SPE-189149-MS

Gas Cap Development Guideline: Closing the Gap Between Effective

Reservoir management and Contract Obligations

Chukwuemeka Nwaokorie and Inem Ekong, Shell Petroleum Development Company

Copyright 2017, Society of Petroleum Engineers

This paper was prepared for presentation at the Nigeria Annual International Conference and Exhibition held in Lagos, Nigeria, 31 July – 2 August 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
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Abstract
Gas portfolio development and the need to support Nigeria's Gas master plan is currently a high priority
effort in government and international companies. Therefore, it is important to have a standardized approach
for the development of the Gas Cap reservoirs. This guideline will provide a clear process to support the
asset/study team in securing appropriate approvals from the government regulatory body (e.g. DPR) for the
development of the gas cap resources.
Gas categorization guideline is adopted as a classification system for the company's gas reservoirs to
help demonstrate the timing of availability of gas cap production. The classification is driven by the time
remaining to produce the economic ultimate recovery from the oil rims associated with the gas caps and
processing plants/evacuation ullage availability.
The objectives of the guideline are:
a. To facilitate development planning and gas forecasting via a transparent picture on what the gas
resources categories are. While existing fields mature, the development decisions regarding the
oil rims become focused on ever reducing infill drilling targets. It is important to be aware how
these decisions impact the availability of the gas cap production. The classification helps to provide
clarity and transparency in this respect. This clarity aids to demonstrate the robustness of the
Company's gas delivery promise.
b. To help in defining standardized approach in getting approval for gas cap development from
Department of Petroleum Resources (DPR). In defining this approach, a concise Gas cap release
methodology is developed to guide asset and study teams in taking decisions on Gas cap
development.
A clear workflow was developed for Gas Cap Development and subjected to company's internal
assurance process.
Proper value assessment is done comparing the oil development and the company's gas requirement.
Several sensitivities were carried out on the reservoir gas cap blowdown timing and the total reservoir NPV
against the different GCBD timing (Figure1).
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Figure 1—GCBD Optimal Timing Sensitivity

INTRODUCTION
The company is increasingly focusing on gas portfolio development and gas cap reservoirs contribute
significant amount of the total gas resources (Figure 2), therefore it is important to have a standardized
approach for the development of the Gas Cap reservoirs. This guideline has provided a clear process that
supports the asset/study teams in securing appropriate approvals from the government regulatory body (e.g
DPR) for the development of the gas cap resources.

Figure 2—Gas Portfolio Resources

Gas categorization guideline is adopted as a classification system for the company's gas reservoirs to
help demonstrate the timing of availability of gas cap production. The classification is driven by the time
remaining to produce the economic ultimate recovery from the oil rims associated with the gas caps and
processing plants/evacuation ullage availability.

1.1 Objective
The objectives of the guideline are:
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i. To facilitate development planning and gas forecasting via a transparent picture on what the gas
resources categories are.
ii. The development decisions regarding the oil rims development scenarios.
iii. To fully understand the impact gas cap availability in view of oil rim development scenarios.
iv. To provide clarity and transparency on reservoir clarification.
v. The robustness of company's gas delivery promise.
vi. To help in defining standardised approach in getting approval for gas cap development from
Department of Petroleum Resources (DPR).
vii. To develop a concise Gas cap release methodology. This will guide asset and study teams in taking
decisions on Gas cap development

2.0 Gas Cap resources

The company has a vast gas cap resources from all the fields across land, swamp, and shallow offshore
assets. For more than four decades, productions focus has been on the large non-associated gas and oil
reservoirs (figure 3). The company is currently implementing gas cap blowdown for reservoirs in her major
gas hubs as part of export and domestic gas supply strategy.

Figure 3—Gas Portfolio forecast

The company currently have three key gas-processing plants for the export gas node and several AGG
mini plants across different fields to support flare out strategy and domestic gas supplies. However, some
additional major gas plants are in execution /or planned for future execution to meet Nigeria's Domgas
supply requirement. Proper development planning and standardized workflow for unlocking the gas cap
potential becomes necessary to meet the different supply obligations.

2.1 Gas Cap Categories

The gas cap categorisation was developed for internal use and provided a guide for decisions making on
gas cap development.
Figure 4 illustrates the 3 gas resources categories defined by the impact to oil recovery. The figure is self-
explanatory but brief description for each category is as follows:
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Figure 4—Gas categories defined by the oil impact

2.1.1 Category NG. NG is for gas resources that have no impact on oil recovery. The gas resources are
Non-Associated Gas (NAG). The NAG gas accumulation is defined in a situation where clear gas water
contact (GWC) is observed from the well.
2.1.2 Category GC1. Category GC1 is defined as associated gas (i.e. gas with oil rim) but there is no
ongoing or future development for the oil rim. It has very little impact on oil recovery. It could be because
of the oil rim has been fully developed ("spent oil rim") or the oil rim is too small for any economic oil
development. Also, this category applies to cases where only gas down to (GDT) is observed and there is
likelihood that there is oil rim based on regional data and reliable technology but if the likelihood of oil
rim is low, then the gas resources can be classified as Category NG. Formal DPR approval prior to gas cap
development is required for Category A gas resources.
2.1.3 Category GC2. Category GC2 is defined as gas resources that have little or limited impact on the
oil recovery. The gas caps for this category generally provide energy for the oil rim production. However,
the oil rim has only small resource volumes and expected to last only for less than 5 years (expectation
forecast). There is also no viable new opportunity for this reservoir for further development identified in
current operating plan. The category will trigger company to focus on studies that will convert category
GC2 gas resources into category GC1. Also by having this category, it will aid the operating planning
process especially for the medium-term gas forecast. There is no formal approval required to categorise gas
resources to GC1 category.
2.1.4 Category GC3. Category GC3 is defined as gas resources that have significant impact on oil recovery.
The gas cap predominantly provide energy to the oil recovery process. The reserves of the oil rims are
expected to have more than 5 years of production. Generally, for category GC3 gas, the focus will be on
optimising oil development.
The option of concurrent gas production for Category GC3 reservoirs are governed by the GOR policy/
waiver and DPR approval. The production policy of the reservoirs must be properly defined taking into
consideration the gas production.
However, in a case where oil rim with minimal production and long production tail, acceleration
opportunity or projects should be considered taking into account the opportunity of unlocking gas
production. Once the project is in place (i.e. in the operating plan), then it is possible to reclassify the gas
cap category accordingly.
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3.0 Gas Cap Development Workflow

The Gas Development Workflow chart (Figure 5) provides a methodology for identifying, assessing and
developing remaining gas in the field. Due diligence to oil rims is a key component of this workflow
strategy. Where gas development may impact existing or potential future oil development, decision points
are embedded in the workflow whether to further study, appraise, or accept that there is no scope for further
oil developments and the gas cap can be released. Another key decision point is ullage availability in the
gas facility planned to process any gas for release.

Figure 5—Gas Cap Development Workflow.

The Gas Cap Development Workflow is implemented once the Gas Cap reservoir category has been
established as per figure 6. For category NG, Gas cap release is automatic post asset and discipline leadership
approval. For GC1 and 2 categories, clear definition of uncertainties and economic evaluation of the oil
rim is done to acertain viability and value trade off between gas cap blown down and oil rim development
(Figure 1). The overall company strategy and Government needs are also aligned for any portfolio or project
before final decisions are taken.
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Figure 6—Gas Cap Categorization Workflow

Facility ullage availability need to be checked at portfolio level before projects on stream dates are
implemented in the operating plan.

4.0 Gas Resources Screening

The workflow for gas resources screening (marked by dark purple dashed line in Figure 6) are as follows:
1. Define Pressure Compartments – Understands pressure communication between reservoirs blocks.
2. Calculate STOIIP, GIIP and UR with Static/Analytical Model.
3. Categorize Reservoir / Compartment – Gas in each compartment classified as NG, CG1, GC2, or
GC3 categories depending on the impact of producing the gas on future oil development (Reference
Figure and figure 6)
4. Appropriate technical authority approval is required during the screening and categorization phase.

Conclusions
A standardized workflow for the categorization and development of the Gas Cap reservoirs has been
developed in this study. The workflow provides a methodology for identifying, assessing and developing
remaining gas in the field with due diligence to oil rims as a key component of the workflow strategy. Clear
definition of uncertainties and economic evaluation of the oil rim is done to acertain viability and value
trade off between gas cap blown down and oil rim development.
Proper value assessments of gas need versus oil development are done by comparing the oil development
and the gas requirement (obligations). The value drivers might be different depending on the overall
company's strategy during the evaluation. The oil regret by concurrent production of oil rim and gas cap
should be weighed against the value generated. Often, concurrent production generates higher value than
the development concepts of either oil rim or gas cap. This enables the team to make recommendation to the
stakeholders based on the defined value drivers. They also can create several sensitivities on the reservoir
gas cap blowdown timing and evaluate the total reservoir NPV against the different GCBD timing.
Overall, the workflow provides a clear process to support the asset/study team in securing appropriate
approvals from the government regulatory body for the development of the gas cap resources.
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Acknowledgement
The author wishes to express her gratitude to the management of Shell Petroleum Development Company
of Nigeria for permission to publish this material.

References
1. Olugbenga O., From pore to pipeline, First-Pass Screening of Reservoirs with Large Gas Caps
for Oil Rim Development. SPE-128603-MS, 2009.
2. Emmanuel G., May K., Kelvin M, OGP Exploration & Production Waste Management
Guidelines. SPE-112861-MS, 2008.
3. Ashraf L., et al, Adapting Field Development Plan of Compartmentalized Oil Rim Reservoir with
Significant Gas Cap and Water Aquifer - Case Study SPE-183046-MS.