Vol. 59 No. 1
January 2007
Discussion
Iain Percival
I would like to offer my congratulations to the authors (M.M. Honarpour, N.R. Nagarajan, and K. Sampath) for their lucid and timely overview of an all-important topic in “Rock/Fluid Characterization and Their Integration—Implications on Reservoir Management” (Distinguished Author Series, September 2006 JPT, page 120). I say “timely” because of the rapidly increasing reliance on improved and enhanced recovery from the already discovered hydrocarbon resources to underpin production forecasts in the face of declining (size) of new discoveries. Without a genuine understanding of the fundamental properties of the fluids and the rocks that contain them, the estimates of proved, probable, and possible reserves and associated production are bound to be suspect to a greater or lesser degree. Yet in spite of this, many geoscientists and petroleum engineers have only a superficial knowledge of and limited interest in the fundamentals of the physics and chemistry dictating the properties that will ultimately determine the efficiency and effectiveness of a given (re)development plan. It is not seen as a “must have” on the curriculum vitae of many an ambitious petroleum engineer.
Earlier this year I retired from the position of Chief Petroleum Engineer at a major oil company publicly committed to technical excellence. Yet a major effort in the final 3 to 4 years was to continually nag the global operating units for minimal funding required to keep alive the laboratory equipment and technical capability necessary to conduct the serious special core analysis and geochemical studies to support reservoir simulations and development plans of an increasingly complicated nature. The response was generally, “Farm out the work to third-party laboratories; it is always cheaper than our lab.” I grant that such laboratories fulfill a valuable service to the oil and gas business, but then one important element remains at arm’s length from the operator.
This is the development of real knowledge of rocks and fluids gained from the process of designing analytical techniques/experiments, analyzing results, understanding errors, and working closely with applied mathematicians, physicists, and chemists. Any operator with aspirations to be considered a genuine “center of excellence in hydrocarbon recovery” must maintain in-house/company capability in order to truly understand the recovery processes. It is to the credit of ExxonMobil, for whom the authors work, that this remained a core capability (no pun intended) for the company even during the dark days of R&D cost cutting at the turn of the century, when in-house laboratories were regarded as expensive luxuries.
Reply
M.M. Honarpour, N.R. Nagarajan, and K. Sampath, ExxonMobil Upstream Research Co.
We thank Mr. Percival for his insight and compliments on our Distinguished Author Series article. We strongly concur with his assessment that in-house capabilities of rock and fluid technologies are essential for effective reservoir management, including implementation of development plans and as a basis for design of improved- and enhanced-oil-recovery (IOR/EOR) projects. This is particularly critical for the design of depletion plans for complex reservoirs requiring significant investment.
We believe that the key to capturing the full value of a technology fundamental to hydrocarbon recovery is through innovation and technology application. Furthermore, in-house training is essential for transferring the knowledge base and maintaining technical leadership. Unfortunately, the cost-cutting approach over the past decades eliminated in-house laboratory capabilities in many energy companies, contributing to a significant increase in uncertainties associated with the assessment of in-place and recoverable volumes. The alternative approach of outsourcing can be effective only if the company has internal laboratory capabilities and a strong team of multidisciplinary experts to set objectives, design experiments, monitor and quality control data, and integrate them with other data sources. Fig. 1 depicts a road map for effective management of core and fluid technologies in an energy company. Without strong in-house expertise and capabilities, the components of effective technology management are disjointed and most likely will not add value.
Fig. 1—Effective management of core and fluid technologies.
In summary, company management has a critical role to play in protecting valuable technologies during the difficult times that our industry experiences cyclically. The technologists, in turn, have the responsibility to quantify the value of technology in comparison to project investment.
