Dynamic Reservoir Simulation of The Alwyn Field Using Eclipse.

INSTITUTE OF PETROLEUM STUDIES
Dynamic
Reservoir
Simulation of the Alwyn
TM
Field using ECLIPSE
NWOSU UGONNA DIXON

IJEH GIFT ISIJOKELU
IPS/MSC/PPD/2014/240
IPS/MSC/PPD/2014/235
June 2015
EXECUTIVE SUMMARY
This project proposes an optimized development plan for production of the Alwyn North reservoir
through the maximization of total oil production at minimum cost per barrel. A black oil model was
simulated using Eclipse for the determination of the field oil recovery, among other parameters such as
field oil production rate and field water cut, of four development scenarios: natural depletion, water
injection, gas injection and water-alternating-gas injection. Each development scenario was optimized for
number, location, completion and geometry of production and injection wells as applicable.
Natural depletion was simulated by depleting the reservoir to a bottom-hole pressure limit 0f 100 bars
using four already-drilled wells. The field oil recovery was 30 % and the duration of the production
plateau at 4200m3 was 6 years.
Water injection was simulated injecting water as a secondary recovery mechanism after depleting the
reservoir to a bottom-hole flowing pressure of around 260 bars. Two additional production wells and four
additional injection wells were drilled to give maximum results with this scheme. The oil recovery thus
increased from 30% to about 53% with the production plateau sustained for 3.9 years albeit at a higher
plateau rate of 7200m3
Gas injection was proposed to reduce the high water cut levels associated with water injection by
injecting gas into the reservoir using the same water injection wells. The field oil recovery reduced to
42%.
The Water-alternating gas scheme, using the same injectors and producers as in water injection, gave a
field oil recovery of about 555 with a production plateau sustained for 4.2 years.
Water Injection and Water-alternating Gas stood out clearly in terms of profitability, internal rate of return
and pay-back time. . Water Injection was the best performer with a pay-back time, internal rate of return
and profitability index of 1.2 years, 90% and 3.26. Recommendation on best production scheme was
proposed based on technical criteria, environmental consideration and comparison of economic
parameters.
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ACKNOWLEDGEMENT
This project is dedicated to Mrs Elizabeth Nneka Nwosu who departed this earth
on 5th, June 2015. May her soul rest in perfect peace.
Mr Soma Sakthikhumar also deserves a worthy mention for being patient enough
to impart the desired knowledge to us.
Picarq Corporation, Total Nigeria and Institute of Petroleum Studies are also
appreciated for putting the necessary logistics, facilities and finance in place to
make this project a success.
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IJEH, ISIJOKELU
Table of Contents
Executive Summary ...................................................................................................... ii
Acknowledgements
iv
List of Tables
vi
List of Figures
ix
CHAPTER ONE ............................................................................................................... 9
INTRODUCTION ........................................................................................................... 11
1.1 Purpose of study..................................................................................................... 11
1.3 Geological Description And Field Characteristics .............................................. 11
1.3.1 Location ............................................................................................................... 12
1.3.2 Field Characteristics Tectonics .......................................................................... 13
1.3.3 Geological Setting ............................................................................................... 13
1.3.4 Brent East Reservoir of Alwyn North Field ....................................................... 15
1.3.4.1 Geological Description..................................................................................... 15
1.3.4.2 Tectonics ..........................................................................................................16
1.3.4.3 Sedimentology ................................................................................................. 17
1.3.4.4 Log correlations ...............................................................................................19
1.4 OBJECTIVES OF THE STUDY............................................................................. 20
1.5 Reservoir Model And Characteristics................................................................... 21
1.5.1 Rock Typing ........................................................................................................ 22
1.5.2 Reservoir Fluid Properties................................................................................. 24
1.5.3 Fluids in Place .................................................................................................... 24
CHAPTER TWO ............................................................................................................ 26
FIELD DEVELOPMENT TECHNIQUES ...................................................................... 27
2.1 Constraints............................................................................................................ 27
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2.1.1 Drilling Constraints ........................................................................................... 27

2.1.2 Production Constraint ...................................................................................... 28
2.1.3 Water Injection Constraint ............................................................................... 28
2.1.4 Gas Injection Constraint ................................................................................... 29
2.2 Analytical Calculations ........................................................................................ 29
2.2.1 Case One: Natural Depletion ............................................................................ 30
2.2.1.1 Minimum number of wells .............................................................................. 31
2.2.1.2 Material Balance For Natural Depletion Alone ............................................ 32
a. Rock And Fluid Expansion .................................................................................... 32
i. Tarbert Region: ....................................................................................................... 33
ii. Ness Region: .......................................................................................................... 33
2.2.2 Case Two: Water Injection ............................................................................... 35
2.2.2.1 Material Balance ............................................................................................. 35
i. Tarbert Region: ....................................................................................................... 35
Evaluation of Ea ......................................................................................................... 35
Evaluation of Ed ........................................................................................................ 37
ii. Ness Region ........................................................................................................... 38
Evaluation of Ea ......................................................................................................... 38
2.2.2.2 Estimation of Oil Recovery Using Hand Calculation .................................. 40
Table 2.6: Oil Recovery from Natural Depletion and Water Injection ................... 41
2.2.2.3 Minimum number of wells: ............................................................................ 41
Implication:................................................................................................................ 43
2.2.3 Case Three: Gas Injection ................................................................................. 44
2.2.3.1 Material Balance ............................................................................................. 44
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i. Tarbert Region ........................................................................................................ 44

Evaluation of EA: ....................................................................................................... 44
Evaluation of ED: ....................................................................................................... 44
CHAPTER THREE ......................................................................................................... 49
DYNAMIC FIELD DEVELOPMENT STUDY USING ECLIPSE SOFTWARE ............. 49
3.1 Case One: Natural Depletion ............................................................................. 49
3.1.1 Natural Depletion with the Available Four Exploratory Wells ..................... 49
3.1.2 Effect of Critical Gas Saturation ....................................................................... 52
3.1.3 Natural Depletion with Increased Development Wells: ............................... 54
3.1.3.1 Natural Depletion with Five Producer Wells .............................................. 54
3.1.4 Inferences: Natural Depletion .......................................................................... 57
3.2: Case 2: Water Injection Preceded by Natural Depletion ................................ 58
3.3 Case 3: Gas Injection Preceded by Natural Depletion ....................................... 62
3.4 Case 4: Water- Alternating Gas Injection .......................................................... 63
CHAPTER FOUR ........................................................................................................... 68
ECONOMIC ANALYSIS ................................................................................................ 68
4.1 Economic Evaluation of Natural Depletion at Economic Limit ....................... 70
4.2 Economic Evaluation of Gas Injection Scheme at Economic Limit ................. 72
4.3 Economic Analysis of Water Injection Scenario ............................................... 76
4.4 Economic Analysis of the Water-Alternating-Gas Scheme .............................. 78
4.5 Investment Decision ............................................................................................81
4.5.1 Lowest Capital Investment ............................................................................... 82
4.5.2 Pay-back time ................................................................................................... 83
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4.5.3 Profitability Index and Economic Life............................................................. 84

4.5.4 Gross Profit Margin per barrel......................................................................... 85
4.5.5 Cumulative Net Present Value (CNPV): ......................................................... 86
4.5.6 Internal Rate of Return (IRR): ......................................................................... 86
CHAPTER FIVE ............................................................................................................. 88
CONCLUSION AND RECOMMENDATIONS ............................................................ 88
5.1
Conclusion ......................................................................................................... 88
5.2 Recommendations ............................................................................................ 89

REFERENCES................................................................................................................. 90
APPENDICES .............................................................. Error! Bookmark not defined.
APPENDIX A ............................................................................................................. 92
A1 Natural Depletion: Evaluation Of Revenue, Opex, Cash Flow, Internal Rate
Of Return , Pay-Back Time And Npv Using 10% As The Discount Factor ............ 92
A2 Gas Injection: Evaluation Of Revenue, Opex, Cash Flow, Internal Rate Of
Return , Pay-Back Time And Npv Using 10% As The Discount Factor ................. 93
A3 Water Injection: Evaluation Of Revenue, Opex, Cash Flow, Internal Rate Of
Return , Pay-Back Time And Npv Using 10% As The Discount Factor ................. 94
A4 Natural Depletion: Evaluation Of Revenue, Opex, Cash Flow, Internal Rate
Of Return , Pay-Back Time And Npv Using 10% As The Discount Factor ............ 95
APPENDIX B .............................................................................................................. 96
Evaluation Of Npv For The Various Development Schemes Using The Calculated
Internal Rate Of Return ............................................................................................ 96
B1 Gas Injection: Evaluation Of Npv Using The Calculated Internal Rate Of
Return......................................................................................................................... 96
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B2 Water Injection: Evaluation Of Npv Using The Calculated Internal Rate Of

Return......................................................................................................................... 97
B3 Wag Injection: Evaluation Of Npv Using The Calculated Internal Rate Of
Return......................................................................................................................... 98
APPENDIX C.............................................................................................................. 99
Full PVT Report ......................................................................................................... 99
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LIST OF TABLESTable 1.1: Rock Typing and Layers representing the Tarbert and Ness
22
Table 1.2: Initial Values of Fluid Properties ............................................................. 24
Table 1.3: Table Showing the Fluids in Place Volume ............................................. 25
Table 2.1: PVT File ..................................................................................................... 30
Table 2.2: Analytical solution for Recovery by Natural Depletion Drive............... 34
Table 2.3: Reciprocal Mobility Ratio computation for obtaining error. Ea ........... 37
Table 2.4: Relative Permeability (Imbibition) data table ....................................... 37
Table 2.5: Relative Permeability (Imbibition) data table ........................................ 39
Table 2.6: Oil Recovery from Natural Depletion and Water Injection ................... 41
Table 2.7: Gas-Oil Relative Permeability Data for Rock-Type 1 ............................. 45
Table 2.8: Recoveries from combined Natural Depletion and Gas Injection ........ 48
Table 3.1: Comparison of WI and WAG ................................................................... 67
Table 4.1 Revenues and Expenditures for Natural Depletion ............................... 70
Table 4.2 Economic Evaluation Indices for Natural Depletion ............................. 71
Table 4.3 Revenues and Expenditures for Gas Injection 73
Table 4.4 Economic Evaluation Indices for Gas Injection .................................... 74
Table 4.5 Revenues and Expenditures for Water Injection .................................... 76
Table 4.6 Summary of Economic Evaluation for Water Injection
77
Table 4.7 Revenues and Expenditures for WAG Injection ................................... 79
Table 4.8 Summary of Economic Evaluation Parameters for WAG Injection .... 80
Table 4.9: Economic Evaluation for the various development schemes
87
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LIST OF FIGURES
Figure1.1: Alwyn North Field Localization Map
Figure 1.2: Alwyn Area Location Map
Figure1.3: Stratigraphy of the Alwyn North Field
Figure 1.6: Cross Section Through Alywn Showing The Faults
11
Figure 1.7: Depositional Setting of the Brent Group

Figure 1.8: Showing Log Correlations
13
Figure 1.8: Reservoir Model Showing the Grids
17
Figure 1.9: Data File Initialized to Obtain Volumes In-Place
19
Fig2.1: Reciprocal Mobility Ratio Chart
29
Fig2.2: Fractional Flow curve for the Tarbert Region
31
Fig2.3:
32
Fractional
Flow
curve
for
the
Ness
Region
Figure 2.4: Relative permeability versus gas saturation curves
39
Figure 2.5: Plot of Gas Fractional flow against saturation for Tarbert
Fig 3.1: Well Architecture: Natural Depletion
40
42
Fig 3.2: FOPR, FOPT and FOE for the 4-well Natural Depletion case
42
Fig 3.3: Oil Production Rate from Wells PA2, PA1, PN2 and P N1
44
Fig 3.4: Field Recovery Efficiency and Field Plateau Rate for both cases 46
Fig 3.6: Field Water Cut and Field Gas-Oil Ratio for both cases
47
Fig 3.7: Well Architecture: Natural Depletion with Wells
48
Fig 3.9: FPR, FOE, FWCT, FGOR as a function of time

Fig 3.10:
49
Well by Well Analysis
50
Fig 3.11: Well Architecture: 7 producers and 5 injectors

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Fig 3.12: Water Injection: FOPR, FOE and FOPT
53
Fig 3.13: Water Injection: FPR, FWCT and FWIR

Fig 3.14: Gas Injection: FOPR, FOE and FOPT
Fig 3.15: Water Injection: FPR, FWCT and FWIR
54
55
56
Fig 3.16: Sub-case 1: FOPT, FOE, FOPR, FWIR and FOPR
59
Fig 3.17: Sub case 2: FOPR, FOPT, FOE, FWIR and FPR
59
60
61
Fig4.1 Cash flow curve for Natural Depletion Scheme
67
Fig4.2
Cash flow for Gas Injection
69
Fig4.3
Cash flow for Water Injection
73
Fig 4.4: Cash flow for WAG Injection
75
Fig 4.5: Investment Costs for the various development schemes
76
Fig 4.6 : Pay-back time for the various development schemes
77
Fig 4.7: Economic Life and PI for the various development schemes 79
Fig 4.8 GPM per barrel for the various development schemes
80
Fig 4.9 NPV for the various development schemes
81
Fig 4.10 IRR for the various development schemes
82
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CHAPTER ONE
INTRODUCTION
1.1 Purpose of study
To determine the optimum field development plan for the Alwyn North Field
(Brent East Reservoir) in terms of recovery and economics, using Eclipse reservoir
simulator.1.2 Scope of Study
This study was limited to the Brent East panel of the Alwyn North Field. The
reservoir model focused on the Ness 2 and Tarbert 1, 2 and 3 units because of the
small oil content in Ness 1.
Black Oil PVT representation was used in this study. The drive mechanisms were
determined using material balance. Annual production was set at 15% of ultimate
reserves.
The following cases were examined:
1. Natural depletion with Flowing well pressure limit of 100bars
2. Natural depletion up to a reservoir pressure 290bars then introduction of
Water injection as secondary recovery process
3. Natural depletion to a reservoir pressure 350bars then introduction of Gas
injection as secondary recovery process
4. Natural depletion to a reservoir pressure 350bars then introduction of
Water injection as secondary recovery process for 4years followed by an alternate
gas injection.
1.3 Geological Description And Field Characteristics

In a bid to explore the Alwyn North field a thorough geological description of the
field is necessary to ensure complete understanding of the geology of the area. The
geological settings, sedimentology and other related aspects of the field are
described in this section.
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1.3.1 Location
The Alwyn North Field was discovered in 1974 in the South Eastern part of the East
Shetland Basin in the UK North sea, about 140 km East of the near most Shetland
Island and about 400 km North East of Aberdeen. The Alwyn field lies respectively
4 and 10 km south of Strathspey and Brent field, 7 km east of Ninian field, and 10
km north of Dunbar field (see field localisation map below). The water depth is
around 130 m. The field is in the UKCS Block 3/9 and extends northward into the
Block 3/4. The location map and 3D view of the area is shown in Fig. 1.1 and 1.2
respectively.
Figure1.1: Alwyn North Field Localization Map
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Figure 1.2: Alwyn Area Location Map
1.3.2 Field Characteristics Tectonics

Tectonics played a significant role on the structure of ALWYN North field.
Tensional movements leading to the development of the Viking Graben from
the lower Permian times to Upper Jurassic generated a complex fault pattern.
Several seismic data acquisition programs were carried out: 2D seismic in 1974
and 1977, and 3D in 1980/81. Seismic data analysis indicates that the oil bearing
sands are controlled on one hand by normal sealing faults with a general NorthSouth direction, on the other hand by a major unconformity at the base of
Cretaceous. This unconformity is related to erosion of the Brent formation in the
eastern part of ALWYN North field.
In a bid to explore the Alwyn North field a thorough geological description of
the field is necessary to ensure complete understanding of the geology of the
area. The geological setting, sedimentology and other related aspects of the field
are described in this section.
1.3.3 Geological Setting

The Brent formation was deposited in a deltaic and shallow marine environment
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during the Middle Jurassic period. The Statfjord formation was deposited in a
fluvial and shallow marine environment during the Lower Jurassic period. Each
panel has several pre-cretaceous tilted blocks (see Figure 1.3 below). The cap
rock is made of three on lapping shaly formations:
Heather formation: marine transgressive shales with thin limestone
stringers, which is deposited after the tectonic activity.
Kimmeridge clay thick in the West, thin in the East, which is the main
hydrocarbon source rock.
Thick cretaceous sequence.
Figure1.3: Stratigraphy of the Alwyn North Field
ALWYN North reservoirs were relatively unaffected by diagenesis due probably

to an early hydrocarbon impregnation.
RFT shows that each panel had its own pressure regime. Water-oil contacts were
identified at different depth. All the panels were independent from the other.
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1.3.4 Brent East Reservoir of Alwyn North Field

This study was considering only the East Panel of the Alwyn North field.
1.3.4.1 Geological Description

The structure of Alwyn Brent East Block was generally an eroded monoclinal,
with Base Cretaceous Unconformity (BCU) setting east and south limit, Spinal
Fault setting west limit (separating Brent east from north and central west
blocks), and a fault with sometimes very small throw setting north limit. East
structure under BCU is quite complicated, and described under the generic term
of slumps (linked to gravitational collapse of head blocks during Cretaceous
erosion similar as ones encountered in Brent field).
In the Brent East panel, the oil zone is in a stratigraphic trap as shown below
created by the erosion unconformity to the east, by a northsouth fault to the
west (between A-1 and A-2 wells) and by a transverse fault to the north. The
Brent Geological Cross section is shown below.
Figure 1.4: Brent Geological Cross section
The Brent geological well section is shown in Fig. 1.5.
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Fig: Brent Geological well Section
1.3.4.2 Tectonics
Several seismic data acquisition programs were carried out: 2D seismic in 1974
and 1977, and 3D in 1980/81. Seismic data analysis indicates that the oil bearing
sands are controlled on one hand by normal sealing faults with a general NorthSouth direction, on the other hand by a major unconformity at the base of
Cretaceous. This unconformity is related to erosion of the Brent formation in the
eastern part of ALWYN North field.
Following the seismic interpretation, ALWYN North field was divided into the
following panels:
Brent North.
Brent Northwest.
Brent Southwest.
Brent East.
Statfjord
Triassic
.
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The first four panels are oil bearing within the Brent. The Statfjord formation is
a condensate gas reservoir with the Brent completely eroded. The underlying
Triassic is gas bearing.
Figure 1.6: Cross Section Through Alywn Showing The Faults
1.3.4.3 Sedimentology
The Brent group is divided into three main units: the Lower Brent (Broom,
Rannoch and Etive formations), the Middle Brent (Ness formations), and the
Upper Brent (Tarbert formations). The last two are the only oil-bearing
formations in the Brent East panel.
The Lower Brent formation was deposited in a shoreface (Rannoch) to
coastal barrier (Etive) environment. The clastic reservoir is made of
transgressive sandstone (Broom) and prograding sandstones (Rannoch
and Etive). Thus, the petrophysical properties range from low to medium
permeability. This unit does not contain any oil in the Brent East reservoir.
The Middle Brent formation was deposited in a deltaic to alluvial plain
(Ness 1) and lagoon to lower delta plain (Ness 2) environment. Thus,
sandstones are inter bedded with clay and coal. In general, Ness 1 unit has
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poorer petrophysical characteristics than Ness 2 unit and its oil-bearing

leg is much lower especially to the East of the reservoir.
The Upper Brent was deposited in a prograding lower shoreface
environment. Three different types of sandstone are identified. At the top
(Tarbert 3), are massive sands with very good reservoir characteristics.
This is the main oil bearing unit in the Brent East reservoir. Below
(Tarbert 2), there are mica-rich sandstone with lower permeability. These
mica-rich sandstones exhibit a high natural radioactivity. The base of the
Tarbert formation (Tarbert 1) is very similar to the top sandstone. Despite
its lower average permeability, Tarbert 2 unit is not considered as a
permeability barrier.
Figure 1.7: Depositional Setting of the Brent Group
To summarize, Tarbet can be described as massive shore face sands with

excellent petro-physical properties, well connected throughout the field and
may be even regionally, communicating partially with Upper Ness fluviatile
system which is isolated from Lower Ness.
Base Brent Etive and Rannoch are better quality reservoirs, but mainly water
bearing in Brent East Block.
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Considering the small oil content in Ness 1, this unit is neglected in the reservoir
model. Thus, the reservoir model focuses on the Ness 2 and Tarbert 1, 2 and 3
units.
The Brent East reservoir of Alwyn North was characterized using data from two
of the original vertical appraisal wells (3/9A-2, 3/9A-4) and two new deviated
delineation wells (N1 and N3). N3 characterized the northern part of the field
where an important oil leg was confirmed mainly in the Tarbert units. N1
located to the West did not produce any oil and only encountered the aquifer,
which does seem to be active. The water salinity in the reservoir is about 17,000
ppm.
1.3.4.4 Log correlations

The last two appraisal wells, namely N1 and N3, were extensively cored.
Numerous core samples were analyzed through routine conventional core
analysis. Several permeability-porosity relationships were derived (see annex 2):
one for each of the reservoir units considered (Tarbert 3, Tarbert 1&2 and Ness 2).
Special core analyses were carried out on a few samples from each of the
reservoir units. Unsteady state measurements under reservoir conditions (fluids
and pore pressure) were conducted to obtain a set of relative permeability and
of capillary pressure curves.
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Figure 1.8: Showing Log Correlations
1.4 OBJECTIVES OF THE STUDY

The goal of this study is to propose an initial development plan for the Brent
East reservoir, this plan should maximize the total hydrocarbon production and
minimize the development cost in $/bbl.
Several aspects were investigated:
a. Using available data, a reservoir performance analysis was performed to
identify the main reservoir driving force. Using material balance, the different
drive mechanisms were investigated in order to estimate the oil recovery.
Primary production as well as secondary production must be investigated
(material balance calculation above Psat). In order to calculate the Material
Balance, use average values of Swi and Sor.
b. Based on the results of the first step, different production schemes should
were defined: Natural depletion, water injection, gas injection. Each scenario
was reported in detail with all relevant information, assumptions and selected
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options. The annual production plateau was estimated to be around 15% of

EUR. The production profiles were evaluated over 15 years.
c. 60% of EUR must be produced at plateau rate.
d. Each scenario was implemented in the numerical reservoir model. In natural
depletion, the model was run until 100 bar (BHP). Are the calculated
numbers of producers relevant? Investigate was done to give the best number
of wells. For secondary production: We optimize the injectors to meet the
target production. Attention was paid to the critical gas saturation (Sgc).
e. A proposed scenario was selected based on technical criteria and economic
parameters were compared.
f. Using the selected development scheme, the major uncertainties were
investigated to assess the impact of the model assumptions including for
instance:
permeability anisotropy: Ky = 10*Kx,
fault transmissibility: sealing / non sealing,
Tarbert 2 Tarbert 3 connection: transmissivity of layer 4,
aquifer strength: decrease of pore volume in the water zone (see the impact
on natural depletion scheme),
1.5 Reservoir Model And Characteristics

Based on the Brent East characteristics described previously, a reservoir
simulation model was designed to investigate the production capacity of this
reservoir. The reservoir model was built using the four appraisal wells: A2, A4,
N2 and N3. These wells can be abandoned according to the production scheme.
Due to a sketchy knowledge of the Brent East reservoir at the beginning of the
study, a Black Oil model was designed with rectangular cells with 36 cells along
the x-direction and 51 cells along the y-direction. The geometry definition is
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given in a Petrel file: 'MODEL_PETREL.GRDECL'. The structural

framework used for the Corner Point Geometry is based on the Spinal Fault
Geometry and the North fault limit. Model size is geometrically 36x51x18 but is
in reality 36x51x17 (since the 1st layer representing all layers between the Base
Cretaceous Unconformity and Top Brent is killed by nil porosity), Fig. 1.8.
1.5.1 Rock Typing

The rock typing to represent the Tarbert and Ness formations as shown in Table
1-1. Tarbert can be described as massive shore-face sands with excellent
petrophysical properties, well connected throughout the field. Tarbert
communicates partially with the Upper Ness fluviatile system which is isolated
from Lower Ness.
Ness 1 and Ness 2 bear small oil content while lower Brent is mainly water and
are thereby neglected in the reservoir model. Thus, the reservoir model focuses
on Tarbert 1, 2 and 3.
Table 1.1: Rock Typing and Layers representing the Tarbert and Ness
Rock Type
Formation
Rock Type Formation Layer Tags
Impermeable zone
Type 1
Type 2
Type 2
Layer Tags
1
Tarbert 3
2,3,4
Tarbert 2
5,6
Tarbert 1
7,8,9
Ness 2
10,11,12,13,14
Ness 1
15,16
Lower Brent
17,18
This model will only include the oil bearing sands from the Tarbert (1, 2 &
3) and Ness (1 & 2) formations. Thus, in this study, the reservoir model has 17
layers:
3 in Tarbert 3
2 in Tarbert 2
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3 in Tarbert 1
5 in Ness 2
4 in Ness 1
There are three equilibration regions defined in the EQUNUM keyword in the
Regions section. However, there is no evidence of compartmentalization, all the
regions have the same water-oil contact (WOC) and pressure regime.
Figure 1.8: Reservoir Model Showing the Grids
Initial pressure of the reservoir is 446 bar and saturation pressure is 258 bar. The
reservoir petrophysical properties (porosity, permeability) were also scaled up.
The property modeling was done as follows:
Tarbert and Ness shallow marine sheet flood sandstone: Determine
modelling with trend surface control maps
Ness: Object modelling floodplain & lagoonal back barrier lobes
Porosity: Depth and facies trends incorporated
Permeability: Calibrated with core and DST Data
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The petrophysical properties (porosity, permeabilities and NTG) are included in

the grid in the include file: 'MODEL_PETREL_PETRO.GRDECL'. The original
oil in place (OOIP) estimation, according to the geological model, is about 35.68
MMsm3; this value is dependent on capillary pressure.
1.5.2 Reservoir Fluid Properties

Black Oil PVT representation was used in this study. The PVT data file PVT.INC
contains the relevant composite black oil PVT data which accounts for the field
separation conditions. Below is a table showing the initial PVT values of the
reservoir fluid.
Table 1.2: Initial Values of Fluid Properties
Properties Value
Initial Reservoir Pressure (Pi)
446 Bar
Temperature (T) 110 oC

Saturation Pressure (Psat)
258 Bar
GOR 206.8974 v/v

Formation factor, Bo@ Pi
OOIIP
1.6038
35.68MMm3
1.5.3 Fluids in Place

The original data file was initialized to obtain the fluid in place values shown
below. This was illustrated by adding the ECHO and FIPNUM keywords in the
dot DATA simulation.
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Table 1.3: Table Showing the Fluids in Place Volume
Currently in place
Tarbert
Ness Entire Field
31,104,045 4,577,946 35,681,991
Oil (sm3)
Water (sm3)
Dissolved Gas
125,222,389 188,540,747 313,763,137

6,426,769,976
945,920,886
7,372,672,862
(sm3)
Figure 1.9: Data File Initialized to Obtain Volumes In-Place
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As shown above, the Tarbert (Region 1) had Oil Originally in place as 31104045
Sm3, while Ness (region 2) had Oil Originally in place as 4577946 Sm3,with
Tarbert contributing 87% of the total oil in place in the entire field. The Ness
can be said to be non-prolific, since it is producing more water than oil. For this
reason, region 2 will not contribute per say to our proposed production, as such
drilling into it would lead to early breakthrough and a reduction in oil recovery.
Hence, our study was focused mainly on the Tarbert rock.
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CHAPTER TWO
FIELD DEVELOPMENT TECHNIQUES
In this chapter we proposed an initial development plan for the Brent East
reservoir, this plan should maximize the total hydrocarbon production and
minimize the development cost in $/bbl. This is done in two parts, the analytical
calculation of the recovery from natural depletion, water injection and gas
injection and the other part, the simulation using ECLIPSE for each of the above
mentioned scenarios with the inclusion of water alternate gas injection. In the
excel calculation involving material balance and the different drive mechanisms
were used to estimate the oil recovery. The first case used to produce the oil in
place was natural depletion and also different cases of secondary production
were also investigated (material balance calculation above Psat).
The different secondary production schemes used were: Natural depletion, water
injection, gas injection as well as Simultaneous Water Gas Injection (WAG).
Each case is described in this chapter using both excel calculation and eclipse to
validate. The annual production plateau estimate is around 15% of EUR. The
production profiles were evaluated over a period of 15 years.
Each case was implemented in the numerical reservoir model. For primary
method, production was optimized by investigating the best number of wells.
For secondary method, production was optimized by investigating the best
number of producers and injectors to meet the target production.
2.1 Constraints
2.1.1 Drilling Constraints
To develop the Brent East reservoir, a 40-slot well platform will be used.
The maximum well deviation should not exceed 46 with respect to
vertical.
Production program should start at the beginning of 2012.
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The maximum horizontal drain (x or y direction) of a well will be less than

1000 m.
The kick off point (start of deviation) is set at 2,000 m ground level. It is
also possible to drill vertical wells with subsea completion.
The average drilling completion time is about 2 months for vertical wells
and 2 months for the horizontal ones.
Wells may be t
Two drilling rigs are available.
The wells are drilled in 7".
2.1.2 Production Constraint

The minimum bottom hole flowing pressure (BHFP) is 260 bar.
The perforations of the wells are chosen to optimize recovery depending
on the well location.
Vertical well production test indicates a maximum fluid (oil + water) rate
of 1,800 Sm3/d.
Horizontal well could produce up to 2,400 Sm3/d of liquid. Only flowing
production is considered at this stage.
Drainage radius for vertical wells is about 400 m.
The averaged maintenance down time is 10 % for all the wells.
Due to surface facilities on platforms, the maximum allowable GOR is 1500
m3/m3 and the maximum allowable water cut is 90 %.
The minimum economical rate for the field is 1000 Sm3/d of oil.
To estimate the productivity index, we considered a skin of 5
The annual production plateau should be around 15% of EUR (~7200
Sm3/d)
The production plateau should be maintained for 60% of the total oil
production
The production profiles should be evaluated over 15 years
2.1.3 Water Injection Constraint

During secondary recovery, the following constraint will be considered for water
injection.
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Seawater may be injected into the reservoir without any water

compatibility problem.
To estimate the water injectivity index, we considered a skin of -4 induced
by thermal fractures due to the low temperature of the sea water injected
in the formation (surface temperature of water: 8C).
The fracture pressure of the Brent reservoir is about 480 bars.
The maximum water injection rate is 3,000 Sm3/d. The maximum total
water injection available is 15,000 Sm3/d.
Control in voidage replacement
2.1.4 Gas Injection Constraint

If gas injection is considered during secondary recovery, the following constraint
will be considered:
Lean Statfjord gas may be injected.
This lean gas is assumed to have the same characteristics as the Brent dissolved
gas.
The maximum gas injection rate is 800,000 Sm3/d per well. The maximum total
gas injection available is 3,200,000 Sm3/d.
Control in voidage replacement.
2.2 Analytical Calculations

The main drive mechanism for production of the Alwyn North Brent East
reservoir is Expansion of original reservoir fluids (Oil) because the reservoir
initially is undersaturated and will be depleted above bubble point pressure with
a minimum drawdown of 20 bars. However, secondary and enhanced oil
recovery mechanisms will also be deployed to increase recovery via water and/or
gas injection. These scenarios will be investigated using MBE (Analytical or
Hand Calculations) vis--vis dynamic Numerical Simulation with Eclipse and
the results will be presented and discussed.
However, before proceeding we ran Eclipse in NOSIM mode to generate the
PRT file containing the STOIIP of Alwyns Tarbert and Ness formations. The
following screenshot captures this information and other important data.
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The PVT file used for various calculations is shown below. The full PVT file used
for gas injection is shown in the appendix.
Table 2.1: PVT File
Assumptions
1. The Petro-physical and PVT Properties of both rock types are assumed to be
similar.
2. Vertical Sweep Efficiency, Ev is assumed to be 0.7 for all regions.
2.2.1 Case One: Natural Depletion

This refers to production of hydrocarbons from a reservoir without the use of
any process (such as fluid injection) to supplement the natural energy of the
reservoir. In the case of natural depletion, we used the material balance equation
(MBE) to calculate the production and ultimate oil recovery under a natural
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depletion process. The reservoir was depleted from the initial pressure (Pinitial =
258bar) to a bottom hole pressure limit of 100 bar.
The data used for these calculations were obtained from the PVT report and the
INPUT data file. The Original Oil in Place for the two regions (Tarbert and Ness)
was obtained from an initialization run in ECLIPSE. The result is displayed in
Figure 1.9.
In this type of reservoir, the principal source of energy is a result of gas
liberation from the crude oil and the subsequent expansion of the solution gas
as the reservoir pressure is reduced.
Assumptions:
1. No Aquifer support or water influx into the reservoir
2. Recovery is by rock and liquid expansion
2.2.1.1 Minimum number of wells

The following equations were used to determine the minimum number of wells:
------------------------------2.1
To get the initial number of wells, we need:
--------------------------------------2.2
Considering that for the development field case we don't have any production
data, to estimate productivity index (average value between Pi and Pmin):
--------------------------------------------------2.3
Where,
= 0.0086.2 = 0.0536 ___metric units
= 0.0086.2 = 0.0536 ___metric units
At reservoir pressure, 446bars
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At 280bars,
Well Potential =
----------------------------------------------2.4
Assuming EUR = 25%
Hence,
Minimum number of wells =
2.2.1.2 Material Balance For Natural Depletion Alone

a. Rock And Fluid Expansion
The equations were used for calculating material balance;
---------------------------------------------------------------2.5
Where,
Np = Cumulative Oil Produced
Boi = Initial Formation Volume Factor of Oil
Bo = Final Formation Volume Factor of Oil
N
= Stock Tank Oil Initially in Place (STOIIP)
Ce = Equivalent Compressibility of Oil
P = Pressure Drop
But,
----------------------------------------------------2.6
Where,
Co = Compressibility of Oil
Cw
= Compressibility of Water
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So
= Oil Saturation
Swc = Connate Water Saturation

Cf
= Rock Compressibility
Also
-----------------------------------------------------------------------------2.7
i. Tarbert Region:
Boi = Bo @ 446 = 1.6038
Bo @ 280 = 1.6737
For water participating in expansion,

-----------------------------------------------------------------------2.8
ii. Ness Region:

Boi = Bo @ 446 = 1.6038
Bo @ 280 = 1.6737
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For water participating in expansion,
Estimation of the above parameters and final EUR for NATURAL DEPLETION
case are presented below:
Table 2.2: Analytical solution for Recovery by Natural Depletion Drive
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2.2.2 Case Two: Water Injection

The previous case assumed the reservoir produced only by natural depletion. In
practice, reservoirs are rarely allowed to deplete almost to their bubble point
pressures. Pressure maintenance schemes are implemented to sustain plateau
production usually with Water Injection Scheme (Note: Pressure maintenance
by Gas Injection is usually not feasible because of the enormous amounts of gas
that is required; gas Injection supports oil recovery mainly via dissolution and
miscibility phenomena).
Here, we will calculate the amount of additional oil that can be recovered by
water injection and also the number of wells that will effectively sweep oil in the
reservoir while maintaining the reservoir pressure above bubble point.
The total recovery during a water injection process can be given by;
----------------------------------------------------------------2.9
-------------------------------------------2.10
Where,
Ed = f(primary depletion, krw & kro, o & w)
Ea = f(mobility ratio, pattern, directional permeability, pressure
distribution, cumulative injection & operations)
Ev = f(rock property variation between different flow units,fluid density), Ev =
0.7(assumption)
2.2.2.1 Material Balance

i. Tarbert Region:
Evaluation of Ea
Ea can be gotten from the graph as shown below:
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Fig2.1: Reciprocal Mobility Ratio Chart
The Mobility Ratio (MR) is first obtained using the relationship

---------------------------------------------------------2.11
Next, the Reciprocal Mobility Ratio (inverse of MR) is calculated and the areal
sweep efficiency (EA) corresponding to this value is read off the Reciprocal
Mobility Ratio Chart.
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Table 2.3: Reciprocal Mobility Ratio computation for obtaining error. Ea
From the table and chart above, Ea = 0.98
Evaluation of Ed
Ed is calculated from a plot of fractional flow, fw versus water saturation, Sw.
This plot shows the fractional flow of water when injected into the reservoir to
displace oil. The plots are different for each rock type.
-------------------------------------------------------------2.12
Plot of fw vs Sw is generated using corresponding Relative Permeability
(Imbibition) data
Table 2.4: Relative Permeability (Imbibition) data table
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Tarbert
1.1
1
0.9
0.8
fw
0.7
0.6
Tarbert
0.5
0.4
0.3
0.2
0.1
0
0
0.2
0.4
0.6
Sw
Swm 0.8
1.2
Fig2.2: Fractional Flow curve for the Tarbert Region
As shown above,
Swc = 0.15, Swm = 0.71
Therefore, the drainage efficiency at Break-through (BT) is obtained from
equation 2.12;
Recovery =
= 0.6588 = 65%
Ed = 0.66, Ev = 0.7, Ea = 0.98

Therefore, R = 0.66*0.7*0.98 = 0.45
ii. Ness Region

Evaluation of Ea
EA is the same as obtained for Tarbert since both rock types contain the same
reservoir fluid.
Evaluation of Ed:
Plot of fw vs Sw is generated using corresponding Relative Permeability
(Imbibition) data
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Table 2.5: Relative Permeability (Imbibition) data table
Swm
Fig2.3 : Fractional Flow curve for the Ness Region
As shown above,
Swc = 0.30, Swm = 0.66
Therefore, the drainage efficiency at Break-through (BT) is obtained from
equation 2.12;
Recovery = (0.66-0.30)/(1-0.30) = 0.51 = 51%
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Ed = 0.51, Ev = 0.7, Ea = 0.98,

R = 0.51*0.7*0.98 = 0.35
2.2.2.2 Estimation of Oil Recovery Using Hand Calculation

From equation 2.9,
Oil Recovery with water:
Total oil produced:
------------------------2.13
Therefore,
Table 2.6 shows a section of an MS Excel file that contains calculations for the
total oil that can be produced by water injection.
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Table 2.6: Oil Recovery from Natural Depletion and Water Injection
From the table above, the total oil recovery from Tarbert and Ness by natural
depletion and water injection is 4.49E+06 Sm3 with a Global percent recovery of
51%.
Given that annual production plateau should be around 15% of Estimated
Ultimate Reserves (EUR), Average Oil Withdrawal per day calculated from Table
2.6 is 7478 Sm3/day.
2.2.2.3 Minimum number of wells:

Oil Flow rate, Qo, per well, is given by :
----------------------------------------------------------2.14
Where,
Kro = relative permeability of oil in the presence of water
Bo = oil formation volume factor
o = viscosity of oil
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C =conversion factor
K = permeability
H = net pay thickness
P = pressure drawdown
Rd = reservoir drainage radius
Rw = well radius
S = skin
Assumptions for Calculation:
Wells drilled and completed in the TARBERT Region
Reservoir producing at Pseudo-steady state
Oil flowing at connate water saturation
Reservoir drainage radius equals 400m
Values of average permeability, K, Net-to-Gross ratio, NTG and average
thickness, DZ were obtained from the geological model using FLOVIZ with
Eclipse Simulator run on NOSIM mode. An examination of the 9 vertical
layers of the Tarbert region showed an erosion of the top layer. Hence, only 8
layers of reservoir sand thickness were used.
Qo @ 446bars
Bo = 1.6038
o = 0.3916
Kro = 0.8
Z = 8.0907 per layer* 8 layers *NTG = 64.7256 * 0.96883 = 62.7081m
Qo @ 280bars
Bo = 1.6737
o = 0.2829
Kro = 0.8
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Z = 8.0907 per layer* 8 layers *NTG = 64.7256 * 0.96883 = 62.7081m
We have been informed of a possible production downtime of 10%. Hence, our

rate is subject to a WEFAC (Well Efficiency Factor) of 90%.
Therefore,
=
Implication:
We need to drill at least 5 producer wells for optimal reservoir exploitation by
Natural Depletion.
Secondary oil recovery by water injection is usually incorporated in the field life
of a reservoir. Hence, optimum number of wells for increased recovery by water
injection was also calculated. Because of thermal cracks induced by injecting
cold North Sea water into the hot reservoir, a skin of -4 is expected for a water
injection case.
The most efficient way to determine the amount of Water for injection is to
calculate the amount of water required to achieve zero-net-voidage by applying
the VOIDAGE REPLACEMENT PRINCIPLE.
Field oil production rate was previously determined as 7478 Sm3/day. We shall
find the equivalent reservoir oil volume. This volume is equal to reservoir water
volume for zero-net-voidage.
Subsequently, we determine the surface equivalent of this reservoir water which
is calculated as:
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Implication:
We need to drill at least 4 injection wells for optimal reservoir exploitation by
voidage replacement.
2.2.3 Case Three: Gas Injection

We would calculate the amount of recovery that can be achieved by gas
injection while maintaining the reservoir pressure above bubble point. Because
the NESS region is predominantly water zone, there will be no need injecting gas
in this region. Hence, we focused on recoveries from the TARBERT region.
2.2.3.1 Material Balance

i. Tarbert Region
The total recovery possible during a gas injection process can be obtained from
equation 2.15
---------------------------------------------------------------2.15
Recall that Equation 2.10 for Recovery Factor with all parameters defined as
previously is:
Evaluation of EA:
The Mobility Ratio is first obtained, Reciprocal Mobility ratio estimated, and
traced up to the corresponding gas cut curve to read off EA =0.74 (See Table
2.8).
Evaluation of ED:
As with the water injection case, plot varies for the different rock types as
presented below. Because the reservoir is predominantly water-wet, Gas
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Injection constitutes a Drainage Process. Hence, the Drainage Data for Tarbert
is made use of for computing fractional flow.
Table 2.7: Gas-Oil Relative Permeability Data for Rock-Type 1
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Figure 2.4: Relative permeability versus gas saturation curves
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Figure 2.5: Plot of Gas Fractional flow against saturation for Tarbert
From the graph, the Sgf and Sgm as shown on the chart are determined.
Sgm = 0.25 , Sgc 0.0
Therefore, the drainage efficiency at Break-through (BT) is obtained as follows;
EV = 0.7 (assumption)
Applying Equation 2.10,
Recovery of oil from gas injection is shown in the Table 2.8 below:
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Table 2.7: Recoveries from combined Natural Depletion and Gas Injection
As shown in the table above, total oil produced from Tarbert due to gas injection
is 5,219,682.323 Sm3 with a per cent recovery of 14.49 %.
Total oil from Tarbert from both natural depletion and gas injection is therefore,
6,978,338.529 Sm3 with a per cent recovery of 19 %.
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CHAPTER THREE
DYNAMIC FIELD DEVELOPMENT STUDY USING ECLIPSE
SOFTWARE
A field development study can be conveniently done using Eclipse as different
reservoir production cases can be simulated to determine the best strategy for
producing from the field.
Four cases will be considered:
Natural Depletion
Natural Depletion followed by Water Injection
Natural Depletion Followed by Gas Injection
Natural Depletion followed by Water Alternating Gas Injection (WAG)
3.1 Case One: Natural Depletion

Natural depletion, also known as primary production, describes a scenario
where the reservoir is produced via its natural energy. In natural depletion, the
energy required to drive the fluids from the reservoir to the wellbore and
consequently to the surface is the reservoirs energy. This energy might be due
to a solution gas drive, aquifer and rock expansion, gravity drainage or water
drive.
3.1.1 Natural Depletion with the Available Four Exploratory Wells

For this natural depletion case, the original four vertical wells in the model were
run to limit BHP of 100 bars atmospheric and the evolution of field pressures
and flow rates during the period were noted.
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Fig 3.1: Well Architecture: Natural Depletion from Wells PA2, PN2, PA1 and
PN1
Fig 3.2: FOPR, FOPT and FOE as a function of time for th e 4-well Natural
Depletion case
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The figure above indicates a maximum oil recovery of 22% for this natural
depletion case. Also, the plateau production period peaks for only five years and
then declines to zero in seven years. Hence, natural depletion can neither
sustain production for the 15 years proposed for the project nor can recoveries
are maximized.
Moreover, the principle of profitable business is directly challenged as oil
production revenue will be insufficient to offset the huge investments required
for a project of this magnitude.Thus, the need for secondary and tertiary
recovery schemes arises as the field cannot be produced with a primary recovery
technique alone.
Further, a disparity was observed between the calculated and simulated value of
the maximum recovery. The recovery from the analytical calculations was 6%
while the recovery from the numerical simulation was 22%. This suggests that
there is a nearby aquifer that provided pressure support to the reservoir
Fig 3.3: Oil Production Rate as a Function of Time from Wells PA2, PA1, PN2
and PN1
From an analysis of the figure above, it was observed that well PA2 contributed
poorly to the total field production. This could be due to any or a combination
of the following reasons:
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Improper well placement,

Proximity to a fault,
High positive skin
Completing the well in a water zone.
Well PA2 can either be shut off or converted into an injection well since it is a
poor producer. The latter was deemed a better economic decision as it ensured
the continuous use of the well to add value to the field. Hence, subsequent
simulations for the natural depletion case were done with PA2 shut while new
wells were drilled and brought on stream.
3.1.2 Effect of Critical Gas Saturation

To study the effect of critical gas saturation on field productivity, the critical gas
saturation was increased from 0%, as was used in the previous cases, to 10%. The
implication of setting the critical gas saturation to 0% is that gas begins to
evolve from solution throughout the reservoir as soon as the reservoir pressure
depletes to a level that is below the bubble point pressure of the oil. This leads
to an increase in gas-oil ration and a subsequent decrease in oil productivity.
Fig 3.4: Comparing the Field Recovery Effi ciency and Field Plateau
Production Rate for both cases
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Higher recoveries and longer plateaus were recorded for the simulation case
with a critical gas saturation of 10%. There was an increase in total recovery from
22% to 26% and the time required for production to terminate increased by one
year.
Fig 3.5: Comparing the Field Pressure and Total Field Production Volume for
both cases
By increasing the critical gas saturation to 10%, the field total production
increased from 8MMm3 to 9MMm3 and an additional year was required for the
reservoir to deplete to the bottom hole flowing pressure limit of 100bars.
As with the previous graphs, the new case gave better results. In contrast with
the previous case, an extra year was required for the field water cut to attain its
maximum value and an additional 18 months was required for the field gas-oil
ratio to attain its peak. From the results above, it can be confidently inferred
that recovery is improved when dissolved gases stay longer in solution as gas
mobility is delayed to obtain better oil recoveries. Hence, subsequent simulation
cases will be done with the critical gas saturation set to 10%.
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Fig 3.6:
Comparing the Field Water Cut and Fie ld Gas-Oil Ratio for both
cases
3.1.3 Natural Depletion with Increased Development Wells:

The need to drill added development wells arises as a result of the fact that the
three available wells are inadequate to optimally drain the field of its oil
resources. Economics plays a major role here as drilling of new wells represents a
major portion of capital expenditures. Thus, the number of new wells to be
drilled should be optimized to obtain maximal recovery from the field.
3.1.3.1 Natural Depletion with Five Producer Wells

The minimum number of production wells, as computed through the hand
calculations, was 5 wells. Well PA2 was shut in and two new wells, PB1 and PB2,
were drilled to increase recovery from the field. PB2 was drilled very close to the
shut-in PB1 and PB1 was drilled in an area with very high oil saturation.
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Fig 3.7: Well Architecture: Natural Depletion with W ells PA1, PNI, PN2, PB2
and PA4
Fig 3.8:
Natural Depletion with 5 Producers: FOE, FOPT and FOPR as a

function of time
For the 5-well case, FOPR peaked for 6 years in contrast with the 4-well case in
which FOPR peaked for only 5 years. Field Oil Recovery also increased from 26%
to 30%.
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Fig 3.9: Natural Depletion with 5 Producers: FPR, FOE, F WCT, FGOR as a
function of time
Fig 3.10:
Well by Well Analysis: Individual Oil Well Production Rate as a

function of time
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3.1.4 Inferences: Natural Depletion

From the simulations and optimizations done thus, we came up with the
following inferences:
Ultimate Oil Recovery:
The oil recovery obtained from the different simulation runs is shown on
the bar chart displayed above. EUR from the natural depletion varied from 20%
to about 30%. The highest recovery (30%) was obtained by depleting the
reservoir naturally with 7 wells while shutting well A2. The low recovery from
this type of reservoirs suggests that large quantities of oil remain in the reservoir
and the reservoir pressure dropped very much for this low recovery. This
naturally depleted reservoir will be considered a good candidate for secondary
recovery applications such as water injection as well as gas.
Reservoir pressure:
The reservoir pressure declined rapidly and continuously. This reservoir

pressure behaviour is attributed to the fact that no extraneous fluids or gas caps
are available to provide a replacement of the gas and oil withdrawals. There is
no voidage replacement no sweep provision for the hydrocarbon.
Water production:
There was considerable water production with the oil during the entire
producing life of the reservoir. This is due to the presence of an active water
drive.
Gas-oil ratio:
This natural depletion is characterized by a rapidly increasing gas-oil ratio from

all the wells, regardless of their structural position. After the reservoir pressure
has been reduced below the bubble-point pressure, gas evolves from solution
throughout the reservoir. Once the gas saturation exceeds the critical gas
saturation, free gas begins to flow toward the wellbore and gas-oil ratio
increases.
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3.2: Case 2: Water Injection Preceded by Natural Depletion

In many cases, water injection has traditionally used in the oil industry for
pressure maintenance. It is usually used to maintain pressure above the bubble
point pressure and in some cases, to pressurize the reservoir to the bubble point
pressure. By simulation for water injection, water is pumped or injected into the
reservoir to maintain pressure and expel oil in the pore spaces. This water
displaces this resident oil and pushes them towards the producing wells in that
manner so as to maintain pressure and achieve improved recovery.
In this water injection simulation case, the desire was to maintain the average
reservoir pressure at 290 bars. Hence, the field was naturally depleted from 490
bars to 290 bars and water injection was initiated at this instance. Well PA2, the
poor producer well, was converted to an injector well. Four additional wells were
then drilled to serve as injection wells.
Due to the fact that oil could be recovered as a result of the water injection
sweep, two extra producer wells were drilled. This gave a total of 7 producers
and five injector wells.
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Fig 3.11: Well Architecture: 7 producers and 5 injectors. We ll PA2 is an

injection well
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Fig 3.12: Water Injection: FOPR, FOE and FOPT as a function of time
As predicted, the recovery efficiency increased with the water injection scheme.
The recovery efficiency increased astronomically from 30%, as obtained with
natural depletion to 52%. The maximum oil production of 7200m3/day could be
sustained for four years and the production constraint of a keeping the plateau
for a 60% of the Estimated Ultimate Recovery could be met.
Also, the total oil production rose steadily and finally peaked at 18MMm3 in 14
years.
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Fig 3.13: Water Injection: FPR, FWCT and FWIR as a function of time
Since the oil production was done at a pressure above oil bubble point pressure,
the FGOR remained constant at a value of 0.2m3/m3. Reservoir pressure dropped
steadily from initial reservoir pressure to 296 bars and started rising at the start
of water injection. Field pressure rose very slowly from 296 bars to a final value
of 312 bars in 14 years.
The water injection wells were opened in the 16th month after the start of oil
production. Water injection was done mostly in the Tarbert region. For this 7well case, the water injection rate increased rapidly at the time of injection in
order to compensate for voidage already created before injection. Injection rate
then dropped gradually as the plateau rate (oil production) dropped too. The
average reservoir pressure was maintained above 300 bars as it gently rose. The
water cut also increased as the plateau rate was dropping which indicated that
the injected water has broken through and then being produced.
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3.3 Case 3: Gas Injection Preceded by Natural Depletion

This was simulated by re-defining the water injection wells as gas injection wells.
Gas was then injected into the reservoir when the reservoir pressure had
dropped to 290bars because the injected gas is most soluble in the oil at that
pressure.
Fig 3.14: Gas Injection: FOPR, FOE and FOPT as a function of time
The FOPR plateau at 7200m3 could only be sustained for 4 years and total oil
recovery was 15 million cubic metres of oil. FOE dropped to 42% as against 52%
that was obtained with water injection
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Fig 3.15: Water Injection: FPR, FWCT and FWIR as a function of time
From the production profile of the four wells case, proposed pressure
maintenance at 340 bars wasnt as successful as desired. But however, the rate of
pressure decline around 340 bars reduced for a while, it then reduced gradually
from 340 bars at 300 days to 290 bars at 4 years where it was then maintained
continuously.
Since the field oil recovery dropped by using gas injection, there are still
bypassed oil that were not recovered. This makes only the gas injection not very
suitable on an absolute scale, hence the need for combination with water.
3.4 Case 4: Water- Alternating Gas Injection

In this secondary recovery scheme, the reservoir was allowed to deplete to a
predetermined pressure after which water and gas were alternately injected.
Water-alternating gas schemes have proven very effective for secondary recovery
as gas injection schemes result in viscous fingering and reduced sweep
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efficiency. In WAG schemes, the injected water displaces the oil in the high
permeability layers while the gas displaces the oil in the low permeability zones.
Water is injected into the reservoir for a period of say two years with the same
conditions required for ordinary water injection. The water pumps are then shut
off and the gas compressors are started for injection of gas into the reservoir
through the same injection wells for a shorter duration. The duration of the
water and gas injections are continuously altered until favourable results are
obtained.
Four WAG cycles were considered:
Sub case 1: 2.5 years of water injection - 6 months of gas injection - 1.5
years of water injection - 6 months of gas injection-water injection.
Sub case 2: 32 months of water injection - 6 months of gas injection - 2
years of water injection - 6 months of gas injection - 18 months of water
injection-3 months of gas injection - 12 months of water injection - 3
months of gas injection - 12 months of water injection - 3 months of gas
injection - water injection
Sub case 3: 2.5 years of water injection - 6 months of gas injection - 2 years
of water injection - 6 months of gas injection - 2 years of water injection 6 months of gas injection - 2 years of water injection - 6 months of gas
injection - 2 years of water injection - 6 months of gas injection -water
injection.
Sub case 4: 5 years of water injection-6 months of gas injection-2 years of
water injection-6 months of gas injection-2 years of gas injection-6 months
of gas injection-2 years of water injection-6 months of gas injection-water
injection.
The results are presented below:
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Fig 3.16: Sub-case 1: FOPT, FOE, FOPR, FWIR and FOPR as a function of time
Fig 3.17: Sub case 2: FOPR, FOPT, FOE, FWIR and FPR as a function of time.
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Fig 3.18: Sub case 3: FOPR, FOPT, FOE, FWI R and FPR as a function of time
Fig 3.19: Sub case 4: FOPR, FOPT, FOE, FWIR and FPR as a function of time
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Sub-case 3 was the most effective as it had the highest field oil recovery of 55%.
Sub-cases 1, 2 and 4 had field oil recoveries of 54%, 54.5% and 52 % respectively.
The pressure maintenance was effective around 350 bars and the decline in
plateau rate was gradual over time. The field gas oil ration rose gently over the
production period while the water cut rose steeply during the plateau
production and then unnoticeable slowly during the decline period.
There was fluctuation in the producing gas-oil ratio during the life of the
reservoir due to the alternating injection of water and gas with FGOR highest
during years of gas injection.
In conclusion, compared to the water injection case, WAG showed an overall
increase in FOE, FOPR, reduction in FWCT and better pressure maintenance.
Table 3.1: Comparison of WI and WAG
FOPT (MM FWCT (%)
Sm3)
PLATEAU
(Years)
FPR
(Bar)
CASE
WI
FOE (%)
50
18.30
85
3.8
310
WAG
55
18.75
80
4.2
350
WAG has a higher total oil production with reduced water production and
better pressure maintenance than the water injection scheme. This is due to the
fact that injecting gas; reduces the viscosity of oil which improves the sweep,
reduces the amount of injected water/water cut. WI exhibited a longer plateau
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CHAPTER FOUR
ECONOMIC ANALYSIS
The oil and gas business aims to maximize profitability of any prospect while
minimizing expenditures and associated uncertainties/risks, within a shorter
time frame. Hence, a key parameter for the justification of any petroleum
business is its economic viability.
The goal of this reservoir simulation project is to propose a development plan
for the Brent East reservoir that maximizes hydrocarbon production and
minimizes the development cost in $/bbl. In the previous chapter, the optimized
development cases for the different development scenarios were determined
after rigorous numerical simulations. This chapter will therefore, deal with the
economic evaluation of those optimal development options for the ALWYN
field.
The capital costs, operating costs, gross revenues, pay-back time and other
profitability indices will be determined for each of the development strategies
that were optimised in the previous chapter. The final project decision will then
be based on the economic evaluation results.
The following assumptions were made in the evaluation:
Oil price is pegged at $110/bbl.
OPEX is limited to the lifting, transportation and distribution costs only.
Other components of the operating expenditure that are based on
specific activities anticipated in the lifetime of the field were not
considered.
The already existing wells come at zero cost. They will be neglected in
the computation of the CAPEX
The cost of water and gas volumes used for the injection cases, as well as
their supportive surface handling equipment, was ignored.
Taxation costs is 40% of gross revenue
Maintenance
costs,
replacement
costs,
manpower
costs,
decommissioning and well work over expenditures were not considered
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On-stream time was 7884 hours per year

The economic analysis will be based on the field development capital
and operating costs that were given in the November 2011 edition of the
Journal of Petroleum Technology
CAPEX
Treatment and Production Facilities Platform
Drilling and Accommodation Platform
Secondary Platform
Drilling Cost per well for deviated wells from a platform
Gas compressors
OPEX
Lifting, Production and Transportation costs
700MM$
250MM$
250MM$
12MM$
44.2MM$
6.5$/bbl
The following computed parameters were used to evaluate the profitability of

the different scenarios:
Revenue = Selling Price of oil x Volume of Produced Oil
Total CAPEX = Cost of drilling and accommodation facilities + Cost of
Production facilities
Total OPEX= Lifting costs x Volume of Produced oil
Depreciation = CAPEX/ Project life
Taxable Income= Gross Revenue Depreciation - Operating Expenses
Project tax bill = Taxation Rate x Taxable Income
Cash Flow = Revenue Investment - OPEX- Tax bill
Discounted Factor = (1 + i) n
Discounted Cash Flow = Discount Factor x Cash Flow
Net Present Value = Cumulative NPV each year.
Gross Profit Margin = Gross Revenue Total Investment Costs
GPM per barrel = GPM/ Total Production
Profitability Index = Final CNPV/Total Investment
Pay Back Period = Time at CNPV is 0

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Internal Rate of Return, IRR = D.F at CNPV is 0
4.1 Economic Evaluation of Natural Depletion at Economic Limit

The natural depletion case represents the simplest and cheapest production
strategy. Production commences as soon as the production and treatment
facilities have been set up and no extra wells have to be drilled. Oil production
from the four available injection wells totalled 67.33 million barrels with a
recovery efficiency of 30%.
Table 4.1 Revenues and Expenditures for Natural Depletion
CAPITAL EXPENDITURE
Treatment
and
Production
Facilities
Drilling
and
Accomm0dation
Platform with 40 Platform slots
Drilling Cost for Horizontal Wells
Drilling cost for Deviated/Vertical
Wells
Horizontal Subsea Well and Piping
Vertical Subsea well and Piping
Gas Injection Compressors
Total Capital Investment
OPERATING EXPENDITURE
Production and Transportation
Costs
TOTAL EXPENDITURE
Total Expenditure per barrel
PROFIT
Profit per barrel
Gross Profit Margin in MM$
NWOSU, DIXON
Units/Cost
per barrel
Unit
Cost
in
MM$
Total Cost in
MM$
700
700
1
0
250
16
250
0
2
0
0
0
12
40
36
44.2
24
0
0
0
974
67.33
6.5
974
437.6
1411.6
20.96539433
89.03460567
5994.7
70
1411.6
5994.7
IJEH, ISIJOKELU
Table 4.2 Economic Evaluation Indices for Natural Depletion

NATURAL DEPLETION
Total Oil Production in MMbbls
Total Investment in MM$
Gross Revenue in MM$
Gross Profit Margin per barrel in MM$
Profitability Factor
Cummulative Net Present value in MM$
Internal rate of Return in %
Pay back Period
Project's Economic Life
67.33
724
7406.3
5994.7
92.75
1.975138122
1430
40%
2.8 years
9 years
With a gross profit of $5.99 billion dollars, over a fifteen year period, from a total
expenditure of 974 million dollars, this seems to be a very sound investment
strategy. For every barrel of oil produced, a gross profit of $89 is to be made.
Investors should also drool at the fact that the initial capital investments would
be recovered after only 2.7 years. Cumulative Net Present value stands at a
staggering 1.43 billion dollars and the profitability factor is 1.97.
The financial soundness of this production strategy is also backed by other
profitability indices. The internal rate of return is 42% which is far greater than
the projects rate of return.
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Cash Flow for Natural Depletion

800
600
Cash flow in MM$
400
200
0
-200 0
-400
10
Cash Flow
Time in years
-600
-800
-1000
-1200
Fig4.1 Cash flow curve for Natural Depletion Scheme
However, the short economic life of the project might want to deter investors
from backing this option. The project is only economic for 9 years out of the 15
years that it is expected to run. The cash flow is fairly constant at 500 million
dollars for the first six years and peaks at 580 million dollars in the seventh year.
Economic decline sets in after the seventh year as cash flow is at the end of the
8th and 9th is 419 MM$ and 41 MM$ respectively. The project is no longer
economically viable after the 9th year.
At face value, this is profitable for any investor but the short economic life
represents a drawback.
Other development strategies will have to be evaluated to determine the most
profitable development option based on basic assumptions, available constraints
and data.
4.2 Economic Evaluation of Gas Injection Scheme at Economic Limit

The gas injection scheme consists of seven producers (four new wells) and five
injectors (four new wells) as well as the associated treatment and production
systems. A very expensive gas compressor is also installed on-site to facilitate the
injection of the gas at the required pressure. The gas injection strategy led to the
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production of 92.25 million barrels with a recovery efficiency of 42%. The

production and investment data are given below:
Table 4.3 Revenues and Expenditures for Gas Injection
GAS INJECTION
PRODUCTION DATA
OOIP in MMSm3
Fractional Oil Recovery
Unrecoverable Oil in MMSm3
Produced Oil in MMSm3
Produced Oil in MMbbl
REVENUE
Selling Price per barrel in $
35.68
42
20.6944
14.9856
92.25
10147.5
CAPITAL EXPENDITURE
Treatment
and
Production
Facilities
Drilling and Accomodation
Drilling Cost for Horizontal
Wells
Drilling
cost
for
Deviated/Vertical Wells
Horizontal Subsea Well and
Piping
Costs
TOTAL EXPENDITURE
NWOSU, DIXON
110
Units/Cost
per barrel
Total
Unit Cost Cost in
in MM$
MM$
700
700
250
250
16
12
96
0
0
1
40
36
44.2
0
0
44.2
1090.2
1090.2
599.625
1689.825
1689.825
92.25
6.5
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PROFIT
Profit per barrel
18.317886
91.682114
8457.675
8457.675
Table 4.4 Economic Evaluation Indices for Gas Injection

GAS INJECTION
Gross Profit Margin per barrel in
MM$
Cummulative Net Present value in
MM$
Pay back Period
92.25
1090.2
1014.5
8457.675
91.68
2.494606494
2719.62
84.68
1.3 years
11 years
This field development scenario has all the trapping of an investors delight. 8.46
billion dollars to be made on an investment of 1.09 billion dollars is absolutely
astonishing. 91.68 dollars of gross profit per barrel is to be made on a barrel cost
of 18.32 dollars is completely unbelievable but the figures dont lie.
A project is usually considered profitable if its Internal Rate of Return (IRR)
exceeds the projects discount rate (DR). This is observed in this development
option as the IRR of 84.68% is by far greater than its DR of 10%.
A project with shorter payback period is usually preferred as investors are
assured of timely break-even, and hence profit in a shorter time. As the Net
Present Value (NPV) measures the present days worth of a projects future
revenue or worth; a positive NPV indicates that the project of concern is
profitable. The payback period of 1.3 years, for an economic project life of 11
years, and a high positive Net Present Value (NPV) of $2.719 billion, are
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individually positive indicators of a projects economic feasibility, among other

profit indicators.
Cash Flow for Gas Injection
1500
Cash flow in MM$

1000
500
0
0
8
10
Time in years
12
14
16
-500
-1000
-1500
Fig4.2
Cash flow for Gas Injection
However, just as in the previous case, the project isnt economic throughout its
whole life. It stops being economic in the 11th year and losses of over 84 million
dollar will be made in the 12th year.
After pay back in 1.3 years, investors begin to have positive cash flow which
maintains a fairly constant plateau of one billion dollars for 2.7 years. Revenues
begin to slump continuously as from the 4th year until the 11th year when losses
begin to set in. The project stops being economic at this point as the field is no
longer producing but production costs still have to be shouldered. The total
losses to be taken for the last four years are projected at 84 million dollars.
This picture wont be very exciting to investors who are willing to stump 1.09
billion dollars in the high-risk oil and gas business.
Depending on the business strategy of the investor, the gas injection scheme
represents a profitable development option if the investors are willing to make
profit in the first 10.7 years after pay-back years, take losses in the 12th year and
expect no revenue up till the 15th year.
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4.3 Economic Analysis of Water Injection Scenario

A major assumption made in the economic analysis of this strategy is that the
costs associated with injecting water into the wells are negligible. In this case,
52% oil recovery is obtained from producing oil using a scheme that comprises
seven producers and five injectors. The total volume of oil produced was
116.23MM barrels
Table 4.5 Revenues and Expenditures for Water Injection
WATER INJECTION
PRODUCTION DATA
OOIP in MMSm3
Unrecoverable Oil in MMSm3
Produced Oil in MMSm3
REVENUE
CAPITAL EXPENDITURE
Treatment
and
Production
Facilities
Drilling
and
Accomodation
Wells
NWOSU, DIXON
35.68
51.8
17.2
18.48
116.23
110
12785.3
Units/Cost
per barrel
Unit
Cost
in
MM$
Total
Cost
MM$
700
700
1
0
250
16
250
0
8
0
0
0
12
40
36
44.2
96
0
0
0
1046
116.23
76
6.5
in
1046
755.495
IJEH, ISIJOKELU
Costs
TOTAL EXPENDITURE
PROFIT
Profit per barrel
1801.495
15.499398
1801.495
94.500602
10983.81
10983.805
Table 4.6 Summary of Economic Evaluation Parameters for Water Injection

WATER INJECTION
Gross Profit Margin per barrel in
MM$
Cumulative Net Present value in
MM$
Pay back Period
116.23
1046
12785.3
10983.81
94.5
3.256879541
3406.696
90.4
1.2 years
`15 years
Via this scheme, 10.9 billion dollars is to be made from an initial capital
investment of 1.05 billion dollars. A profit of 94.5 dollars is to be made for every
barrel of oil produced which comes at a cost of 15.5 dollars. The Net Present
Value is a staggering 3.19 billion dollars while investors are expected to recover
their initial outlay of 1.05 billion dollars in 1.2 years.
Profitability factor stands at an impressive 3.05 while internal rate of return is
at an even more impressive 92% in contrast to the discount rate of 10%.
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1500
Cash Flow Curve for Water Injection Scheme

Cashflow in MM$
1000
500
0
0
10
12
14
16
Time in years
-500
-1000
-1500
Fig4.3
Cash flow for Water Injection
begin to slump continuously as from the 4th year to 500 million dollars in the 6th
year to about 81 million dollars in the 11 year. As from the 11th year, huge cash
flows are no longer guaranteed but there is cash flow all through the producing
life of the field. The cash flow in the 12th year is 36 million dollars and slumps
even more to an all-time low of 24 million dollars at the end of the projects life.
With this scheme, investors are guaranteed profit throughout the producing life
of the project as the project is economic all through.
Clearly, this is a production scheme that investors should look into as all its
economic indices are positively high. This scheme outperforms the gas injection
and natural depletion production schemes in all aspects.
4.4 Economic Analysis of the Water-Alternating-Gas Scheme

In this scheme, water and gas are alternately injected through five injection
wells and produced through seven producers to give a field oil recovery of 55%
and a total oil production of 123.42 million barrels.
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Table 4.7 Revenues and Expenditures for WAG Injection

WATER ALTERNATING GAS
INJECTION
PRODUCTION DATA
OOIP in MMSm3
35.68
55
3
Unrecoverable Oil in MMSm
16.056
3
Produced Oil in MMSm
19.624
123.42
REVENUE
CAPITAL EXPENDITURE
Treatment
and
Production
Facilities
Drilling
and
Accomodation
Wells
Lifting,
Production
and
Transportation Costs
TOTAL EXPENDITURE
PROFIT
Profit per barrel
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110
13576.2
Units/Cost
per barrel
Unit
Cost
in
MM$
Total Cost
in MM$
700
700
1
0
250
16
250
0
8
0
0
1
12
40
36
44.2
96
0
0
44.2
1090.2
123.42
6.5
802.23
1892.43
15.333252
1090.2
1892.43
94.666748
11683.77
11683.77
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Table 4.8 Summary of Economic Evaluation Parameters for WAG Injection

WAG INJECTION
Total Oil Production
Total Investment
Gross Revenue
Gross Profit Margin
Gross Profit Margin per
barrel
Cumulative Net Present
value
Internal rate of Return
Pay back Period
92.25
1090.2
13576.2
11683.77
94.66
3.2224211
3513.083483
85%
1.3 years
15 years
The gross revenues to be made from this scheme far outstrip whatever
investment costs that might have been outlaid for the project. Investors are
expected to bag over 11.68 billion dollars from an initial investment of 1.09 billion
dollars that would be recouped in 1.3 years. 94 .66 dollars of oil is expected to be
made for every barrel of oil that costs 15.33 dollars.
The Net Present Value is a monstrous 3.513billion dollar, profitability factor is
3.22 and the internal rate of return is highly impressive at 85%.
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1500
Cash Flow for WAG Injection

CashFlow in MM$
1000
500
0
0
8
Time in Years
10
12
14
16
Cash Flow
-500
-1000
-1500
Fig 4.4: Cash flow for WAG Injection
begin to slump continuously as from the 4th year to 632 million dollars in the 6th
year to about 115 million dollars in the 11 year. As from the 11th year, huge cash
flows are no longer guaranteed but there is cash flow all through the producing
life of the field. The cash flow is constant for the next two years at 95 million
dollars, reduces to 74 million dollars in the 14th year and slumps to a final value
of 65 million dollars in the 15th year. `
4.5 Investment Decision

The four schemes are very profitable and will guarantee high returns for any
willing investor. However, the investor would like to maximize returns on
committing huge funds into the high-risk oil and gas business. Hence, there is a
need to juxtapose the economic evaluations of the described cases to ascertain
the scheme that will yield optimum returns on investment. In making the final
investment decision, the following questions have to be answered by the
investor
What scheme has the lowest risk or has the lowest capital investments?
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How fast can I get my initial outlay back?

What scheme yields maximum profits?
What scheme yields maximum profits relative to the amount invested?
What scheme satisfies a short-term investment strategy?
What scheme satisfies a long-term investment strategy?
What scheme yields the highest Net Present value on investments?
4.5.1 Lowest Capital Investment

The huge volume of the funds required for the field development necessitates
the minimisation of investment costs. For the four schemes, investment costs
range from 774 million dollars to 1090 million dollars. Sourcing funds of this
volume would not be an easy task at all as it might require a consortium of
banks to provide the necessary loan facility.
16
14
Investment Costs in MM$
12
10
8
6
4
2
0
Natural Depletion
Water Injection
Gas Injection
WAG Injection
Fig 4.5: Investment Costs for the various development schemes
An investor, with limited borrowing power and weak financial muscle, should
simply settle for the natural depletion strategy as it limits his financial exposure.
He is more willing to settle for the cheapest project as the profitability of all the
schemes has been certified.
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4.5.2 Pay-back time

The pay-back time is a measure of the time required to recoup the initial outlay
that was invested into a project. This is the length of time required to recover
the cost of a project. The payback period of a given project is an important
determinant of whether to undertake the position or project, as longer payback
periods are typically not desirable for investment positions (Investopedia, 2014).
The water injection scheme has the lowest pay-back time of 1.2 years while
natural depletion has the highest pay-back time of 2.8 years. Even though
natural depletion has the pay-back time of 2.7 years, it should not be discounted
for this reason as the pay-back time is favourable.
Water Injection, gas Injection and WAG injections are the top performers in this
regard.
16
14
Pay-back time
12
10
8
6
4
2
0
Natural Depletion
Water Injection
Gas Injection
WAG Injection
Fig 4.6 : Pay-back time for the various development schemes
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4.5.3 Profitability Index and Economic Life

16
14
12
10
Economic Life
Profitability Index
6
4
2
0
Natural Depletion
Water Injection
Gas Injection
WAG Injection
Fig 4.7: Economic Life and PI for the various development schemes
The profitability index is an evaluation that attempts to identify the relationship

between the costs and benefits of a proposed project through the use of a ratio
of the Present Value of Future Cash Flows to the Initial Investment of the
project. The attractiveness of a proposed project increases directly with the PI.
Based on this, water injection appears to be most profitable. WAG injection
follows closely while gas injection and natural depletion are third and fourth
respectively.
The water injection schemes and WAG injection schemes could see out the
proposed project life of 15 years at economic conditions. However, the gas
injection scheme and natural depletion scheme had an economic life of 11 years
and 9 years respectively.
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4.5.4 Gross Profit Margin per barrel
GPM per barrel

96
95
94
93
92
91
GPM per barrel
90
89
88
87
86
Natural Depletion Water Injection
Gas Injection
WAG Injection
Fig 4.8 GPM per barrel for the various development schemes
This is a financial metric used to assess a projects profitability by revealing the

proportion of profit realisable per unit of production. For comparative purpose,
a project with the highest GPM is usually favoured over the others. In view of
this, water injection had the highest gross profit per barrel while WAG injection
follows closely again.
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4.5.5 Cumulative Net Present Value (CNPV):
NPV
4000
3500
3000
2500
2000
NPV
1500
1000
500
0
Natural Depletion
Water Injection
Gas Injection
WAG Injection
Fig 4.9 NPV for the various development schemes
Due of the time value of money, a dollar earned in the future wont be worth as
much as one earned today. This is accounted for by the discount rate in the NPV
formula. The NPV therefore calculates the present worth of future cash flows of
a project, to determine its profitability. The higher it is, the better the projects
profitability. In view of this, WAG shows the highest potential.
4.5.6 Internal Rate of Return (IRR):

This is the discount rate often used in capital budgeting that makes the net
present value of all cash flows from a particular project equal to zero. Generally
speaking, the higher a projects internal rate of return, the more desirable it is to
undertake the project. As such, IRR can be used to rank several prospective
projects a firm is considering. Assuming all other factors are equal among the
various projects, the project with the highest IRR would probably be considered
the best. Water Injection therefore appears to be the most economically
profitable.
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IRR
100
90
80
70
60
50
IRR
40
30
20
10
0
Natural Depletion
Water Injection
Gas Injection
WAG Injection
Fig 4.10 IRR for the various development schemes
Table 4.9: Summary of Economic Evaluation Parameters for the various

development schemes
IRR
GPM
Natural Depletion
40
89
Water Injection
90.4 94.5
Gas Injection
84
91.68
WAG Injection
85
94.66
NWOSU, DIXON
Pay
back
PI
Time
2.8
1.975 years
1.2
3.257 years
1.3
2.436 years
1.3
3.222 years
87
Economic
Life
NPV
Oil
CAPEX Production
9 years
1430
724
`15 years
3406.696 1046
116.23
11 years
2656
1090.2
92.25
15 years
3513.083
1090.2
123.42
67.33
IJEH, ISIJOKELU
CHAPTER FIVE
CONCLUSION AND RECOMMENDATIONS
5.1
Conclusion
From the performances of the individual development options against the

economic indicators as detailed in the previous chapter, the following were
determined:
1.
All the development options are economically feasible, with Natural
Depletion option as the least performer.
2. The WAG scheme has the highest Net Present Value (NPV).
3. The WI scheme has the highest Gross Profit Margin (GPM) per barrel, highest
Productivity Index (PI), highest Internal Rate of Return (IRR), and the shortest
Pay-Back Period.
Proper judgement of the economic profitability of a project requires making
decisions based on the performances of candidate options against more than
one economic indicator. In view of this, the WI option is therefore favoured over
the WAG option. This is further consolidated by the fact that the additional cost
of supportive facilities for gas injection were not accounted for in this study,
which might offset the NPV margin of WAG over WI. It is also usually preferable
(were possible) to maintain single phase flow for ease of reservoir surveillance
and management, as well as management of surface facilities.
It is important to note that these results will change with alterations in
operating cost, crude oil prices, logistics, regulations, host government policy,
and petroleum fiscal systems among other factors.
The Water injection scheme showed a higher profit, lower capital investment, a
longer production plateau and a better recovery. It is clearly the most profitable
scheme and is recommended because well effluent will always be single phased
and surface facilities will not have to encounter a lot of gas.
NWOSU, DIXON
88
IJEH, ISIJOKELU
5.2
Recommendations
The WI field development strategy is recommended for the ALWYN field. The
following studies and approaches are highly recommended:
1. Further studies to determine the optimal wells placement for the field, as
such will add to recovery.
2. Compatibility test on the water to be used for the injection programme.
3. Strategic production approach to avoid early water coning problems. This
includes monitoring of the WOC at the vicinity of the wells.
4. Continual improvement of the model as the field is brought upstream.
5. EOR method after 14 years to sweep the remaining oil in place.
6. The economic analysis is highly simplistic and more factors should have to be
taken into account to give a true picture of the economics the various
development schemes.
7. A compositional model (employing ECLIPSE 300) that captures the effects of
gas solubility on production enhancement should be used for the simulation. A
compositional model captures the dynamism of PVT properties of the fluid and
mimic thermodynamic processes such as gas miscibility with oil which is
responsible for recovery efficiency. The black oil model (ECLIPSE 100) is limited
as regards the aforementioned
NWOSU, DIXON
89
IJEH, ISIJOKELU
REFERENCES
1. Sakthikumar, S., (2010) Lecture Notes on Reservoir Simulation, Institute of
Petroleum Studies, University of Port-Harcourt/IFP Training, France,
Unpublished.
2. Ahmed, T., (2010), Reservoir Engineering Handbook; Fourth edition.
3. Cosse, R., (1998) Basics of Reservoir Engineering, Editions Technip, Paris.
4. Ahmed, T., and McKinney, P.D., (2005) Advanced Reservoir Engineering,
Elsevier, Oxford.
5. Eclipse Reference manual
NWOSU, DIXON
90
IJEH, ISIJOKELU
NOMENCLATURE
List of Abbreviations
FGOR:
Field Gas-Oil Ratio FOE:

Field Oil Recovery Factor (%)
FOIP:
Field Oil In Place
FORFE:
Field fraction total oil produced by expansion
FORFF:
Field fraction total oil produced by free gas influx
FORFG:
Field fraction total oil produced by gas influx
FORFR:
Field fraction total oil produced by rock expansion
FORFS:
Field fraction total oil produced by solution gas
FORFW:
Field fraction total oil produced by water influx
FOPT:
Cumulative Field Oil Production cumulative total
FOPR:
Field Oil Production
FPR:
Field Pressure
FWCT:
Field Water-Cut
FWPR:
Field Water production rate
FWPT:
Field Water Production cumulative total
ROIP:
Regional Oil in Place WBHP:

Well
Bottom-Hole
Pressure
WGOR:
Well Gas-Oil Ratio
WOPR:
Well Oil Production Rate
WWCT:
Well Water-Cut
NWOSU, DIXON
91
IJEH, ISIJOKELU
APPENDICES
A: Evaluation Of Revenue, Opex, Cash Flow, Internal Rate Of Return ,
Pay-Back Time And Npv For The Various Development Schemes Using
10% As The Discount Factor
A1 Natural Depletion: Evaluation Of Revenue, Opex, Cash Flow, Internal Rate Of

Return , Pay-Back Time And Npv Using 10% As The Discount Factor
NATURAL DEPLETION
Oi l Pri ce = $110/bbl
Di s c. ra te= 10%
Prod. in
Prod. in
bbls
Year Disc. Factor
0
MMm3
CAPEX Revenue Depr

974
Tax
Bill
Income
OPEX
Cash
Flow
0
-1090.2
NPV
Cum.NP
V
1 0.909
8.427673
1.34
927.044 64.93
54.78
807.3308 322.9 484.3985 440.3623 -649.84
-1090.2 -1090.2
2 0.826 8.3647799
1.33
920.126 64.93 54.371
800.8214 320.3 480.4928 397.1015 -252.74
3 0.751
8.427673
1.34
927.044 64.93
54.78
807.3308 322.9 484.3985 363.9358
111.2
4 0.683
54.78
807.3308 322.9 484.3985 330.8507
442.05
8.427673
1.34
927.044 64.93
5 0.621 8.8679245
1.41
975.472 64.93 57.642
852.8969 341.2 511.7381 317.7491 759.799
6 0.564
8.427673
1.34
927.044 64.93
807.3308 322.9 484.3985 273.4303 1033.23
7 0.513 10.377358
1.65
1141.51 64.93 67.453
1009.123 403.6
8 0.467 7.7987421
1.24
857.862 64.93 50.692
742.2365 296.9 445.3419 207.7553 1551.69
9 0.424 1.6981132
0.27
186.792 64.93 11.038
110.8214 44.33 66.49283 28.19945 1579.89
54.78
605.474 310.7039 1343.93
10 0.386
0 64.93
0 -64.93333
-26
-38.96 -15.02077 1564.87
11
0.35
0 64.93
0 -64.93333
-26
-38.96 -13.65524 1551.21
12 0.319
0 64.93
0 -64.93333
-26
-38.96 -12.41386
13
0.29
0 64.93
0 -64.93333
-26
-38.96 -11.28532 1527.51
14 0.263
0 64.93
0 -64.93333
-26
-38.96 -10.25939 1517.25
15 0.239
0 64.93
0 -64.93333
-26
-38.96 -9.326714 1507.93
IRR
1538.8
42%
PAYBACK PERIOD 2.7 YEARS
NWOSU, DIXON
92
IJEH, ISIJOKELU
A2 Gas Injection: Evaluation Of Revenue, Opex, Cash Flow, Internal Rate Of

GAS INJECTION
Di s c. ra te= 10%
Prod. i n
Prod. i n
s
Yea rDi s c. Fabbl
ctor
0
MMm 3
Depre
ci a tio
CAPEX Revenue n
OPEX
1090
Ta xa bl e
Income
0
Ta x
Bi l l
0
Ca s h
Fl ow
0
Cum.
NPV
NPV
1 0.909 16.163522
2.57
1777.99 72.68 105.06
1600.245 640.1 960.1467 872.8607 -217.34
-1090.2
-1090.2 -1090.2
2 0.826 16.761006
2.665
1843.71 72.68 108.95
1662.084 664.8 997.2505
3 0.751 16.389937
2.606
1802.89 72.68 106.53
1623.678 649.5 974.2071 731.9362 1338.77
4 0.683 16.566038
2.634
1822.26 72.68 107.68
1641.905 656.8 985.1429 672.8659 2011.64
5 0.621 8.8679245
1.41
975.472 72.68 57.642
845.1502 338.1 507.0901 314.8631
6 0.564 6.6352201
1.055
729.874 72.68 43.129
614.0653 245.6 368.4392 207.9743 2534.47
7 0.513 4.2641509
0.678
469.057 72.68 27.717
368.6596 147.5 221.1958 113.5084 2647.98
8 0.467 2.7672956
0.44
304.403 72.68 17.987
213.7351 85.49 128.2411
824.174 606.835
2326.5
59.8254 2707.81
9 0.424 1.8113208
0.288
199.245 72.68 11.774
114.7917 45.92 68.87502 29.20973 2737.02
10 0.386 1.1509434
0.183
126.604 72.68 7.4811
46.44264 18.58 27.86558 10.74339 2747.76
11
0.35 0.9874214
0.157
108.616 72.68 6.4182
29.51811 11.81 17.71087 6.207551 2753.97
12 0.319 0.0628931
0.01
13
6.91824 72.68 0.4088 -66.17057
-26.5 -39.7023 -12.65039 2741.32
0.29
0 72.68
-72.68
-29.1
-43.608 -12.63168 2728.69
14 0.263
0 72.68
-72.68
-29.1
-43.608 -11.48335
15 0.239
0 72.68
-72.68
-29.1
-43.608 -10.43941 2706.76
IRR
2717.2
85%
NWOSU, DIXON
93
IJEH, ISIJOKELU
A3
Water Injection: Evaluation Of Revenue, Opex, Cash Flow, Internal Rate Of

WATER INJECTION
Oil Price = $110/bbl
Disc. rate= 10%
Producti Producti
on in
on in
bbls
MMm3 CAPEX Revenue Depr
Year Disc. Factor
0
1046
Cash
OPEX Income Tax Bill Flow
0
0 -1046
NPV
Cum.NP
V
-1046
-1046
1 0.91
16.214
2.578
1783.5 69.733
105 1608.4
643.4
965
877.3
-168.7
2 0.83
16.528
2.628
1818.1 69.733
107 1640.9
656.4 984.6
813.7
645
3 0.75
16.572
2.635
1823 69.733
108 1645.5
658.2 987.3
741.8 1386.8
4 0.68
16.572
2.635
1823 69.733
108 1645.5
658.2 987.3
674.3 2061.1
5 0.62
13.358
2.124
1469.4 69.733 86.8 1312.9
525.1 787.7
489.1 2550.2
6 0.56
9.1006
1.447
1001.1 69.733 59.2 872.18
348.9 523.3
295.4 2845.6
7 0.51
6.4843
1.031
713.27 69.733 42.1 601.39
240.6 360.8
185.2 3030.8
8 0.47
5.1384
0.817
565.22 69.733 33.4 462.09
184.8 277.3
129.3 3160.1
9 0.42
4.1258
0.656
453.84 69.733 26.8 357.29
142.9 214.4
90.91
10 0.39
3.2704
0.52
359.75 69.733 21.3 268.76
107.5 161.3
62.17 3313.2
11 0.35
2.6415
0.42
290.57 69.733 17.2 203.66
81.47 122.2
42.83
12 0.32
1.9748
0.314
217.23 69.733 12.8 134.66
53.87
80.8
25.74 3381.8
13 0.29
1.2579
0.2
138.36 69.733 8.18 60.455
24.18 36.27
10.51 3392.3
14 0.26
1.195
0.19
131.45 69.733 7.77 53.946
21.58 32.37
8.523 3400.8
15 0.24
1.0692
0.17
117.61 69.733 6.95 40.927
16.37 24.56
5.879 3406.7
IRR
3251
3356
90%
NWOSU, DIXON
94
IJEH, ISIJOKELU
A4 Natural Depletion: Evaluation Of Revenue, Opex, Cash Flow, Internal Rate Of

WAG INJECTION
Disc. rate= 10%

Producti Producti
on in
on in
bbls
MMm3 CAPEX Revenue Depr
Year Disc. Factor
0
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
1
0.91
0.83
0.75
0.68
0.62
0.56
0.51
0.47
0.42
0.39
0.35
0.32
0.29
0.26
0.24
0
15.597
16.34
17.006
16.465
14.843
10.893
7.2075
5.5912
4.2327
2.9057
2.566
2.2453
2.239
1.8868
1.7296
NWOSU, DIXON
0
2.48
2.598
2.704
2.618
2.36
1.732
1.146
0.889
0.673
0.462
0.408
0.357
0.356
0.3
0.275
1090
0
1715.7
1797.4
1870.7
1811.2
1632.7
1198.2
792.83
615.03
465.6
319.62
282.26
246.98
246.29
207.55
190.25
0
72.68
72.68
72.68
72.68
72.68
72.68
72.68
72.68
72.68
72.68
72.68
72.68
72.68
72.68
72.68
95
OPEX Income Tax Bill
0
101
106
111
107
96.5
70.8
46.8
36.3
27.5
18.9
16.7
14.6
14.6
12.3
11.2
0
1541.7
1618.5
1687.5
1631.5
1463.5
1054.8
673.3
506.01
365.4
228.06
192.9
159.71
159.06
122.6
106.33
Cash
Flow
NPV
Cum.NP
V
0
616.664
647.388
674.988
652.596
585.419
421.902
269.32
202.403
146.162
91.2223
77.162
63.8827
63.6223
49.0412
42.5318
-1090.2 -1090.2 -1090

924.996 840.905 -249.3
971.083 802.548 553.25
1012.48 760.693 1313.9
978.894 668.598 1982.5
878.128 545.248 2527.8
632.852 357.229 2885
403.981 207.306 3092.3
303.605 141.634 3234
219.243 92.9804 3326.9
136.834 52.7552 3379.7
115.743 40.5672 3420.3
95.8241 30.5325 3450.8
95.4335 27.6437 3478.4
73.5618 19.3711 3497.8
63.7977 15.2727 3513.1
IRR
85%
PAYBACK PERIOD
I.3 YEARS
IJEH, ISIJOKELU
APPENDIX B
Evaluation Of Npv For The Various Development Schemes Using The
Calculated Internal Rate Of Return
B1 Gas Injection: Evaluation Of Npv Using The Calculated Internal Rate Of Return
GAS INJECTION
Disc. Rate
0.8468
Prod. in
Prod. in
bbls
Year Disc. Factor
MMm
CAPEX Revenue Depr
0.541
16.163522
2.57
0.293
16.761006
0.159
0.086
1090
Income
OPEX
0
Tax
Bill
1777.99
72.68 105.06
2.665
1843.71
16.389937
2.606
16.566038
2.634
0.047
8.8679245
0.025
0.014
Cash
Flow
0
NPV
Cum.NP
V
-1090.2
-1090.2
-1090.2
1600.245
640.1 960.1467
519.8975
-570.3
69.48 108.95
1665.284
666.1 999.1705
292.9543
-277.35
1802.89
69.48 106.53
1626.878
650.8 976.1271
154.9697
-122.38
1822.26
69.48 107.68
1645.105
658 987.0629
84.85264
-37.526
1.41
975.472
69.48 57.642
848.3502
339.3 509.0101
23.69338
-13.832
6.6352201
1.055
729.874
69.48 43.129
617.2653
246.9 370.3592
9.334776
-4.4977
4.2641509
0.678
469.057
69.48 27.717
371.8596
148.7 223.1158
3.045027
-1.4527
0.008
2.7672956
0.44
304.403
69.48 17.987
216.9351
86.77 130.1611
1.08121
-0.3715
0.004
1.8113208
0.288
199.245
69.48 11.774
117.9917
47.2 70.79502
0.283285
-0.0882
10
0.002
1.1509434
0.183
126.604
69.48 7.4811
49.64264
19.86 29.78558
0.064537
-0.0236
11
0.001
0.9874214
0.157
108.616
69.48 6.4182
32.71811
13.09 19.63087
0.023031
-0.0006
12
6E-04
0.0628931
0.01
6.91824
69.48 0.4088 -62.97057 -25.19
-37.7823 -0.024002
-0.0246
13
3E-04
69.48
-69.48 -27.79
-41.688
-0.01434
-0.039
14
2E-04
69.48
-69.48 -27.79
-41.688 -0.007765
-0.0467
15
1E-04
69.48
-69.48 -27.79
-41.688 -0.004204
-0.0509
NWOSU, DIXON
96
IJEH, ISIJOKELU
B2 Water Injection: Evaluation Of Npv Using The Calculated Internal Rate Of

Return
WATER INJECTION
Di s c. Ra te
0.904
Annua l
Producti
Annua l
Depre
Production on i n
ci a tio
3
n bbl s
MMm
CAPEX Revenue n
Yea rDi s c. Fai ctor
OPEX
0
1046
Ta x
Bi l l of
the
Projec Ca s h
t
Fl ow
Ta xa bl e
Income
0
-1046
-1046
Net
Pres ent
va l ue
1 0.525 16.213836
2.578
1783.52 69.73 105.39
1608.399 643.4 965.0392 506.8483 -539.15
2 0.276 16.528302
2.628
1818.11 69.48 107.43
1641.199 656.5 984.7195 271.6306 -267.52
3 0.145 16.572327
2.635
1822.96 69.48 107.72
1645.756 658.3 987.4535 143.0592 -124.46
4 0.076 16.572327
2.635
1822.96 69.48 107.72
1645.756 658.3 987.4535 75.13614 -49.326
1313.124 525.2 787.8743 31.48634 -17.839
86.83
Net
Pres ent
Va l ue
-1046
0.04 13.358491
2.124
1469.43 69.48
6 0.021 9.1006289
1.447
1001.07 69.48 59.154
7 0.011 6.4842767
1.031
713.27 69.48 42.148
601.6426 240.7 360.9856 3.979433 -2.8729
8 0.008 5.1383648
0.817
565.22 69.48 33.399
462.3408 184.9 277.4045 2.304318 -0.5685
9 0.003 4.1257862
872.4351
0.656
453.836 69.48 26.818
0.327044
0.052
35.9748 69.48 2.1258 -35.63094
-14.3 -21.3786 -0.034144 0.04966
11 8E-04 0.2641509
0.042
29.0566 69.48
1.717 -42.14038
-16.9 -25.2842 -0.021209 0.02845
12 4E-04 0.1974843
0.0314
21.7233 69.48 1.2836 -49.04038
-19.6 -29.4242 -0.012963 0.01549
13 2E-04 0.0125786
0.002
1.38365 69.48 0.0818 -68.17811
-27.3 -40.9069 -0.009465 0.00602
14 1E-04 0.0119497
0.0019
1.31447 69.48 0.0777 -68.24321
-27.3 -40.9459 -0.004976 0.00104
15 6E-05 0.0106918
0.0017
10 0.002
NWOSU, DIXON
1.1761 69.48 0.0695
97
357.5389
349 523.4611 10.98709 -6.8523
-68.3734
143 214.5233 0.652337
-27.3
0.0838
-41.024 -0.002618 -0.0016
IJEH, ISIJOKELU
B3 Wag Injection: Evaluation Of Npv Using The Calculated Internal Rate Of

Return
WAG INJECTION
Di s c. Ra te
0.8181
Prod. i n
Prod. i n
s
Yea r Di s c. Fabbl
ctor
0
CAPEX
Ca s h
Fl ow
OPEX Income Ta x Bi l l
0
-1090.2
-1090.2
72.68
101 1541.66 616.6638 924.99577 508.2394
-581.96
2 0.303 16.33962
2.598
1797.36
72.68
106 1618.47 647.3884 971.08257 293.7789
-288.18
3 0.166 12.83019
2.04
1411.32
72.68
83.4 1255.24 502.0978 753.14672 125.3217
-162.86
4 0.092 16.46541
2.618
1811.19
72.68
107 1631.49 652.5959 978.89389 89.59103
-73.269
0.05 14.84277
2.36
1632.7
72.68
96.5 1463.55 585.4186 878.12785 44.20475
-29.064
6 0.028 10.89308
1.732
1198.24
72.68
70.8 1054.75 421.9016 632.85238 17.52249
-11.542
7 0.015 7.207547
1.146
792.83
72.68
46.8 673.301 269.3205 403.98068 6.152282
-5.3894
8 0.008 5.591195
0.889
615.031
72.68
36.3 506.009 202.4035 303.60521
2.52196
-2.8674
9 0.005 4.232704
0.673
465.597
72.68
27.5 365.405
146.162 219.24294 1.010103
-1.8573
2.90566
0.462
319.623
72.68
18.9 228.056 91.22234 136.83351 0.346749
-1.5106
11 0.001 2.566038
0.408
282.264
72.68
16.7 192.905 77.16196 115.74294 0.161324
-1.3493
12 8E-04 2.245283
0.357
246.981
72.68
14.6 159.707 63.88272 95.824075 0.073462
-1.2758
13 4E-04 2.238994
0.356
246.289
72.68
14.6 159.056 63.62234 95.433509 0.040241
-1.2356
0.3
207.547
72.68
12.3 122.603 49.04121 73.561811 0.017061
-1.2185
0.275
190.252
72.68
11.2 106.329 42.53177
-1.2104
1.72956
NWOSU, DIXON
98
-1090.2
Cum.NP
V
15 1E-04
NPV
1715.72
14 2E-04 1.886792
0 1090.2
Revenue Depr
2.48
10 0.003
1 0.549 15.59748
MMm
63.79766 0.008138
IJEH, ISIJOKELU
APPENDIX C
Full PVT Report
-- Maximum Simulation Pressure

PMAX
550 418 1* 1* /
--- ++++++++++++++++++++ WATER +++++++++++++++++++++++++++++

--- ++++++++++++++++++++ W,O,G Gravity ++++++++++++++++++++++
--PVTW
ECHO
-- DENSITY created by PVTi
-- Units: kg /m^3 kg /m^3 kg /m^3
DENSITY
--- Fluid Densities at Surface Conditions
-829.7675 1020.0000 1.0449
/
NWOSU, DIXON
99
IJEH, ISIJOKELU
-- Column Properties are:

-'Oil RS' 'PSAT' 'Oil FVF' 'Oil Visc'
-- Units: sm3 /sm3 bar
rm3 /sm3
cp
PVTO
--- Live Oil PVT Properties (Dissolved Gas)
-0.0000 1.0132 1.0463 3.6674
25.0000 1.0450 3.7326
50.0000 1.0436 3.7990
100.0000 1.0411 3.9272
150.0000 1.0387 4.0495
175.0000 1.0377 4.1086
200.0000 1.0366 4.1665
225.0000 1.0356 4.2231
250.0000 1.0346 4.2784
258.2362 1.0343 4.2964
300.0000 1.0328 4.3858
350.0000 1.0310 4.4888
375.0000 1.0302 4.5387
400.0000 1.0294 4.5877
409.1537 1.0291 4.6054
413.7306 1.0290 4.6142
418.3074 1.0289 4.6230
450.0000 1.0279 4.6828
500.0000 1.0265 4.7743
550.0000 1.0251 4.8625 /
18.5139 25.0000 1.1266 1.2536
50.0000 1.1213 1.3220
100.0000 1.1119 1.4561
150.0000 1.1038 1.5868
NWOSU, DIXON
100
IJEH, ISIJOKELU
175.0000 1.1001 1.6509

200.0000 1.0966 1.7142
225.0000 1.0934 1.7767
250.0000 1.0903 1.8384
258.2362 1.0893 1.8585
300.0000 1.0846 1.9595
350.0000 1.0794 2.0775
375.0000 1.0771 2.1355
400.0000 1.0748 2.1927
409.1537 1.0740 2.2135
413.7306 1.0736 2.2238
418.3074 1.0732 2.2341
450.0000 1.0705 2.3050
500.0000 1.0666 2.4145
550.0000 1.0630 2.5213 /
35.3469 50.0000 1.1813 1.0227
100.0000 1.1695 1.1400
150.0000 1.1595 1.2548
175.0000 1.1550 1.3114
200.0000 1.1507 1.3673
225.0000 1.1468 1.4227
250.0000 1.1430 1.4774
258.2362 1.1418 1.4954
300.0000 1.1362 1.5853
350.0000 1.1300 1.6909
375.0000 1.1271 1.7428
400.0000 1.1244 1.7942
409.1537 1.1235 1.8128
413.7306 1.1230 1.8222
418.3074 1.1225 1.8314
450.0000 1.1193 1.8953
500.0000 1.1147 1.9942
NWOSU, DIXON
101
IJEH, ISIJOKELU
550.0000 1.1104 2.0910 /

67.7343 100.0000 1.2798 0.7137
150.0000 1.2651 0.8008
175.0000 1.2586 0.8439
200.0000 1.2525 0.8868
225.0000 1.2469 0.9294
250.0000 1.2417 0.9718
258.2362 1.2400 0.9856
300.0000 1.2321 1.0555
350.0000 1.2237 1.1381
375.0000 1.2198 1.1790
400.0000 1.2161 1.2195
409.1537 1.2147 1.2343
413.7306 1.2141 1.2417
418.3074 1.2135 1.2490
450.0000 1.2092 1.2997
500.0000 1.2030 1.3786
550.0000 1.1973 1.4562 /
103.9068 150.0000 1.3865 0.5143
175.0000 1.3772 0.5464
200.0000 1.3686 0.5785
225.0000 1.3607 0.6105
250.0000 1.3534 0.6424
258.2362 1.3511 0.6529
300.0000 1.3403 0.7060
350.0000 1.3287 0.7690
375.0000 1.3235 0.8004
400.0000 1.3185 0.8316
409.1537 1.3168 0.8430
413.7306 1.3159 0.8487
418.3074 1.3151 0.8543
450.0000 1.3094 0.8936
NWOSU, DIXON
102
IJEH, ISIJOKELU
500.0000 1.3012 0.9549

550.0000 1.2937 1.0156 /
124.0654 175.0000 1.4453 0.4401
200.0000 1.4350 0.4677
225.0000 1.4256 0.4952
250.0000 1.4170 0.5227
258.2362 1.4143 0.5318
300.0000 1.4015 0.5776
350.0000 1.3881 0.6322
375.0000 1.3820 0.6595
400.0000 1.3763 0.6866
409.1537 1.3743 0.6965
413.7306 1.3733 0.7015
418.3074 1.3723 0.7065
450.0000 1.3657 0.7407
500.0000 1.3563 0.7943
550.0000 1.3477 0.8476 /
146.0774 200.0000 1.5092 0.3782
225.0000
1.4980 0.4017
250.0000 1.4877 0.4253
258.2362 1.4845 0.4330
300.0000 1.4695 0.4724
350.0000 1.4538 0.5195
375.0000 1.4467 0.5430
400.0000 1.4400 0.5665
409.1537 1.4376 0.5751
413.7306 1.4365 0.5794
418.3074 1.4354 0.5837
450.0000 1.4278 0.6134
500.0000 1.4169 0.6600
550.0000 1.4071 0.7064 /
170.3161 225.0000 1.5795 0.3260
NWOSU, DIXON
103
IJEH, ISIJOKELU
250.0000 1.5672 0.3461

258.2362 1.5634 0.3527
300.0000 1.5456 0.3864
350.0000 1.5271 0.4267
375.0000 1.5188 0.4469
400.0000 1.5110 0.4672
409.1537 1.5083 0.4746
413.7306 1.5069 0.4783
418.3074 1.5056 0.4820
450.0000 1.4968 0.5076
500.0000 1.4842 0.5479
550.0000 1.4729 0.5882 /
197.2831 250.0000 1.6576 0.2819
258.2362 1.6530 0.2875
300.0000 1.6318 0.3161
350.0000 1.6099 0.3505
375.0000 1.6001 0.3678
400.0000 1.5910 0.3851
409.1537 1.5878 0.3914
413.7306 1.5863 0.3946
418.3074 1.5847 0.3978
450.0000 1.5745 0.4197
500.0000 1.5599 0.4544
550.0000 1.5469 0.4891 /
206.8974 258.2362 1.6855 0.2688
300.0000 1.6629 0.2959
350.0000 1.6398 0.3285
375.0000 1.6294 0.3449
400.0000 1.6198 0.3613
409.1537 1.6165 0.3673
413.7306 1.6148 0.3703
418.3074 1.6132 0.3733
NWOSU, DIXON
104
IJEH, ISIJOKELU
450.0000 1.6024 0.3942

500.0000 1.5871 0.4271
550.0000 1.5734 0.4601 /
262.4248 300.0000 1.8468 0.2119
350.0000 1.8154 0.2364
375.0000 1.8016 0.2488
400.0000 1.7888 0.2612
409.1537 1.7843 0.2658
413.7306 1.7822 0.2681
418.3074 1.7800 0.2704
450.0000 1.7659 0.2862
500.0000 1.7458 0.3114
550.0000 1.7281 0.3367 /
352.8457 350.0000 2.1123 0.1584
375.0000 2.0917 0.1670
400.0000 2.0728 0.1756
409.1537 2.0663 0.1788
413.7306 2.0631 0.1804
418.3074 2.0599 0.1820
450.0000 2.0393 0.1930
500.0000 2.0105 0.2106
550.0000 1.9853 0.2284 /
418.4723 375.0000 2.3092 0.1347
400.0000 2.2851 0.1417
409.1537 2.2769 0.1443
413.7306 2.2728 0.1456
418.3074 2.2688 0.1468
450.0000 2.2429 0.1558
500.0000 2.2069 0.1701
550.0000 2.1756 0.1846 /
516.4766 400.0000 2.6103 0.1112
409.1537 2.5991 0.1132
NWOSU, DIXON
105
IJEH, ISIJOKELU
413.7306 2.5936 0.1142

418.3074 2.5883 0.1152
450.0000 2.5534 0.1221
500.0000 2.5055 0.1332
550.0000 2.4644 0.1445 /
572.8376 409.1537 2.7881 0.1015
413.7306 2.7817 0.1024
418.3074 2.7755 0.1032
450.0000 2.7351 0.1094
500.0000 2.6798 0.1193
550.0000 2.6326 0.1293 /
611.3386 413.7306 2.9115 0.0959
418.3074 2.9046 0.0968
450.0000 2.8603 0.1025
500.0000 2.7998 0.1116
550.0000 2.7483 0.1209 /
665.6448 418.3074 3.0883 0.0893
450.0000 3.0382 0.0945
500.0000 2.9700 0.1028
550.0000 2.9124 0.1113 /
/
-- Column Properties are:

-- 'Pressure' 'Gas FVF' 'Gas Visc'
-- Units: bar
rm3 /sm3
cp
PVDG
--- Dry Gas PVT Properties (No Vapourised Oil)
-1.0132 1.3262 0.0109
25.0000 0.0505 0.0126
NWOSU, DIXON
106
IJEH, ISIJOKELU
50.0000
100.0000
150.0000
175.0000
200.0000
225.0000
250.0000
258.2362
300.0000
350.0000
375.0000
400.0000
409.1537
413.7306
418.3074
NWOSU, DIXON
0.0247
0.0121
0.0080
0.0069
0.0061
0.0056
0.0051
0.0050
0.0045
0.0040
0.0039
0.00373
0.00372
0.00371
0.0036
0.0136
0.0153
0.0175
0.0189
0.0203
0.0217
0.0232
0.0237
0.0261
0.0289
0.0302
0.0314
0.0319
0.0321
0.0324/
107
IJEH, ISIJOKELU

Dynamic Reservoir Simulation of The Alwyn Field Using Eclipse.

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Dynamic Reservoir Simulation of The Alwyn Field Using Eclipse.

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INSTITUTE OF PETROLEUM STUDIES

NWOSU UGONNA DIXON

2.1.1 Drilling Constraints ........................................................................................... 27

i. Tarbert Region ........................................................................................................ 44

4.5.3 Profitability Index and Economic Life............................................................. 84

5.2 Recommendations ............................................................................................ 89

B2 Water Injection: Evaluation Of Npv Using The Calculated Internal Rate Of

Figure 1.2: Alwyn Area Location Map

Figure1.3: Stratigraphy of the Alwyn North Field

Figure 1.6: Cross Section Through Alywn Showing The Faults

Figure 1.7: Depositional Setting of the Brent Group

Figure 1.8: Reservoir Model Showing the Grids

Figure 1.9: Data File Initialized to Obtain Volumes In-Place

Fig2.1: Reciprocal Mobility Ratio Chart

Fig2.2: Fractional Flow curve for the Tarbert Region

Figure 2.4: Relative permeability versus gas saturation curves

Fig 3.9: FPR, FOE, FWCT, FGOR as a function of time

Well by Well Analysis

Fig 3.11: Well Architecture: 7 producers and 5 injectors

Fig 3.12: Water Injection: FOPR, FOE and FOPT

Fig 3.13: Water Injection: FPR, FWCT and FWIR

Fig 3.16: Sub-case 1: FOPT, FOE, FOPR, FWIR and FOPR

Fig4.1 Cash flow curve for Natural Depletion Scheme

Cash flow for Gas Injection

Cash flow for Water Injection

Fig 4.4: Cash flow for WAG Injection

Fig 4.5: Investment Costs for the various development schemes

Fig 4.6 : Pay-back time for the various development schemes

Fig 4.9 NPV for the various development schemes

Fig 4.10 IRR for the various development schemes

1.3 Geological Description And Field Characteristics

Figure1.1: Alwyn North Field Localization Map

Figure 1.2: Alwyn Area Location Map

1.3.2 Field Characteristics Tectonics

1.3.3 Geological Setting

Figure1.3: Stratigraphy of the Alwyn North Field

ALWYN North reservoirs were relatively unaffected by diagenesis due probably

1.3.4 Brent East Reservoir of Alwyn North Field

1.3.4.1 Geological Description

Figure 1.4: Brent Geological Cross section

The Brent geological well section is shown in Fig. 1.5.

Fig: Brent Geological well Section

Figure 1.6: Cross Section Through Alywn Showing The Faults

poorer petrophysical characteristics than Ness 2 unit and its oil-bearing

Figure 1.7: Depositional Setting of the Brent Group

To summarize, Tarbet can be described as massive shore face sands with

1.3.4.4 Log correlations

Figure 1.8: Showing Log Correlations

1.4 OBJECTIVES OF THE STUDY

options. The annual production plateau was estimated to be around 15% of

1.5 Reservoir Model And Characteristics

given in a Petrel file: 'MODEL_PETREL.GRDECL'. The structural

1.5.1 Rock Typing

Figure 1.8: Reservoir Model Showing the Grids

The petrophysical properties (porosity, permeabilities and NTG) are included in

1.5.2 Reservoir Fluid Properties

Temperature (T) 110 oC

GOR 206.8974 v/v

1.5.3 Fluids in Place

Table 1.3: Table Showing the Fluids in Place Volume

125,222,389 188,540,747 313,763,137

Figure 1.9: Data File Initialized to Obtain Volumes In-Place

The maximum horizontal drain (x or y direction) of a well will be less than

Z = 8.0907 per layer* 8 layers NTG = 64.7256 0.96883 = 62.7081m