Oil and Gas Exploration
Oil and gas reservoir engineers are charged with the task of estimating the recoverable reserves of natural gas reservoirs. These estimates are used for production forecasting, well testing and drilling, economic modeling, and financial reporting to regulators (e.g., SEC), among other uses. Recoverable reserves are the volumes of dry gas and liquid condensate that can be recovered from the reservoir using a specified recovery method. The reserves are estimated from volumetric calculations to determine the pore volume of the reservoir rock containing the gas and condensate, and an estimate of the recovery efficiencies.
Key measures are porosity—defined here as the percentage of void space within the reservoir rock that can contain fluids, and permeability—the degree of fluid conductivity through the reservoir. Porosity represents the storage capacity of the reservoir. Permeability is a measure of the ease with which fluids will flow through the reservoir rock.
Forecasts of these key measures for proposed new well sites can be obtained using Crystal Ball as shown here. This chapter, based on Hoye and Charnes (2011), gives an example of how Crystal Ball is used to help determine where to drill new wells to tap oil and gas reservoirs.
Simulation methods have been used in the oil and gas industry for several decades, and continue to play a leading role in exploration activities. For classic references about using Monte Carlo simulation in the industry ...