Reserve Evaluation for Enhance Oil
Recovery Purposes Using Dynamic Reserve
Evaluation Model
Woodside Research Facility
GPO Box U 1987
Perth West Australia 6845
BY
CHAWARWAN HUSSEN
Tuesday 22 September 2009
International Energy Agency Collaborative Project On Enhanced Oil Recovery 2009
Reserve Evaluation for Enhance Oil Recovery Purposes
Outline of The Presentation
• 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
International Energy Agency Collaborative Project On Enhanced Oil Recovery 2009
Reserve Evaluation for Enhance Oil Recovery Purposes
Introduction and Objective 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).
International Energy Agency Collaborative Project On Enhanced Oil Recovery 2009
Reserve Evaluation for Enhance Oil Recovery Purposes
Reserve Definition and Reserve Growth
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
Society of Petroleum
Engineer (SPE)
Securities and
Exchange Commission
(SEC)
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
International Energy Agency Collaborative Project On Enhanced Oil Recovery 2009
Reserve Evaluation for Enhance Oil Recovery Purposes
Reserve 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 place
d. Production Technology
e. Political economic changes
International Energy Agency Collaborative Project On Enhanced Oil Recovery 2009
Reserve Evaluation for Enhance Oil Recovery Purposes
After 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.
International Energy Agency Collaborative Project On Enhanced Oil Recovery 2009
Reserve Evaluation for Enhance Oil Recovery Purposes
Analogy 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
International Energy Agency Collaborative Project On Enhanced Oil Recovery 2009
Reserve Evaluation for Enhance Oil Recovery Purposes
Development Defines Field Limits
Volumetric Method
Estimation of OIIP from Natural
energy of the Reservoir.
 Vb (1  Sw) 

OIIP  
 Bo (t ) 
- 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)%
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
International Energy Agency Collaborative Project On Enhanced Oil Recovery 2009
Reserve Evaluation for Enhance Oil Recovery Purposes
Estimation of Recovery Factor
Securities and Exchange Commission (SEC)
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
International Energy Agency Collaborative Project On Enhanced Oil Recovery 2009
Reserve Evaluation for Enhance Oil Recovery Purposes
Estimation of Recovery Factor and Incremental Increase in Recovery Factor
Estimation of Recovery Factor from
Natural Energy of the Reservoir
RFNr  [(OIIPNr  OIIPPa ) /(OIIPNr )]
Estimation of Recovery Factor after
CO2 injection at initial reservoir
pressure
RFCO2  [(OIIPNr  OIIPCO2 ) /(OIIPNr )]
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 Incremental Increase in
Recovery Factor
IIRF  RFCO2 %  RFNr %
International Energy Agency Collaborative Project On Enhanced Oil Recovery 2009
Reserve Evaluation for Enhance Oil Recovery Purposes
Estimation of Recovery Factor and Classification of Reserve
Total Recovery Factor of Re-evaluated Reserve
TRF %  IIRF %  RFNr %
TRF %
RF Nr %
IIRF %
: 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)
International Energy Agency Collaborative Project On Enhanced Oil Recovery 2009
Reserve Evaluation for Enhance Oil Recovery Purposes
Estimation of Petroleum Reserve Bankability
Petroleum Reserve Bankability
BPGR  (Cp  Dp )  GR
BPmoney  (Cp  Dp )  BPGR
: Booking price $ in term of growth rate
: Booking price in term of money
BP
Cp: Current price $
Dp: Development price $
GR: Growth rate of cumulative oil produce for the reclassified reserve%.
BPGr
money
International Energy Agency Collaborative Project On Enhanced Oil Recovery 2009
Reserve Evaluation for Enhance Oil Recovery Purposes
Estimation of Dynamic Reserve Evaluation (DREM)
DREM  OIIP TRF %
Where
- OIIP : Oil Initial in Place
- TRF% : Total Recovery Factor
Forecasting an Economic Limit
Estimation of growth rate of Cumulative oil produced from the re-evaluated
reserve.
 V tn 
GR  
 V to 



1
tn to
1
V(t0) : start Volume, STB
V(tn) : finish volume, STB
tn − t0 : number of years
International Energy Agency Collaborative Project On Enhanced Oil Recovery 2009
Reserve Evaluation for Enhance Oil Recovery Purposes
Estimation of Current Price Of Oil Reserves
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
International Energy Agency Collaborative Project On Enhanced Oil Recovery 2009
Reserve Evaluation for Enhance Oil Recovery Purposes
Estimation of Current Price Of Oil Reserves
24.2104
International Energy Agency Collaborative Project On Enhanced Oil Recovery 2009
Reserve Evaluation for Enhance Oil Recovery Purposes
Case Study of Application Model
Probability of volumetric factors
Area
26,700
acres
%
Thickness
49
Porosity
8
45
%
Initial reservoir pressure Pi
2980
psia
Abandonment pressure Pa
300
psia
Oil formation volume factor at Pi
1.68
bbl/STB
Oil formation volume factor at Pa
1.15
Average water saturation
%
Gas saturation at Pa
34
bbl/STB
%
Oil saturation after CO2 injection
20
%
International Energy Agency Collaborative Project On Enhanced Oil Recovery 2009
Reserve Evaluation for Enhance Oil Recovery Purposes
Firstly, calculating oil initial in place
Vb = 7758 * A * h = 7758 * 26700 * 49 = 10.15 MMMbbl
1- Oil initial in place by volumetric method
10.15 x10 9 (0.08)(1  0.45)
Ni 
 266MMSTB
1.68
2- The oil in place after volumetric depletion to abandonment pressure:
10.15 x10 9 (0.08)(1  0.45  0.34)
N1 
 148MMSTB
1.15
3- The oil in place after CO2 injection at initial reservoir pressure:
10.15 x10 9 (0.08)0.2
N2
 97 MMSTB
1.68
International Energy Agency Collaborative Project On Enhanced Oil Recovery 2009
Reserve Evaluation for Enhance Oil Recovery Purposes
Secondly, Estimation of Recovery Factor
1- Estimation of Recovery Factor from Natural Energy of the Reservoir
RF Nr  ((( 266  148)  10 6 ) /( 266  10 6 ))  44%
2- Estimation of Recovery Factor after CO2 injection at initial reservoir pressure
RFCO2  ((( 266  97) 106 ) /( 266 106 ))  64%
3- Estimation of Incremental Increase in Recovery Factor
IIRF  64%  44%  20%
4- Estimation of Total Recovery Factor
TRF  20%  44%  64%
International Energy Agency Collaborative Project On Enhanced Oil Recovery 2009
Reserve Evaluation for Enhance Oil Recovery Purposes
Thirdly, using Dynamic Reserve Evaluation for Estimating Reserve
DREM  266MMSTB  64%  170.24MMSTB
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
International Energy Agency Collaborative Project On Enhanced Oil Recovery 2009
Reserve Evaluation for Enhance Oil Recovery Purposes
Thus, growth rate of the reserve for five year is:
 89606 
GR  

 29524 
1
51
 1  31.98983%barrel
Estimation of Current Oil Price, Based on the Excel Simulation Model to Forecast Oil
Price for the Selected Five Years.
Years
Flow Rate
Cumulative Production
Yearly Production
(MMP STB)
(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$
International Energy Agency Collaborative Project On Enhanced Oil Recovery 2009
Reserve Evaluation for Enhance Oil Recovery Purposes
In the last step, petroleum reserve bankability
BPGR  (Cp  Dp )  GR
BPmoney  (Cp  Dp )  BPGR
Year
Current
price $
BPGr
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%
BPmoney
International Energy Agency Collaborative Project On Enhanced Oil Recovery 2009
Reserve Evaluation for Enhance Oil Recovery Purposes
Conclusion
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.
International Energy Agency Collaborative Project On Enhanced Oil Recovery 2009