Hydrocarbon Reserve Calculatation

Presented By :-

Rishi Nandan Vashistha (44) Robinu Rose Mathew (45) Sameer Sharma (46)

Agenda
To give a brief view of Hydrocarbon Reserve Estimation Techniques To give a brief view about the reserves and their classifications.

To give a brief view of reserve status categories

Introduction
With this global expansion of the petroleum industry has come ongoing technological development that provides better tools and techniques for analyzing reservoirs and reservoir fluids as well as greater understanding of how reservoir geology affects reservoir performance. The estimation of reserves is more than just a periodic, statutory calculating and reporting of company assets. It is an essential element of investment planning and resource management for every prudent operator. Begins with identifying a drillable prospect, and it continues while the prospect is developed and placed on production

Classification of Reserves
In 1930s API made attempts to standardize classification. Since than evolution of technology has intensified the need for an improved nomenclature to achieve consistency among professionals working with reserve terminology. SPE and WPC drafted a strikingly similar sets of reserve definitions and these were introduced in 1987.

 In 1993 the Petroleum Society of CIM published a monograph containing a report on reserve definitions. In 2000 SPE, WPC and AAPG jointly approved and published Petroleum Resources Classification and Definitions. The Petroleum Society published Definitions and Guidelines for Estimating and Classifying Oil and Gas Reserve in 2002.

Reserves Definition According to the Classification

Total PetroleumInitiallyinPlace: It is the quantity of petroleum which is estimated to exist originally in naturally occurring accumulations, plus those quantities in accumulations yet to be discovered on a given date. It may be subdivided into 1. Discovered Petroleum-Initially-In-Place 2. Undiscovered Petroleum-Initially-In-Place

Discovered-Petroleum-Initially In-Place
It is that quantity of petroleum which is estimated to be contained in known accumulation, plus those quantities already produced there. Discovered Petroleum initially-in-place may be subdivided into commercial and sub commercial categories, with the estimated potentially recoverable portion being classified as: a) Reserves (commercial) I. Proved II. Proved plus probable III Proved plus probable plus possible b) Contingent resources (Sub Commercial) I. Low Estimate II. Best estimate III High Estimate c) Unrecoverable

a) Reserves
Those quantities of oil and gas anticipated to be economically recoverable from discovered resources from a given date forward are classified as reserves (published in draft by the Society of Petroleum Engineers (SPE) and World Petroleum Congress (WPC)). In general, quantities must not be classified as reserves unless there is an expectation that the accumulation will be developed and placed on production within a reasonable timeframe.

I. Proved Reserves
Proved reserves are those quantities of petroleum which, by analysis of geological and engineering data, can be estimated with reasonable certainty to be commercially recoverable, from a given date forward, from known reservoirs and under current economic conditions, operating methods, and government regulations. Proved reserves can be categorized as developed or undeveloped.

If deterministic methods are used, the term reasonable certainty is intended to express a high degree of confidence that the quantities will be recovered. If probabilistic methods are used, there should be at least a 90% probability that the quantities actually recovered will equal or exceed the estimate.

II. Proved Plus Probable

Probable reserves are those Unproved Reserves* which analysis of geological and engineering data suggests are more likely than not to be recoverable. In this context, when probabilistic methods are used, there should be at least a 50% probability that the quantities actually recovered will equal or exceed the sum of estimated proved plus probable reserves. *Unproved reserves may be estimated assuming future economic conditions different from those prevailing at the time of the estimate.

III. Proved Plus Probable Plus Possible

Possible reserves are those unproved reserves which analysis of geological and engineering data suggests are less likely to be recoverable than probable reserves. In this context, when probabilistic methods are used, there should be at least a 10% probability that the quantities actually recovered will equal or exceed the sum of estimated proved plus probable plus possible reserves.

b) Contingent Resources
Contingent resources are defined as those quantities of oil and gas estimated on a given date to be potentially recoverable from known accumulations but are not currently economic. Contingent resources include, for example, accumulations for which there is currently no viable market. It can be categorize in three types : I. Low Estimate II. Best estimate III. High Estimate

 Low Estimate: This is considered to be a conservative estimate of the quantity that will actually be recovered from the accumulation. If probabilistic methods are used, this term reflects a P90 confidence level. Best Estimate: This is considered to be the best estimate of the quantity that will actually be recovered from the accumulation. If probabilistic methods are used, this term is a measure of central tendency of the uncertainty distribution (most likely/mode, P50/median, or arithmetic average/mean.) High Estimate: This is considered to be an optimistic estimate of the quantity that will actually be recovered from the accumulation. If probabilistic methods are used, this term reflects a P10 confidence level.

c). Unrecoverable
Unrecoverable resources, whether discovered or undiscovered, are neither technically possible nor economic to produce. They represent quantities of petroleum that are in the reservoir after commercial production has ceased, and in known and unknown accumulations that are not deemed recoverable due to lack of technical and economic recovery processes.

2. Undiscovered Petroleum-InitiallyIn-Place
Undiscovered resources are defined as those quantities of oil and gas estimated on a given date to be contained in accumulations yet to be discovered. The estimated potentially recoverable portion of undiscovered resources is classified as prospective resources. a). Prospective resources

I. Low Estimate II. Best estimate III High Estimate

b). Unrecoverable

a). Prospective resources

Prospective resources are defined as those quantities of oil and gas estimated on a given date to be potentially recoverable from undiscovered accumulations. They are technically viable and economic to recover.

 Low Estimate: This is considered to be a conservative estimate of the quantity that will actually be recovered from the accumulation. If probabilistic methods are used, this term reflects a P90 confidence level. Best Estimate: This is considered to be the best estimate of the quantity that will actually be recovered from the accumulation. If probabilistic methods are used, this term is a measure of central tendency of the uncertainty distribution (most likely/mode, P50/median, or arithmetic average/mean.) High Estimate: This is considered to be an optimistic estimate of the quantity that will actually be recovered from the accumulation. If probabilistic methods are used, this term reflects a P10 confidence level.

b). Unrecoverable
Unrecoverable resources, whether discovered or undiscovered, are neither technically possible nor economic to produce. They represent quantities of petroleum that are in the reservoir after commercial production has ceased, and in known and unknown accumulations that are not deemed recoverable due to lack of technical and economic recovery processes.

Reserves Status Categories

Reserves status categories define the development and producing status of wells and reservoirs. 1. Developed Reserves: Developed reserves are expected to be recovered from existing wells including reserves behind pipe. Improved recovery reserves are considered developed only after the necessary equipment has been installed, or when the costs to do so are relatively minor. Developed reserves may be subcategorized as producing or nonproducing.

a) Producing: Reserves subcategorized as producing are expected to be recovered from completion intervals that are open and producing at the time of the estimate. Improved recovery reserves are considered producing only after the improved recovery project is in operation.

b) Nonproducing: Reserves subcategorized as nonproducing include shut-in and behind-pipe reserves. Shut-in reserves are expected to be recovered from (a) completion intervals that are open at the time of the estimate but that have not started producing, (b) wells which were shut in for market conditions or pipeline connections or (c) wells not capable of production for mechanical reasons.

2. Undeveloped reserves are expected to be recovered (a) from new wells on undrilled acreage, (b) from deepening existing wells to a different reservoir, (c) where a relatively large expenditures required to (I) recomplete an existing well or (II) install production or transportation facilities for primary or improved recovery projects.

Classification of Reserves followed by ONGC

The professional expertise of ONGC was imbibed from the systems, approaches and regulations followed in erstwhile USSR. Therefore the classification of reserves followed in USSR was adopted with modifications suiting to Indian environment. The reserves were classified as- Geological Reserves (Inplace volumes of hydrocarbons) and Recoverable reserves. The reserves were divided into A, B, C1, C2 and Z -balance categories. After global changes in petroleum industry, the ONGC adopted a classification similar to that recommended by SPE, WPC and AAPG.

Periodicity of the Estimates

1. Prior to drilling of exploratory well 2. During and after appraisal and delineation drilling 3. After trial production data becomes available 4. Prior to development strategy optimization 5. During production 6. When the production is declining 7. At depletion

Range of Recovery Estimates

Estimated Ultimate Recovery: Estimated ultimate recovery (EUR) is an approximation of the quantity of oil or gas that is potentially recoverable or has already been recovered from a reserve or well.

Cumulative production: The total amount of oil and gas recovered from a reservoir as of a particular time in the life of the field. Cumulative production can be referenced to a well, a field, or a basin.

Ranges in estimates of ultimate recovery during life of reservoir

The Methods to follow

Volumetric Estimates
Performance Techniques Material balance approach Decline curve analysis Monte-Carlo Method

Volumetric Estimates
Used early in the life of a reservoir, before sufficient production and/or pressure data to use the performance method, Results from their use might be subject to considerable uncertainty, Depends on the geologic setting and the amount and quality of geologic and engineering data.

Estimation of OIL Reserves

Q0 = 7758 x x S0 x h x A 0

where, 7758 = bbl/acre feet (converts acre-feet into STB, Stock Tank bbl) Q0 = Quantity of Oil in Barrels = Porosity of reserve in fraction S0 = Saturation fraction h = Average effective thickness in feet A = Area of pool Acres 0= Formation volume factor for Oil

Estimation of GAS Reserves

Qg = 43560 x x Sg x h x A g

Where,

43560 = ft3 / acre feet (1 acre = 43,560 sq. feet) Qg = Quantity of gas in Standard Cubic Feet = Porosity of the reservoir in fraction Sg = Gas saturation in fraction h = Average effective thickness in feet A = Area of pool in acres g = Formation volume factor for Gas

The Methods to follow

Volumetric Estimates

Performance Techniques Material balance approach

Decline curve analysis
Monte-Carlo Method

Performance Techniques
Material Balance Approach
It is a computational procedure, treating the reservoir as though it were a tank. These methods can be used when there are sufficient historical reservoir pressure and production data to perform reliable calculations. The method is based on the premise that the Pore Volume of a reservoir remains constant or changes in predictable manner with reservoir pressure drop.

 The data used for this approach consist of the following :

Production volume Reservoir Pressure & Temperature Fluid Analysis Data Log Data ,Core data Drive mechanism

The Equation
A general material balance equation that can be applied to all reservoir types was first developed by Schilthuis in 1936.

Expansion of oil in the oil zone + Expansion of gas in the gas zone + Expansion of connate water in the oil and gas zones + Contraction of pore volume in the oil and gas zones + Water influx + Water injected + Gas injected = Oil produced + Gas produced + Water produced

Mathematically

where,
Np = cumulative oil production, STB Bt = formation volume factor, total, RB/STB Bg = formation volume factor, gas, Rcf/sc Rp = cumulative (producing) gas/oil ratio, scf/STB Rsi = initial solution gas/oil ratio, scf/STB Bw = formation volume factor, water, RB/STB Wp = cumulative water production, ST Ni = oil initially in place, STB or m Bt = formation volume factor, total, RB/STB Bti = initial total formation volume factor, RB/STB m = ratio of initial gas cap volume to initial oil column volume, dimensionless Bgi = initial formation volume factor, gas, Rcf/scf or RB/scf We = cumulative water influx, RB

The Methods to follow

Volumetric Estimates Performance Techniques Material balance approach

Decline curve analysis

Monte-Carlo Method

Decline Curve Analysis

Analysis of Production Decline Curve can provide estimation of three important items.
Remaining Oil and gas reserves. Future expected production rate. Remaining productive life of well or reservoir.

What it is
A decline curve of a well is simply a plot of the wells production rate on the y-axis versus time on the xaxis. The plot is usually done on a semilog paper; i.e. the y-axis is logarithmic and the x-axis is linear. Three types of Decline Curves
Exponential Curve Hyperbolic Curve Harmonic Curve

Exponential Curve
When the data plots as a straight line, it is modeled with a constant percentage decline exponential decline. The equation of the straight line on the semilog paper is given by:

q= qi e-Dt
Where,
q = wells production rate at time t, STB/day qi = wells production rate at time 0, STB/day D = nominal exponential decline rate, 1/day t = time, day

Hyperbolic Curve
When the data plots concave upward, it is modeled with a hyperbolic decline

The equation of the hyperbolic decline is given by:

q = qi (1+bDit) -1/b
Where,
q = wells production rate at time t, STB/day qi = wells production rate at time 0, STB/day Di = initial nominal exponential decline rate (t = 0), 1/day b = hyperbolic exponent t = time, day

Harmonic Curve
A special case of the hyperbolic decline is known as harmonic decline. The equation of the straight line on the semilog paper is given by: q = qi 1+ bDit

The Methods to follow

Volumetric Estimates Performance Techniques Material balance approach Decline curve analysis

Monte-Carlo Method

Monte Carlo Method

A method of random sampling the Stochastic input values to provide a picture of the output distribution values and probabilities The model takes these inputs and calculates the outputs These outputs are recorded The process is repeated x time until sufficient repeat samples are collected to provide a probability breakdown for a range of output values

The Equation
Hydrocarbon in Place = GRV x N/G x Porosity x Sh FVF
Gross Rock volume - amount of rock in the trap above the hydrocarbon water contact N/G - net/gross ratio - percentage of the GRV formed by the reservoir rock ( range is 0 to 1) Porosity - (typically 5-35%) Sh - hydrocarbon saturation FVF - formation volume factor - oil shrinks and gas expands when brought to the surface. The FVF converts volumes at reservoir conditions (high pressure and high temperature) to storage and sale conditions

References
Chapter 18, Estimation of Primary Reserves of Crude Oil, Natural Gas, and Condensate. Ron Harrell, SPE, Ryder Scott Co. and Chap Cronquist, SPE, Consultant.

Chapter 11, Sec 11.4-11.7, Bassiouni, Z: Theory, Measurement, and Interpretation of Well Logs, SPE Textbook Series, Vol. 4, (1994) Corelab, Fundamentals of Core Analysis, Houston, TX (1983), Chapter 7

Thats all folks!!!!!!!!