01 introduction
- 1. 1 INTRODUCTION Reservoirs, Resources, Reserves (Evaluating Reservoirs, Seals & Pay) PROFESSOR JOHN KALDI AUSTRALIAN SCHOOL OF PETROLEUM UNIVERSITY OF ADELAIDE • Petroleum Systems Review • Risk Assessment • Sources of Geological Data • Traps, Reservoirs, Seals Introduction aps, ese o s, Sea s • E & P Process • Relationship Between Exploration / Production • Understanding Reservoirs • Effective Reservoir Management Methods Introduction Purpose ?………………Objectives?
- 2. 2 Introduction Purpose • To give engineers an understanding of Petroleum Geology, and how the same principles that are applied to exploration and production of hydrocarbons, can be used for the injection and storage of various fluids (eg water, methane, acid gas, carbon dioxide) in the subsurface Objectives • Summarise important reservoir concepts and processes • Review main techniques used to develop oil and gas fields and potential CO2 storage sites • Provide understanding of geological control on reservoir properties and the fundamental principles of fluid movement in the subsurface. • Introduce principle tools used to understand reservoir rocks and fluids, seal evaluation and CO2 storage Reservoir: Rock capable of containing and producing hydrocarbon Seal: Rock capable of retaining a column (thickness) of hydrocarbon P F ti thi k f R i R k ithi th Introduction Pay: Formation thickness of Reservoir Rock within the hydrocarbon column that can be produced economically In general, pay requires a reservoir / seal pair consisting of: • Porous and permeable “reservoir” rock that contains a high enough ratio of hydrocarbon to water (saturation) to be produced economically • Overlain by a low permeability “seal” that can retain an economic volume (column thickness) of hydrocarbon Petroleum Systems Requirements for a petroleum accumulation • Source Rock & Maturation • Migration Path & Timing • Reservoir Rock S l R k Introduction • Seal Rock • Trap ALL of these factors must be present for an oil or gas field to exist. Exploration is the use of scientific principles to locate areas where the probability of all of these factors occurring exceeds the company’s risk threshold for investment.
- 3. 3 CO2 Storage Systems Requirements for a storage system • Source Rock & Maturation • Migration Path & Timing • Reservoir Rock S l R k Introduction Injection Depth Potential Leakage Path • Seal Rock • Trap ALL of these factors must be present for a viable storage site to exist. Exploration is the use of scientific principles to locate areas where the probability of all of these factors occurring exceeds the company’s risk threshold for investment. Oil Industry: A Risk Business = Assessment of Risk • What is probability (= confidence) that SOURCE ROCK is present? P1 • What is probability (= confidence) that RESERVOIR ROCK is present? P2 • What is probability (= confidence) that MIGRATION PATH is present? P3. • What is probability (= confidence) that TRAP is present? P4 • What is probability (= confidence) that SEAL is present? P5 • PS (probability of success) = P1 x P2 x P3 x P4 x P5 • PF (probability of failure) = 1 - PS
- 4. 4 Assessment of Risk: Rangely Field, CO: EOR CO2 Injection Oil Production 1 Km Assessment of Risk • Global Wildcat Exploration Well Success Rate = 1:10 PS = 0.1; PF = 0.9 • Global Production Well Success Rate = 1:3 PS = 0.33; PF = 0.67 What hard data do we normally have? • Cuttings (fractions to few mm) • Sidewall cores (few cm) Assessment of Risk • Conventional cores (15 cm x 10 m) • Fluid samples from RFT/DST
- 5. 5 We need to supplement the hard data with: • Indirect or soft data ‒ seismic, gravity, magnetics, well logs ‒ Analogs Assessment of Risk o Outcrops o Modern depositional environments ‒ Integrated models • A team approach to the project. • Quantified risk assessment • Geophysics – Seismic; gravity; magnetics • Drilled wells – Rock • Core; sidewall core; drill cuttings Sources of Geological Data • Core; sidewall core; drill cuttings – Wireline logs • Analogs – Outcrops – Modern depositional environments • Integrated models What is Seismic? Photo courtesy Philips Research Ultrasound examination during pregnancy Animation courtesy US Department of Energy Collecting seismic data on land
- 6. 6 Truck-mounted Vibroseis (“Thumper”) BobCat-mounted weight drop Offshore seismic Seismic cross-section: Gippsland Basin Seal Rock Fault Seismic imaging uses reflected sound waves to create a picture of underground rock formations. It can show structural and stratigraphic traps, potential reservoirs and seal rocks and other geologic features such as faults. After production of hydrocarbon it can show the areas of depletion. For CO2 storage projects, once injection begins, it can show the location of the CO2. Reservoir Rock
- 7. 7 M-2 M-6 M-3 M-4 M-10 M-9 M-6 M-5 Q-1 3D Seismic Volumes (example from Cooper Basin) Nakanishi and Lang, 2001 • Technical objectives for drilling: – Test concepts (exploration) – Produce / inject fluids (prod.) – Drill to targeted zone – Acquire representative core – Acquire quality log data – Collect other samples (formation fluid, mud gas and cuttings) A i t d t Why drill a well? – Acquire pressure, temp data • Non-technical objectives: – Safe operations – On time – On budget Drill bits: the “business end” of the drilling rig Roller cone drill bits Examples: Tri-cone “milled tooth” (left), Tungsten carbide inserts (right) Fixed cutter drill bit
- 8. 8 Drilling Mud • Provides hydrostatic pressure to prevent formation fluids from entering the well bore • Keeps the drill bit cool and lubricated • Removes drill cuttings Shale shaker removing cuttings from mud Cuttings 2 cm Cuttings Cuttings from shale shaker
- 9. 9 Bagged cuttings drying out in front of diesel radiators Cuttings Cuttings 2 cm Examining Cuttings in laboratory Core• Technical objectives for drilling: – Test concepts (exploration) – Produce / inject fluids (prod.) – Drill to targeted zone – Acquire representative core – Acquire quality log data – Collect other samples (formation fluid, mud gas and cuttings) A i t d t– Acquire pressure, temp data • Non-technical objectives: – Safe operations – On time – On budget
- 10. 10 Core“Hollow” bits for cutting core Fibreglass and aluminium core barrels Core retainer Core Orienting the core: It is important to know “way up” of core. Core is “scribed” with red and black markers; by convention, when core right way up, red mark is on the right; black on left. Plugging the core: The core must be analysed for porosity, permeability and grain density (Routine core analysis); Sometimes, Special Core Analyses (SCAL) is performed. For these tests, small samples (core plugs) are drilled I 1cm Core Interpretation – Dep. Envs.; poro/perm Wave-dominated/Tide-influenced Upper Shoreface. Fluvial-dominated/Tide- influenced Mouthbar. Stacked Fluvial/Tidal Multistory Channel Complex (Incised Valley).
- 11. 11 Wireline Well Logging Scale of investigation for different logs Enderlin et al 1991 Wireline well log data Wireline log data (correlate between wells) Well 1 Well 2
- 12. 12 Reservoir / Seal Architecture - Deltaic Deposits How to Correlate? B. Ainsworth Reservoir / Seal Architecture - Deltaic Deposits Injection / Migration Implications B. Ainsworth Integrated data for reservoir characterisation & modelling -Dep. Env. - Poro/Perm Core data Seismic Outcrop analogs - Stratigraphy Outcrop analogs Static model Wireline log data (correlate between wells)
- 13. 13 The E & P Process •In most nations, the mineral resources are owned by the people, and managed by the Government on their behalf. •The Government authorises activities by issuing exploration permits and production licences. •Companies must seek approval from Government agencies for most field activities, such as seismic surveying, drilling and abandoning wells, and installing production facilities. •The people benefit from the resource through royalties, taxes, production-sharing contracts, etc., imposed on the companies by the Government. • Permit evaluation / bid • Exploration • Discovery & Initial Appraisal The E & P Process • Full Appraisal • Primary Development • Enhanced Recovery • Abandonment The E & P Process Stage 1 – Identification and offer of new Permit Areas • Prospective areas are identified, either by Government agencies (eg geological surveys or government oil companies), or by interested exploration companies themselvesthemselves. •The Government announces the new permit areas, and invites companies to bid for exploration permits. • A period (typically 6 months) is allowed for bids to be submitted, to allow companies to evaluate the acreage.
- 14. 14 The E & P Process Stage 2 – Companies evaluate permits on offer Basic questions: • do petroleum systems exist in the area? • what is the chance that they have generated commercial hydrocarbon accumulations?y Need to evaluate all aspects of petroleum systems, ie source, maturation, migration, reservoir, seal, trap. Use existing data, rather than acquiring new information: • published data in scientific literature • open file data acquired by Government and/or previous explorers. The E & P Process Stage 2 (cont’d)– Companies evaluate permits on offer Data: • gravity and aeromagnetic surveys • outcrop information/geological maps • seismic surveysy • well data (WCRs, logs, cores, etc.) • seeps Geoscientists build a basin model – distribution of environments of deposition and rock types in space and time. Gravity Map Example (Malacca Strait) DEPTH TO THE GRAVITY BASEMENT
- 15. 15 Brantas Natural Gas Seep Natural gas seeps occur quite regularly in the Brantas block. Here a villager is using an old Dutch casing to cook with the gas seep. The E & P Process Stage 2 (cont’d)– Companies evaluate permits on offer Evaluate petroleum systems: Is there source rock, trap, reservoir, seal, and correct timing of migration to favour commercial accumulations of HC? Assess range of hydrocarbon volumes within each system, and their risk ie chance of success (CoS). • Define Plays • Determine Fairway(s) • Delineate and map Prospects • Risk and rank Prospects per CoS • A conceptual model for a potential hydrocarbon accumulation used by explorationists to develop opportunities in a basin, region or trend. • Used by development personnel to continue exploiting a given trend. A play (or a group of The E & P Process Play: interrelated plays) generally occurs in a single petroleum system. The Austin Chalk Play has been an important area for learning about fractured reservoirs and includes several large fields
- 16. 16 • The geographic trend along which a particular play is likely to occur, such as a sand fairway or a reef trend which include the “right” elements of the petroleum system. • Prediction of conceptual fairways helps explorationists The E & P Process Fairway: develop prospects. • Along the sand fairway (below), sand was deposited, allowing an interpretation of the presence of reservoir rock in the fairway. Isopach map showing a Fairway along which gas wells are producing from a thick sand body and dry holes in areas where sand is absent. The contours indicate sand thickness. • A specific site where hydrocarbons have been predicted to exist in economic quantity. Commonly a geologic structure or a seismic amplitude anomaly that is recommended for drilling a well. • Justification for drilling a prospect is made by The E & P Process Prospect: • Justification for drilling a prospect is made by assembling evidence for an active petroleum system, or reasonable probability of encountering reservoir- quality rock, a trap of sufficient size, adequate sealing rock, and appropriate conditions for generation and migration of hydrocarbons to fill the trap. • A group of prospects constitutes the “prospect inventory”. The E & P Process Prospect: Structure map of Sand X showing a prospective drilling location at the crest of the faulted anticline. Cross section A-A' demonstrates essential elements of the prospect, including the trap, reservoir and cap rock (seal).
- 17. 17 • Petroleum system confirmed • Fairway(s) recognized • Plays defined • Prospects delineated / mapped The E & P Process Stage 2 (cont’d)– Checklist to evaluate permits on offer • Prospects risked / ranked per COS • Exploration well locations established Financial evaluation of exploration and development scenarios: • Is permit worth bidding for? • If so, what should the bid be? • Highlight areas in permit for further work The E & P Process Stage 3 - Companies bid and permits are awarded Depending on the nation and the basin, bids may be: • cash payment • work program (eg 3D seismic + 3 wells over 5 years) • production sharing arrangement Companies often form Joint Ventures to bid ThisCompanies often form Joint Ventures to bid. This enables them to share the risk and their expertise. Government evaluates bids: • value (in financial and information terms) • technical expertise • financial capacity • track record Exploration permits are awarded to successful bidders. The E & P Process Stage 4 – Initial exploration program Shoot seismic over most prospective areas identified during bid evaluation. Develop and rank a prospect inventory. Drill one or more wells to test best prospects. If unsuccessful, review data to understand reasons for failure. May decide to: • Acquire more data • Drill more wells • Relinquish permit (may have to satisfy minimum work program before government permits relinquishment) If successful, evaluate discoveries.
- 18. 18 Well-1 Proposed Location Well-1 Prop loc Base Tertiary Fault (interp) Dip Section Cross line 2100Top Fm. “X” Top Fm. “Y” Well-1 Depth Map Topop Formation “X” Well-1 prop loc Middle East Prospect “X” Schematic Section NW SE Crest 2070m
- 19. 19 Wellsite in Middle East The E & P Process Stage 5 – Appraisal program • Shoot 3D seismic over discovery, if not acquired before. • Detailed reinterpretation of all data to decide number and location of appraisal wells. As wells are expensive, f l i l ll b l t dsuccessful appraisal wells may be completed as producers. • Program may change as it proceeds, and more data become available. Drilling usually provides surprises! 3D seismic helps to minimise these. • On completion, build a detailed reservoir model for further studies. Stage 5a: Initial Appraisal • Discovery well results analysed – confirm trap & hydrocarbons – compare with pre-drill maps calibrations of seismic (velocities t:d)– calibrations of seismic (velocities, t:d) – fluids, reservoir, seal analysed • Plans for further appraisal reviewed • Appraisal well locations reviewed
- 20. 20 Stage 5b: Full Appraisal • Step-out locations drilled – wells tested – fluid contacts established – minimum hydrocarbon volume to justify– minimum hydrocarbon volume to justify development established – aquifer tested/described to determine continuity & contribution to drive • Generate development plan for field – drilling/completion/production The picture changes as a field undergoes appraisal. eg Flounder Field, Gippsland Basin The E & P Process 1968 - pre Flounder-1 1969 - post Flounder-3 1975 - post Flounder-5 1984 - post 3D survey The E & P Process Stage 6 – Development program Basic questions: • can the field be produced profitably? • if so, what is the best way to exploit it? Must consider many things, including: • recoverable reserves • optimum production rate • no. and location of development wells for efficient production • Is there need for pressure support • What surface facilities are required • pre-existing infrastructure / access to markets • price! If an acceptable development plan can be designed, company applies for a production licence.
- 21. 21 The E & P Process Stage 7 – Field development Main components: • construction of surface facilities • drilling of production wells Wells progressively come on stream as they are drilled and tied into the surface facilities. The reservoir model is continually updated as the wells are drilled. Peak production is usually achieved at the end of this stage. Stage 7: Primary Development • Drill Wells; record results • Recognize separate reservoir intervals – rock types – thickness (h), porosity (), permeability (k), water saturation (Sw) • Construct Maps • Estimate reserves (more wells = more certainty) • Evaluate drilling results (cf expectations) • Evaluate plan Large Production Facilities (North America)
- 22. 22 The E & P Process Stage 8 – Field production, maintenance and monitoring Monitor field performance: • pressure • fluid production rates (oil/gas/water) Review management strategy in light of production: • production forecastsproduction forecasts • well workovers/recompletions • infill drilling • pressure support (eg pumps, gas lift) • secondary recovery (eg water flood) The reservoir model is continually updated as production continues. Numerical simulation of the reservoir provides increasingly accurate forecasts of recoverable reserves, and testing of strategies for enhancing production. Typical Field Production Profile Rate increases rapidly as development wells are drilled and come on stream (B-C) The E & P Process on stream (B C). Rate then plateaus for some time (months to years) (C-D). Rate then declines gradually until production is uneconomic, and field is abandoned (D-F). Stage 9 – Enhanced Recovery • Method to recover those resources not producible on “normal” (primary) production methods – pressure maintainence • (gas / water injection) – steam – combustion The E & P Process • Need to consider following geological parameters • Net pay – rock types vs hydrocarbon saturation – net pay continuity – net to gross calculations • Compartmentalization – barriers to fluid flow – kh and h maps • Adapt geological model for reservoir simulation model
- 23. 23 The E & P Process Stage 10 – Field Abandonment • When production declines to uneconomic rates, and (further) techniques to maintain or increase it have been exhausted, or are also uneconomic, the field is abandoned. • Abandonment procedures include: l i ll ll ith t t t l k-plugging all wells with cement to prevent leakage -removal of surface facilities -environmental remediation • Abandonment conditions vary from country to country, and are enforced by the respective Governments. They are likely to become more rigorous as environmental concerns grow. • Abandonment can cost many millions of dollars for large fields. The E & P Process The E & P process is often a long one! It may take several years to drill a discovery, several more to appraise it, and several more to develop it. The process may be completed in a couple of years for very small fields, or many decades for supergiant fields. The greatest costs are incurred during development ForThe greatest costs are incurred during development. For large fields, particularly offshore, the cost of surface facilities, pipelines, and drilling development wells is generally much greater than the exploration cost. The time value of money means that companies aim to bring a field into production as soon as possible, and to produce it at the maximum rate possible without prejudicing the ultimate recovery factor. Relationship Between Exploration & Production • Historical View: Exploration – Regional scale – Plays and play concepts – New reservesNew reserves – optimistic (upside) potential • Historical View: Production – Field scale – Reservoir zones – Infill well locations / workovers – Conservative (downside) evaluation
- 24. 24 Relationship Between Exploration & Development • Historical View: – Exploration is a distinct operation from development – Exploration is the domain of geoscientists – Production is the domain of engineers Juni r e scientists w rk in Pr ducti n and in– Junior geoscientists work in Production and in “support” role to engineering – With increasing seniority geoscientists “graduate” to Exploration • Modern View: – Boundaries between Expl & Prod less clear – Need for expertise greater; multidisciplinary – Reservoir mgmt: discovery to abandonment The Problem with Reservoirs CEO of (unsuccessful) intermediate oil & gas co.: “Why do we bother spending so much time & money on studying reservoirs? Why don’t we just concentrate on drilling the ones with oil in ‘em?” Understanding the reservoir leads to better predictions, and lowers exploration and development uncertainty so as to better understand and manage risk. Two major issues in reservoir characterisation: 1 Heterogeneity Understanding Reservoirs 1. Heterogeneity 2. Scales of heterogeneity L. Lake, 1989
- 25. 25 Scales of Reservoir Heterogeneity Properties(,k,kv/kh,etc) + _ 0 Properties and Variabilities Pore level heterogeneities eg mineralogy, lithology, grain, pore / throat size distribution Core-scale: eg perm, porosity, saturation and wettability, also petrophysical properties; SCAL, rel perm, cap pressure Simulator grid block scale: few feet in breadth and width eg pressure-transient data (PTA), RFT’s, resid oil sat, single well tracer tests, some seismic on this scale Mainly seismic scale; identify major fault locations; interference well tests (for interwell perm), Scales of Reservoir Heterogeneity Properties(,k,kv/kh,etc) + _ 0 Properties and Variabilities The Reservoir Team
- 26. 26 Different Interpretations from Same Data The Reservoir Team Geologist Res. Eng. Geophysicist Half full no wait Driller The Basic Personality Types in the Oil & Gas Industry Half full…no, wait, half empty…What do you want it to be? The glass is over-designed “The fundamental principle in understanding reservoirs is that the Understanding Reservoirs g rocks and fluids in the subsurface don’t care what you or I do for a living!” R.M. Sneider
- 27. 27 The Reservoir Team The Reservoir Team • Development of a field requires the skills and efforts of individuals from various disciplines • Geologists, geophysicists, reservoir engineers, drilling engineers and a host of support personnel are required to produce hydrocarbons from, or sequesterrequired to produce hydrocarbons from, or sequester CO2 in the reservoir • These individuals must work together effectively and efficiently despite differences in technical backgrounds • Field Development and CO2 storage are ideally suited domains of “multidisciplinary teams” The Reservoir Team