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    Stratigraphic Reservoir Characterization for Petroleum Geologists, Geophysicists, and Engineers
    Stratigraphic Reservoir Characterization for Petroleum Geologists, Geophysicists, and Engineers
    Stratigraphic Reservoir Characterization for Petroleum Geologists, Geophysicists, and Engineers
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    Stratigraphic Reservoir Characterization for Petroleum Geologists, Geophysicists, and Engineers

    By Roger M. Slatt

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    Reservoir characterization as a discipline grew out of the recognition that more oil and gas could be extracted from reservoirs if the geology of the reservoir was understood. Prior to that awakening, reservoir development and production were the realm of the petroleum engineer. In fact, geologists of that time would have felt slighted if asked by corporate management to move from an exciting exploration assignment to a more mundane assignment working with an engineer to improve a reservoir’s performance.

    Slowly, reservoir characterization came into its own as a quantitative, multidisciplinary endeavor requiring a vast array of skills and knowledge sets. Perhaps the biggest attractor to becoming a reservoir geologist was the advent of fast computing, followed by visualization programs and theaters, all of which allow young geoscientists to practice their computing skills in a highly technical work environment. Also, the discipline grew in parallel with the evolution of data integration and the advent of asset teams in the petroleum industry. Finally, reservoir characterization flourished with the quantum improvements that have occurred in geophysical acquisition and processing techniques and that allow geophysicists to image internal reservoir complexities.

    • Practical resource describing different types of sandstone and shale reservoirs
    • Case histories of reservoir studies for easy comparison
    • Applications of standard, new, and emerging technologies
    LanguageEnglish
    PublisherElsevier Science
    Release dateNov 21, 2013
    ISBN9780444563705
    Stratigraphic Reservoir Characterization for Petroleum Geologists, Geophysicists, and Engineers

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      Stratigraphic Reservoir Characterization for Petroleum Geologists, Geophysicists, and Engineers - Roger M. Slatt

      kindness.

      Preface

      Roger M. Slatt

      School of Geology and Geophysics and Institute of Reservoir Characterization, University of Oklahoma Norman, Oklahoma 73019

      Much has changed in the field of reservoir characterization, as well as in the world, since the first edition of this book was published in 2006. Technological advances, coupled with new directions in exploration and development of hydrocarbons, increasing global energy demand and new energy sources and energy-related issues, prompted this updated second edition. In addition to replacing some of the older case histories and other aspects of the first edition, two new chapters have been added to this second edition.

      The first addition is on shales (i.e., mudrocks) as an unconventional resource (Chapter 12). Not many would have believed in 2006 that the most abundant rock type in the stratigraphic record would be capable of producing vast quantities of gas and oil, enough to make countries energy independent, and net exporters instead of importers of hydrocarbon fuels. The second addition is on the basics of geological and engineering modeling (Chapter 13). A chapter on this subject was not included in the first edition because the field was expanding too rapidly. The pace of advancement in modeling concepts, programs, and applications has not really diminished since 2006, so it was decided to include this chapter (mainly written by Dr. Fuge Zou) as background material for someone just needing to know the modeling basics.

      I have been very fortunate in having experienced a dual career spanning 14 years in the petroleum industry and 29 years in academia. Thus, this book carries with it my experience in the scientific and technical aspects of reservoir characterization as well as my understanding of the necessity for explaining a concept or practice in a manner that is understandable to technical people from a variety of experience levels and interests. To accomplish this, I have drawn upon personal experiences in reservoir characterization and also upon both classic and recently published comprehensive literature, including graduate student theses and dissertations. The course from which this book evolved is actually a flexible series of topics presented to graduate-level students, to domestic and international petroleum companies, to petroleum societies and organizations, and formerly as a public, online Web (distance-learning) course.

      Reservoir characterization as a discipline grew out of the recognition that more oil and gas could be extracted from reservoirs if the geology of the reservoir was understood. Prior to that awakening, reservoir development and production were the realm of the petroleum engineer. In fact, geologists of that time would have felt slighted if asked by corporate management to move from an exciting exploration assignment to a more mundane assignment working with an engineer to improve a reservoir’s performance.

      Slowly, reservoir characterization came into its own as a quantitative, multidisciplinary endeavor requiring a vast array of skills and knowledge sets. Perhaps, the biggest attractor to becoming a reservoir geologist was the advent of fast computing, followed by visualization programs and theaters, all of which allow young geoscientists to practice their computing skills in a highly technical, rewarding work environment. Also, the discipline grew in parallel with the evolution of data integration and the advent of asset teams in the petroleum industry. With the ever-increasing global demand for energy, partly alleviated by extracting more hydrocarbons from existing or young fields, the science of reservoir characterization is now flourishing. Quantum improvements in geophysical acquisition and processing techniques allow geophysicists to image internal reservoir complexities, quantitative geological reservoir models can now be based on extensive outcrop and mature field studies, and the computing capabilities are in place to relatively quickly build computer-simulation models of reservoirs for performance prediction and volumetric calculations.

      As was the case in 2006, universities still lag behind this discipline’s growth in the petroleum industry. With the exception of some geosciences departments in U.S., European, and Australian universities, young geoscience students typically do not get much opportunity to interact and study with their engineering counterparts. Students at those universities now are reaping the benefits of relatively steady industry recruitment that aims to avoid the demographic trap of workers collectively approaching retirement age at a time when energy demand is increasing globally.

      Thus, this book is intended as a primer for geologists and geophysicists whose education and careers have taken them to this fascinating, multifaceted discipline. The book is also for petroleum engineers who seek to understand what geologists and geophysicists do and to explore how all three groups can help improve reservoir performance in a team setting.

      The book focuses on stratigraphic aspects of characterization, with particular emphasis on understanding the primary control that depositional processes and systems exert on reservoir performance, and the extent (or sometimes the limits) to which stratigraphic features can be predicted away from the wellbore. Unlike the first edition, this second edition is built around a sequence stratigraphic framework since that discipline has matured to a point of common usage in subsurface prediction of the occurrence of source, seal, and reservoir rocks of all types and in most places.

      I have purposefully avoided much discussion of structural aspects of reservoirs because it is a vast field in itself. For the same reason, I apply engineering principles in only a peripheral manner.

      Yes, the discipline of reservoir characterization is complex, comprehensive, multidisciplinary, and exciting. It promises many careers for young people entering the petroleum industry and for more experienced individuals seeking to broaden their horizons.

      I would like to acknowledge individuals with whom I have had the honor and pleasure to work with, and learn from, during my years in petroleum geoscience. These people include, but are not limited to, Hamid Al-Hakeem, Al Barnes, Greg Browne, Mike Burnett, Dave Campbell, John Castagna, Bob Davis, Marlan Downey, Jim Ebanks Jr., Eric Eslinger, Camilo Goyeneche, Neil Hurley, Cretis Jenkins, Doug Jordan, John Kaldi, T.K. Kan, Marcus Milling, Shankar Mitra, Clyde Moore, Matthew Pranter, Dave Pyles, Bill Reed, Mark Scheihing, Bob Sneider, Charles Stone, Rod Tillman, Lew and Myra Ward, John Warme, Bob and Paul Weimer, Jon Withrow, Alan Witten, and Fuge Zou. I also thank the 70 + graduate students that I have so far had the pleasure to work with and graduate while at OU. The patience and encouragement of my late-wife Linda Gay during the writing of this book is also greatly acknowledged. My son Andrew Slatt, and Ms. Lingxin (Cindy) Meng completed most of the excellent graphics used in the book and Carol Drayton spent many long and sometimes frustrating hours editing chapters and securing permissions to publish figures. My other son Tom Slatt frequently provided food for thought and nourishment at his restaurant. Finally, I am especially indebted to Robert Stephenson for providing the incentive for me to take up residence at the University of Oklahoma in 2000 to enhance its energy program, and for providing continued financial support that has allowed me to complete both the first and second editions of this book.

      Series Editor's Preface

      John Cubitt

      Holt, Wales

      In the latest book published in this series, Geophysics for Petroleum Engineers, written by Professor F. Aminzadeh and Dr. S.N. Dasgupta, I had the pleasure of providing a brief preface that emphasized the strong need to maintain and improve lines of communication among and between modern reservoir, drilling, and production engineers and geophysicists, geologists, and petrophysicists. That volume, produced by experts in the geosciences and engineering within industry and academia, was designed and written with alleviating the traditional communication gap between the disciplines and asset team members firmly in mind.

      Now in the second edition of Professor Roger Slatt’s popular book on Stratigraphic Reservoir Characterization for Petroleum Geologists, Geophysicists, and Engineers, we have the ability to build on that important message. He realized that reservoir characterization as a discipline grew out of the recognition that more oil and gas could be extracted from reservoirs if the detailed geology of those reservoirs was better understood by both geoscientists and engineers. Over the past 30 years, it has developed into a multidisciplinary technical activity employing the very latest in computer, data management, and visualization technologies. In the new business world of asset teams, the use of reservoir characterization leapt forward when 3D and 4D geophysical acquisition and processing allowed geoscientists and engineers to image and model reservoir complexities and even the flow of hydrocarbons through reservoirs.

      Professor Slatt has in the light of numerous technical advances in reservoir characterization over the past 10 years put together a book that emphasizes stratigraphic aspects of reservoir characterization in particular the role depositional processes and environments have on reservoir performance and the prediction of stratigraphic features away from the well bore. This edition also has an enlarged section on modern sequence stratigraphy and its role in improving our understanding of reservoir intricacies and the resulting impact on production of hydrocarbons.

      Nowhere is there greater demand for this understanding than in the vitally important and rapidly growing world of unconventional reservoirs including gas and oil shales, tight gas sandstones, and coal-bed methane. So a new chapter on this topic has been added to this edition.

      In the preface to the first edition of his book, Professor Slatt stated that this book is intended as a primer for geologists and geophysicists whose education and careers have taken them into this fascinating, multifaceted discipline. The book is also for petroleum engineers who seek to understand what geologists and geophysicists do and to explore how all three groups can help reservoir performance in a team setting. These important intentions apply as much to this edition and will help to improve communication between these three technical areas.

      This preface also provides an opportunity to remind readers that the Developments in Petroleum Science series will now incorporate the Handbook of Petroleum Exploration and Production series going forward. As currently Series Editor of the Handbook of Petroleum Exploration and Production, I will continue as Series Editor of the Developments in Petroleum Science series and hope that readers will enjoy the combined series.

      Chapter 1

      Basic Principles and Applications of Reservoir Characterization

      Roger M. Slatt

      Keywords

      Compartmentalization; Energy consumption; Gas hydrates (Clathrates); Geologic reservoir heterogeneity; Global energy resource; Oil and gas; Reservoir characterization; Shale Gale

      1.1 General Introduction

      The volume of information that is being generated and made publicly available about oil and gas reservoirs is increasing at an exponential rate, as is most knowledge. The information age applies equally to oil and gas exploration and development as to other global issues, as evidenced by the almost unlimited amount of information that can be gathered from the Internet on both general and specific aspects of basic and applied geoscience and engineering.

      In addition to the Internet revolution, specific technology advances over the past few years include improved seismic processing and imaging for 3D and 4D seismic surveys, drilling in deeper offshore waters and onshore horizontal drilling and completions, and continued understanding of the physiochemical makeup of reservoirs at finer-and-finer detail.

      Since publication of the first edition of this book, exploration for and extraction of oil and gas from shales and tight sands has revolutionized the global energy balance and the petroleum industry's response to that revolution. Although it has long been recognized that there is an abundance of oil and gas in shales, they were generally considered to be hydrocarbon source rocks and seals. Advances in horizontal drilling, artificial fracturing (required of almost all shales to make them productive), and passive seismic monitoring provided the capability to economically extract oil and gas from these ultratight rocks. It has been suggested that there currently is a 100+-year supply of natural gas from North American shale (at current consumption rates), thus reducing the dependence on international sources of energy. In the early stages of development of shale gas, principally from the Barnett Shale, so much gas was produced that market price declined substantially. At the same time, oil prices were rising. As a result, the development of gas declined substantially, gas-rich shale plays were abandoned or sold off, and petroleum industry exploration moved toward liquid-rich intervals in the shales. An example is the Eagle Ford play of South Texas, which has a downdip dry gas window, an updip oil window, and an intermediate wet gas/condensate window (Fig. 1.1).

      Figure 1.1 Distribution of oil, wet gas, and dry gas in the Eagle Ford Shale Play of South Texas. Figure provided by EIA.

      Although new engineering and geophysical technologies were the driving forces behind shale development, our understanding of the basic physiochemical and stratigraphic makeup of shales lags far behind that of sandstone and carbonate reservoirs. New measurement methodologies and workflows are just being developed for characterizing shale reservoirs (Slatt et al., 2012). Chapter 12 in this second edition is devoted to characterization of shale and tight sand reservoirs.

      Engineering and geophysical advancements, coupled with higher-resolution computing capabilities, have led to steady improvements in our capacity to build quantitative 3D geologic models for reservoir performance simulation and volumetric calculations. All of these advances have come about in large part because of the greater emphasis being placed upon enhanced hydrocarbon recovery from existing, mature fields (brownfields) and shale/tight sand reservoirs. As AAPG President Ted Beaumont stated, The shale/tight sand reservoir play changed the concept of a hydrocarbon reservoir forever and the key to the evolution of our knowledge and understanding of this incredible play is reservoir characterization, the collaboration of geology, geophysics, and engineering.

      1.2 Integrating Expertise for Reservoir Characterization

      Today, the field of reservoir characterization routinely involves disciplines of geology, geophysics, petrophysics, petroleum engineering, geochemistry, biostratigraphy, geostatistics, and computer science. Even behavioral science must be included in this list, because people in the different disciplines do not think or act similarly and sometimes must be encouraged to work together in a team setting. A popular quote (of unknown origin) is very appropriate to the oil and gas industry: Two stonecutters were asked what they were doing. The first said, I'm cutting this stone into blocks. The second replied, I'm on a team that's building a cathedral. The concept behind this latter statement is now fully ingrained within the petroleum industry, as evidenced by the organizational subdivision of exploration and development personnel into asset teams.

      Different disciplines even use their own technical language, so that effective communication is sometimes lacking, leading to costly mistakes such as the Macondo blowout in April 2010 (http://en.wikipedia.org/wiki/Macondo_Prospect). A more mundane example is the term deep water, which is used by a geologist to indicate deposition of sediments in water depths beneath storm wave base (slope and basinal depths) and by an offshore drilling engineer to indicate present-day water depths > 500 m (1500 ft.) above the mudline (seafloor).

      Visualization technologies and instrumentation introduced in earnest in the mid-1990s (Slatt et al., 1996) and now routinely used in all large and midsize companies have provided an effective means of breaking down some of the communication barriers among the disciplines. In part, this is due to the greater willingness of young entrants into the petroleum industry—geoscientists who were raised with home and school computers and sophisticated video games—to seek out, be comfortable with, and use computers for most tasks. Although we all acknowledge the advances that have been made in oil and gas exploration and development as a result of computers, there are a number of occasions of computer overuse (i.e., using the computer instead of knowledge to attempt to solve a problem). University professors are sometimes chided for producing Nintendo geologists (a term first introduced to me by W. Camp, a long-time petroleum industry geologist).

      Thus, the field of reservoir characterization is quite comprehensive and challenging. In fact, definitions of reservoir characterization now vary according to the technologies available for characterization and the skills of the technologists. A rather vague definition that I like (perhaps because it is vague) has been provided by Halderson and Damsleth (1993): The principal goal of reservoir characterization is to outsmart nature to obtain higher recoveries with fewer wells in better positions at minimum cost through optimization.

      1.3 Oil and Gas: The Main Sources of Global Energy

      1.3.1 Resources and Reserves

      The volume of oil and gas that is present beneath the Earth's surface can be classified in several ways. Figure 1.2 illustrates one classification, from the resource (undiscovered, total estimated) to the reserves (either proven or probable at a given price). Determining the resource and reserves at any one time is a difficult task, and the values will change over time. As shown in Fig. 1.2, undoubtedly, the total anticipated resource is not accessible to exploration, for geographic, political, and economic reasons and technological challenges.

      Figure 1.2 A visual definition of resources and reserves. Modified from Favennec (2002). Reprinted with permission of Institut Francais du Petrole.

      Also, what is not accessible today may become accessible in the future, so that the total resource can change with time. Then, once the resource is identified and discovered, only a percentage of it may be technically recoverable. However, future technologies (some of which will focus on improved reservoir characterization) will modify this percentage from time to time. Finally, although the resource might be technically recoverable, economics will dictate how much is produced at a given time and price. Because global and local economics change more or less continually, the amount of resource that is actually extracted or extractable will also vary with time. It is this amount of the resource that can be considered the reserves, both proven and probable. A good example of the economic effect of supply and demand on exploration and production is the recent revelation and development of vast quantities of technically recoverable gas and liquids from shales (see Chapter 12 and as discussed earlier).

      1.3.2 Predicting the Remaining Resource

      Over the years, many estimates and calculations have been made regarding when the global supply of oil and gas will be exhausted. Perhaps, the most widely cited set of predictions are those of M. K. Hubbert. The Hubbert curve, which attracted significant attention, was published in 1957, when Hubbert predicted that annual U.S. oil production would peak as early as 1965 and no later than 1970, based on reserve estimates at that time of 150–200 billion barrels (bbl) of oil. In fact, U.S. oil production did peak in 1970 at 3.44 billion bbl (Deming, 2001).

      Hubbert's prediction was based on the assumptions of (1) a finite supply of oil and (2) exponential growth, peak, and decay of the production rate. Such predictions can be fraught with difficulty because of the inaccuracy or unavailability of data from which to estimate the finite supply. Aside from Hubbert's two assumptions, his production predictions were based solely upon time. However, other factors that can affect supply and production rates include ever-changing economics, global politics, complex reporting procedures, and technological advancements for both exploration and production. Some of the estimates made during the past 30 years, using different philosophies and information are summarized in Table 1.1.

      Table 1.1

      Some Estimates of Ultimate Recovery (EUR) and Peak Production, Made in Different Years

      Modified from Edwards (2001). Reprinted with permission of AAPG, whose permission is required for further use.

      These data show that the estimated ultimate recovery predictions vary by a factor of 2 ×, without a systematic increase or decrease over the 30-year time span of predictions. Most predictions place peak production within the next 5–25 years. If this proves to be true, there is still uncertainty as to how long production would continue on a downward exponential trend, because that would depend on the various nongeologic factors mentioned earlier, in addition to the size of the resource. The more pessimistic predictions of the end of significant oil and gas production have fueled the debate over conservation, industrialization, environmentalism, alternate energy sources, hydrogen economy, and fusion, to name a few. They have also stimulated research, development, and advancements in these areas. Again, research into shales as reservoirs is a recent example.

      1.3.3 The Global Energy Resource

      An excellent, up-to-date listing of global energy resource is available from BP Statistical Review of World Energy, June 2013 (bp.com/statisticalreview), and this Web publication is recommended to readers. An example from that publication is the trend of reserves/production ratio for oil reserves from 1981 to 2011, by global region (Fig. 1.3).

      Figure 1.3 Thirty-year history (1981–2011) of reserves to production ratio for global oil, by region. Vertical axis is in BBO. http://www.bp.com/assets/bp_internet/globalbp/globalbp_uk_english/reports_and_publications/statstical_energy_review_2011/STAGING/local_assets/pdf/statstical_review_of_world_energy_full_report_2012.pdf.

      A statistical review of global resources by the U.S. Geological Survey (2000) revealed that on both a global and a U.S. basis, reserve growth (defined as the increase in known petroleum volume that commonly occurs as oil and gas fields are developed and produced; it refers to oil and gas that are recoverable by current technology, through improved reservoir management; chapter 1) is about equal to the volumes of undiscovered conventional oil and gas. This point is particularly significant for a number of reasons. First, it raises the issue of the economics of exploration versus development. Because approximately the same volume of reserves is thought to remain undiscovered as is presently left in existing fields, is it better to place more emphasis on exploring for new resources or on exploiting the existing reserves? Repeated studies have shown that over the past few decades in the United States, greater additions to oil and gas reserves came from discovered fields than from new field discoveries. In the United States, for example, about twice the volume of reserves of both oil and gas is derived from reserve growth, compared with remaining reserves (chapter 1; table 1.2), which suggests that initial estimates of field reserves are often too conservative.

      A 2012 review by the U.S. Geological Survey (published in the AAPG Explorer) placed the … potential undiscovered US reserves additions total at 32 billion bbl of crude oil, 291 tcf of natural gas, and 10 billion bbl of technically recoverable domestic oil and gas. This estimate did not include reserve growth estimates for federal offshore areas, nor economically recoverable accumulations of shale gas, tight gas, tight oil, and tar sands. Unlike past reserve growth estimates which relied entirely on statistical extrapolations of growth trends, this one is partly based on detailed analysis of geology and engineering practices used in the assessed producing accumulations, the report said. The assessment used published and commercial, proprietary geologic information and field production data. By providing geologically based, domestically consistent estimates of the potential additions of oil and gas from the growth in reserves in known fields, and placing that information in the public domain, we are furnishing a valuable projection on how much and where fossil fuels may be produced in the future. When combined with our estimates of undiscovered resources, policymakers can obtain a more complete picture of domestic, technically recoverable oil and gas, said USGS Director Marcia K. McNutt.

      At a more regional U.S. scale, Grace (2006) correlated reserve growth with field size in the northern Gulf of Mexico shelf and found that a field containing > 10 MMBOE (barrels of oil equivalent) (to convert gas to BOE, one BOE = 5620 ft.³ of gas) had a 75% chance of growing its reserves with time. There, the causes of reserve growth include (a) discovery and development of new reservoirs or compartments within a field, (b) recognition of larger volumes of productive rock than predicted, (c) increase in recovery factor from discovered reservoirs, and (d) amalgamation of fields formerly recognized as being separate hydrocarbon accumulations (Grace, 2006).

      As one moves from exploration to discovery, then to appraisal and development/production, more and more data are generated that provide a better understanding of the reservoir. Improved understanding increases the accuracy of resource estimates and reduces uncertainty about reserve calculations and ultimate recovery (Fig. 1.4). Reservoir characterization plays a significant role in reserve growth, particularly when the price of oil and gas is high, and companies have more money to spend on field development (Fig. 1.4).

      Figure 1.4 Evolution of uncertainty in resource estimation with time; the vertical axis represents the estimated ultimate recovery (EUR). Modified from Ross (1997). Reprinted with permission of Society of Petroleum Engineers.

      Some companies have reduced exploration budgets in favor of acquiring and further developing properties with known reserves. The success of exploration is not simple and varies according to the geography and the remoteness of exploration and field locations, the potential for infrastructure to move hydrocarbons once they have been discovered, and the fluctuating price of oil and gas over the short term. On the other hand, an incremental increase in production, above what was expected from the remaining reserves in a mature field, can add significantly to the field's livelihood and the operating company's profits (Fig. 1.5).

      Figure 1.5 Total reserve additions/reductions for the northern Gulf of Mexico shelf in relation to the real price of oil and gas (BOE) for the years 1976–2001. Figure provided by Grace (2006).

      1.3.4 The Shale Gale

      The effect of unconventional resources on overall production and reserve growth is, at the moment, an unknown part of the energy mix, particularly for shales. This is mainly because relatively little is understood about producing oil and gas from shales (see Chapter 12 for details of resource shales). In North America alone, there are about 60 potentially economic shale gas plays and several shale oil plays. As recently as 2007, it was widely believed that natural gas was in tight supply in the United States and that the United States was going to become a growing importer of gas. This outlook has now been turned on its head by the shale gale as it is called by D. Yergin. Thus, recent supply-side estimates have been more encouraging than those published a mere few years ago. For example, there is now an estimated 500 TCF of recoverable gas in the United States. Shale gas currently accounts for 33% of U.S. natural gas production, and by 2035, it is predicted to account for 60% (HIS Global Insight, referenced in Ramchand, 2012). Globally, such countries as Argentina, Australia, Canada, China, Colombia, India, Poland, and Saudi Arabia are currently active in shale gas exploration. In Argentina, 927 MMBOE (80% oil) have been estimated from a widespread shale formation (Oil and Gas Journal, November 8, 2011).

      Shale resources are so new that technologies to accurately measure hydrocarbons-in-place remain to be developed and there are relatively few long-term production histories to reliably accept some of the calculated estimates (Nehring, 2010). Other technologies are still evolving to better locate and produce from these reservoirs. For example, horizontal drilling commenced in the Barnett Shale of North Texas, United States, in 2003 and now almost all wells there are drilled horizontally and then artificially fractured. These two technologies combined have led to an increase in Barnett production from 0.2 BCFG/day in 2000 to 4.8 BCFG/day in 2010, along with a corresponding decrease in required drilling days and well costs and an increase in horizontal well length and average fracture stages (Henning, 2010).

      1.3.5 Gas Hydrates (Clathrates)

      Another unconventional resource with tremendous potential is gas hydrate. Gas hydrate is a naturally occurring, icelike, solid combination of natural gas and water with a crystalline structure of a hydrocarbon molecule (usually methane; CH4) surrounded by a cage of water molecules (Fig. 1.6).

      Figure 1.6 The upper left picture shows the cage-like structure of gas hydrate with a central methane molecule surrounded by water molecules. The upper right picture shows the specific structure of a piece of the hydrate from the subduction zone off Oregon, United States. The lower left picture shows a naturally burning piece of gas hydrate owing to the decrease in pressure and increase in temperature. From http://chem.ps.uci.edu/~kcjanda/Group/gas_hydrate_structue.html; http://en.wikipedia.org/wiki/Methane_clathrate.

      Gas hydrate deposits are found along the world's ocean margins and in Arctic regions (Fig. 1.7). A current inventory of gas hydrate occurrences is published by the U.S. Geological Survey (Kvenvolden and Lorenson, 2010). Hydrates might be twice as abundant as all the worlds' current fossil fuel reserves and 10–20 times the total remaining global reserves and undiscovered resources of conventional natural gas. Large deposits have been found onshore in Alaska, Canada, and Russia, and offshore deposits have been mapped in the northern Gulf of Mexico, Japan, India, and China.

      Figure 1.7 Known (black circles) and potential (white circles) gas hydrate deposits of the world (Kvenvolden and Lorenson, 2010).

      Because of the potential size of the global gas hydrate resource base, there are many governmental and multinational research teams assessing properties of gas hydrates and ways to produce the gas. The U.S. Department of Energy/National Energy Technology Laboratory (DOE/NETL) is one of several such organizations whose goal is to characterize the in-place methane hydrate reserves on Alaska's North Slope (http://www.netl.doe.gov/technologies/oil-gas/FutureSupply/MethaneHydrates/projects/DOEProjects/Alaska-41332.html; 2011).

      Seismic reflection surveys are the principle means by which gas hydrate deposits have been discovered and mapped offshore. The major constraints to production are both technical and economic. Because the gas occurs under very high pressure and low temperature, the gas must be separated from the water and extracted very carefully to avoid its release into the ocean or atmosphere, perhaps catastrophically. An international research program has demonstrated the technical feasibility of producing the gas from gas hydrates through pressure reduction (Space Daily, 2003; http://www.spacedaily.com/news/energy-tech-03zz.html). Nevertheless, much still needs to be learned about gas hydrates before they can be added to the global energy mix.

      1.3.6 Energy Consumption

      Figure 1.8 illustrates the past and predicted future trends of global consumption of various energy sources, to the year 2035 (Newall, 2009). Consumption trends, which are directly related to population growth, suggest that, at least for the foreseeable future, oil and natural gas will provide the bulk of global energy. Thus, the need exists for continued global exploration and exploitation of this valuable resource. Irrespective of predictions, it is a certainty that oil and natural gas are finite resources that must be exploited efficiently to give maximum benefit to a global population whose growth rate is also exponential (Edwards, 2001).

      Figure 1.8 Energy consumption by fuel and area, 1990–2035 (trillion cubic feet, TCF). After Newell (2009). Annual Energy Outlook, 2010.

      1.4 The Added Value of Reservoir Characterization

      The preceding discussion illustrates the value of reservoir characterization. If a proper reservoir characterization is conducted for a field and it leads to an incremental improvement in production beyond what was anticipated, then there is economic value to the characterization. For example, if the characterization of a field that was originally estimated to contain 100 MMB of recoverable oil improves that field’s recovery by an additional 5%, an extra 5 MMBO is produced. Production improvements can come about through a better understanding of the geologic complexities of the field (Fig. 1.9), which may result from either sound geologic evaluation or new technologies applied to the field (i.e., from improved reservoir characterization). 3D seismic technology can image fine-scale stratigraphic and structural features that were previously unnoticed by mapping from well control but were highlighted after application of seismic attributes (Chopra and Marfurt, 2007) (Fig. 1.10). Horizontal drilling is now widely used to improve recovery over a larger area of a reservoir, either in highly compartmentalized reservoirs or in blanket-type deposits (Fig. 1.11). Thus, the characterization of reservoirs has evolved from a simple engineering evaluation to one developed by multidisciplinary teams of geologists, geophysicists, petrophysicists, and petroleum engineers.

      Figure 1.9 (a) Simplistic perception of a continuous reservoir sandstone undergoing waterflood. (b) Stratigraphic and structural complexities between wells that can affect the waterflood. Figure provided by Ebanks.

      Figure 1.10 Stratal slices through most positive (red) and (c) most negative (blue) curvature attribute volumes. Right figure illustrates the concepts of positive (convergent) and negative (divergent) attribute with a syncline–anticline structure in the background (channels and their margins can give the same attribute response, Chopra and Marfurt, 2007). Reprinted with permission of Society of Exploration Geophysicists (SEG).

      Figure 1.11 Slant and horizontal wells can lead to improved recovery over vertical wells, both in compartmentalized reservoirs such as the lenticular sandstones shown in the figure and in blanket deposits such as resource shales. From http://paulpereira.wordpress.com/category/oil-and-gas/.

      1.4.1 Examples of Added Value by Reservoir Characterization

      It is difficult to find information on value added or costs saved by reservoir characterization, because such information normally is not provided by companies nor is it often tracked sufficiently. Examples are presented in the succeeding text that do provide some insights into the economic value of integration and use of technologies that were new at the time.

      The first example went a long way toward breaking the petroleum industry out of its traditional silo mold, whereby technical personnel would apply their particular expertise to a project, often in isolation, and seldom as part of a coordinated team. This example, publicized by Sneider (1999), concerns a major oil and gas company that, for many years, was organized in a traditional manner (Fig. 1.12). As an experiment in the value of integration, the company formed a small subsidiary organization composed of personnel with different skills and expertise who worked in synergistic teams (Fig. 1.13). At the end of a 5-year trial period, the finding costs and proven reserves of the major company and the small subsidiary were compared, with startling results (Fig. 1.14). Not only did the synergistic company find 2.8 times the reserves of the large company, but also they did so at less than half the finding cost! Experiments like this paved the way for the modern organizational unit within the petroleum industry—often called the asset team (or similar titles). This example demonstrates the positive value of teamwork, in both exploration and production settings.

      Figure 1.12 Traditional discipline organization within the petroleum industry up to the late 1980s, when companies began to form more integrated organizations. After Sneider (1999). Reprinted with permission of AAPG, whose permission is required for further use.

      Figure 1.13 The early 1990s concept of integrated teams, of which members with different expertise could move in and out of as required. This organizational structure was the forerunner of today's asset teams (or similar names) that form the main upstream organizational structure of major petroleum companies. After Sneider (1999). Reprinted with permission of AAPG, whose permission is required for further use.

      Figure 1.14 Proved reserves and finding costs after the 5-year experimental term of the subsidiary company. Almost three times as much oil was found by the synergistic company as was discovered by the large exploration division of the company and at a finding cost of less than half that of the large division. After Sneider (1999). Reprinted with permission of AAPG, whose permission is required for further use.

      The second example is of a Cretaceous low-porosity/low-permeability, fluviolacustrine field in China (Sneider et al., 2006). Early appraisal wells and reservoir prediction had disappointing results, so a detailed reservoir characterization was initiated in 2001. Production improved in the first 6 months of 2002 by 21% and by an additional 24% in the first 6 months of 2003 (Fig. 1.15). In the first 6 months of 2004, as field development accelerated, drill sites were selected on the basis of a grid pattern rather than on geologic reservoir prediction, and the new well production declined by 51%. As a consequence of this drop, drill sites were again selected on a geologic basis, and after that, new well production increased by 47% after the first 6 months of 2005.

      Figure 1.15 Daan Field, China, cumulative production normalized to first month of production and showing monthly production during the years pre-2002 to first half 2005 (Sneider et al., 2006).

      The third example demonstrates the value of 3D seismic in field development. In 1995, a 3D seismic survey was shot over a small field in the Rocky Mountains (Montgomery, 1997; Sippel, 1996). Prior to the survey, the field was mapped from well logs and production information as a continuous sandstone body (Fig. 1.16). After the 3D seismic shoot, analysts recognized that the field was subdivided into a number of functional compartments that were mutually isolated. This finding prompted realignment of the initial waterflood design and selective emplacement of additional infill wells, which led to a greater than 100% increase in daily unit production, an increase in estimated OOIP from 5.9 to 6.9 MMBO, and an increase in projected total recovery to 32.6% of OOIP. Also, costs were reduced and expenditures became more efficient. This example provides clear proof of economic success through the use of seismic technology.

      Figure 1.16 (a) Net pay thickness determined from well control only and from (b) 3D seismic and well control. Contour interval is 5 ft., from 0 to 25 ft. The 3D seismic clearly shows the high degree of compartmentalization of the reservoir sandstone, unlike the more continuous nature of the sandstone as mapped from only the well control. Note that some sandstone thicks have not been penetrated by wells (black dots) and represent untapped parts of the total reservoir. After Sippel (1996) and Montgomery (1997). Reprinted with permission of American Association of Petroleum Geologists and European Association of Geoscientists and Engineers.

      The fourth example is of the Northeast Betara Field, which is discussed in detail in Chapter 7 of this book and in Suta et al. (2006). Detailed reservoir characterization during early field development led to a depositional model that more accurately identified areas for reservoir sandstone accumulation. The model was proven valid by new wells. As of 2011, 80 wells had been drilled at an average 500 m well spacing to account for compartmentalized sandstone bodies with different fluid contacts, pressures, and CO2 contents. About 90% of the well locations were based upon the depositional model. As planned, the field produced the most oil in the first 5 years of production, after which gas and condensate were produced (Fig. 1.17).

      Fig. 1.17 Northeast Betara field production profile. See Chapter 7 for details of the field. Data provided by Suta (2011).

      1.4.2 Brownfields

      Reservoir characterization is particularly applicable to brownfields. This is a relatively new term in the oil industry, which is synonymous with old field, mature field, and marginal field (Hassam, 2008). Brownfields are fields that have passed their peak production and are now on significant production and economic decline. Some companies restrict the term brownfield to those fields that have been on production for > 30 years. About 60% of the world's oil production comes from brownfields. Operating companies try to extend the economic life of the field by cost-effective, low-risk technologies such as stimulation, refracturing, completing additional zones, infill drilling, use of artificial lift, and reinterpreting old data, such as well logs and well tests (Schlumberger, 2012). Because the infrastructure is already in place, such fields can be made to be economic with only an incremental increase in production. A problem associated with characterizing a brownfield is that over time, field data have been lost or destroyed and such data sets as well logs are old and not readily amenable to advanced characterization. In such cases, it is wise to drill a new well for calibration of the wellbore geology with the older well data.

      1.5 Compartmentalization of Oil and Gas Reservoirs

      1.5.1 Compartmentalization: The Exception or the Rule?

      Integration of technical disciplines over the past few decades has changed our perception of the characteristics of oil and gas reservoirs. Whereas it used to be commonly perceived that oil and gas reservoirs were relatively simple geologic features, the reality is that they are quite complex and they can be subdivided into architectural elements or compartments on the basis of several structural and stratigraphic features (Figs. 1.9 and 1.16). Part of the misconception comes from the fact that one cannot actually see a reservoir, because it is beneath ground level, in the subsurface. Slatt (1998) had claimed that in Rocky Mountain basins, compartmentalized reservoirs are the rule, rather than the exception. With increased flow of information into the public domain concerning reservoirs worldwide, this claim appears to be valid beyond the Rockies. Thus, in the initial through final stages of characterization, investigators should assume that the field will be compartmentalized and segmented, even at scales too small to recognize by normal between-well, subsurface technologies. By integrating the various disciplines mentioned earlier, it is possible to more accurately quantify the characterization

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