
For the prediction runs additional input will need to be defined.

trai
Facility c o m m will be modeled, e.g. by grouping wells
according to existing operational requirements (such as
production to a common separator, platform etc.). Vertical flow

performance tables will be constructed in accordance with well
inflow performance data and any tubing-head pressure c o m m
tr aii mp o sed by the capacity of surface facilities up to the fast
separator.
Between ten and fifteen prediction runs will be performed for 20

years if feasible, addressing the following options for further
reservoir depletion and development:
 Base Case (continuation of current operations)
 Infill drilling to replace high water cut / low gas rate wells
 Re-completion strategies and their impact on reservoir

performance and reserves
 Evaluation of Horizontal wells
State of the art display of simulator input and results will be

provided to facilitate the decision-making process. X company
will provide the following data in each prediction run:
a) Production and injection profile of existing wells (rates and

cumulative);
b) Number of wells, completion strategy, location, artificial lift
and drilling schedule;
c) Reservoir pressure, well pressure profile for the life of the

producing wells;
d) Time of artificial lift installation and associated hydrocarbon
recovery.
e) (A selection of) fluid saturation plots at start and end of
prediction period
A meeting will be held in X company's office to review the

results of the prediction runs and recommend a selection of most
attractive cases for further refinement (Meeting 3).
X company will recommend the optimum development plan as

well as possible alternatives and will run the selected optimum
prediction case until the abandonment criteria and calculate the
ultimate recoverable oil and gas volumes.
A report will be written on the prediction runs and final

optimization runs (Interim Report 6).
Phase 7: Final Presentation and Report
Final Presentation
A final study report will be compiled addressing all aspects of the

study, and presenting conclusions and recommendations regarding
reservoir, production and operating aspects. The recommendations
will address immediate practical applications for recovery
optimization.

A meeting will be held at the end of the study in client‟s office
(Meeting 4) to present the final report and review the conclusions
and recommendations of the study.
Reporting
The final report will include summary tables and synthetic maps,
as well as technical appendices that will contain all relevant
detailed documentation produced during the course of the study.
In addition to the final study report (5 copies), X company will

provide the final X field database in digital format for future
updating by client If possible X company will assist client to
transfer the data to their system.
The following reporting to client will be undertaken by X

company :
a) A detailed progress report every two weeks during the project;

b) Computer outputs after each phase of the project in digital
and hard copy format.
X company will additionally preserve on its computers or backup

media for a period of 5 years the reservoir simulation model and
initialization data to facilitate additional runs in the time period if
required. X company will require a separate work-order from
client for this service as discussed in the Financial Proposal. Any
such runs would be under a new and additional budget.
Client Participation and Skills Transfer
X company understands that client may wish to have two but no

more than three professionals participating throughout the key
points of the study.
X company Capability Statement
The geotechnical, reservoir engineering and economics

departments of X company have much experience of oil and gas
prospectivity and fields in X country and the region.
Exceptions to the Invitation to Tender

Requirements
Introduction
The invitation to tender specifies requirements for the

consultant that is awarded the study. Due to the nature and
exigencies of the consultancy business that X company
operates a number of these requirements cannot necessarily be
commitments by X company These are listed below as
Exceptions.
Exceptions
a) X comany will make endeavors to commence data gathering

within 1 month of the aforementioned date.
b) With regard to the continuous provision of data during the
study, once significant milestones have been reached in the
study, no work will be repeated by X company due to
acquisition of new data, unless a new work order is raised.
c) Whilst X company intends to base the study at its office in,

it may be a requirement to undertake some or all of the work in
the X company‟s office due to the location of staff and
computing resources.
d) X company will endeavor to provide client personnel with

suitable office space, however x company does not guarantee
this and X company does not commit to the provision of a
standalone office.
E) Owing to the nature and exigencies of the petroleum

consulting business, X company is not able to dedicate the
staff working on this study exclusively to this study. X
company staff will be permitted to work on other projects
during the relevant phase of this study. However X company
wi11 endeavor to minimize and eliminate where possible the
other project work undertaken by staff during their relevant
phases of this project.
f) If client rejects the services of any consultant on the project,

X company will source and provide a replacement however

due to the nature of the petroleum consulting business X
company cannot guarantee that this will be without any delay.
Project Schedules
The study should include schedule summary of the anticipated

work scope, chronological sequence and duration of the seven
phases of the project.

References:
1. Abdus satter, PhD & Gansesh C.Thaker,PhD” Integrated

Petroleum Reservoir Management”
2. Wiggins, M.I & R.A.Startzman “ An approach to Reservoir
Management “ SPE paper 20747, Reservoir Management Panel
discussion, SPE 65th ann. Tech. Conf. & Exhib. New Orleans,
LA, Sept.23-26, 1990.
3. Satter A., Varnon, J.E &Hung, M.T.” Reservoir Management :
Technical Prospective.” SPE paper 22350, SPE International
Meeting on Petroleum Engineering, Bijing , China, March 24 -27,
1992.
4. Calhoun, J.C “ A Definition of Petroleum Engineering “ JPT
(july 1963) 725 – 727.
5. Dale Brown , Subsurface Director, chevron Bangladsh “
Reservoir Simulation Overview”
6. Thompson & Wright “Oil Property Evaluation”
7. Zolotukhin & Jann-Rune Ursin “ Fundamental of Petroleum
Engineering Handbook”
8. SPE Monograph No. 1 “ Determination of Oil& Gas Reserves.
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Petroleum Reservoir Management handbook (Dr. Jawad R. Rustum Al-Assal)

Book · June 2018

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Dr. Jawad R. Rustum Al-Assal

 Definition of Reservoir Management.

 Types of recovery Mechanisms.

 Objectives of Reservoir Management.

 Synergy and team.

 Integration of Geosciences and engineering.

 Integration Exploration and development Technology.

 The Reservoir Management process.

 Technology and Technological Toolbox.

 Development plan and Economic.

 Development Depletion strategy.

 Data Acquisition and Analysis.

 Geological and Numerical Studies.

 Production and Reserves Forecast.

 Surveillance and Monitoring.

 Revision Plan and strategy.

 Reasons for Failure of reservoir management.

M U of S & T/ Dr. Jawad Rustum 2

 Data Storing and Retrieval.

 Role of reservoir model.

 Reservoir Performance analysis and Forecast.

 Natural Production Mechanisms.

 Methods of Resources / Reserves Estimation.

 Reservoir Management Economic.

 Reservoir Management Plan

 Draft Tender Document Form To Conduct an Integrated Geological &

 Technical Proposal of Reservoir Simulation study.

M U of S & T/ Dr. Jawad Rustum 3

ABANDONEMENT Reservoir DEVELOPMEN

Figure (1) Reservoir Life Process

So integrated, sound reservoir management is the key to a successful

M U of S & T/ Dr. Jawad Rustum 4

Natural Flow: Artificial Lift

tertiary means, and

Water Flood Pressure Maintenance

Water Injection Gas Injection

THERMAL Gas Miscible/immiscible Chemical:

Definition of Reservoir Management:

There are many definitions for Reservoir Management one of

Reservoir Management involves making certain choices. Either let

M U of S & T/ Dr. Jawad Rustum 6

OBGECTIVE OF RESEVOIR MANAGEMENT

The prime objective of Reservoir Management is the economic

1. Identify and define all individual reservoirs in a particular field

Thus the basic purpose of Reservoir Management is to control

The following questions – and – answer provides Reservoir

1. When Reservoir Management should starts?

The ideal time to start managing a reservoir is at its discovery.

 Provides a better monitoring and evaluation tool, but also

M U of S & T/ Dr. Jawad Rustum 7

To answer this question, we must follow an integrated approach of

 Are the data necessary, and what are we going to do with

The reservoir team should prepare a coordinated reservoir