The Future of Reservoir Simulation
Authors: Galas Chris 
Published: March 2010

This issue of JCPT examines the overall outlook for the oil and gas industry. In this article I want to examine the future of one aspect of the industry, the business of numerical simulation of oil and gas reservoirs.

There has been considerable growth in the use of reservoir simulation over the past ten years. The prime engine for this growth, past, present and future, is the staggering increase in computing power, first with the RISC UNIX-based workstations and more recently with PCs. This power has made the time required for a simulation study to drop spectacularly. The drop in hardware costs has been equally dramatic, so that a small consulting outfit can have the same computing power as any mega-company.

Since the size of petroleum projects is log-normally distributed, a drop in the cost of simulation results in a disproportionate increase in the number of projects suitable for simulation, and this increases the demand for simulation. Thus there is little doubt that reservoir simulation is a tool whose usage will continue to grow. This conclusion echoes comments made at the 47th Annual Technical Meeting The Petroleum Society in June of last year.

At the same meeting, three particular comments were made which stuck in my mind. The first comment suggested that the many rounds of down-sizing in the oil patch have not had a negative effect on research and development, as evidenced by the development of SAGD and horizontal drilling. The second comment was that the growth of global telecommunications and rising educational standards in the third world will result in most of the engineering work for the oil patch contracted out to countries such as India and the Philippines. The third comment was that as simulation and geoscience software becomes more integrated, robust and user-friendly, and computing hardware less expensive, every engineer will have a full geoscience/reservoir simulator on his desktop machine and will perform his own simulation work.

The effect of down-sizing in the petroleum industry has never been properly addressed. In financial circles and in the boardrooms only the immediate "bottom-line" effects have been noted and celebrated. The negative results of down-sizing, however, are clearly seen at the engineering level. Within most oil and gas companies, the engineers have workloads which force them to tackle only the immediate problems, leaving them with little time for detailed engineering, let alone reservoir simulation. An unintended benefit of the re-engineering and reorganization within companies in recent years is the new availability and affordability of simulation for smaller oil companies through the host of contractors and consultants which has arisen. There is a wide range of consultants available, ranging from large simulation consulting firms, with house-brand simulation software, to contract employees. The consultants who will survive and thrive in the future are those with technical expertise (to be efficient), ability (to keep on top of the changing technology), drive (to meet and try to surpass the client's expectations) and intuition (to select the optimal solutions)- years of experience alone are not enough.