Tim Carr - West Virginia University

Role of Geology in Field Development Develop static geological model of the reservoir(s) Analyze relevant geoscience and engineering data, integrate them into model Interface with engineering to develop a dynamic simulation model of the reservoir(s) Contribute to and participate in reservoir management decisions 2

Result A Reservoir Model 3

Horizon Mapping Fault Mapping The data for performing these steps are usually provided from seismic and wellogs Velocity Modeling 4

Analog Data Base Geological Objects 5 The basis for performing these steps is provided by geological knowledge and well data Objects Into Model

Seismic Guided Mapping Property Mapping Flow Grid Intrinsic properties are evaluated from seismic, log and core data. Upscaling becomes ever less important with increasing computer power. 6

Reservoir Characterization Reservoir Monitoring Production Management Economic Analysis Field Planning And Development Goal: To Produce Fossil Hydrocarbons As Efficiently as Possible 7

Reservoir management is a continually ongoing process. Although an artist s rendition and thus lacking engineering accuracy, it clearly shows the essential geological and production technological details. It is worthwhile to observe and try to understand the various well placements. 9

All Fields Are Managed Some Just Better Than Others Technical Reserves, Depth, Geology Climate Corporate, Political, Business 10

Discovery of new fields Discovery of new reservoirs in known fields Extension of known fields Redefinition of reserves Economics Technology Reservoir management applies to known fields No need to find them Infrastructure on place Markets available Technology is cost effective 2/3 of oil remains after secondary recovery 13

Geophysics Land Geology Computer Technology "Digital Data" Drilling Production Engineering 14

Reservoir description Best reservoir model Reservoir communication Simulation methods Better predictions Enhanced oil recovery methods Move trapped oil Sweep improvement Surfactant Polymer Alkaline Foam Surfactant Polymer Water Oil Monitoring Find best drilling targets 15

Application of Computer Systems in Petroleum Geology, Geophysics and Reservoir Engineering Relational Database Management Systems Mapping Packages ARC-GIS, Kingdom, PETREL, PETRA Reservoir Simulators - CMG Impact of Technology Integration Approaches to Reservoir Description Operators: Questions and Constraints 16

Assemble Digital Database Develop an Integrated Reservoir Characterization Evaluate Potential Reservoir Management Plans Present Results to Management 17

Information loss Information discontinuities within an organization Lack of continuity in personnel Lack of continuity in ownership Perceptions Biases about characteristics and performance Perceived low potential upside Limited Resources Capital, Time and Personnel 18

A comprehensive and detailed understanding of the reservoir rocks, reservoir fluids and the aquifer is critical to optimize hydrocarbon recovery and maximize income. Rock-pore-fluid system. Experience indicates that such knowledge is not gathered until a critical technical and economic project failure is on the horizon. 19

Regional Setting External Geometry Internal Geometry Rocks Pay, Continuity Pores Porosity, Permeability, Saturation Properties Fluids Distribution of Hydrocarbons and Water 20

Reservoir Framework Structure, Zonation, Faults, Fractures, Barriers Distribution of Rock Properties Net Pay, Porosity, Permeability, Capillary Properties Rock/Fluid Properties Connate Water Saturation, Oil/Gas Saturation, Relative Permeability, Fluid Contacts Aquifer Size, Strength 21

Appraisal Hydrocarbons in Place Remaining Reserves Rates (Hydrocarbons and Water) Drive (Aquifer - Size/Strength) Planning Optimum Depletion Plan Risk Assessment 22

The exploration phase involves drilling of discovery wells. The additional wells are referred to as appraisal or delineation wells. They are required to provide more information on the size, shape and petroleum volumes in the field. On declaration of a commercial discovery, a development plan is put in place. The type of development depends costs, environmental conditions and prevailing legislation. 23

Exploration & Production Sequence Application & Award of Permit - Licencing $m. 0-10+ Years 0+ Exploration Prospect Identification 1-3 1 Exploration Exploration Drilling 1-20 1+ Appraisal of Discovery - reduce the uncertainties 2-15+ 1-3 Development FEED studies design & build surface facilities, development drilling Production 100-1000 s 1-4 10+ 24

Exploration Development Gross Revenues Tax & Royalty Allowances Operating Net Revenue 25

Drilling in Oklahoma in the 1920s 26

Finding- Exploration: lease costs, exploration and appraisal wells seismic, overheads ($3-5/bbl) Developing- production wells, surface plant, export pipelines ($17/bbl) Production-lifting and related operating costs ($8/bbl) Transportation and Tariff- export pipeline, shipping costs ($2/bbl) Abandonment: decommissioning costs at the end of production ($2/bbl) 30

Development Geology Goal to Produce the Reservoir Efficiently Develop Static Geomodel Contribute to Dynamic Simulation Model Reiterate Continued 31

Good Reservoir Management Involves Integration of Disciplines Be Involved From the Beginning Invest and Collect Data Digital Data Reservoir Management Represents the Majority of a Fields/Reservoirs Life, Costs and Income Be Prepared to Rethink Geologic Model 32

Assignments Reading for this week Take a look at PRMS http://geodc.aapg.org/prms_guidelines_nov2011.pdf or http://www.spe.org (Need membership Free as student) Exercise Estimating HC Volumes Due on Wednesday 4/29 Discuss Current Energy Events Read Today in Energy for Thursday (4/23) at http://www.eia.gov/ Be Prepared to Discuss in Class Friday (4/20) Discussion Leader Yousef Almubarak Last Quiz Wednesday 4/29 Open at 1:00pm Close at 11:00 on 5/1 33