Deepwater Gulf of Mexico projects benefit from
quick-turnaround reservoir simulation analysis

Thomas Wagenhofer, petroleum engineer

   High-risk, high-reward exploration projects in the deepwater Gulf of Mexico (GOM) represent some of the greatest challenges facing the oil and gas industry today. The successful quest for profitable deepwater hydrocarbons not only depends on careful geoscientific analysis, but on a thorough understanding of reservoir performance.
   More often than not, decisions to move forward with billion-dollar investments are based on data from just one or two well penetrations and integrated seismic, little or no data from cores or flow tests and limited information on reservoir performance. Where there is little well control, reservoir simulation has become an indispensable tool for combining engineering and geoscientific principles to help quantify reservoir performance, uncertainties and risks. The tool can also be used to help quantify the value of certain data.

Vastar Resources Inc. conducted exploratory drilling with the Diamond Offshore Ocean Victory semi-submersible rig at the King prospect in Mississippi Canyon Block 764 in 1998. Before drilling the proposed well bore in the Gulf of Mexico deepwater, the operator reviewed the results of a small-scale reservoir simulation study prepared by Thomas Wagenhofer, now an engineer with Ryder Scott Petroleum Consultants. The study focused on the combined effects of reservoir compaction and water encroachment from a nearby aquifer. Vastar anticipates initial production from the discovery later this year.

  In the deepwater GOM, the predominant productive geologic formations are young, unconsolidated, turbidite deposits. During exploration and early development of identified reservoirs, the key to building a reliable simulation model is to focus on reservoir parameters with the most impact on performance, namely sand continuity/connectivity and reservoir drive mechanism.
   In particular, the degree of compaction potential is extremely important, as some deposits may exhibit complex rock compressibility behavior with peak values exceeding 60.0x10-6 psi-1. Mechanistic studies performed by Ryder Scott have shown that recovery from a combination compaction/depletion drive may be as low as 10 percent of the original oil in place (OOIP) in low-compaction or depletion-dominated reservoirs and more than 35 percent of the OOIP in reservoirs with high rock compressibility. While these recovery factors apply to a specific prospect for a specific set of PVT properties, they illustrate the significance of compaction in deepwater GOM reservoirs.
   Simplified, conceptual, yet properly designed models with reasonable assumptions for unknown rock and fluid properties allow for "what-if" scenarios that quantify uncertainty in all key reservoir parameters as well as their effects on recovery. The varying results are then incorporated into the decision-making process at different stages of exploration and development.
   Typical decisions involve where to drill the next well, what additional data to gather, what is the value (costs vs. benefits) of acquiring additional data, whether to proceed with field development and what is the best development plan.

Gulf of Mexico Blocks with Areas Evaluated by Ryder Scott Although individual areas cannot be differentiated here, this map is a smaller representation of a larger map that plots in detail the more than 1,600 GOM blocks with areas that have been evaluated by Ryder Scott. At the request of interested parties, the firm examines the map and checks a cross-reference system for reserves reports available for review. The cross-reference system electronically stores information from tens of thousands of reports on GOM and international properties. Companies interested in computing screening economics for a particular property in the Gulf of Mexico and elsewhere frequently ask Ryder Scott to check its cross-reference system. Ryder Scott always protects confidential information and only shares data with specified parties after approval has been granted by the client for which the report was done. Ryder Scott has evaluated approximately two-thirds of all producing properties in the gulf.

Performance issues addressed with reservoir simulation include the following:
   (1) While well locations may seem intuitively obvious from geologic mapping, considering the limited amount of data available, simulation sensitivity studies may help optimize well spacing and locations through investigations of well interference based on uncertainties in predicting fault sealing, sand-to-sand communication and permeability.
   (2) Given the wide range of rock compressibility and associated recovery, particularly in volumetric reservoirs, a simulation study may identify the importance of recovering core and measuring rock-compressibility in future wells to determine compaction potential. This may be especially critical data when concerned with reserves bookings.
   (3) Similarly, investigations of various, equally probable aquifer geometries and sizes combined with various compaction-drive potentials will boost confidence in estimates of combination-drive recovery factors.
   (4) Compaction may result in permeability reduction caused by a change in pore structure with a concomitant decline in hydrocarbon productivity over time. A series of sensitivity cases may provide valuable information about well productivity changes and their effects on rate of return caused by delayed or reduced recovery.
   (5) In cases where waterflood installations are expected, simulation models may help pinpoint installation timing and possibly defer capital expenses.
   (6) While high compaction potential may be desirable as it boosts recovery, it can be the cause of problems with respect to well tubulars. In some instances, the significant change in thickness of reservoir rock due to pore volume reduction has resulted in severe mechanical problems or failures of well tubulars. A properly designed model may help design the right completion scheme for the well by predicting the change in reservoir thickness as a function of depletion.
   Most of these quick-turnaround, small-scale simulation studies are completed in anywhere from a few days to a couple of weeks, depending on geologic complexity. The power and beauty of these simulation models stem from the fact that, although they are simplified, they are also customized to focus on key factors needed to make informed decisions.
   The ultimate objective is to develop a dynamic process whereby the simulation model is continuously updated with new data as that information becomes available. This creates a live reservoir-management tool that facilitates and accelerates the decision-making process step by step from exploration to development through analyses of only the most critical data.
   Editor's Note: This article and other case studies involving Ryder Scott simulation work were scheduled to be published in Hart's E&P magazine in April.