Incorporating Numerical Simulation Into Your Reserves Estimation Process: A Practical Perspective
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The document discusses the integration of numerical simulation in estimating petroleum reserves, highlighting the importance of adhering to reserves definitions and guidelines. It contrasts immature and mature reservoirs, noting the need for historical validation in mature reservoirs to ensure reliability and compliance for categorizing reserves. Case studies illustrate practical applications of simulation results in the reserves estimation process, emphasizing the significance of reasonable assumptions and sensitivity analyses.
Incorporating Numerical Simulation Into Your Reserves Estimation Process: A Practical Perspective
- 1. Dean C. Rietz, P. E. Incorporating Numerical Simulation Into Your Reserves Estimation Process: A Practical Perspective Society of Petroleum Engineers Distinguished Lecturer Program www.spe.org/dl 1
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- 3. Outline Introduction A Look at Reserves Combining Reserves and Simulation Immature Reservoirs Mature Reservoirs Examples Conclusions 3
- 4. Introduction Any estimate of future recovery does not necessarily qualify as an estimate of reserves. Specific criteria must be met to qualify estimated recoverable volumes as reserves. These criteria are generally defined in the form of “reserves definitions.” 4
- 5. Background on the Subject SPE 71430 (2001) Intended to start a dialog SPE 96410 (2005) Reviewing History Matches SPE 110066 (2007) Case Study Examples 5 ─ SPE 71430 “The Adaptation of Reservoir Simulation Models for Use in Reserves Certification Under Regulatory Guidelines or Reserves Definitions” ─ SPE 96410 “Reservoir Simulation and Reserves Classifications – Guidelines for Reviewing Model History Matches to Help Bridge the Gap Between Evaluators and Simulation Specialists” ─ SPE 110066 “Case Studies Illustrating the Use of Reservoir Simulation Results in the Reserves Estimation Process”
- 6. A Look at Reserves 6 “Estimates of recoverable and marketable quantities can be considered reserves only if commercial or economic.”
- 7. “Reserves” in the Press 7
- 8. Reserves Definitions SPE/WPC/AAPG/SPEE Petroleum Resources Management System 2007, pp. 20 and 21 (PRMS Document) Proved, probable, and possible reserves SEC 17 CFR Part 210.4-10 Recent revisions effective January 1, 2010 References: “Modernization of the Oil and Gas Reporting Requirements,” Conforming Version No. 33-8935, pp. 134-147, found at: http://www.sec.gov/rules/proposed/2008/33-8935.pdf Federal Register Final Rule, January 14, 2009, pp. 2190- 2192, found at: http://www.sec.gov/rules/final/2009/33- 8995fr.pdf 8
- 9. Not to scale RESERVES PRODUCTION PROSPECTIVE RESOURCES UNRECOVERABLE UNRECOVERABLE Low Estimate Best Estimate Range of Uncertainty TOTALPETROLEUMINITIALLY-IN-PLACE(PIIP) DISCOVEREDPIIP UNDISCOVEREDPIIP CONTINGENT RESOURCES Probable PossibleProved 1P 2P 1C 2C 3C High Estimate 3P IncreasingChanceofCommerciality COMMERCIALSUB-COMMERCIAL LIFECYCLE ChanceofCommerciality “… projects are “classified” based on their chance of commerciality (the vertical axis) and estimates of recoverable and marketable quantities associated with each project are “categorized” to reflect uncertainty (the horizontal axis).” SPE-PRMS Page 5 SPE-PRMS Combines Both Resource Classification and Categorization 9
- 10. Reference to Simulation with Reserves (SPE-PRMS) SPE-PRMS and Reservoir Simulation Recovery can be based on analog field or simulation studies. Reservoir simulation is a “sophisticated form of material balance.” Most reliable when validated with a history match. 10 PRMS Document – SPE/WPC/AAPG/SPEE, pp. 20-21 (Petroleum Resources Management System 2007)
- 11. Reference to Simulation with Reserves SEC (2009) 11 {2008} (25) Reliable technology. Reliable technology is a grouping of one or more technologies (including computational methods) that has been field tested and has been demonstrated to provide reasonably certain results with consistency and repeatability in the formation being evaluated or in an analogous formation. consistency repeatability
- 12. Combining Reserves & Simulation 12 Reliable results from models can be used for reserves. - Verify commerciality - Comply with guidelines
- 13. Applying Simulation Results for Estimating Proved Reserves Usually, the primary objective of a simulation study is to better understand the reservoir to improve recovery (Proved + Probable – 2P or “most likely”). Development plans should be based on 2P or even 3P (Proved + Probable + Possible). 13
- 14. Applying Simulation Results for Estimating Proved Reserves It is common that results from a simulation model cannot be directly applied to the proved reserves category, even if they are passed through a cash flow analysis to demonstrate economic viability. 14
- 15. Applying Simulation Results for Estimating Proved Reserves Typical models might not be consistent with “proved” guidelines due to: Original oil-in-place (OOIP) beyond “proved” Pressure support or energy Other parameters 15
- 16. Immature and Mature Reservoirs Mature reservoirs contain a period of production history that is modeled or “history matched.” Immature reservoirs contain little or no production history and the simulation models have not yet been verified by actual field performance. 16
- 17. Immature Reservoirs Description relies primarily on geophysical and geological data. A “history match” of the model to the reservoir is easy to obtain. Few performance points Not very reliable 17
- 18. Immature Reservoirs Unlikely to be acceptable for proved reserves. “Most likely” OOIP Not reliable Models helpful in estimating hydrocarbon recovery efficiency. Sensitivity studies Unless contradicted by analogy data (or experience) 18
- 19. Mature Reservoirs: Validating with a History Match Model parameter adjustment Reasonable Non-contradictory Consistent with known geological and engineering evidence Sensitivity studies can investigate uncertain parameters. 19
- 20. Mature Reservoirs & History Matching Drawbacks Non-unique Certain parameters may have a limited impact on the history match but may have a dramatic impact on the prediction. Aquifer dimensions Original hydrocarbon in-place! 20
- 21. Mature Reservoirs & History Matching Additional Considerations Recognize situations where there may be changes to the depletion process Assess the Transition to Forecast Status quo or “do nothing” case is consistent in rate’s decline 21
- 22. Some Examples 22
- 23. Example 1: Apply Reservoir Simulation to Assess Geological or Drive Mechanism Uncertainty 23 Two models with different assumptions Both have good history match Models provide range of expected recovery History Match Reservoir Pressure 60% RF (Proved) 80% RF (Probable) Case 1 Small Aquifer Case 2 Large Aquifer
- 24. 24 Example 2: Misuse of Simulation: The “Gasifer” Conclusions not supported by model results Easily disputed With “Gasifer” ~300 BCF Ultimate Recovery Without “Gasifer” ~30 BCF Ultimate Recovery GasRate GasRate Time Time
- 25. Example 3: Reserves Assigned Based on Forecast Uncertainties 25 Murphy West Africa, LTD Azurite Marine Western & Central Simulation Sensitivity Study Western & Central Cumulative Oil Recovery Comparison 0 10,000 20,000 30,000 40,000 50,000 60,000 70,000 80,000 90,000 100,000 Jan 2009Jan 2010Jan 2011Jan 2012Jan 2013Jan 2014Jan 2015Jan 2016Jan 2017Jan 2018Jan 2019Jan 2020Jan 2021Jan 2022Jan 2023Jan 2024Jan 2025Jan 2026Jan 2027Jan 2028Jan 2029Jan 2030Jan 2031Jan 2032 Date CumulativeOil,Mstb 1/1/2019 Base Case M26_BASE_3P2I Displayed in Red J05_SENS_HI_OWC J05_SENS_LOW_VREP J14_SENS_LO_FACIES_LO_VCL Modeling used to assess field recovery under various operating and input parameter assumptions All of the above projected volumes must be demonstrated to have economic or commercial viability before being called “reserves.” Most Likely Case High Case Low Case 1P 2P 3P Sensitivity Cases using various input assumptions (one variable changed at a time) Contract Limit Cumulative Oil Recovery Beyond Contract (Not Reserves)
- 26. Case Studies Illustrating the Use of Reserves (SPE Paper 110066) Case Study 1 - Modify the simulation results (Mature Reservoir). Case Study 2 - Modify so model complies with reserves definitions (Mature Reservoir). Case Study 3 – If the field being evaluated is an Immature Reservoir with no sustained production history, then perform a series of sensitivity studies. 26 MatureImmature SPE Paper 110066 (2007) was written to provide examples of incorporating simulation results in the reserves process.
- 27. Overall Conclusions The reliability of the results from a model is strongly dependent on the understanding of the geology and the confidence in all of the parameters used to construct the model. What is needed? Reasonable assumptions Good history match Good/reasonable forecast Sensitivity cases Documentation/Supporting Information 27
- 28. Final Remarks Reliable results from models can be used for reserves. Verify commerciality Comply with guidelines Provide significant supporting information. For proved reserves, detailed analysis and scrutiny should be applied to “typical models.” 28 Consistent
- 30. Society of Petroleum Engineers Distinguished Lecturer Program www.spe.org/dl 30 Your Feedback is Important Enter your section in the DL Evaluation Contest by completing the evaluation form for this presentation Visit SPE.org/dl