reserve evaluation for enhance oil recovery purposes using dynamic reserve evaluation model

Reserve Evaluation for Enhance Oil Recovery Purposes Using Dynamic Reserve

Evaluation Model

Woodside Research Facility

GPO Box U 1987

Perth West Australia 6845BY

CHAWARWAN HUSSEN Tuesday 22 September 2009

International Energy Agency Collaborative Project On Enhanced Oil Recovery 2009

Reserve Evaluation for Enhance Oil Recovery Purposes

• Introduction and Objective of the presentation• Reserve Definition and Reserve Growth• Requirements of EOR response to CO2 injection from analogous

reservoirs and Data Needed to Analysis for Analogy Method • Estimation Incremental Increase and classification in Recovery Factor• Estimation of Recovery Factor and Classification of Reserve • Estimation of Dynamic Reserve Evaluation Model• Estimation of Growth Rate and Estimation of Current Price of Oil Reserves• Estimation of Petroleum Reserve Bankability 1) Booking price in term of growth rate 2) Booking price in term of money • A case Study• Conclusion

Outline of The Presentation


• The first objective is the concept of EOR to make decision whether the reserve should be re-classified in terms of recoverable, commercially or potentially from known or unknown reservoir, therefore, add them again into the categorizations of reserves such as 1P, 2P and 3P or waiting for the development of market viability, technology advance or removal of other constraints to the development .

•The second objective is Dynamic Reserve Evaluation Model (DREM) will be a function of an economic analysis from forecasting economic conditions, reserve management and reporting reserves, based on petroleum reserve bankability to estimate the return on the investment of (DREM).



Introduction and Objective of the Presentation


SPE and SEC regulations applicable to oil and gas reserves

-Petroleum Reserve Definition 1997-Petroleum Resource Classification and definition 2000-Guidelines for the Evaluation of Petroleum Reserves and Resources 2001-Accounting Series Release No. 257-Financial Accounting Standard Board

Reserve Definition and Reserve Growth

Definition of Reserve:

Reserves identified those accumulations that can be extracted profitably with existing technology under present economic conditions.

Definition depends both on price, and on time frame of assessment


Society of Petroleum Engineer (SPE)

Securities and Exchange Commission (SEC)

Reserve Evaluation for Enhance Oil Recovery PurposesReserve Definition and Reserve Growth

• Definition of Reserve Growth

Reserve growth is the observed increase in reserves for fields over time. Initial estimates of reserves are lower than the ultimate volume of oil produced.

• Cause of Reserve Growth

Factors that contribute to the reserve growth of fields can be grouped into five categories that are not independent of each other: a. Reserve calculation b. Recovery percentage c. Additional oil and gas in placed. Production Technology e. Political economic changes


Reserve Evaluation for Enhance Oil Recovery PurposesAfter Field Discovery

Analogy Method:

The purpose of this method is to apply knowledge gained from analogous and mature reservoirs or recovery processes to estimate the performance in target reservoir. Especially when new recovery mechanism or enhancements are introduced to a field (e.g. CO2 flooding). Mostly this method will be applied at the early stage of evaluation when there is not enough definitive performance and/or geologic data available.

The proof of this method, the rock and fluid properties of the target reservoir need to be equal to or more positive than the analogous reservoir properties in order to qualify for proven reserves.


Reserve Evaluation for Enhance Oil Recovery PurposesAnalogy Method

Data Needed to Analysis for Analogy Method

-Need a good estimate of OOIP (STB) for both the analogy reservoir and the reservoir being studied.- CO2 Flood Area OOIP - Initial Oil Formation Volume Factor - Current Oil Formation Volume Factor - Current Reservoir Temperature and Pressure - CO2 Formation Volume Factor - Initial and Residual Oil Saturation- Historical production and injection rates



Estimation of OIIP from Natural energy of the Reservoir.

)()1(

tBSwV

OIIPo

b

Requirements to estimate RF using volumetric equation

• Estimation OIIP from natural energy of the reservoir• Estimation of OIIP after volumetric depletion at Pa• Estimation of OIIP after CO2 injection at Pi

- Area (A)- Thickness (h)- Average reservoir porosity, %- Average water saturation (Swi)- Oil formation volume factor (Boi) at initial reservoir pressure (Pi).-Oil saturation after CO2 injection (Sor)%

Development Defines Field Limits


Volumetric Method


Reserves cannot be classified as proved undeveloped reserves based on improved recovery techniques until;

Such time that they have been proved effective in that target reservoir already being studied in `the same geologic formation in the immediate area’.

As the SEC guidelines state “the intent of the definition of proved reserves is interpreted as estimates that are more likely to result in a positive revision than a negative revision” immediately

Estimation of Recovery Factor


Securities and Exchange Commission (SEC)


Estimation of Recovery Factor from Natural Energy of the Reservoir

Estimation of Recovery Factor after CO2 injection at initial reservoir pressure

)]/()[( NrPaNrNr OIIPOIIPOIIPRF

)]/()[(22 NrCONrCO OIIPOIIPOIIPRF

%%2 NrCO RFRFIIRF

Estimation of Incremental Increase in Recovery Factor

According to the equation incremental increase in recovery factor of re-evaluated reserve will be categorized into three groups.

1- IIRF ≥ 50% (Good reserve)

2- 20% ≥ IIRF ≤ 50% (Intermediate reserve)

3- IIRF is less 10% ( Poor reserve)

Estimation of Recovery Factor and Incremental Increase in Recovery Factor



Total Recovery Factor of Re-evaluated Reserve

: Total Recovery Factor : Incremental Increase in Recovery Factor : Recovery Factor at Natural Reservoir

According to the equation (TRF%) re-classification of the re-evaluated reserve will also be categorized into three groups. For example value of recovery factor:

1- If TRF is 90% (proved reserve)

2- TRF is 50 % (probable reserve)

3- TRF 10% (possible reserve)

%%% NrRFIIRFTRF

%IIRF

%TRF

%NrRF

Estimation of Recovery Factor and Classification of Reserve



Petroleum Reserve Bankability

GRDpCpBPGR )(

GRmoney BPDpCpBP )(

: Booking price $ in term of growth rate : Booking price in term of money : Current price $ : Development price $ : Growth rate of cumulative oil produce for the reclassified reserve%.

GrBP

CpDp

GR

moneyBP

Estimation of Petroleum Reserve Bankability



Estimation of Dynamic Reserve Evaluation (DREM)

Where - OIIP : Oil Initial in Place - TRF% : Total Recovery Factor

%TRFOIIPDREM

Estimation of growth rate of Cumulative oil produced from the re-evaluated reserve.

V(t0) : start Volume, STB V(tn) : finish volume, STB tn − t0 : number of years

1

1

totn

toVtnVGR


Forecasting an Economic Limit


Source: Chevillon and Rifflart (2009)

Table: Independent Variable Variable

Cumulated past supply in excess of demand outside OECD

Past supply in excess of forecasted demand in OECD

Cumulated past supply in excess of demand within OECD

Change in OECD demand

Difference between observed oil price and OPEC target price


Estimation of Current Price Of Oil Reserves



Estimation of Current Price Of Oil Reserves

24.2104


Probability of volumetric factors Area 26,700 acresThickness 49 %

Porosity 8 %

Average water saturation 45 %

Initial reservoir pressure Pi 2980 psiaAbandonment pressure Pa 300 psiaOil formation volume factor at Pi 1.68 bbl/STBOil formation volume factor at Pa 1.15 bbl/STBGas saturation at Pa 34 %

Oil saturation after CO2 injection 20 %


Case Study of Application Model


Firstly, calculating oil initial in place

= 7758 * A * h = 7758 * 26700 * 49 = 10.15 MMMbbl

1- Oil initial in place by volumetric method

2- The oil in place after volumetric depletion to abandonment pressure:

3- The oil in place after CO2 injection at initial reservoir pressure:

Vb

MMSTBxNi 26668.1

)45.01)(08.0(1015.10 9

MMSTBxN 14815.1

)34.045.01)(08.0(1015.1019

MMSTBxN 9768.1

2.0)08.0(1015.1029



1- Estimation of Recovery Factor from Natural Energy of the Reservoir

2- Estimation of Recovery Factor after CO2 injection at initial reservoir pressure

3- Estimation of Incremental Increase in Recovery Factor

4- Estimation of Total Recovery Factor

Secondly, Estimation of Recovery Factor

%44))10266/()10)148266((( 66 NrRF

%64))10266/()10)97266((( 662

CORF


%20%44%64 IIRF

%64%44%20 TRF


Thirdly, using Dynamic Reserve Evaluation for Estimating Reserve

MMSTBMMSTBDREM 24.170%64266

According to a case study, production rate of a well at time 0 is 100 BOPD, initial nominal exponential decline rate is 0.5/year, and hyperbolic exponent is 0.9. Assuming hyperbolic decline predict the amount of oil produced for five years. To find out the growth rate, production at the end of each year must be determined.

Years Flow Rate Cumulative Production Yearly Production

0 100 0 -

2001 66.176 29,524 29524

2002 49.009 50,248 20724

2003 38.699 66,115 15867

2004 31.854 78,914 12799

2005 26.992 89,606 10692



Thus, growth rate of the reserve for five year is:

barrelGR %98983.3112952489606 15

1

Years Flow Rate Cumulative Production(MMP STB)

Yearly Production(MMP STB)

Current price $

0 100 0 - 0

2001 66.176 29524 29524 24.21$

2002 49.009 50248 20724 50$

2003 38.699 66115 15867 60$

2004 31.854 78914 12799 90$

2005 26.992 89606 10692 30$

Estimation of Current Oil Price, Based on the Excel Simulation Model to Forecast Oil Price for the Selected Five Years.



In the last step, petroleum reserve bankability

GRDpCpBPGR )(

GRmoney BPDpCpBP )(

Year Current price $

1 24.21$ 0.0288% 0.2592%

2 50$ 0.111% 3.885%

3 60$ 0.1431% 6.4395%

4 90$ 0.2391% 170.9325%

5 30$ 0.0471% 0.7065%

GrBP moneyBP


Reserve Evaluation for Enhance Oil Recovery PurposesConclusion

This model deals with the estimation of the combined effects of the geological economical uncertainty of hydrocarbon reserves. • The geological uncertainty is mainly associated with the quality and quantity of hydrocarbon reserves which is different according to the nature of rock and fluid properties, as well as the location offshore or onshore, or in shallow or deepwater. • The economical uncertainty is associated with production rate, future cost and oil price.


reserve evaluation for enhance oil recovery purposes using dynamic reserve evaluation model

Documents

reserve management

reserve growth of fields

enhanced oil recovery

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ultimate volume of oil

term of growth rate

reporting reserves

categorizations of reserves