SPE 59551

Role of Geoscience and Engineering Software in Reservoir Management

Abdus Satter, SPE, Satter & Associates; James O. Baldwin, SPE, Baldwin Associates; Rich Jespersen, Consultant

Copyright 2000, Society of Petroleum Engineers Inc.

This paper was prepared for presentation at the 2000 SPE Permian Basin Oil and Gas
Recovery Conference held in Midland, Texas, 2123 March 2000.
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Abstract
Integrated geoscience and engineering software plays a key
role in providing reservoir performance analysis, which is
needed to develop management plan, as well as to monitor,
evaluate, and operate the reservoir. As opposed to only one
reservoir life, the software can simulate many lives for the
reservoir under different scenarios, and thus provide a very
powerful tool to optimize reservoir operations.
This presentation will discuss how to build an integrated
geoscience/engineering reservoir model, which dictates the
accuracy of the computed performance results, and illustrates
the role that software plays in reservoir management with the
following examples:
Newly discovered offshore oil field
How to create an economically viable development plan
i.e., natural depletion, or natural depletion augmented by water
injection, and well spacing requiring the number of wells and
platforms, based upon simulation studies and economic
analyses?
Nigerias North Apoi /Funiwa Field
How did a team of geoscientists and engineers evaluate,
using integrated software, the past and future reservoir
performance under various operating conditions, and more
than double the reserves of this mature offshore field?
Waterflood Project Development
How to engineer an economically viable waterflood
development plan for a primary depleted reservoir,
considering peripheral and patterns floods?
It was concluded that integrated software is now playing a
key role in reservoir management. Software provides the
opportunity to quickly and inexpensively test the various ways
to produce a field. In addition, software can be effectively

utilized to choose the most economically viable way to exploit

an asset.

Introduction
Reservoir management can be defined as the process used to
add value to the Companys assets by managing them in the
context of the upstream, midstream and downstream
businesses. The goal is to maximize profits by optimizing
recovery while minimizing capital investments and operating
expenses (Figure 1) 1,2 .
Sound reservoir management practice involves goal
setting, planning, implementing, monitoring, evaluating, and
revising unworkable plans. Success of a project requires the
integration of people, technology, tools and data and multidisciplinary professionals working together as a wellcoordinated team.
Integrated computer software plays a key role in providing
reservoir performance analysis, which is needed to develop a
management plan, as well as to monitor, evaluate, and operate
the reservoir 3 . As opposed to only one reservoir life, the
software can simulate many lives for the reservoir under
different scenarios (Figure 2), and thus provide a very
powerful tool to optimize reservoir operations. It is also useful
in day-to-day operational activities.
A major breakthrough in reservoir modeling has occurred
with the advent of integrated geoscience (reservoir
description)
and
engineering
(reservoir
production
performance) software designed to manage reservoirs more
effectively and efficiently. Several services, software and
consulting companies have developed and are marketing
integrated software installed on a common platform (Figure
3). Users from different disciplines can work with the
software cooperatively as a basketball team, rather than
passing their data/results like batons in a relay race.
Results
This presentation will illustrate how geoscience and
engineering data and computer software can be integrated to
analyze reservoir performance under various scenarios for
developing economically viable projects. The following
examples are presented to show the use of computer software
for:

SATTER, BALDWIN & JESPERSEN

Development Plan for a New Oil Field

Revitalization Plan for a Mature Oil Field
Waterflood Project Development Plan

EXAMPLE 1 Newly Discovered Offshore Oil Field

This example shows how to create an economically viable
development plan i.e., natural depletion, or natural depletion
augmented by water injection. We also look at varied spacing
for wells based upon simulation studies and economic
analyses for all development scenarios.
An offshore oil field, analogous to many Gulf Coast
reservoirs, was discovered by rank wildcat Well No. 1 (Figure
4) 1 . Four additional wells, Wells 2, 3, 4 and 5, were drilled
to delineate the field. A drill stem test was performed at the
discovery well, and the results indicated two productive zones.
Well No. 4 was a dry hole, and Well No. 3 penetrated the oilwater contact. The available data indicated that this field has a
significant amount of potential reserves.
An integrated team consisting of geologists, geophysicists,
petrophysicists, and structural, reservoir, drilling, completion,
and equipment engineers, and other professionals was charged
by the management with developing an economically viable
plan for the reservoir.
This case illustrates the results of commercially available
reservoir simulation software in making a development plan
for this field.
The goal was to determine the optimum well spacing and
recovery scheme. This required building an integrated
reservoir model and using it to predict reservoir production
performance under various scenarios. Finally, an economic
evaluation of each scenario determined the preferred plan.
A 30x23x6-grid model was developed, having 2 layers in
the upper sand and 3 layers in the lower sand, with an
impermeable layer separating the two sands. Simulation runs
were made with an active aquifer to predict field-wide primary
reservoir performance for 40, 80, 120 and 160-acre well
spacing (Figure 5).
The results, presented here, show that larger spacing
require longer life, with little effect on ultimate oil recovery.
Note that the simulation runs were initiated with production
from the bottom sand, and each well was recompleted to the
top sand member when it became uneconomic.
An additional run was made using 160-acre well spacing
for initiating primary depletion, followed by 80-acre, 5-spot
infill waterflooding after two years. Water injection was
initiated in the bottom sand and then recompleted to the top
sand when all production wells were plugged back to the top
sand. The production performance of this case is compared
here with the 160-acre depletion case (Figure 6). The oil
recovery from the waterflood operation was computed to be
more than double the primary recovery.
Using estimated production, capital, operating expenses,
and other financial data, economic analyses of the primary and
waterflood development cases were made. Results are shown
in Table 1, which provided management with several

SPE 59551

economic criteria upon which to base their decision. The

waterflood case shows the highest oil reserves, DCFROI,
NPV, and PWI and the lowest development costs per barrel of
oil. Therefore, earlier waterflood appears to offer the most
economic means to exploit the field.
EXAMPLE 2 Nigerias North/ Apoi/Funiwa Offshore Oil
Field
This example shows how a team of geoscientists and
engineers evaluate, using integrated software, the past and
future reservoir performance under various operating
conditions, and more than double the reserves of this mature
offshore field.
The mature North Apoi/Funiwa Field, operated by Texaco
Overseas
(Nigeria)
Petroleum
Company
Unlimited
(TOPCON) is located offshore Nigeria 4 . Multiple reservoirs,
including the Ewinti and the Ala series have been producing
for more than 20 years.
Due to declining production and uncertainty in the
recovery efficiency, an integrated team of geoscientists and
engineers from TOPCON, Nigerian government organizations,
and Texaco E & P Technology Department were charged in
1995 to review the field's performance and recommend future
direction.
The team had to face the challenges of dealing with mature
reservoirs having declining production, increasing operating
cost, and unrealistically high recovery factors. It was urgently
needed to investigate ways to add value to this asset.
The systematic approach utilized computer software for
classical reservoir performance analysis. Then a computer
model of the reservoir was created, integrating all available
geoscience and engineering data. The past performance of the
reservoir was analyzed, and predictions were made for future
performance under various operating scenarios.
The team consisted of multi-disciplinary professionals
from TOPCON, the Nigerian Government and Texacos E&P
Technology Department (Table 2). Except for an engineer and
a geophysicist, EPTD specialists served as needed basis.
Support and encouragement of management were critical to
the ultimate success of the project.
Most of the computing was done with a commercially
available integrated software package, allowing integration of
data and use of multiple applications for reservoir
characterization and reservoir performance models from a
common platform.
The estimated original oil-in-place values from classical
material balance analyses and simulation techniques are
presented in Figure 7 for the studies that were performed in
three phases. As shown, each phase accounted for two
reservoirs. Both the classical material balance and simulation
results are substantially greater than the booked value prior to
the study. The primary reason for this discrepancy was new
data from 3-D seismic mapping, which resulted in larger
reservoirs than previously mapped.
The placement of the proposed horizontal wells was
determined by examining the simulator-calculated oil
saturation distributions throughout the expected life of the

SPE 59551

ROLE OF GEOSCIENCE AND ENGINEERING SOFTWARE IN RESERVOIR MANAGEMENT

reservoir. Results of this analysis are shown in Figure 8 for a

selected layer. The End-of-Lease Base Case shows significant
remaining producible oil. By placing two horizontal wells at
the Present time, and running the model again to end-of-lease,
most of this oil is seen to be recoverable.
The estimated reserves increases (in millions of stock tank
barrels) from the simulation studies are shown in Figure 9.
These new estimated reserves are substantially more than the
booked values. Each barrel represents several dollars per
barrel profit margin to the company. Within 9 months of the
start of the Phase 1 study, the recommended two horizontal
wells were quickly approved, drilled, completed, and came on
production as predicted, validating the results of the study.
This kind of reservoir management study and the resulting
added value to Texaco was made possible by the integration of
professionals, data, technology, and computer software, and
alliance of organizations.
EXAMPLE 3 - Waterflood Project Development
This example illustrates how to engineer an economically
viable waterflood development plan for a primary depleted
reservoir (hypothetical, but akin to real life reservoirs),
considering peripheral and pattern floods.
The field that was discovered many years ago is now
depleted 3,5 . It consists of a simple domal structure, and five
of the nine wells drilled were producers (Figure 10). Primary
producing mechanisms were fluid and rock expansion
(reservoir pressure above the bubble point), solution gas drive
and limited natural water drive. Data available is limited.
Even the gas, oil and water production data are somewhat
unreliable. Reservoir pressures were not routinely monitored.
This is typical when dealing with old, mature fields.
An integrated team of geoscientists and engineers was
charged by the management to review the past performance
and investigate waterflood potential of this field. The teams
approach was to:
Build an integrated geoscience and engineering
model of the reservoir using available petrophysical,
and production data and correlations for fluid PVT
and relative permeability,

Carry out a conceptual simulation of full-field

primary performance without history matching since
no historical pressure data or reliable production
volumes could be obtained,

Forecast performance under peripheral and pattern

waterflood,

Finally, an economic evaluation of each scenario to

determine the preferred plan.

This example presents the results of the study. Although

the field is not real, much can be learned about how to
engineer a waterflood project, even with incomplete data.

Development cases using peripheral and pattern

waterflooding are illustrated in Figure 11. Performance
forecasts for oil recovery in each case were made using
commercially available integrated software. Ten years of
primary and twenty years of waterflood oil recovery are
shown in Figure 12 for each case. Significantly higher
recoveries are predicted for cases 2 and 5, which have more
injectors and producers than the other cases. Case 3, with only
one producer shows the least recovery. Or in other words,
recoveries are directly related to the number of production
wells.
Figure 13 compares recovery vs. water injected and shows
that Case 5 is the least efficient recovery scheme when
injected water requirements are considered.
More oil recovery with more injection and production
wells may not provide the best economically viable scheme.
That can only be determined by economic analysis of the
cases considered. The five waterflood design cases were
analyzed to determine the most economically viable project.
The results of the analysis are presented in Table 3. They
provide management with several economic criteria upon
which to base their decision.
The limited cases considered here do not necessarily give
the answer as to how best to develop the field for
waterflooding. These cases simply demonstrate that more
than one way of developing the field needs to be investigated
in order to determine the optimum development plan.

Conclusions
1. Integrated software is now playing a key role in reservoir
management.
2. Software provides the opportunity to both quickly and
inexpensively test the various ways to produce a field.
3. Finally, software can be effectively utilized to choose the
most economically viable way to exploit an asset.
Acknowledgements
We thank Texaco Inc. for its permission to publish this paper.
References
1. Satter A., Varnon, J. E. and Hoang, M. T.: Integrated
Reservoir Management, JPT (Dec. 1994).
2. Satter, A. and Thakur, G. C.: Integrated Petroleum
Reservoir Management, PennWell Books, Tulsa,
Oklahoma (1994).
3. Satter, A., Baldwin, J. O. and Jespersen, R. E. : Computer
Assisted Reservoir Management, PennWell Books, Tulsa,
Oklahoma (2000).
4. Satter, A., Wood, L. R. and Ortiz, R. : Asset
Optimization Concepts and Practice, JPT (August 1988)
5. Thakur, G. C. and Satter, A.: Integrated Waterflood Asset
Management, PennWell Books, Tulsa, Oklahoma (1998).

SATTER, BALDWIN & JESPERSEN

SPE 59551

Table 1 - Economic Evaluation for Example 1

Parameters
Investment
$MM
Reserves
MMSTBO
Economic Life
Years
Payout
Years
Disc. Cash Flow Return
on Investment
(DCFROI) %
Net Present Value
(NPV) $MM
Present Worth Index
(PWI)
Development Costs
$/BO

Primary Development
80 - Acres
120 - Acres
222
202

40 - Acres
325

160 - Acres
162

Waterflood
80 - Acres
220

40.3

40.2

38.7

38.0

81.3

11

15

15

22

5.1

4.8

4.7

4.7

4.9

29.0

38.8

35.8

40.4

42.7

112

161

144

157

309

1.63

2.31

2.15

2.49

3.64

5.95

3.91

3.62

2.87

2.18

Table 2 - Example 2 Team Members

TOPCON
Engineers - 3
Geologist - 1
Nigerian Government Professionals
Engineers -2
Texaco EPTD Specialists
Geophysics - 1
Computer Support --1
Geostatistics - 1
Horizontal Wells - 4
Texaco Management Support and Commitment

Case - 1
Capital Investment
$MM
Reserves
MMSTBO
Project Life
Years
Payout
Years
Disc. Cash Flow Return
on Investment
(DCFROI) %
Net Present Value
(NPV) $MM
Profit - to - Investment
Ratio
Present Worth Index
(PWI)
Development Costs
$/BO

Geophysicist - 1

Petrophysics -1
Project Management -1
Reservoir Engineering - 2
3D Visualization 2

Table 3 - Economic Evaluation Results for Example 3

Case - 2
Case - 3
Case - 4

Case - 5

1.853

4.882

0.973

3.484

8.799

1.965

5.138

1.378

3.178

5.105

15

15

15

15

15

2.58

1.78

2.44

2.74

2.28

69.64

131.15

80.12

87.83

104.84

9.454

34.702

7.013

16.721

35.184

16.88

16.44

23.32

13.91

8.74

5.66

7.76

8.02

5.90

4.35

0.94

0.95

0.71

1.10

1.72

SPE 59551

ROLE OF GEOSCIENCE AND ENGINEERING SOFTWARE IN RESERVOIR MANAGEMENT

s t i f o rP

Maximize Profits

$ $$

Capital Investments

Figure 1 -Reservoir Management Goal

Prediction

rate

History

Infill & Waterflood

Depletion
time
Figure 2 - Performance Analysis & Forecasts

Waterflood

SATTER, BALDWIN & JESPERSEN

SEISMIC

SPE 59551

GEOLOGICAL

LOGGING
CORING
DATA
FLUID
PRODUCTION
WELL TEST

PC

RESERVOIR
PERFORMANCE

OUTPUT

RESERVOIR
CHARACTERIZATION

UNIX WORKSTATION
Figure 3 - Example of Integrated Software

4700

#2
4300

4400

#5
4800
4600

#3

4100

#1
4200

4300
4400
4500
4600

#4
4800

Figure 4 - New Field Development in Example 1

4700

SPE 59551

ROLE OF GEOSCIENCE AND ENGINEERING SOFTWARE IN RESERVOIR MANAGEMENT

40

30

20
40 Acre
80 Acre
120 Acre
160 Acre

10

0
0

6
8
Time, Years

10

12

14

Figure 5 - Effect of Well Spacing on Recovery In Example 1

100
Cumulative Oil Production, MMSTB

Cumulative Oil Production, MMSTB

50

80

60

40

Waterflood
Depletion

20

0
0

10
15
Time, Years

Figure 6 - Cumulative Oil Production vs. Time In Example 1

20

25

SATTER, BALDWIN & JESPERSEN

Ala-5
Ewinti-7

500

400

400

200

200

100

100

A
W
IL
O

TO
R Y
O
I UD
P R ST

Phase I

M
SI

LA

TO

261

267

300
200

136

181

152

110

100

TO
R Y
IO D
P R STU

M
SI

LA

TO

TO
R Y
I O UD
P R ST

Phase II

300

300

312

500

400

600

500

600

IL

508

565

600

Ala-7
Ewinti-6

Ewinti-5

IL

Ala-3

SPE 59551

SI

Phase III

Figure 7 - Original Oil In Place in Example 2

HORIZONTAL WELLS
Figure 8 - Oil Saturation Distribution in Example 2

LA

TO

ROLE OF GEOSCIENCE AND ENGINEERING SOFTWARE IN RESERVOIR MANAGEMENT

Ala-3
Ewinti-5

MMSTBO
45

45

40

40

35

35

35

30

30

30

25

25

20

20

15

15

15

10

4.0

3.9

20

2.8

10

D In
W rill f i l l
o r in
ko g /
ve
rs

Ga
s

W
In ate
jec r
tio
n

Lif
t

Dr I n f i
o r illin l l
ko g
ve /
rs

W
In ate
jec r
tio
n

Lif
t
Ga
s

Dr I n f i
o r illin l l
ko g
ve /
rs
W

0.8

Phase I

12.5

Phase II

Phase III

Figure 9 - Reserves Addition Summary in Example 2

Top Structure Map

-4
2

W-9

-42 70

2
-4

-4
3
90

00

W-8

80
-42

80

- 4 25

W-3
-4 2

40

- 42 3

80

-4 2 7

W-2
-42

-4220

-4 2 8
0

W-1

-4 2 4

- 42 30

W-4

W-5

0
28
-4

0
28
-4

-4 2 50

W-8

-4

270

-4

W-7

9
-4 2

29
0

-4

28
0

-43

00

Figure 10 - Waterflood Development Project in Example 3

W
In ate
jec r
tio
n

10

25

13.1

Lif
t

43.3

40

45

Ala-7
Ewinti-6

Ala-5
Ewinti-7

Ga
s

SPE 59551

10

SATTER, BALDWIN & JESPERSEN

SPE 59551

Case 2

Case 3

Case 4

Case 1
Case 2
Case 3
Case 4
Case 5

Case 5

Peripheral 5
Peripheral 9
Pattern
1
Pattern
4
Pattern
12

Figure 11 - Development Cases in Example 3

Cum. Oil Produced (MSTB)

12000
10000
Case-5
Secondary

8000
6000

Case-2

Primary

Case-4
Case-1
Case-3

4000
2000
0
0.00

Depletion

5.00

10.00

Depletion
Case-3

15.00
TIME (Years)
Case-1
Case-4

20.00

25.00
Case-2
Case-5

Figure 12 - Case Comparison for Cumulative Oil Recovery in Example 3

30.00

or
ct
je

In

Pr

od

uc

er

Case 1

4
8
4
9
13

SPE 59551

ROLE OF GEOSCIENCE AND ENGINEERING SOFTWARE IN RESERVOIR MANAGEMENT

11

Oil Recovery (fraction)

0.5
0.4
Case-2
Case-4

0.3

Case-5

Case-1
Case-3

0.2
0.1
0
0

0.25

0.5

0.75

PV Water Injected (fraction)

Case-1

Case-2

Case-3

Case-4

Figure 13 - Case Comparison of Oil Recovery vs. Water Injected in Example 3

Case-5