geoscience

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

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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

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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

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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

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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

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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

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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).

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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

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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)

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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.

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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

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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

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• 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).

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• 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.

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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

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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

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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.

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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)

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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

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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

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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

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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

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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

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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

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The Reservoir Team