introduction to reservoir management

Why is it critical?

In the past, new fields used to be discovered every now and then.

Today, all the giant fields have been explored, except those in the Arctic (where exploration costs are skyrocketing) and other remote areas

Most fields being discovered today are smaller in comparison

•Very small fields -Few•Small fields - Many•Medium-size fields - Handful•Large fields - Very few

• FSD typically shifts towards smaller sizes as exploration matures

• Exploration and development opportunities diminish over time in a mature basin

0.5 – 1 1 – 2 2 – 4 4 – 8 8 – 16 16 – 32 32 – 64 64 – 128

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According to the theory of peak oil, worldwide reserves of petroleum have reached their maximum.

New discoveries will not push reserve replenishment figures to where it was in the past

Further discoveries of oilfields will only help stem the decline in reserves

Going by the trend of exploration and production the world over, the theory of peak oil has been proved beyond doubt.

Although common perception may suggest that drilling more wells will give us more production, this is a misconception

The production comes from the reservoir, so drilling more wells is just wastage of money; moreover, too much drilling can damage the reservoir

Finding new oilfields today presents a challenge not only in terms of technical issues, but also from the monetary point of view

Breaking ground in inhospitable places requires enormous amounts of expenditure

There are other issues as well; Shell Oil deciding to drill in the Arctic has led to widespread activism against it

Similar problems are faced by Oil India as well, in conventional as well as NELP areas

Worldwide energy demand is skyrocketing. It is estimated that by 2030, it will be 1.5 times what it is today, and 30% of that will come from petroleum.

In India, we can indigenously produce less than a quarter of the country’s demand of oil.

With new oilfields increasingly difficult and costly to find, and accelerated drilling programs starting to not yield results, the best option is to make the most of what we have.

Herein steps in reservoir management.

Sound Reservoir Management relies on the use of available resources (human, technological and financial) to maximize profits from a reservoir by optimizing recovery while minimizing capital investments and operating expenses.

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

Recovery Efficiency, % OOIP

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Liquid and Rock Expansion

Solution Gas Drive

Gas Cap Expansion

Water Influx

Gravity Drainage

`

Through proper reservoir management, it is aimed to keep the graph following this pattern, in order to maximize recovery

Reservoir pressure is crucial for optimum production

It is due to pressure difference that reservoir fluids are produced

Hence it is of utmost importance that reservoir pressure be kept as stable as possible to maximize production and recovery.

Regular static and flowing bottom-hole pressure recordings (SBHP & FBHP) in wells offer a way of monitoring reservoir pressure

If the reservoir operates under strong aquifer drive, and pressure is seen to be remaining constant, then production may be increased

On the other hand, if a rapid pressure decline is seen then the reservoir might be under overproduction, and pressure maintenance schemes need to be looked at.

Production monitoring is another key aspect of reservoir management

A lot can be learnt by studying the trends of oil production, water cut, and gas-oil ratio (GOR)

As an example, increasing GOR may suggest declining reservoir pressure, and increasing water-cut may suggest water-channeling or coning problems.

Production monitoring is carried out at various levels Well level Reservoir level Field level

If a particular problem (like high water cut) is spotted in one well, the adjoining wells are also analyzed, so as to narrow down the cause, whether individual well-related (resolved by workover) or reservoir related (resolved by production optimization or introduction of pressure maintenance and other IOR/EOR schemes)

For example, a well producing on higher GOR as compared to neighbouring wells may indicate that the perforations in the problem well are drawing gas from the gas-cap, which needs to be rectified immediately.

It is noteworthy that companies the world over invest billions of dollars in exploration of new areas, when a major part of the oil is left trapped in the known reservoirs

Primary recovery lies in the range of 30-40%, which means ample scope exists for further exploitation

IOR/EOR processes are instrumental in ‘making more from what we have’

Water injection falls under the banner of improved oil recovery (IOR)

In this process, water is injected into the aquifer in downdip injection wells, thereby assisting production by means of pressure maintenance

Planning of water injection requires study of injection well candidates and deciding optimum injection rate

Too little injection will not aid in production, while too much injection might lead to water breakthrough

InjectionProductionProduction InjectionInjectionInjectionProductionProduction

New Pay

OWC

Old Geologic Concept Continuous Pay

Current Geologic Concept Non-Continuous Pay

OWC

Old total

Depth

Enhanced Oil Recovery (EOR) is a generic term for techniques for increasing the amount of crude oil that can be extracted from an oil field.

Using EOR, 30-60%, or more, of the reservoir's original oil can be extracted compared with maximum around 40% using primary and secondary recovery.

Shown in the figure is a type of EOR process called ‘steam injection’

In CO2 flooding, carbon dioxide is pumped into the oil zone followed by water.

The CO2 being miscible in oil, swells it and hence decreases its viscosity, making it easier to push out of the reservoir

The water is pumped behind as a pushing medium

Alternating waves of CO2 and water are pumped

Microbial EOR is one of the most innovative EOR techniques

Microbes are genetically engineered to behave in a planned way in the reservoir, like breaking down the heavy crude oil, giving off CO2 gas, etc, aiding in recovery

They are then pumped into the reservoir with nutrients and a are followed by a water flush.

LIMITATION

1. EOR processes require a lot of investment and planning

2. Lot of uncertainty regarding the effectiveness of EOR in a particular reservoir

3. Possibility of damage to the reservoir

4. Environmental concerns

MITIGATION

1. EOR can yield upto double the amount of oil that can be produced by primary recovery

2. Uncertainties exist in exploratory drilling also

3. Pilot project studies can be undertaken to assess suitability

4. Care can be taken to mitigate environmental concerns; of greater concern is energy security

•EOR techniques have resulted in considerable improvement in

•arrest of reservoir pressure decline

•enhanced recovery

•So far, around 1400 MM bbls of STOIIP have been subjected to the above mentioned processes, representing 28 reservoirs

•It is estimated that around 140 MM bbl oil reserves have been added due to the above processes, of which around 100 MM bbl oil have been produced so far.

Who will take it forward?

Man-years : E xperienc e

G eology, 1100

G eophys ics , 620

R es ervoir, 85

L ogg ing , 440

C hemical & R &D ,

950

D rilling , 2550

P roduction, 2000

In OIL, a 5% increase of Recovery Factor would result in

around 258 MMbo of additional oil reserves----------

(OIL’s current Proved oil reserves stand at 278 MMbo)

GLOBALLY, a 1% increase of Recovery Factor would result in

around 88 Bbo of additional oil reserves(sufficient to replace three years of current world production

)

The oil potential is there …

STOIIP, MM bbl 49

Cum. Oil Produced (Recovery)

21 (43%)

Reserves, MM bbl

0.4006

Initial Pressure, kg/cm2

270

Current Pressure, kg/cm2

250

Crude Oil Viscosity, cp

5.6

No. of Wells Completed

14

Reservoir Depth, m

2652

Additional Oil Recovery ~ 11 MM bbls (43% of STOIIP)

Material balance is a classical reservoir engineering concept, which treats the production of a reservoir on the lines of the theory of conservation of mass

It takes into account various reservoir parameters, like pressure, reservoir radius, permeability, aquifer strength and builds a relationship between pressure, production and injection.

Material balance studies help us predict future trends of production based on production history, help us study the reservoir drive mechanism, and it can also analyze the effectiveness of water or gas injection

It is a quick-reference tool, and its main drawback is that it does not take into account reservoir heterogeneity. Which is why for more detailed analyses, reservoir simulation studies are carried out.

Reservoir simulation helps us view the effects of production and injection plans in the past, as well as helps us forecast future production trends

In simulation, the entire reservoir is converted into a cyber grid, and using processed seismic, geological and petrophysical data, the model is made to resemble the reservoir as best as possible.

We can then play with well positioning, and consider all scenarios to analyze what would be the best possible well placement

We can also alter the production, and even introduce IOR/EOR scenarios to see the effect on production and recovery

What we can do only once in the field, we can run hundreds of such scenarios on a simulation model and then choose the best case.

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SIMULATION OF MAKUM-N-HAPJANOil Saturation 2003-04-01 J layer: 23

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Set Economic Objective

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Choose Optimum Operation

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In both the cases shown previously, it was seen that the production rate was in a state of decline.

Using effective reservoir management by planning optimum IOR methods, the decline was arrested, and in the case of NHK 79 block, the reservoir was rejuvenated to production levels of 30 years ago.

These cases highlight the role of effective reservoir management in maximizing production and recovery.

Pushing new frontiers does not only refer to unexplored frontiers, indeed, pushing recovery figures higher than what was previously thought possible is also breaking the barriers which were established earlier.

“What stops us is not the wall, but our unwillingness to climb it.”

SIBSAGAR

MECHAKI

NORTH LAKHIMPUR DHAKUAKHANA

MAJDEURI GAON

GARMURBIHPURIA

BIHPURIANIJLALUKPANIGAON

MADHUPUR

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DIBRUGARHNearest Airport

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EXPLORED & DRILLED

STRUCTURE UNDER EXPLORATION/ TO BE EXPLORED

ARUNACHAL PRADESHASSAMASSAM

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Rank Name Reserves (barrels)

1 Venezuela 290,100,000,000

2 Saudi Arabia 269,800,000,000

3 Canada 175,200,000,000

4 Iran 150,600,000,000

5 Iraq 143,500,000,000

6 Kuwait 104,000,000,000

7 United Arab Emirates 97,800,000,000

8 Russia 88,200,000,000

9 Libya 47,000,000,000

10 Nigeria 37,200,000,000

22 India 5,682,000,000

Total Worldwide 1,392,461,050,000

Reserves Proved (1P)

Total (3P)

Oil initially in Place (MMT) 707 819.9

EUR of Oil (MMT) 182.7 262.5

Oil Reserves (MMT) 37.8 117.6

Reserves to production ratio 10.9 34.0

Non-associated GIIP (MMm3) 85017.4 100141.6

Remaining producible NA gas (MMm3)

34723.8 61717.9

Production (2011-12)

Crude Oil 4.3267 MMSKL

Natural Gas 2.408 BCM