The purpose of this paper is to introduce the present day's concept of reservoir management process in monitoring reservoir's performance. There are probably as many different definitions of reservoir management as there are different perceptions of the process. However, to the best knowledge of the authors, there are no published key performance indicators for monitoring the various reservoir developments and operations. Proper principles and practices of reservoir management process should govern any sound reservoir developments and operations. This should be attributed too clearly and well-defined key performance (technical, operation and economic) indicators to assist in determining the reservoir management effectiveness. These indicators are derived from the total integrated reservoir management process. This paper also proposes a reservoir management process definition and discusses the concept of the value drivers on how to apply the chosen key performance indicators in reservoir management decision making process.

Historical background

In the early years of the oil boom in the USA, reservoir management practices concentrated on the prevention of the physical and economic waste of oil and gas. Oil companies were interested to offset and produce the competitors' reservoirs. These unnecessary actions resulted in waste and drainage to reservoir's energy and ultimate recovery by producing at high rates the wells that were drilled on close spacing.

As a result of simultaneous discoveries of the giant fields of East Texas and Oklahoma City, a disturbance in the oil prices occurred due to overproduction. Consequently, certain producing States in the USA enacted oil production control, known as proration policies to avoid the economic losses and prevent unnecessary waste. This resulted in limiting the reservoirs' production rate to maximum efficient rates. certain producing GOR and well spacing. In 1935, the Interstate Oil Compact Commission was executed in Dallas, Texas, USA, to promote the principle of oil and gas conservation.

As a response to the above needs, reservoir engineering principles were established between 1935 and 1950s. However, in early 1960s the computer applications in reservoir engineering were introduced. In due time, further enhancements of reservoir modeling and simulation became the reservoir engineering modern tools. As a result of the political and economic upheaval of the 1970s to 1990s, Enhanced Recovery (EOR) methods were introduced to improve and increase oil recoveries. However, in the mid to late 1970s, at the time of the development of the North Sea's complex reservoirs, combined with the enormous costs incurred in these frontier developments led to the formation of teams of engineers and geoscientists to work together to plan the field developments. Consequently, this necessitated the breakdown of the traditional hierarchical organizational structure, and the formation of an ad-hoc groups to work together to describe and develop these fields. It was thus, driven more by operational pressures than a conscious decision to improve the reservoir development and management process.

What is Reservoir Management?

There are many different definitions of reservoir management as there are authors on this topic. The fact that there have been so many attempts, and that there is still no generally accepted definition of the term emphasizes what reservoir management is within the industry.

Management is defined to be a process and is characterized by planning, co-ordination, controlling, administration, communication/feedback and delegation. However, planning is the most important step in the management process. Planning requires defining the problem at hand and conducting rigorous evaluation of the various solution alternatives. Also, it involves setting the objectives based on the design of single purpose plan that includes the associated budgets, policies, work programs. Management integrates all the above steps into workable procedures for the implementation, monitoring and controlling the designed process during its productive life. P. 571^

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