November 2014

Executive viewpoint

An 80% solution isn’t enough!

Kjetil Fagervik / Roxar Software Solutions, Emerson Process Management


There’s no doubt that in many areas of the world, the oil and gas industry has a poor track record, when it comes to recovery. Today, average recovery rates are approximately 35%—substantially better than the 1980s but still well short of technical limits that are estimated at around 70%.

3D reservoir modeling is the standard platform for the mapping, understanding and predicting of reservoir behavior.

 Too often, over the past two decades, oil and gas production strategies have been guided by short-term decision-making—predominantly by fluctuating oil and gas prices—and a knowledge that once the easy oil has been found, and a recovery rate of 25% to 30% has been achieved, oil can be found more cost-effectively elsewhere.

However, as the low-hanging fruit has disappeared, and as operators move into more remote and geologically complex fields with high-cost environments putting pressure on profitability, the business case for increasing recovery is clear. The smallest percentage improvements within a field can have a huge impact on future oil and gas production, and the bottom line. This is especially true, if the infrastructure is already in place, and there’s considerably less risk in focusing on a known economic discovery, rather than a pure exploration play.

Globally, a recovery increase of even just one percentage point leads to an additional 35 Bbbl to 55 Bbbl of reserves, equivalent to one or two years of world oil production (source: Eni). It’s for these reasons that operators, such as Statoil and Saudi Aramco, are targeting recovery rates of up to 65% and 70%, respectively. Yet, with resource owners demanding best-in-class technologies that maximize the value of their resources over the life cycle of the field, are their requirements being met?

One technology integral to increasing recovery is reservoir modeling. 3D reservoir modeling is the standard platform for the mapping, understanding and predicting of reservoir behavior. A robust, reliable and accurate reservoir model provides operators with the crucial information they need when developing their assets, and extends oil and gas recovery.

Yet, similar to the acceptance of low oil and gas recovery rates in the past, the reservoir modeling landscape, too, has been characterized by an acceptance of second-best—a compromise and over-simplification of geological complexities, and a lack of a direct reference between the seismic and the reservoir model. Certainly, reservoir modeling innovations have brought the operator unprecedented levels of information over the last few years. The feeling remains, however, that they could still provide much more, and that reservoir modeling is operating at just 80% of its potential.

The outcome is missed opportunities and missed value—reservoirs, zones or compartments being bypassed; structural characteristics of the reservoir going unnoticed; and a lack of a direct reference to seismic, when it comes to creating accurate reservoir descriptions. With operators facing deeper, more challenging geological settings, any reservoir model that oversimplifies such obvious geological complexities is simply not going to deliver the vital information that operators require.

Yet, the good news is that similar to the renewed attention on recovery rates, technologies are now emerging that enable reservoir modeling to take a central role at the forefront of increasing oil and gas recovery—closer to 100% than 80%.

How is reservoir modeling achieving this? It is enabling operators to access an integrated picture of all available subsurface data, establishing a close link between the seismic and the reservoir model alongside existing data types, such as geological, geophysical and simulation data. It is also establishing the reservoir model as the focal point for optimal decision-making, allowing operators to build and test multiple production scenarios, to determine how to best develop and produce their resources. It also informs operators on where features are well constrained and where they need to acquire more data. Where should I drill? How should I inject? How can I ensure my wells operate at their maximum potential? These are the kinds of questions to which effective reservoir modeling can provide answers.

Modern-day reservoir modeling is also representing geologic complexity at the relevant scale, which is key to unlocking value. Effective reservoir models represent faults and the accurate compartmentalization of the reservoir; incorporate the controlling flow properties (porosity and permeability) at the right scale; and keep the time to simulation, and the cost, to a minimum. Finally, they can quantify uncertainty accurately within the reservoir modeling workflow, giving operators increased confidence in the specific traits of their fields, and reducing risk in reservoir management decision-making.

Effective reservoir models lead to more informed decisions across the prospect life cycle on where to drill, what production strategies to adopt, and how to maximize oil and gas recovery. They also represent good resource stewardship and give operators the tools to unlock the value of their assets. An 80% solution is quite simply no longer good enough! wo-box_blue.gif 


About the Authors
Kjetil Fagervik
Roxar Software Solutions, Emerson Process Management
Kjetil Fagervik is Managing Director of Roxar Software Solutions, Emerson’s portfolio of reservoir management software. Prior to these duties, Mr. Fagervik was V.P. of Product Development at Roxar. Previous roles include Country Manager at Senergy and Ocean Project Manager at Schlumberger. He holds a Ph.D in Signal Processing from the University of Surrey, UK, with a particular focus on wireless communications.
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