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SPE-185709-MS

Production Optimization Through Utilization of Smart Wells in Intelligent


Fields

Rahul Ranjith, Anuj Suhag, and Karthik Balaji, University of Southern California; Dike Putra, Rafflesia Energy; Diyar
Dhannoon, Texas A&M University; Onder Saracoglu, Consultant; Arief Hendroyono, OXY; Cenk Temizel, Aera
Energy LLC

Copyright 2017, Society of Petroleum Engineers

This paper was prepared for presentation at the 2017 SPE Western Regional Meeting held in Bakersfield, California, USA, 23 April 2017.

This paper was selected for presentation by an SPE program committee following review of information contained in an abstract submitted by the author(s). Contents
of the paper have not been reviewed by the Society of Petroleum Engineers and are subject to correction by the author(s). The material does not necessarily reflect
any position of the Society of Petroleum Engineers, its officers, or members. Electronic reproduction, distribution, or storage of any part of this paper without the written
consent of the Society of Petroleum Engineers is prohibited. Permission to reproduce in print is restricted to an abstract of not more than 300 words; illustrations may
not be copied. The abstract must contain conspicuous acknowledgment of SPE copyright.

Abstract
With improvements in technology and increasing amount of opportunities in more challenging assets, the
use of smart well technologies to improve recovery has caught significant attention in the oil and gas
industry in the last decade. Several workflows have been developed and proposed in order to automate the
whole process that integrates several subprocesses focusing on specific parts of the surface or subsurface
phenomena. Reservoir sweep is a crucial part of recovery efficiency, especially where significant investment
is done by means of installing smart wells that feature inflow control valves (ICVs), which are remotely
controllable. However, as it is a relatively newer concept, effective use of this technology has been a
challenge. In this study, the objective is to present the efficient use of ICVs in intelligent fields to maximize
sweep, and thus, recovery tied to the objective function.
A standard realistic SPE reservoir simulation model of a waterflood process has been used where the
smart well ICVs are controlled with conditional statements, called procedures, in a fully-commercial full-
physics numerical reservoir simulator. Key performance indicators, including but not limited to water cut
and oil rate, are used to adjust the degree of opening of ICVs on the producer side to balance injection on the
injector side. This turns out to be a complex phenomenon of higher degree of nonlinearity in a multi-well
system in a large field where several wells interact with each other. Objective function seeks to maximize
the net present value (NPV) of cumulative oil recovery.
Smart well technologies have been challenged with the associated cost component, thus, it is important
to present the benefits of this technology with applications on more diverse cases showcasing different
workflows. It has been observed that robust reservoir management in an intelligent field can significantly
improve the sweep and recovery by utilization of smart wells with ICVs. The results are presented in a
comparative way against the base case to illustrate the incremental value of use of ICVs, along with key
performance indicators. Most importantly, it has been shown that the use of smart wells without a robust
reservoir management strategy does not always lead to successful results.
In reservoir management, it is not only important to catch the well level details but also to see the big
picture at field level for improving reservoir performance beyond individual well performances, taking into
account the interference between wells. Although smart wells with ICVs have been deployed on wells all
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over the field, unfortunately, some similar studies mainly focus on individual or near-wellbore performance
rather than the whole asset. In this study, a field-wide approach is followed that integrates data from key
performance indicators in an integrated workflow, which outlines efficient integration of variables available
to optimize recovery.

Introduction
Management is a process characterized by the following – coordination, planning, control, administration,
communication and delegation. Planning is the most important aspect of management. It includes setting
up objectives based on the design of a single purpose plan that includes associated budgets, work policies
and programs. Management integrates all these for implementation, monitoring and controlling the process
during its life cycle. Swabini (1997) defined reservoir management as "An orderly and repetitive process
that integrates all the reservoir characteristics to predict its performance using sound reservoir engineering
principles, so as to prudently design the needed surface facilities and subsurface equipment, develop,
monitor, control and maximize its recovery for the duration of its productive life in an integrated synergistic
approach, in an economical and timely fashion."

Reservoir Management
Swabini and Egbogah (1997) defined reservoir management with seven different components as follows:
Synergy Team Plan. It is the bringing together of different disciplines involved in the upstream sector of
oil and gas, and organizing them in an orderly and prudent manner for maximizing gains and results, thereby
saving time. This is a superior metholodgy as compared to making several disciplines of the upstream sector
work in the dark without understanding of the subsurface. This involves groups of engineers, geophysicists,
geologists and operators working together to achieve the goal, improving holistic results.
Data Acquistion Team. Data acquisition is one of the cornerstones for proper management of a reservoir,
as it provides all the necessary information one needs about reservoirs. This also involves the realization
that data should be available in whole sets and should be systematically saved for professional synergy.
Reservoir Development Plan. Reservoir Development Plan is usually preceded by proper reservoir
modeling and reservoir description to get an idea of the tasks at hand. Data needs to be verified for accuracy,
the check for missing data needs to be done and missing data needs to be acquired. Holistic prediction
of OOIP and GOIP needs to be done, and economic and operational feasibility study must be carried out
for the whole field as well as individual wells. The entire plan for the field needs to be drawn out so as
to optimize profits and recovery from wells. This includes all enhanced oil recovery strategies, primary
recovery strategies, economic analyses, reservoir description studies and inventory management. These
plans must be revisited constantly and updated along with new developments in the system.
Drilling and Production Plan. This plan defines the basic well design for drilling and completion
processes. It also includes the plan for appraisal and development efficiently and properly. The plans will
be converted to well taught out programs addressing all aspects of well drilling, completion, production and
abandonment. Data acquisition must be integrated with this program for updating plans. Proper simulations
need to be run prior to starting of implementation to analyze the most efficient process.
Surface Facilities Plan. The Surface Facilities Plan defines the total system of all components involved
in the upstream sector from production point till custody transfer point. This includes the control of water
injection and oil production rates at wellheads. Surface facilities should be properly identified for feasibility,
both operationally and economically. Provisions should be made for surface facility design and execution
procedures. Project execution will commence with detailed design along with a timetable for all activities,
SPE-185709-MS 3

followed by procurement, fabrication and construction. A proper scheduling scheme needs to be installed.
Any deviation from plans and over-runs need to be identified for remedial actions to be implemented.
Operation and Monitoring Plan. This involves proper surveillance of facilities and subsurface equipment.
Timely collection of data points on pressure, flow, seismicity, production & injection rates, water-cuts and
so on. This helps in the future planning of processes needed to keep the well profitable. This also helps
in better identifying reservoir properties, analyzing for EOR and other remedial & corrective processes. It
includes setting up SCADA systems and intelligent well systems.
Economic Evaluation Plan. The economic feasibility of each process needs to be validated to check if
pay-offs are met. It includes the synergy of market effects, production plans and scheduling in a proper
manner. This plan needs to be frequently revisited and updated.
The steps discussed above comprise the traditional approach used by most companies for reservoir
management. However, with time new techniques have evolved. One such technique is integrated asset
management involving real-time data collection and integration of multiple subsections of the upstream
industry to create a synergy.

Key Performance Indicators (KPI) for Waterfloods


Waterflooding is one of the most essential functions involved in the development of a well. Pressure
maintenance is essential for various reasons inclusive economic production of crude, discouraging
subsidence, maintaining Voidage Replacement Ratio (VRR). However, there are multiple factors that need
to be checked to keep waterfloods in check. These factors are known as the Key Performance Indicators
(KPI) of a waterflood. Some of them are noted as follows,
Production Rates. Production rate is the most basic KPI to be defined for waterfloods. It indicates the
improvement and weening of the effects of waterflooding. It helps to analyze the project efficiency and
understand the procedure.
Water Cut. Water cut indicates the water breakthrough time and is the best indicator of viscous fingering.
It helps us to understand how to control the injection rates so as to control water breakthrough, and thereby
making the process more efficient.

(1)

Displacement Efficiency. Displacement efficiency is the ratio of recoverable reservoir fluid to the recovered
reservoir fluid. Waterfloods are planned in a way to maximize displacement efficiency. Displacement sweep
efficiency can be expressed as,

(2)

Where,
  Soi – Initial oil Saturation
  Sor – Residual oil Saturation
Microscopic processes such as preferential sweep affect the displacement efficiency, which negatively
affects oil displacement. Preferential sweep is dependent on relative permeabilities as it is related to the rock
chemistry. Other micro processes also affect the displacement efficiency like adsorption and pore geometry.
Capillary Pressure. It is the difference in pressure across the interface between two immiscible fluids.
In simple terms, it is defined as the pressure difference of the non-wetting phase and the wetting phase.
In a porous media capillary pressure is the force necessary to push a hydrocarbon droplet through a pore
throat, and it is inversely proportionally to the pore throat diameter. The general expression for capillary
pressure is as follows,
4 SPE-185709-MS

(3)

Where,
  γ – Interfacial Tension
  θ – Angle between fluid and solid surface
r – Radius of Pore Throat
Waterflood performance and engineering calculations are affected by capillary pressure due to the extent
to which the water/oil flood front is vertically and horizontally spread out during a waterflood, and is
controlled by the imbibition curve. Reservoir rocks are considered initially water-wet because of deposition
patterns.
Relative Permeability. Relative permeability curves greatly influence waterflood characteristics and the
expected recovery factor. Relative permeability curves are important to imbibition curves. A common
formula for obtaining relative permeability is provided by Corey co-relation as stated below,

(4)

(5)

Where,
  So – Oil saturation
  Sor – Residual oil saturation
  λ – Mobility of phase

Figure 1—Relative permeability curves

Other common correlations include Power law curves, Carmen-Kozeny curves, the Chierici model and
so on. Relative permeability curve shape depends on the nature of reservoirs, pore geometry and wettability.
The relative permeability curves for water in a water-wet reservoir are small and vis-a-vis, the relative
permeability curve for water is large in oil-wet reservoirs as compared to oil relative permeability curve.
From the curves, we can see that for mixed wet conditions oil relative permeability is significantly different
SPE-185709-MS 5

as compared to water-wet conditions. In the former oil maintains phase continuity due to oil-wetted rock
surfaces, therefore, oil saturations decrease at a slower rate. In water-wet conditions, mobility is lost quicker
since the oil phase becomes discontinuous.
Mobility Ratio. Mobility of a phase is the ratio between relative permeability and viscosity of the fluid
phase. It depends on both rock and fluid properties. Mobility ratio, denoted by M, is defined as the displacing
phase mobility divided by the mobility of the displaced fluid. Generally low viscosity fluid has a higher
mobility than higher viscosity fluids.

(6)

(7)

Where,
  λ – Mobility of phase
  krw – Relative permeability of water
  µ - Viscosity
Mobility is related to the resistance for a given saturation of fluid provided by flow to the reservoir rock.
Mobility ratio is favorable if, M<1, as the mobility of displacing fluid is lower than the mobility of displaced
fluid. Similarly, it is considered unfavorable if M>1, as mobility of the displaced fluid is lower than that
of the displacing fluid. This helps us the judge the effectiveness of a waterflood and helps to decide the
additive to be added to water, if any.
Voidage Replacement Ratio. Voidage Replacement Ratio (VRR) is the ratio between reservoir barrels of
injected fluid and produced fluids. VRR can be expressed as follows,

(8)

VRR can be calculated instantaneously using produced fluids and injected fluids over a specific period
of time, with the time specific GOR from volumes. It can also be calculated over a cumulative basis of
injected and produced fluids over time, with GOR averages. A comparision between the two types of VRR
calculations is shown in Fig. 2.

Figure 2—Cumulative and Instantaneous VRR over a sample dataset

If VRR for a month is greater or equal to a value of 1, then the reservoir pressure is said to be maintained or
increased. Whereas when the VRR for a month reduces below 1, the reservoir pressure declines. Reduction
of VRR can lead to severe consequences, such as subsidence, compression and reduction of permeability.
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VRR is encouraged by most regulatory authorities to be maintained near values close to 1. However, as we
will see, maintaining the VRR at 1 might not be the optimal solution.

Production Optimization
In hydrocarbon reservoirs, production optimization is critical to maximize production from a field and/or to
minimize the cost per barrel. With current advances in production engineering and data acquisition, use of
optimization methods with operational and reservoir management context is therefore an excellent practice.
Listed below are a few common production optimization methods that can aid us to achieve targeted
reservoir management strategies,

• Nodal Analysis

• Determination of optimum production conduit sizes

• Use of artificial lift

• Selection of optimum lift gas rates and production rates

• Optimum well connection to flow lines

• Selection of optimum well completion type

• Well stimulation

• Optimization of surface networks and facilities, such as choke size, separator, flow line size etc.

Production optimization techniques are selected based on reservoir and fluid characteristics, selected
reservoir management strategies and production system components. Clearly there isn't any unique strategy
that can be recommended by us for all fields/reservoirs. Through a combination of some of these strategies,
teams can maximize production while minimizing cost/barrel. This paper presents one such study.
Steamflooding is one of the primary techniques for increasing oil recovery. Reservoir characterization
and understanding of fluid properties is a challenge, and this information needs to be known at the beginning
of the operation. Additionally, selection of a correct VRR, injection-production strategy and well pattern
for injectors and producers also need to be addressed. Considering the fact that there are many uncertainties
and variables to steam flooding operations, it is difficult to optimize VRR.
On the other hand, injection strategy is easier to optimize. For instance, studies suggest that cyclic
injection strategy can give a better result than continuous injection-production throughout the reservoir
depletion life. As stated above, production optimization is unique to reservoir types. For example, steam
flooding in a naturally fractured reservoir requires extra caution during early breakthrough. Therefore,
selection of correct well pattern is yet another important optimization technique.
Use of vertical wells as injectors and producers is commonly used for steamflooding projects even though
horizontal wells can provide high increments in injectivity and productivity. Therefore, selection of a right
well type for producers and injectors is an important optimization method. The placement of horizontal
injectors and producers parallel to each other is critical to increase the efficiency of steamflood operations.
Also, length of the horizontal producer is important to increase recovery.
Use of smart well technology has proven to be a potent production optimization technique. Smart wells
present a great opportunity to optimize production-injection strategies. The effectiveness of flood operations
is dependent on having monitoring systems and evaluation & improvement of reservoirs. Evaluation of
the reservoir performance is done using dynamic reservoir simulations and analytical approaches. New
developments, such as 4D seismic for monitoring fluid saturations distribution in flood operations are used
to monitor flooding operation. Although 4D seismic operations are not always cost effective for small sized
SPE-185709-MS 7

fields, it can still be considered as an important optimization technique in relatively big sized reservoirs
(Hadi et al., 2013).
There are numerous techniques suggested in the literature for optimizing production. Here we have
provided a few methods that are accepted by the oil industry for production optimization, especially those
that are playing a vital role in voidage replacement operations.

Intelligent (Smart) Wells


Intelligent completions, also known as smart completions, are being used in the industry to increase
production efficiency by achieving higher ultimate hydrocarbon recoveries, promoting better cleanup of
unconventional wells during "flowback" and improving sweep efficiency of injector wells. In the presence
of reservoir or geological uncertainties, optimal placement and operational settings of the Interval Control
Devices (ICDs), Autonomous Inflow Control Devices (AICDs) and/or Interval Control Valves (ICVs) is
a necessity to ensure economic success and maximize returns on these applications. The requirement for
optimization could also arise from the limitation imposed by present technology on the maximum number
of valves deployable in a single completion string (Schl, 2016).
Use of intelligent completions gives the operator the ability to selectively steer both water and gas
injection into zones as required. Enabling the well to choke back injection into zones that draw excess
amounts of water and closing the zones where gas injection does not provide a benefit is another advantage
of their use. Sleeves and downhole sensors can be controlled and monitored remotely, which proves to be
useful and cost-effective. The production well is installed with a control valve with direct hydraulic (on/off).
Permanent downhole sensors and surface-controlled downhole flow control valves installed in these
intelligent completions allow the operator to monitor, evaluate, and actively manage production (or
injection) in real time without the need for well interventions. Data is transmitted to surface systems for
local or remote monitoring. A few advantages of such completions are discussed below,

• Zonal downhole monitoring of pressure and temperature in real-time

• Enables surface-controlled production from each zone or lateral for production optimization and
reservoir management
• Reduction of undesirable water or gas production

• Increase ultimate recovery and prolong economic life of the well

• Production testing of individual zones without interventions and with minimal production stops

Smart completions were initially applied in off-shore subsea wells; well intervention being expensive
with a high degree of risk involved, they were invaluable for production management from multiple layers,
horizontal wells with multiple zones and wells in mature reservoirs (Schl, 2017). Reliable and fit-for-
purpose intelligent systems enable operators to maximize reservoir efficiency by,

• Increasing production through commingling

• Increasing ultimate recovery

• Reducing CAPEX by using a single well to produce from multiple formations

• Reducing OPEX since wells can be configured remotely, thereby eliminating the need for well
intervention. Also, commingled production from multiple zones shortens field life, and hence,
reduces operating expenditures (HBS, 2017).
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Intelligent completions have some combination of zonal isolation devices, ICDs / ICVs, downhole
control systems, remote well monitoring in real time, surface control and monitoring systems, distributed
temperature sensing (DTS) systems, data acquisition and management software and system accessories.

Inflow Control Devices (ICDs)


Inflow Control Device (ICDs) is a passive component that equals reservoir inflow along the length of
wellbore for production optimization. Multiple ICDs with specific settings for partial choke to flow can be
installed along the completion in the part where it comes in contact with the reservoir. These ICDs reduce
annular velocity across the interval it is deployed in, thereby delaying water or gas breathrough. ICDs also
have applications in open hole completions, where they are used alongwith sand screens. Fig. 3 and Fig.
4 show types of ICDs.

Figure 3—Types of inflow control devices (ICDs); Helical and Hybrid (Garcia, L., 2009)

Figure 4—UNIFORM-FLOW screen with detailed view of regulator section

Production rates are higher at the heel as compared to the toe in long horizontal wells, which can
potentially cause early water or gas breakthrough due to imbalanced production. ICDs placed in each
screen joint could potentially balance the production influx profile, To eliminate this imbalance, inflow
control device (ICDs) are placed in each screen joint to balance the production influx profile and accounts
for permeability variation. Passive IDCs design show consider influx control without well intervention
requirement. (Garcia, L., 2009)
SPE-185709-MS 9

Figure 5—Schematic of production fluid profiles identified during flow testing with/without ICDs

Pressure drop across an ICDs system can be measured using,

Where,
  Potential energy term is given by,

  Kinetic energy term is given by,

  Frictional loss term is given by,

Inflow Control Valves (ICVs)


Inflow Control Valve is an active component in a smart well completion with the function of partially or
completely choking flow into a well. They are installed on the part of the completion which is within the
reservoir section, and each ICV is separated from the next by using a packer. They can be operated remotely,
especially in conditions where flow conformance needs to be maintained and to prevent influx of unwanted
fluids into the well as reservoir depletes. For relaying commands to the ICVs from the surface, permanent
downhole cables are used (SCHL, 2017).

Figure 6—Well with three perforated intervals completed with interval control valves (ICVs)
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ICVs can also be applied for controlling downhole hole flow and pressure as shown in Fig. 7. All major
service companies provide remotely controlled ICVs with various levels of sophistication and costs. At the
higher end of the scale are electrically controlled continuously variable ICVs with pressure and temperature
measurements as well as valve position feedback at each valve come at the higher end of this scale, usually
costing about $0.5 million per valve. Cheaper solutions use valves having limited valve opening settings,
or just having an option of switching between open and closed (on/off valves).

Figure 7—Basic concept of ICVs application (Bond, G., 2016)

ICVs can also be used in wells completed with a slotted liner or a sand screen. Furthermore, they can
potentially be installed in the main wellbore of a multi-lateral well for controlling inflow from each of its
branches, in injections wells for outflow control and for preventing cross flow between zones in a single
wellbore.
Inflow Control Valves (ICV) have been used in the past to enhance performance of producing wells
for unfavorable environments, such as non-uniform permeability and pressure variation along the well
sections. Fig. 8 displays ICVs application in a layered reservoir. (Jansen, 2001). Using multi-lateral wells,
a single well can drain from each zone, in a reservoir with water drive and strong horizontal barriers. Due
to permeability differences, water breakthrough will occur separately in each layer. Multi-lateral wells with
on/off ICVs for every interval can be shut off the interval as water breakthrough occurs, thereby preventing
early lift die out of the well by reducing the amount of water to be processed at surface. (Jansen, 2001)

Figure 8—Control of water break-through in a layered reservoir (Jansen, 2001)


SPE-185709-MS 11

Cost Analysis Case Study: Oseberg Field (North Sea, Norway)


In this study, a four-lateral horizontal well in the Ness formation is being studied. To address the problem
of controlling unwanted fluid influx into the well, a smart well completion was utilized. Production tests
run initially showed excess gas production from wells (all laterals open). To minimize gas production, the
ICVs were adjusted. After running multiple tests smaller GOR along with an increase in oil production was
observed with a specific combination of ICV positions. (Omair, 2007)

Figure 9—Cumulative production history for the Oseberg Field (Reproduced from SPE 62953)

Figure 10—Payback period graph for the Oseberg Field

The economic review of the study showed cost savings by using a smart well completion. Cost per
barrel of production using them was lower as compared to conventional multi-lateral completions. Another
advantage was that the smart well allowed more reserves to be exploited during the production period.
Furthermore, their payback period was quicker than conventional multi-lateral wells. (Omair, 2007)
12 SPE-185709-MS

Smart Well Technology Applications


Well architecture advanced from conventional wells to horizontal, then multilateral wells, which have
allowed for maximized reservoir contact. Along with many potential advantages, increasing well/reservoir
contact also brings into the picture a new set of challenges in terms of drilling and completion because of
the increasing length and complexity of the well's exposure to the reservoir.
Reservoir drainage control from water/gas coning in a conventional well can be managed by closing the
choke at wellhead or in the production flowline. This simple procedure mostly does not work with long
horizontal/multilateral wells. However, it was found that early water/gas coning from the heel section of
the well was a result of lower wellbore pressure at the heel.
Down hole flow control technology, ICDs or ICVs, provides a practical solution to these problems.
As discussed earlier ICDs, first introduced in the early 1990s, help to delay water/gas encroachment
problems in long horizontal wells by balancing inflow contribution along the wellbore. As the flow profile
is distributed more evenly it reduces water or gas coning, prevents sand production and other drawdown-
related production problems; thus, reducing the amount of by-passed reserves.
Henriksen et al. (2006) reported used of ICDs in Troll field, North Sea. Close proximity of horizontal
wells to oil/water contact and potential sand production are the challenges faced, especially being a thin
layered reservoir. The same level of choking was used on the ICDs while completing the lateral section of
the well, as it showed a balanced influx profile on simulation. McIntyre et al (2006) discussed the application
of helical-type of ICD in horizontal wells to delay water breakthrough for equalizing the influx. An example
case discussed in the paper showed that water breakthrough expected in 5 months, did not occur until
after 9 months of production. Augustine et al (2006) presented the challenges of installing ICDs in the
first gravel pack open hole completion. Again, the intent in using ICD was to delay water breakthrough
by equalizing flux along the horizontal well. Quadaihy et al (2003) presented the application of ICDs in a
mature clastic reservoir in Saudi Arabia. These devices worked on the same principle as ICDs developed
for poor consolidated formations, but without a sand screen, to delay water breakthrough. Ivan Vela et al.
(2011) reported that ICDs installed in horizontal wells in Ecuador in consolidated and non-consolidated
reservoirs having variable fluid viscosity, borehole geometries, length and reservoir challenges showed good
performance with increased oil production, lower water rates and extended production life compared to wells
without ICDs. Om Prakash Das et al. (2012) reported Kuwait's first smart level 4 multilateral well which
was completed in the Burgan reservoir. Smart well technologies used in the well included, a customized
viscosity independence inflow control device (ICD), downhole gauge and inflow control valves (ICV). It
helped solved problem of premature water breakthrough, enhanced water free oil production and has also
facilitated uniform depletion that allowed for an increase ultimate recovery.
SPE-185709-MS 13

Figure 11—Example of Smart-multilateral well (Om Prakash Das et al., 2012)

ICDs have applications in water injection wells also, to optimize the waterflooding process as reported
by Anne Gerd et al. (2007). Here, the ICDs prevent increased injection into the fractured zones,
thereby resulting in increased pressure support and better reservoir drainage by ensuring improved water
distribution.
Various types of ICDs have been developed by different vendors. However, broadly they can be classified
into the three following categories,
a. Channel-type ICDs: Using a number of helical channels, each having a preset diameter and length,
this type of ICD enforces a specific differential pressure at a specified flow rate.
b. Nozzle-type ICDs: Preconfigured nozzels on this ICD allow for the generation of a pressure resitance
in the device as fluid flows and passes through them, where the pressure drop is independent of passing
fluid viscosity.
c. Orifice-type ICDs: Each ICD consists of many orifices having known diameter and flow
characteristics and by alternating between the number of open orifices differential-pressure resistance
values can be adjusted (A jacket installed around the base pipe within the ICD chamber contain the
orifices, as opposed to the nozzle type ICD).
14 SPE-185709-MS

Figure 12—Views of ICDs from major service providers (Alkhelaiwi and Davies, 2007)

In unconsolidated formations, the above-mentioned designs can be anchored onto a standalone screen
(SAS) or be combined with a debris filter, if used. The principle for all types ICDs are the same even though
they vary from one another in design. They are designed to apply a specific differential pressure at a certain
flow rate. Although, if the frictional pressure drop is not significant as compared to drawdown pressure,
installing ICDs could lead to restriction of oil production.
Permeability distribution must be identified correctly as well before installing ICDs in the reservoir. A
misplaced ICD will not help delay water breakthrough. Its application requires a detailed understanding of
reservoir complexity because of the non-flexibility of ICDs. Some risk and failures associated with their
installations are as follows,

• Stuck completion string during initial completion prior to reaching the intended depth due to the
presence of the ICDs hinders the ability to circulate the string down through debris, mud cake,
or washouts.
• Plugging or damage of screens or ICD flow restrictions due to asphaltene, scale, debris, mud, or
emulsions. The process can occur during well installation, well cleanup or during the well life
(during flow back or during acid stimulation)
• External packers that fail to set

• Corrosion caused by a combination of carbon dioxide in produce fluids and high shear fluid flow
through ICDs
ICVs can accommodate for more flexible field development strategies as they have a higher degree of
freedom than ICDs, thereby allowing for more adjustments to manage unforeseen circumstances in case of
high reservoirs uncertainties.
In gas fields, ICVs are more effective as compared to ICDs with many successful applications in fields
around the globe to shut-off water or high-sand-producing zones (Chacon et al. 2007; Stair et al. 2004b;
Jackson Nielsen et al. 2001; Jackson Nielsen et al. 2005; Katamish et al. 2005). Irrespective of the formation
permeability or fluid properties, through the use of ICVs operators are also able to control gas production
from multiple zones. By using multiple valve settings on them, pressure and temperature drop as well as
erosion or condensation caused by high sand-flow velocity can be alleviated.
As compred to installation of ICDs, ICV installation is more complex. Integrated control and monitoring
systems installation required specially trained personeel; handling valve equipment is relatively simple They
also take up extra rig time for installation purposes compared to ICDs. The most challenging part of the
SPE-185709-MS 15

installation process involves valves and gauges mounting at the appropriate locations, and clamping the
control lines to the tubing string along with necessary multiple packer feed-through. Risks involved with
an ICV completion include,

• Damage to ICV system components – This risks can be mitigated by precise job planning
undertaken by an experienced crew, constant monitoring of valves and sensors condition while
running in the hole.
• Improper coupling of hydraulic or electric lines – Potentially leads to the loss of ICV control-
system and/or data transmission from the monitoring-system.
For remote operation capability, an ICV requires the following equipment,

• Control lines for hydraulic or electric-power transmission from the surface

• Clamps to attach control lines to tubing

• Feed-through packers to segment and isolate the wellbore

• Wellhead designed with control-line feed-throughs (penetrators)

• Surface readout and control unit.

The addition of a more extensive monitoring system, often considered to be an integral part of the ICV
completion, may add to the ICV's cost. ICDs thus have the advantage for equipment cost.

Economics of Smart Well Implementation


The idea of a smart well is to improve oil production on both the macro and micro scale. A macro scale can
be approached by getting uniform oil displacement through control of injection fluids. On the other hand,
the micro scale improvement is done through improving oil flow by controlling the injection fluids to the
reservoir. There are two main types of smart well controls – active control and proactive control. In the
active control, control of the valves are done remotely in the incident of water or gas breakthrough. Proactive
control type of wells, compared to active smart well type, are more advanced and need more feedback.
Proactive smart well adjust their zonal production prior to water or gas breakthrough by monitoring the
flow and optimizing the valves settings accordingly. The monitoring of valve setting is considered to
be a short-term optimization strategy, i.e., the time window for optimization is relatively small. Another
proactive strategy of production optimization is long term production optimization, where the optimization
of production for the entire life span of the reservoir is considered. Such optimization required more detailed
information about the reservoir compared to short term optimization. Long term proactive optimization also
relies on modeling the reservoir for optimization algorithm; the earliest work for micro-optimization dates
back to 1980's by Z. Fathi, F.W. Ramirez. Their work laid the foundation for current smart wells industry.
The early mathematical formulation for performance index and the effect of surfactant concentration on
oils interfacial tension was studied in depth. This work had great contribution to micro-scale optimization
strategies. Their work related the concentration of injected fluids and the total injection rate of fluid to the
producer bottom hole pressure. Their study was based on the assumption that water interfacial energy is
a function of concentration of the surfactant while the oil interfacial energy is kept constant. Later works
in 1990s by Wei, Ramirez and Feng was about optimal control of steam flooding. This work was about
various two-dimensional steam flooding problems. They investigated the effect of reservoir properties and
heterogeneities on oil production and strategies for optimal production. Their mathematical model was
based on three phase flow of oil, water and steam. Their work promised a substantial increase in oil recovery
and made great contribution to the field of reservoir simulations. Smart wells are capable of collecting,
16 SPE-185709-MS

transmitting and analyzing data to selectively control different parts of the well. This control is called zoning,
which is used to increase the efficiency of the production process.
The first successfully operating intelligent well system was SCRAMS (Surface Controlled Reservoir
Analysis and Management Systems), installed in Saga Snorre Tension Leg platform in the North Sea in
1997. SCRAMS operators were capable of obtaining real time pressure and temperature of each zone. The
operators were also capable of precisely controlling the flow by controlling reservoir control valves of each
zone. Later more advanced smart wells became available for the industry. The decision of implementing a
smart well completion instead of a regular one is a cost to revenue evaluation. Most of the smart wells are
high cost deep water wells. Mature oil fields sometimes could also use smart wells to boost hydrocarbon
recovery. A smart well has many benefits that accompanies the extra cost of implementing it. Such benefits
could be summarized as increasing production through controlling the production amount from different
reservoir zones increasing the productivity of wells and the total recovery by effectively managing water
injection through zonal control so that total amount of the oil recovered increases. The extra cost of smart
well is the biggest challenge in making the decision whether to implement a smart system or a classical
system. Smart systems are important to solve some unique challenges. Here are some examples are shown
for illustration purposes.

Case Studies by Halliburton Illustrating Smart Well Benefits


Case I: Dual eRED® valves save operator $386,000 in rig time on two wells. According to information
obtained from Halliburton company's website, the installation of Dual eRED valve system in an Offshore
Vung Tau, Vietnam saved the investor more than 30 hours of rig time. Korea National Oil Corporation
(KNOC) found it more efficient to install a couple of remotely operated valves for testing tubing integrity
and also, for setting the packers; two Halliburton eRED® remotely operated valves for testing tubing
integrity and also for setting the packer on wells RD-9P and RD-8P in Block. 11–2. This decision saved a
lot of repeated setting and removing the plug and prong in the landing string, which saved a lot of rig time.
Table 1 summarizes the challenge and solution obtained.

Table 1—A sample challenge solved by implementation of smart wells

CHALLENGE SOLUTIONS RESULTS

• KNOC required installation of • ®


Dual eRED valves: pre-installed • Valves successful closed as
two plugs: one above the packer inside X®/XN® assemblies, and barriers after tubing integrity test
for tubing integrity testing, and run-in-hole (RIH) as tubing parts and package set
another one to help set the packer
• Both eRED valves were remotely • Saved 30+ hours of rig time
without using conventional plugs controlled as per the operator's for two wells by removing
and prongs requirement conventional plug and prong
systems
• Avoid potentional HSE risks
involved with multiple wireline
runs

Case 2. Zonal isolation was necessary for a major oil and gas operator in Asia due to having a reservoir
possessing several oil, water and gas zones. The access to mechanical flow controls were costly and
problematic due to the trajectory of the horizontal well bore as shown in the Fig. 13. The necessity to control
or shut off the production from multiple zones to avoid unwanted gas and water production required the
installation of a remotely controlled smart well system. For a single horizontal section gravel packing and
sand screen methods were selected to control the sand. A continuous well monitoring to ensure proper
production in each zone requires downhole pressure and temperature sensors. In addition, interval control
valve (ICV) and internal zonal isolation packers are needed for each zone. Installing this equipment were
not trivial for this field as the completion trajectory had a final inclination greater than 100°.as can be seen in
the figure. As a solution, remotely operated HVC interval control valves, WellDynamics® that is controlled
SPE-185709-MS 17

by Digital Hydraulics™ were installed by Halliburton along with pressure and temperature sensors. Seven
wells using this solution were completed and another 20 wells are also planned to be completed.

Figure 13—A case where smart well is necessary to effectively control the oil flow in a non-classical well type

These two case studies are examples on how smart wells are implemented mostly today. Regarding
challenges and constraints; there are many constrains in optimizing each field, yet the common constraints
are discussed briefly ahead.
Dynamic optimization constrains from the fact that most of the wells are already in production phase.
For modelling the reservoir and optimization, simulation needs initial conditions. Stegnal has mentioned
this optimization in detail in his work. Key points illustrated by Stegnal in his book can be presented as,

• It requires to minimize the time and energy required to transfer from one dynamic states to another.

• It also discusses ways to minimize the risk involved and error one may get to arrive at the final state.

• It highly stresses on the final goal that is to maximize the return on investment at the end of the
period.
Optimization of oil production has many models; the simplest model is with a single water injector and
single oil producer. Fig. 14 shows this model. In this model the injection and production both are controlled
throughout the production period. The production and injection ICV controls to optimize and maximize oil
production. This model is over simplified mostly because production is considered in a two-dimensional
field. To improve the quality of this model, a three-dimensional model is constructed. This improvement
increases its credibility; however, models also have flaws. The biggest problem is to match a model to
reality. A set of variables are already known, such as viscosity and surface tension for water and oil. Yet the
exact topography of the entire field can only be approximated to match available topographic data.
18 SPE-185709-MS

Figure 14—Simplest model used towards long run optimization modeling in oil production

In addition to these challenges unstable oil prices may have an impact on the revenue that is expected to
be collected as a result of the investment of smart technology on a well.
The value addition of smart wells includes elements listed below,

Quantifiable (Hard)
Quantifiable elements include the following,

• Reduced well count to drain reserves or drain more reserves per well.

• Savings in terms of intervention costs.

• Well's ability to respond immediately to unexpected changes to production or injection


performance in all operating environments.
• Increased ultimate recovery from improved well management.

Difficult to Quantify (Soft)


Elements that are important, but difficult to quantify, include the following,

• Early data acquisition to enhance the probability of success of infill wells

• Identification of key variables to be measured to optimize reservoir management options.

• Means to mitigate the downside that is so often difficult to envision in new developments.

• Health, safety, and environment (HSE) benefits from unmanned operations.

• Smaller environmental footprint resulting from a reduced number of wells.

• Opportunity to acquire relevant data in the well to be abandoned.

Model Simulation and Results


Simulations were performed using a compositional model. Fig. 15 shows reservoir dipping on vertical
injector and producer wells. A water zone and a gas cap exist. Water is injected from the injector and each
vertical layer of the producer has a trigger. Considering that water cut will begin to increase from the bottom,
there are 13 triggers for each layer, starting from the bottom layer. Once that layer reaches a specified water
cut, that layer is closed, but the upper layers continue to produce until each of them meets the water cut
SPE-185709-MS 19

criterion. The authors set up for the following models: no trigger, 0.9 water cut trigger, 0.8 water cut trigger,
and 0.7 water cut trigger.

Figure 15—Simulation model

Fig. 16 shows that the layer stops production once the 0.9 water cut criteria is reached. This procedure
is repeated for all layers. Fig. 17 and Fig. 18 show that oil and gas production is highest without a trigger.
As stricter triggers are introduced, oil and gas production decreases. However, Fig. 19 shows that water
production is dramatically higher than those in other scenarios when no trigger is introduced.

Figure 16—Water cut for different layers; layer stops production when water cut reaches 0.9
20 SPE-185709-MS

Figure 17—Cumulative oil production for four different scenarios

Figure 18—Cumulative gas production for four different scenarios


SPE-185709-MS 21

Figure 19—Cumulative water production for four different scenarios

2nd Case/Simulation Model - Use of Layer Based Triggers


This case illustrates the use of nested triggers as a way of shutting-in well perforations for a producer
progressively as water saturation increases in the reservoir. Water saturation changes are driven by an
injection well completed downdip. The trigger conditions are based on layer water cut. This case is designed
with the knowledge that the well will be watered out starting from the deepest layer, #14 to the shallowest
layer, #2. All triggers are assigned the same name 'TRIG-1' in this case since once a trigger condition is
satisfied that trigger does not need to be preserved and can be redefined.

Figure 20—Grid Top


22 SPE-185709-MS

Figure 21—Producer and Injector wellbore diagram

Figure 22—Initial water saturation distribution


SPE-185709-MS 23

Figure 23—Final water saturation distribution

Figure 24—Cumulative oil production


24 SPE-185709-MS

Figure 25—Cumulative water production

Figure 26—Cumulative WOR


SPE-185709-MS 25

Figure 27—Cumulative water cut

Table 2—Cumulative oil and water production for each case

CASE # WCUT Trigger cum oil prod – MSTB cum water prod – MSTB

1 WCUT 75 2187.2 1423.9

2 WCUT 80 2308.8 1893.5

3 WCUT 85 2555.7 3155.1

4 WCUT 90 2862.2 5402.7

5 WCUT 93 2922 6026.2

6 WCUT 95 2922 6105.3

7 WCUT 97 2922 7474.9

8 WCUT 99 2922 9180.2

9 base 2922 26063

Figure 28—Cumulative oil and water production for each case


26 SPE-185709-MS

Conclusions
As an emerging technology, intelligent wells continue to introduce opportunities in terms of improving
recovery through a more balanced injection and production profile, at least with significant effects near the
wellbore. An additional benefit of using intelligent well technologies, as described in this specific study,
is that valves can vary between reservoirs, depending on physical reservoir characteristics and costs. The
objective of this study was to present benefits in terms of improvement to cumulative oil production using
valves on a synthetic but realistic dataset. Currently, the industry is in a stage in which real-time decisions
are performed on dynamic models as part of a wholly integrated workflow that optimizes recovery with
different operating conditions (i.e., tubing head pressure and rate adjustments). Under different objective
functions, a reservoir management team can enforce and apply the workflow, particularly when a reservoir
simulation model is used to forecast future performance regarding varying operating conditions, including
but not limited to pressure and rate.
As described in the simulation section, several iterations of simulations were performed to help determine
the best combination of ICVs to achieve maximum oil production and moderate water production. As per
the simulation results, cumulative water production is in huge amount without smart valves, which could
also lead water treatment/disposal problems in real life. Future work will involve the economic analysis of
installation of smart wells and the benefits on recovery.

Acknowledgement
The authors thank the University of Southern California, VaalbaraSoft, Rafflesia Energy, Texas A&M
University, OXY, Energeyes Consultancy and Aera Energy LLC. All data used in this study is synthetic,
there is no proprietary information used, all data is from literature review. Authors thank Onder Saracoglu
for his contribution and review.
Corresponding author: Cenk Temizel, temizel@alumni.usc.edu

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