3.

APPLIED RESERVOIR GEOLOGY

General

On any hydrocarbon field, the main goal is to drain as much as possible of the in-place oil and
gas, at the lowest possible cost and environmental risk. This requires detailed planning, and
also thorough understanding of the geology (sedimentology, stratigraphy), petrophysical
properties, and fluid contacts. Once a field has been discovered and prior to production, a so-
called PDO (Plan for Development and Operations) document is written and sent to the
authorities (OD) for evaluation. In that document, all the aspects of field development are
addressed, including information on where producers and injectors intend to be drilled. The
location of these wells is based on a geological model, and on a simulation model which is
refined by iteration so as to predict optimal number of producers/injectors, and their
geographical placement on the field.

Small fields never evolve beyond this early stage; ie. the field is set on produced with let say
three producers and one injector, and is shut down once production from these initial wells is
no longer cost beneficial.

On larger fields, it is the norm to have one or several campaigns of infill drilling. That is,
evaluating where the hydrocarbons have not been swept / produced, and planning additional
wells at these locations.

On very large fields such as Statfjord, Gullfaks, Oseberg, Ekofisk, etc, there is continuous
activity over the course of many years, with producers and/or injectors being drilled every
year. On Statfjord, the drilling rate has increased since the field has gone off plateau , with an
average of 15 new wells each year at present. The idea is that as long as drilling new wells is
cost beneficial and provides a satisfactory NPV (net present value) to the partnership, drilling
and well intervention activities can and should be maintained.

Extracting hydrocarbons from reservoirs, both in the early phase on young fields and later on
mature fields, requires focused planning in the form of three main oil / gas recovery activities.
These are: 1) finding areas / pockets of remaining oil (called Targeting Remaining Oil TRO
process on Statfjord ; 2) well planning and drilling ; 3) well interventions. Reservoir
geology and geophysics, together with reservoir and production engineering, are the
important disciplines involved in this work.

Targeting remaining oil

The Targeting Remaining Oil process (TRO, meaning believe in Norwegian) on the
Statfjord Field is a yearly process. It starts with a phase in the autumn (Sept-Dec) called the
Prospect Phase, where maps of all remaining oil pockets (where we believe they are) are
produced. Then comes a phase called Maturing Phase (Jan-Mar) during which the size of the
prospects is evaluated. Some prospects are relatively large and interesting, others are marginal
in size or have a high risk of being water-flooded. The last phase is the Drilling Project Phase,
where new wells are planned roughly, in a way that ideally several prospects are penetrated by
any one well. Because many prospects, large and small, exist, a great amount of different
prospect combinations can be generated with these pseudo-wells. At the end, it is the well
projects that have the highest NPV (cost benefit) that will make up the following years
drilling schedule.

In the Statfjord Formation, and in particular the Raude Member, the sequence stratigraphic
framework is an important tool for targeting remaining oil. Each Raude zone has its best sand
development in the lower part, and it is often there that we find the most remaining oil (Fig.
4.1). Oil is also often present within the many isolated sandstone channels higher up within
each sequence, but generally this oil is difficult to produce because of poor lateral
communication.

Flood-front monitoring maps in Raude are produced every year for each zone. These show the
areas thought to be water-flooded, gas-flooded, or containing remaining oil (Figs. 4.2 and 4.3,
showing only the central part of the Statfjord Field, the A platform area). Based largely on
these maps, the prospects for the Raude Member are found and outlined as polygons (Fig.
4.4). The same procedure is done for all the other Statfjord Field reservoirs. Each prospect is
then documented on spreadsheets, including detailed explanation and volumetrics (amount of
oil) (Fig. 4.5). Such spreadsheet are generated both at the end of the Prospect Phase, and in
the course of the Maturing Phase. During the subsequent Well Project Phase, maps containing
all prospects are produced, and new tentative well paths (sidetracks) are designed (Fig. 4.6).

Well planning and drilling

The wells that end up on the drilling schedule are then thoroughly planned (during the TRO
process, wells are designed, but not planned to a high level of detail). Well A-13 B was drilled
in June 2002, and penetrated two prospects : a Brent East Flank prospect (small rotated fault
block) and a Raude prospect (Fig. 4.7, seismic cross-section). Figure 4.8 shows the Raude
prospect in cross-section. As one can see, it was anticipated that oil would be found in the
Raude 4 and 5 zones, whereas Raude 3 (no sand), Raude 2 (isolated channels) and Raude 1
(no sand) where not expected to be produceable. The planned A-13 B well path was also put
on the sequence stratigraphic diagram for the Statfjord Formation in order to evaluate the
nature of the sandstones and shales expected to be penetrated (Fig. 4.9). Nearby wells in the
prospect area need also to be looked at and understood (Figs. 4.10 and 4.11). In addition to
this geological and geophysical evaluation, well planning also requires thorough reservoir
engineering, production engineering, and drilling / well engineering work.

During drilling, well logs of the new well are loaded almost instantly (Real Time) into the
database. For example, immediately after the borehole assembly has penetrated the top of the
Raude Member, the geologist should have the logs for Nansen and Eiriksson already spliced
and entered into the database, such that an interpretation of the stratigraphy encountered so far
can be made (Fig. 4.12). Once A-13 B drilling is completed, the Raude zones will be
interpreted (correlated in), such that the fluid results (oil, gas, or water) on the logs can be
understood with respect to the stratigraphy (Fig. 4.13). It is following this entire evaluation
that the perforation strategy can be determined.

Well interventions

The drilling results in terms of hydrocarbons as read from the saturation log came in as such
(Fig. 4.14) : 1) Brent East Flank prospect partly oil-filled / partly water-flooded ; 2) Raude 5
water-flooded, diverging from the expected interpretation which was that of oil-filled sands ;
Raude 4 oil-filled ; Raude 3 had some sand although this was not expected, and this sand
layer was oil-filled ; Raude 2 oil-filled as predicted (within presumably isolated channels) ;
Raude had no net sand, as predicted.

Based on these observations, the Raude 2 sandstones were first perforated. Unfortunately,
only 5 000 Sm3 of oil was recovered in the course of the month these perforations produced
(these Raude 2 sands are still opened, but are believed not to contribute to production
anymore because of low pressure support from the aquifer). This volume of oil is however
more than was expected, as no reserves were booked in the Recommendation To Drill
document for A-13 B. Afterwards, the lower Raude 3 sandstone was additionally perforated,
and has since produced 130 000 Sm3 oil, which is excellent taking into consideration how
thin the sand layer is (there is a sequence stratigraphic explanation for this: the lower parts of
sequences are often where sandstones are most laterally continuous). These data and
observations are highlighted on Figures 4.15 and 4.16. One can also get a feeling for the
influence of sequence stratigraphy / sedimentology on the drilling and early production results
by looking at Figure 4.17.

The plan now in terms of perforation strategy is to perforate and produce Raude 4 when oil
rates will have fallen down below our cut-off level of 100 Sm3 / day (should happen before
the end of 2004). After Raude 4, an unexpected oil-filled sand in Eiriksson will be perforated
and hopefully produced from. Then, the encountered oil in the Brent East Flank prospect will
be targeted with new perforations, likely with a plug above the Statfjord Formation.