Developing New Fields Using Probabilistic
Reservoir Forecasting
C.S. Kabir and A. Chawathe
, ChevronTexaco, and S.D. Jenkins, A.J. Olayomi, C. Aigbe,
and D.B. Faparusi, Chevron Nigeria Ltd.
Summary
Limited and uncertain geologic and engineering data at the onset
of any new field development are the bane of reservoir character-
ization and simulation. The problem stems from the uncertainty in
various model-input variables, such as reservoir connectivity, fluid
viscosity, and endpoint saturations, to name a few. Given this
scenario, an ad hoc, one-factor-at-a-time approach to earth and
flow-simulation modeling cannot possibly yield unbiased informa-
tion for making objective business decisions.
This study presents three field cases in which both engineering
and earth-model variables were varied in a systematic way to
assess reservoir performance by use of the experimental design
(ED) approach.
Results of the field cases show that well requirements (both
producers and injectors) turned out to be fewer than anticipated.
Equally important, one case study showed that laboratory mea-
surements could minimize uncertainty surrounding oil viscosity
and endpoint saturations. At the same time, we learned that the
preferred horizontal-well orientation was marginally superior to
vertical wells in light of high reservoir anisotropy. In another case,
stratigraphy, gas/oil contact (GOC), and aquifer strength became
the primary variables for the full-factorial design after the initial
screening. Here, we proved that the project could proceed because
it met the minimum reserves criterion. Perhaps most importantly,
all studies showed how to obtain unbiased information in far fewer
flow-simulation runs than one would do using an ad hoc approach.
Introduction
The availability of very limited data with large uncertainty pre-
sents significant challenges to any new field development. Stakes
are high when deepwater prospects are evaluated. With advances
in 3D seismic, the reservoir surface may be mapped with a certain
degree of confidence. However, a few exploratory wells cannot
provide detailed information about the reservoirs internal archi-
tecture, particularly with respect to flow barriers or baffles. In
short, we are confronted with large uncertainty in the reservoirs
flow and, sometimes, fluid properties.
Given limited and uncertain data, questions arise about how to
proceed with a field-development plan. Historically, we have used
reservoir simulation and sensitivity analyses as tools for predicting
various scenarios, followed by economic analysis. But the ap-
proach has been less than satisfactory because of the ad hoc nature
of the exercise, meaning the need to change one variable at a time.
In essence, this approach relies on setting one variable at the p-10
or p-90 level while keeping others at the p-50 level in a simulation
run. Subsequent ranking of the independent variables can conceiv-
ably be biased. Potentially, this bias stems from two sources. First,
simulations may not contain independent information in the result-
ant 2n+1 simulations, where n represents the number of variables.
Second, the method relies on comparing solutions in which all but
one variable are set at the p-50 level. Finally, when one uses p-50
values in the conventional analysis, the p-50 outcome may be an
unrealistic expectation owing to nonlinear fluid-flow behavior in
Copyright 2004 Society of Petroleum Engineers
This paper (SPE 87643) was revised for publication from paper SPE 77564, first presented
at the 2002 SPE Annual Technical Conference and Exhibition, San Antonio, Texas, 29
September2 October. Original manuscript received for review 13 February 2003. Revised
manuscript received 6 August 2003. Paper peer approved 12 December 2003.
February 2004 SPE Reservoir Evaluation & Engineering
the reservoir. In addition, the traditional tornado chart, used for
ranking the variables, does not provide any information pertaining
to statistical significance of the independent-variable effects on
the dependent variable.
However, systematic approaches19 have emerged to account
for uncertainty associated with various input variables, on the basis
of ED. For instance, Chewaroungroaj et al.5 demonstrated the use
of ED with a series of dimensionless variables to allow extension
of the results to similar systems. On the other hand, Corre et al.7
used ED to integrate data from diverse sources, including seismic,
in their effort to quantify uncertainty. Application of ED also has
been extended to history-matched reservoirs.8
In ED, geologic (e.g., fluid contacts, net-to-gross pay thickness)
and engineering (e.g., anisotropy, well count) variables are varied
simultaneously, unlike the ad hoc, one-variable-at-a-time ap-
proach. The advantage of the ED approach is that it generates
relatively unbiased p-10, p-50, and p-90 probabilistic estimates by
capturing nonlinear interactions of variables. Full-factorial three-
level designs, which account for nonlinearities, are currently rea-
sonable with analytic simulations10 or when only a few (n<4)
variables are involved. Realistically, with finite-difference simu-
lations, one can afford to do only a subset of the simulations at a
cost of some higher-order interactions between the variables. Here,
we chose to rely on the statistical principle of sparsity; that is, the
main effects of a few variables cause most primary influences.
In this paper, we used a three-step procedure that involves
variable screening using a simple, linear design, followed by a
nonlinear analysis and the response surface approach. This meth-
odology is outlined in detail in Friedmann et al.2 and is similar to
the one originally presented by Damsleth et al.1
This paper demonstrates the use of ED for making rapid and
unbiased business decisions and, therefore, differs from those
available in the literature. In particular, the paper stresses an op-
erating-company approach, vis-a` -vis developing new data-
gathering strategies and the like. We also discuss the limitations of
ED, especially in an earth-science context, wherein variable
screening tends to be more qualitative than quantitative in nature.
Methodology
In essence, the proposed approach entails a three-step procedure
using ED. First, we screen a large number of variables by using the
two-level (low and high) design of Plackett and Burman (PB).11
This step is designed to identify the major variables, or heavy
hitters, influencing the dependent variable (recovery, for in-
stance) by capturing only the linear effects. Rapid screening with
a minimum number of flow simulations is the focal point here.
Second, the time-lapse recovery (or any other dependent vari-
able) is used to rank the sensitivity of the major variables, identi-
fied in Step 1. The variables belonging to the 95% confidence
interval are selected for the three-level (low, mid, and high) D-
optimal or full-factorial design. Thereafter, flow simulations are
run on the basis of this design. This step is designed to capture both
linear and nonlinear effects in addition to interactions between
the variables.
Third, we generate a response surface with multivariate analy-
sis by fitting a polynomial, which then serves as a proxy to the
flow simulator. To fill in the information void generated by the few
flow-simulation runs, Monte Carlo simulations are done with the
response surface to generate the cumulative distribution function
(CDF). Recovery factors corresponding to different probabilities
are then derived from the CDF.
15
 This methodology produces unbiased results if sufficient care is
taken to correctly identify the range of all variables.
Case Studies
Case 1. The first two reservoirs reported here are defined by
several anticline-type structures and truncated by small splay
faults. Although no cores were available, an earth model was con-
structed by integrating well logs, cores from other analogous res-
ervoirs, and 3D seismic. Six rock types or facies were identified in
the log signatures by establishing the log/core relationship from
reservoirs above and below the subject reservoir.
To speed up the simulation effort, we constructed the flow-
simulation model from the detailed 278,124-cell (864277) earth
model by upscaling it both areally and vertically. The resultant
upscaled model had 25,284 cells (432128). Local grid refine-
ment around the producers ensured solution quality in this 100-m
grid model.
Our main objective was to find the number of producers and
injectors and their locations, given the uncertainty of certain geo-
logic and engineering variables. These variables included number
of wells (producers and injectors), types of wells (horizontal, ver-
tical, or slanted), reservoir anisotropy (kV/kH ratio), horizontal per-
meability, heterogeneity in terms of the Dykstra-Parsons12 coeffi-
cient (CDP), and residual-oil saturation (Sorwf).
Step 1. We invoke the principle of sparsity and use the PB
design, which involved just eight flow-simulation runs for the
seven-variable matrix. Table 1 presents the variable matrix and the
recovery results of flow simulations in % original oil in place
(OOIP). Certain variables, such as well type and kV/kH ratio, are
represented by 1, 0, and 1, which reflect low, mid, and high cases,
respectively. Note that the PB method requires a minimum of a
multiple of four runs. Here, because we started with seven vari-
ables, eight runs sufficed. Of course, for fewer than four variables,
one can use the full-factorial design involving 2n simulation
runs. The main idea of the PB design is to capture the linear ef-
Fig. 1Pareto chart showing recovery after 5 years.
16
fects of independent variables on a dependent variable, such as
recovery factor.
Effects of different variables on oil recovery may be best
judged by viewing the Pareto charts, which, in essence, represent
the tornado charts reflecting the hierarchy of independent vari-
ables. On a Pareto chart, the x-axis represents the t-test values, and
the y-axis represents the variables. Details can be found in a sta-
tistical text, such as Ref. 13. Figs. 1 through 3 represent the
time-dependent nature of these variables influencing recovery.
Note that the negative value associated with a variable suggests
that its increase has an adverse effect on the dependent variable
(oil recovery, in this case). The opposite is true for a positive value.
In other words, the charts indicate that increasing the well count is
good for recovery, while increasing the residual oil decreases re-
covery. These observations are consistent with those one might
expect intuitively.
As expected, the number of producers plays a dominant role
early in the life of the project. However, as the waterflood matures,
residual-oil saturation plays an increasingly dominant role. In fact,
toward the end of the projects life, it becomes the most influential
variable. This outcome is not too surprising given the displacement
process involved in the adverse viscosity-ratio situation. Two other
variables, kV/kH ratio and well orientation, begin to influence the
recovery with the floods maturity.
This screening study led us to consider just four variables for
the next phase of the study. These variables included number of
producers, residual-oil saturation, well orientation, and the kV/kH ratio.
Step 2. With four major variables, we constructed the 16-run
experiment matrix for the D-optimal design, as shown in Table 2.
Recoveries are reported in %OOIP. Note that the results of the two
tables differ somewhat owing to parameter interaction or curvature
in the three-level D-optimal design. Curvature is the difference
between the value predicted by the response surface of a two-level
design when all parameters are maintained at the 0 level (p-50)
and that predicted by the three-level design.
Fig. 2Pareto chart showing recovery after 15 years.
February 2004 SPE Reservoir Evaluation & Engineering

Fig. 3Pareto chart showing recovery after 25 years.
Following the flow-simulation runs, we developed the Pareto
charts, which are shown in Figs. 4 through 6. As expected, the
well count dominates, not just as a linear (L) term or a primary
variable but also as a quadratic (Q) term or a secondary variable.
Herein lies the value of this step, which is designed to capture the
nonlinear or secondary effects (ignored during initial PB screen-
ing) in addition to linear effects.
Figs. 4 through 6 show a trend of variables that is reminiscent
of what we observed earlier in Figs. 1 through 3; that is, the well
count dominates early in the projects life. However, with the
waterfloods maturity, the residual-oil saturation plays an increas-
ingly important role and eventually surpasses the well count as the
major variable. The statistical significance of the ranking is indi-
cated by the p0.05 vertical line, which implies that there is only
a 5% chance that these results could be a fluke. In other words, all
variables to the right of this vertical line are considered significant.
To put it another way, we say that the well count, both linear and
quadratic, and Sorwf are significant in Figs. 4 through 6.
Step 3. Only 16 flow-simulation runs out of a possible 81 (34)
were actually made. The first column of Table 2 identifies those
runs. To fill in the information void, we generated polynomials
using multivariate nonlinear regression. These polynomials, devel-
oped at various points in the projects life, represent response
surfaces, which serve as a proxy to the flow simulator. The poly-
February 2004 SPE Reservoir Evaluation & Engineering
nomials are shown below; note that only two variables are con-
sidered because of the marginal impact of the other two.
RF@5YRS = 3.59 + 15.01*Nwells 6.13*SORWF
2.68*Nwells**2 + Error
RF@10YRS = 2.59 + 17.91*Nwells 19.24*SORWF
3.29*Nwells**2 + Error
RF@15YRS = 10.89 + 15.65*Nwells 29.35*SORWF
3.01*Nwells**2 + Error
RF@25YRS = 29.88 + 1.69*Nwells 41.97*SORWF + Error
Using these polynomials, we used Monte Carlo simulations
with 1,000 realizations to generate the cumulative probability dis-
tributions of the dependent variable, oil recovery. Figs. 7 through
9 represent these distributions. The probability density function
(PDF)-derived p-50 recovery is shown in each graph with dashed
arrows. Note that this p-50 recovery is not necessarily the same as
that obtained from a simulation run with all variables set at the
p-50 level. This comment is even more appropriate in the context
of p-10 and p-90 recoveries.
These results show that most of the oil is recovered in the first
10 years. Thereafter, incremental oil diminishes with increasing
water cut, as expected in an adverse mobility-ratio situation. In
fact, given the range of input variables, the p-50 recovery factor is
only about 23% of OOIP, less than half of that projected for the
Case 2 reservoir, as discussed later. Of course, the oil viscosity in
that reservoir is less than 1 cp, whereas in Case 1, it is approxi-
mately 5 cp.
During this phase of the study, oil viscosity, derived from the
oil sample collected at the exploratory well, was estimated to be
5.2 cp at the bubblepoint. Because of possible contamination of
this oil owing to the presence of oil-based, petrofree mud, viscosity
was thought to be a variable with a range of uncertainty. Therefore,
we made another set of D-optimal design experiments by simply
adding viscosity as the fifth variable. Table 3 presents the range of
variables selected for this set of experiments. Also included here
are other assumptions that were imbedded in the simulation runs,
consistent with those used before.
Following exactly the same procedure discussed before, we
generated probabilistic oil-recovery curves with number of pro-
17

Fig. 4Pareto chart showing relative contributions of variables
to recovery factor at 5 years.
ducers as the variable, as shown in Fig. 10. Similarly, Fig. 11 was
generated with well orientation as the variable. In both figures,
vertical lines indicate the probability, from 1% to 99%. Here, the
effect of the number of producers is clearly demonstrated. The
benefits of the second producer in early life, both in terms of
recovery and cash flow, are obvious. However, the same is not true
when we compare the performance of the second and third wells;
thus, we reach the conclusion that two producers suffice. Interest-
ingly enough, if the oil viscosity is treated as a constant, the un-
certainty spread remains about the same in early life but reduces
quite a bit at late times, unlike those observed here. Clearly, the
message is that reduction in the uncertainty band for a dependent
variable, such as recovery, must include determination of oil vis-
cosity and residual-oil saturation in the laboratory. Note that oil
pressure/volume/temperature (PVT) data were unavailable at the
initiation of study.
As Fig. 11 shows, the horizontal wells provide marginal supe-
riority over conventional wells because of high reservoir anisot-
ropy. Perhaps an explanation is in order. Separate 1D vertical flow
simulations showed that the effective or intercell vertical perme-
ability was one to two orders of magnitude lower than those of the
assigned cell values. Such ultralow effective vertical permeability
does not provide the right environment for optimal performance of
horizontal wells. Nonetheless, horizontal wells were favored be-
cause of completion considerations in this unconsolidated formation.
Case 2. A quick-look faulted earth model was initially constructed
for this reservoir. This model contains approximately 57,000 cells
(1162718), with areal cell dimensions of 100100 m and aver-
age thickness of 2 ft. This model was made from a single strati-
graphic grid encompassing the entire sand, without using addi-
tional internal stratigraphic control. It was used as a screening tool
to quickly establish optimal methods for property distribution, ini-
tial estimates of OOIP, and reserves for different development
scenarios. This quick-look model is called Model I.
Fig. 6Pareto chart showing relative contributions of variables
to recovery factor at 25 years.
18
Fig. 5Pareto chart showing relative contributions of variables
to recovery factor at 15 years.
The final earth model consisted of 215,280 cells (2305218),
with areal cell sizes of 5050 m and average thickness of 2 ft.
These grid dimensions were selected to effectively model the res-
ervoir and to maintain a maximum layer thickness of 3 ft in the
fine-scale model. Of the 215,280 cells, 172,203 cells were active in
flow simulations. This is designated as Model II. To preserve
geologic nuances, neither model was upscaled.
Similar to the previous case, we wished to optimize the number
of producers and injectors and their locations, given ranges of
uncertainty for certain geologic and engineering variables. These
variables include horizontal-well length, reservoir anisotropy (kV/
kH ratio), horizontal permeability, injector completion, and pro-
ducer and injector counts. The simulation model uses a 100-m grid
with local grid refinement around producers. Sensitivity to cell size
also was investigated using an alternative geologic model with a
50-m grid.
Unlike the first case, the first step (PB design calculations) was
unnecessary because both fluid viscosity and endpoint saturations,
important variables likely to have a large impact on recovery, were
well defined. Results of the D-optimal design strongly support
eliminating the PB phase of the study.
The variable matrix and uncertainty ranges used in this study
are presented in Table 4. Beyond this matrix, we assumed that
production and injection rates for a well could not exceed 3,000
STB/D and 10,000 STB/D, respectively, for maintaining comple-
tion integrity in this unconsolidated formation. We also assumed
that a single geostatistical realization represents the reservoir.
Note that well location is not explicit in this experimental ma-
trix. Numerous preliminary runs were made beforehand to opti-
mize locations. Within the scope of desired higher structural el-
evation for producers and correspondingly lower elevation for in-
jectors, we searched for sweet spots and reservoir connectivity as
Fig. 7Probability distribution of oil recovery at 5 years.
February 2004 SPE Reservoir Evaluation & Engineering
 Fig. 9Probability distribution of oil recovery at 25 years.
Fig. 8Probability distribution of oil recovery at 15 years.

Following the generation of Pareto charts, we developed re-

the drivers for preferred well locations. Both static reservoir de-
sponse surfaces at every 5-year interval, using the multivariate
scription and dynamic flow-simulation results formed the basis for
regression analysis discussed earlier. Only 25 of the total 243
location optimization. We observed that minimal spatial changes
(35) flow simulations were actually made. This is how the ED
were needed to maximize oil recovery. To summarize, optimal
approach reduces the large number of simulation runs to a man-
well placement was searched in the background before initiating
ageable few.
the ED work.
We generated the PDF and CDF after Monte Carlo simulations.
Figs. 12 and 13 represent the time-dependent nature of five
Figs. 14 and 15 present the charts showing the recovery factors
variables on recovery. Clearly, the number of producers plays a
corresponding to p-10, p-50, and p-90. Note that the steepness of
dominant role in determining recovery from this reservoir. Note
the elongated S-curve does not change because we are not adding
that the number of producers occurs as both linear (L; primary) and
new information to the project in these flow simulations. However,
quadratic (Q; secondary) terms in the response surface equation,
with the projects maturity and an update of reservoir models,
beyond 5 years of production. Well length becomes marginally
uncertainty can be reduced in an absolute sense. Recovery factor is
important toward the end of the projects life. All other variables
not the only dependent variable that can be optimized. For in-
fall outside the 92% confidence interval. The reason that well
stance, Fig. 16 shows that the oil rate can be viewed the same way.
length becomes a minor contributor stems from setting the with-
After generating results from the quick-look earth model,
drawal rate at a constant value of 3,000 STB/D, owing to comple-
Model I, we verified the solutions by making simulation runs for
tion/operational considerations. In other words, the increasing pro-
the p-50 cases using Model II. Note that Model II has approxi-
ductivity index with increasing length is not taken advantage of in
mately four times as many cells as Model I. Here, the benefits of
early life because of the imposed rate constraint.
employing a fourth producer and a second injector were investi-
These charts certainly confirm that uncertainties associated
gated. Because oil recoveries of the two models are very similar,
with horizontal-well length, kV/kH ratio, horizontal permeability,
as shown in Table 5, we did not see a compelling need for invok-
and injector completion have a minor impact on oil recovery.
ing the ED approach for Model II.
These results are not entirely surprising because displacement is
Questions arise about why the fourth producer does not make a
occurring in a high-permeability, favorable mobility-ratio situation
larger positive impact on recovery (Table 5). Examining time-
in this reservoir, resulting in recovery of approximately 50%
lapse saturation profiles suggests that the location of the fourth
OOIP. We emphasize that the presence of lateral barriers, if any,
producer (in the fairway of the flood front) causes its suboptimal
may change the outcome of actual response in the field. Lateral
barriers, arising from partially sealing faults, can potentially im-
pede flow, resulting in less-than-optimal recovery, as projected in
this study. The number and distribution of flow barriers are very
difficult to ascertain before development drilling occurs. Transient
testing has the potential for identifying the distance and strength of
these partially sealing barriers that go undetected in 3D seismic.

Fig. 10Probabilistic reservoir forecasting: effect of well count.

February 2004 SPE Reservoir Evaluation & Engineering 19


Fig. 11Probabilistic reservoir forecasting: effect of well orientation.
performance. Then again, that is the only logical location for a
fourth producer, given the anticipated reservoir heterogeneity.
As the water-saturation profiles indicate, sweep initially occurs
from south to north, before the flood fronts move east and west.
This pattern of fluid movement is a direct consequence of the
reservoir permeability trend and injector location. A second injec-
tor does help recover incremental oil; however, the incremental
gain is not large and may lie within experimental error for forward
simulations without any production history.
Case 3. To develop or not to developthat was the question for
the Case 3 reservoir. This borderline reservoir needed a minimum
of 40 million STB reserves to be economically viable. Primary
uncertainties in the reservoir included the location of the GOC,
aquifer strength, residual-oil saturation, and the competency of
shale layers, which could act either as vertical baffles or barriers
to flow.
The uncertainty in the GOC stems from our inability to resolve
the gas crossover limit at 7,674 ft, as observed in the well logs.
Because the actual GOC was never penetrated, the possibility of
changes in lithology (sand to shale) or fluid type contributed to this
uncertainty. The lowest known gas was estimated in one of the
wells at 7,686 ft, whereas the highest known oil was spotted
at 7,780 ft.
To compound the GOC uncertainty issue, the solution gas/oil
ratio (GOR) in the field was fairly high at 900 scf/STB. An inde-
pendent PVT measurement from a different region of the reservoir
had indicated that the system should be undersaturated, yet expe-
riences show that a slight change in the estimation of the solution
GOR could result in a saturated system. The water/oil contact was
well established at 7,866 ft. Given these factors, the overall un-
certainty in the GOC could reduce the height of the oil column by
up to 50%. Consequently, the other question being asked was
whether the reservoir should be developed with horizontal or ver-
tical wells.
Fig. 12Relative contributions of variables to the recovery
factor at 5 years, Case 2.
20
We relied on reasonable aquifer support based on the perfor-
mance of an analog in the proximity of this reservoir, but the lack
of long-term data could not confirm this assumption. The compe-
tency of the shale barriers (stratification) was inferred from the
well logs. Admittedly, this factor, even if quantified, cannot be
controlled, but the intention was to mitigate its effect through a
sound distributed reservoir-pressure measurement with forma-
tion testers.
These factors were carried forth into our ED approach. As with
other cases, we performed the well-optimization studies indepen-
dently. The results of the PB analysis confirmed our suspicions, as
shown in Fig. 17 (Step 1). GOC (which was expected to directly
impact the reserves) and stratification (shale competency) showed
up as significant variables after 25 years of production. Because
we sought to establish the ultimate reserves, this analysis was not
done in a time-lapse mode, unlike the previous cases. Fig. 17
indicates that higher stratification results in lower recovery. Satu-
ration maps generated from the simulation results confirmed that
stratification enhances aquifer encroachment. Consequently, many
wells watered out prematurely, thereby reducing recovery. This
finding prompted us to perform further sensitivities on the strength
of aquifer support. Although horizontal wells performed better
than vertical wells in general, GOC and stratification dominated
the overall uncertainty in the system.
Based on the results of the PB analysis, a full-factorial design
was run on two significant variablesGOC and stratification
(Step 2). This was a three-level design resulting in nine (32) runs.
Using the results of the full-factorial design, a quadratic response
surface with one cross term was generated, as shown in Fig. 18.
In Fig. 18, open circles represent the results of the nine full-
factorial simulations.
This quadratic response surface was subjected to 1,000 Monte
Carlo simulations, and a probabilistic recovery CDF was generated
(Step 3). The CDF indicated p-10 and p-90 recovery values of 29.6
and 57.1 million STB, respectively. The CDF also ascertained a
p-50 recovery of 43.3 million STB, which gave us the initial green
light to proceed. However, given the marginal p-50 reserves above
the economic threshold value of 40 million STB, the project got
stalled because it could not compete with other lucrative projects
Fig. 13Relative contributions of variables to the recovery
factor at 19 years.
February 2004 SPE Reservoir Evaluation & Engineering

Fig. 14Probability distribution of oil recovery at 5 years.
at the time of recent budget allocation. This project will get a
favorable management response when the risks are mitigated by
codevelopment of gas reserves in this field.
We point out that risk mitigation is an important element in the
proposed approach by gathering additional data through new seis-
mic acquisition, new drill, and the like. Continuous updating of the
model and recomputation of CDF must follow for reassessment of
the projects economic value at a given point in time.
Discussion
Although we studied the uncertainty of various variables, the issue
of optimal well location was not explored explicitly. Rather, we
relied on a deterministic approach for ascertaining well locations,
independent of the ED approach. We recognize that there are ways
to optimize well locations en route to maximizing an objective
function, such as net present value.14,15 Gu yagu ler and Horne14
extended the well-optimization strategy with a hybrid genetic al-
gorithm (GA)-polytope method. Unfortunately, the current well-
optimization strategies1416 are not well suited for multiple geo-
logical realizations and complex well combinations. However,
given the size of the prospects and the degree of heterogeneity, we
think that the ED approach used here suffices. Experiences under-
score the need to find ways to incorporate the development plan
early in the uncertainty-estimation process. However, this notion
sometimes leads to the chicken-and-egg situation; that is, a devel-
opment plan is based on a specific geologic model, but what is a
p-10 (or p-50, or p-90) geologic model without a development
plan? One recent study17 suggests that the well count, a measure of
development plan, does not change with rock properties alone for
Fig. 16Probability distribution of oil rate at 10 years.
February 2004 SPE Reservoir Evaluation & Engineering
Fig. 15Probability distribution of oil recovery at 19 years.
a given OOIP. Of course, major changes in reservoir connectivity
may have a significant impact on a development plan.
In the first two case studies, we presumed a single geostatistical
realization to be valid for answering the questions that we posed
(i.e., how many producers and injectors were needed for field
development). Experiences suggest that different geostatistical re-
alizations do not necessarily yield different solutions when busi-
ness decisions are made on the basis of recovery. This point was
made when the two geologic models, quick-look and detailed,
yielded very similar recoveries in Case 2. However, Case 3 indi-
cates that major geologic uncertainties, such as stratigraphy, will
impact recovery. But we caution that such variables are extremely
difficult to quantify in continuous probabilistic terms, thereby
questioning the estimation of low, mid, and high identities.
Some geological variables, such as structure, are even more
difficult to quantify because of their inherent spatial nature. Avail-
able algorithms can produce a CDF of structures (and/or geologic
models), which may be ranked on the basis of OOIP. However, we
perceive this approach to be of limited value because a true un-
certainty measure is incomplete without incorporating a develop-
ment plan, which leads us back to the chicken-and-egg situation.
We also think that the presence of yet-to-be-established flow
barriers will have the most impact on reservoir fluid flow and,
therefore, on recoveries. To improve the odds, we recommend
updating these relatively inexpensive studies as additional data are
gathered with the drilling of development wells. In this way, one
can minimize uncertainty in forecasting the performance of
new fields.
Finally, there is the issue of uncertain variables vs. engineer-
ing sensitivities. Some variables can be controlled, such as the well
count. On the other hand, permeability cannot be controlled and is
considered to be a pure uncertainty. In an ideal scenario, we rec-
ommend that the variables be split into two separate designsone
for the uncontrollable variables, and the other for the control-
lable variety. In general, experience indicates that engineering
variables (controllable) tend to dominate the reservoir performance
and, therefore, if coupled with the uncontrollable subsurface
variables, might overshadow the pure subsurface uncertainty.
21
Fig. 17PB analysis shows the importance of GOC and stra-
tigraphy, Case 3.
Conclusions
A systematic ED approach is presented, enabling one to develop a
reservoir by considering uncertainty in various input variables.
Three field examples illustrate the application of ED in developing
new fields in west Africa. All examples had variables that were
known to various degrees of certainty. Specifically, we reached the
following conclusions.
1. ED is an unbiased, rapid approach to obtaining probabilistic
results. The approach allows identification of significant vari-
ables influencing the dependent variable (e.g., recovery).
2. Engineering variables governing recovery in terms of decreas-
ing importance are well count (often the most dominant), oil
viscosity, residual-oil saturation, well orientation, and anisotro-
py. Fluid contacts and stratigraphy are the dominating variables
from geological considerations.
3. From a recovery standpoint, reservoir heterogeneity (in terms of
anisotropy and CDP) plays a weak role. However, major geo-
logic features, such as stratigraphy and fluid contacts, can se-
verely impact a development strategy.
Nomenclature
CDP Dykstra-Parsons coefficient, dimensionless
kH horizontal permeability, md
kV vertical permeability, md
n number of variables, dimensionless
p probability of occurrence
Sorwf residual-oil saturation after waterflood, fraction
o oil viscosity, cp
Acknowledgments
We are grateful to ChevronTexaco management and that of our
partner for permission to present this work. We are indebted to
colleagues Neil Young (for building the earth model for the Case
2 reservoir) and Alan Bernath (for all-around assistance with the
Case 1 and Case 2 studies). One of us (CSK) learned a great deal
about ED from Francois Friedmann, who also contributed to cre-
ating and analyzing ED for the first two case studies.
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February 2004 SPE Reservoir Evaluation & Engineering
 degree in petroleum and natural gas engineering from Penn-
SI Metric Conversion Factors sylvania State U. Chawathe has served as a Technical Editor
and Review Chair for SPEREE. Steve Jenkins has worked on a
bbl 1.589 873 E01 m3 number of seismic imaging and reservoir-characterization proj-
cp 1.0* E03 Pas ects with Chevron USA, Caltex Pacific Indonesia, Chevron Ni-
ft 3.048* E01 m geria Ltd., and Tengizchevroil. His current work includes estima-
ft3 2.831 685 E02 m3 tion of probabilistic oil in place for Tengiz field, Republic of
Kazakhstan, and evaluation of exploration opportunities for
*Conversion factor is exact. Tengizchevroil. Jenkins holds a BA degree in geology from the
U. of Tennessee at Knoxville and an MA degree in geophysics
from Indiana U. Adebola Joseph Olayomi is a reservoir simula-
tion engineer at Chevron Nigeria Limited in Lagos, where he
Shah Kabir is a senior advisor with the Nigeria/Mid-Africa busi- has been employed since 1991; previously, he had stints in
ness unit at ChevronTexaco Overseas Petroleum, Bellaire, production and completion engineering. Before joining Chev-
Texas. He has published extensively in the areas of well testing, ron, he worked as a wellsite operations engineer for three
fluid and heat flows in wellbores, and reservoir engineering; his years with Shell Petroleum. Olayomi holds a BS degree (honors)
latest effort includes the SPE book Fluid Flow and Heat Transfer in petroleum engineering from the U. of Ibadan, Nigeria. Chris
in Wellbores. He holds an MS degree in chemical engineering Aigbe is a reservoir engineer with Chevron Nigeria Ltd., where
from the U. of Calgary. Kabir has served on many SPE commit- he is responsible for the conduct of flow-simulation studies of
tees, including the editorial review committees of SPEPF, various black-oil and gas/condensate reservoirs. Previously, he
SPEREE, and SPEJ; currently, he serves as a Review Chair for was a lecturer at Auchi Polytechnic, Nigeria, as well as a field-
SPEREE. He has received commendation as an outstanding based production engineer and a petroleum engineer with
Technical Editor five times for two different journals. In 2002, he Chevron. He has extensive experience in well testing, well/
received the SPE Western North America Regions Service reservoir problem diagnosis and remediation, workover plan-
Award. Adwait Chawathe is a senior reservoir engineer at ning and execution, production optimization, and new-field
ChevronTexaco working on the Wafra field in Kuwait. Before development. Aigbe holds an MS degree in chemical engi-
joining Chevron in 1997, he worked for 2 years at the New neering from the U. of Benin, Nigeria. Biographical information
Mexico Petroleum Recovery Research Center. He holds a PhD for D.B. Faparusi was not available.

February 2004 SPE Reservoir Evaluation & Engineering 23