SOCIETY OF PETROLEUM ENGINEERS OF AIME PAPER

6200 North Central Expressway. NUMBER SPE 2094

Dallas, Texas 75206

THIS IS A PREPRINT --- SUBJECT TO CORRECTION

Practical Application of Computer

Technology to Petroleum and Gas Operations
By

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P. D. Gaffney, Member AIME, Gaffney, Cline and Assoc.,
Walton-on-Thames, England

© Copyright 1968
American Institute of Mining, Metallurgical and Petroleum Engineers, Inc.

This paper was prepared for the European Regional Meeting of the Society of Petroleum Engineers
of AIME, to be held in Milan, Italy, April 4-6, 1968. Permission to copy is restricted to an abstract
of not more than 300 words. Illustrations may not be copied. The abstract should contain conspicuous
acknowledgment of where and by whom the paper is presented. Publication elsewhere after publication
in the JOURNAL OF PETROLEUM TECHNOLOGY or the SOCIETY OF PETROLEUM ENGINEERS JOURNAL usually is
granted upon request to the Editor of the appropriate journal provided agreement to give proper credit
is made.

Discussion of this paper is invited. Three copies of any discussion should be sent to the
Society of Petroleum Engineers office. Such discussion may be presented at the ~bove meeting and,
with the paper, may be considered for publication in one of the two SPE magazines.

ABSTRACT engineering calculations. The application of

Detailed reservoir calculations, large-
scale pipeline design and many refining opera-
tions now are carried out with the use of
computer techniques. However, routine handling
of small projects such as the calculation of
oil and gas reserves, the evaluation of pressurE
buildup data for production and reservoir
applications, etc., continues to be done to a
large extent by manual techniques.
these techniques to the day-to-day engineering
problems besetting the individual field engi-
neer has not yet been universally accepted.
This paper examines these applications in the
light of more recent computer and data proces-
ing developments, and illustrates the
advantages of applying such techniques to
routine daily problems.
DEFINITIONS

This paper discusses the considerable
potential for the operations engineer in using
both the results of simple data processing and
the new small scientific computer. It is con-
cluded that valuable improvements in the use of
technical manpower would result from a greater
understanding and application of these modern
techniques.
INTRODUCTION
The application of computers and data
processing to the solution of technical prob-
lems for the petroleum industry has seen great
progress in recent years. However, in many
respects, this application has been limited to
the more mathematically inclined and to those
engineering problems involving detailed repeti-
tive solutions such as process and reservoir
Illustrations at end of paper.
"Data processing" in this context refers
to all machine processing that requires simple
multiplication, division, addition and subtrac-
tion and the carrying of totals. These tasks
need relatively uncomplicated sorting machines,
printers, card readers, punches and a small
arithmetic unit. A "computer", on the other
hand, refers here to a processing machine that
has considerable memory [storage] capacity and
can perform calculations much faster than the
simple data processing machine. However, while
in many cases data processing problems are
carried out on computers because of their
greater capacity, it is rarely possible to
reverse this and solve even simple engineering
problems on data processing equipment.
THE PROBLEM BACKGROUND
One reason for the delay in application of
 PRACTICAL APPLICATION OF COMPUTER
2 TECHNOLOGY TO PETROlEUM AND GAS OPERATIONS
these techniques at the operations level is
that most routine production statistics
currently are prepared on machines fully
occupied and controlled by accounting depart-
ments, with whom the operations engineer rarely
comes in contact. A second reason has been the
lack of small, reasonably inexpensive computing
e~uipment that a company could afford to put
into a small engineering office where it might
be expected to remain idle much of the time.
Such computing machinery now has become avail-
able and it is appropriate to look at the
possibilities this equipment offers in in-
creasing the productive capacity of the en-
gineer.
The word "computer" tends to frighten many
engineers engaged in the operating phases of
petroleum engineering because of reservations
about detailed mathematical calc~lations that
have somewhat theoretical and often impractical
results. As a group they have been similarly
dissuaded from using even elementary data
processing facilities because, in many cases,
such processing has been associated with the
accounting function, where engineering work
takes a definitely second place. Therefore,
the advent of small systems that even the
individual engineer can justify naturally opens
up considerable possibilities.
The operations engineer must work with
three different types of calculations:
1. Those based upon analyzing historical
information such as well production data to
decide on future service work, production,
handling, etc.
2. Those involving the solution of an
equation - for instance, the calculation of an
optimum line size and its capacity range under
different conditions. In these cases, the
engineer often is dealing with a minimum of
basic information, and may want a considerable
volume of results to illustrate the entire
range of possible circumstances.
:3. Those calculations that actually are
combination of both 1 and 2 - that is, the
analysis of historical statistical information
combined with an operation upon it in some de-
tailed calculation such as in a reservoir
analysis.
Statistical calculations like group 1 are easy
to handle by simple manipulation of existing
data processing systems and visual techniques.
Group 2 normally requires some form of more
detailed computing equipment so that multiple
solutions of complicated equations can be
obtained rapidly, while the combination type
of calculation that may require days or weeks
manually is best handled by a computer with
considerable data storage and calculation
SPE-2Q94
capacity. Although the reservoir engineering
types of calculations have been handled by
computers for many years they normally have
been run on high-cost systems in the hands of
specialists far from the control of the field
engineer. Thus, when an engineer wishes to
solve a practical problem, the time, expense
and inconvenience of doing so usually prohibit
his obtaining such information. By taking
advantage of the more recent computer develop-
ments, these very complicated and detailed
calculations can be performed at field level.
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The following sections will deal first with
accounting-type installations that can be made
to yield useful data for statistical analysis
of the first type of problem"and then a small,
low-cost computer capable of handling all three
types of problems.
It should be stressed that the engineer
does not have to be a programmer or a mathema-
tician. He simply needs to know what infor-
mation is available, what results [output] he
wants and the flexibility of the computing
system he is dealing with.
DATA PROCESSING APPLICATIONS
A large number of operators routinely pre-
pare their monthly statistical data on well
production utilizing punched card and associated
techniques. Thus a considerable amount of the
diagnostic data on the history of any well is
available in this form. However, many of the
producers who use punched card techniques and
data processing print-out do not yet draw on the
wealth of data that they have on file. With
extremely simple sorting and printing tech-
niques, at virtually no cost, this information
can be made of considerable analytical value to
the operations engineer.
Table I illustrates an elementary example
of this technique. The upper part of the table
shows part of a typical monthly production
record for several wells. The lower part of
the table shows a series of monthly production
records for a single well, obtained by sorting
the monthly data cards in chronological order
so that the trends can be studied visually.
It is evident that the scope for scanning
visually or mechanically to facilitate rapid
and concise evaluation is almost limitless.
Thus it would be possible to sort by producing
rate, GOR, percent water, service rig-time,
etc.
The next step in using data processing
systems where the base information is already
on file is to add coded data or additional
basic data to the existing monthly records.
For example, information on frequency of well
service, reserves data, drilling data, cost
SPE-2094 P. D. GAFFNEY
data, or information on special production
conditions such as wax deposition or sand entry
could be added in a separate card. All this
could easily be up-dated every month, and in
the process, any well falling below a preset
minimum of production or requiring excessive
service could be listed for remedial work or
abandonment consideration. Table 2 illustrates
adding coded data to the wells in Table 1.
Here, then, is a tool for analyzing not
just a single well but groups of wells or entirE
fields. It should be stressed that all these
are relatively simple additions and do not
require that the operations engineer have any
knowledge of programming or detailed computer
techniques. Most of the work can be initiated
by discussion with the existing data-processing
handlers and accounting personnel employed in
almost every operation.
These results from just gathering and re-
arranging data can be used to indicate well
service requirements and workover prospects.
This systemizing could be carried to quite
detailed lengths, and the reports provided to
both the operating engineer and supervisors
could be of considerable value right up the
line to top management. Such reports allow all
concerned to appreciate at a glance how the
individual well, field, or group of fields, is
running and what prospects there are for an
immediate increase in production or other
progre.ss toward optimization. In these days of
constantly changing conditions and economics,
such information cannot readily be obtained by
any simpler means.
To give an idea of the magnitude of costs
under consideration, the cost of running a
monthly production report on a field with 500
active wells at a commercial data processing
center would not be more than $300 monthly,
depending upon the number of wells, amount of
punching and detail that are required. Bearing
in mind that this can represent the full-time
work of 2 to 3 clerks, the advantages of such
systemizing are obvious, even before con-
sidering the production profits that should be
encouraged by the direct review of print-out
results by the practical operations man.
COMPUTER APPLICATIONS
Let us now consider the small scientific
and engineering computer that can handle the
type of work discussed previously but that has
the added advantage of considerable memory
[storage] and calculation power. Apart from
their value for routine reports and more de-
tailed manipulations of the production data,
the main advantage of these systems is that
the computer can be close enough to the
operati~~~neer that it will be used instead
of a slid:e"ruJ..e - this gives him an entire
range of answers instead of the previously
accepted rule-of-thumb calculation or "guess-
timate" . However , it should be made clear
that even the cherished rules of thumb can be
built usefully into a program if so desired.
Not only does this machine availability allow
the individual engineer to become a much more
powerful member of the organization but also it
makes it possible for him to investigate in
detail projects that otherwise he would dis-
card or guess at because of their difficulties
in analysis. A typical machine of this type
would require an elementary knowledge of a
programming language such as FORTRAN, an
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algebraic type of notation that allows the
engineer to write programs in a simple form.
The machine then automatically translates his
program into machine language.
Initially this computer might be used to
rapidly calculate and analyze decline curves,
ultimate reserves, certain types of arti-
ficial lift and pumping well design programs,
pipeline problems and complicated discounted
cash flows. A ready-made library of programs
for many petroleum engineering problems is
available for certain of these machines.
Basically, the formulas or expressions
used for solving all common problems can be
programmed and put into permanent storage on
the machine. Once in storage any program is
always immediately available for use with new
basic data. Each of these programs is so
arranged that, with simple control instructions
and the new basic data, it will perform the
calculation and present the results in an
immediately useful report form.
Table 3 shows some examples of common
calculations that can usefully be computerized.
Their conversion into a FORTRAN statement also
is illustrated. All these examples are of a
relatively simple type but there is no reason
why the engineer should not tailor his
personal programs to his own reqUirements.
Once a program is written and stored it becomes
possible to obtain a solution to the problem
with any new data.
The average engineer should find that
with less than a week of computer orientation
he is adequately conversant with the basic
ideas involved to appreciate the. considerable
advantages that such techniques offer and to
program usefully some of his more preSSing
problems.
A typical minimum system requires little
more than a small 10 ft by 15 ft office and
consists of a processing unit and a card read
and punch-out. To this might be added a fast
printer to supplement the console typewriter.
The cost of such a system runs about $1,500
u. s. per month; or little more than the
 PRACTICAL APPLICATION OF COMPUTER
4 TECHNOLOGY TO PETROLEUM AND GAS OPERATIONS SPE-2094
~ over-all cost to the producer of another one ally desirable and economically attractive for
or two men on the engineering staff. However, the application of these techniques to be more
such a machine in the hands of experienced vigorously encouraged.
operations engineers will increase the scope of
their usefulness several-fold and enhance their CONCLUSIONS
ability to investigate fairly large projects on
their own. FUrther it enables these engineers 1. Operations engineers can usefully
to consider the wider ramifications of such apply computer techniques to day-to-day opera-
projects. tions to improve their capacity for effective
examination of time-consuming technical pro-
The operations engineer is frequently in blems and methods of controlling production
a much better position than others to apply economics.
limiting practical conditions in calculations

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involving improvements and/or new designs.
However, if he is excluded from the original
planning, and does not have resources to do
such work himself, his valuable contribution
may be lost. The use of the small computer can
upgrade his capacity and fill this considerable
gap.
SUMMARY
The use of two basic systems of data
analysis has been described and an attempt has
been made ,to correct the common misconception
that the computer is for only the mathemati-
cally inclined and for use on major projects
involving huge expense. Seen in their proper
perspective, computers are just an additional
tool in the hands of the operations engineer;
they give him the additional capac!ty to
examine a problem in greater depth and in
general to perform much more productive
engineering work. Thus _i1;~ ~is~ .b~thprofession-
2. Even the product of unsophisticated
data processing systems can be utilized to ease
the massive data analysis problems facing all
operations engineers.
3. No particular mathematical or elec-
tronic background is necessary to take advan-
tage of these modern techniques.
4. The engineer can usefully program both
routine reports and more complicated analyses,
so that they can be obtained directly from the
computer or data processing equipment in
finished report form ready for distribution.
5. For maximum advantage the computer or
-aata processing system must be located close
enough to" the operations engineer to avoid
delay in obtaining results J this should make i t
economically attractive to program the solution
of even the simplest day-to-day calculations.

TABLE 1
AN ABBREVIATED MONTHLY PRODUCTION REPORT FOR A RESERVOIR
Last Test
Well Reservoir Percent Monthly
No. Code Date Status Choke THP BOPD BS&w GOR Oil

293 202 9/67 F 12 710 289 2.0 850 6,293

294 202 9/67 F 16 480 125 0.1 868 354

295 202 9/67 P 20 40 21 0.1 880 308

CARDS FOR WELL 293 SORTED ACCORDING TO DATE

293 202 5/67 F 8 850 450 0.0 625 4,020

293 202 6/67 F 9 800 427 1.2 660 12,000

293 202 7/67 F 10 770 375 2.0 691 10,200

293 202 8/67 F 10 760 322 2.0 725 9,175

293 202 9/67 F 12 710 289 2.0 850 6,293

 TABLE 2

CODE DATA CARD

Other
Service Remaining Prospects
Well Reservoir Date Hours Reserves in Wellbore

293 202 9/ 67 0 81,203 B

294 202 9/67 0 61,872 A,C

295 202 9/67 82 40,480 A,B,C

SUMMARY PRINT-Our AND SUMMARY CARD

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[Table 1 Monthly Data plus Code Data]
Other
Monthly Service Remaining Prospects
Well Reservoir Date Status Oil Hours Reserves in Wellbore

293 202 9/67 F 6,273 0 81,203 B

294 202 9/67 F 3,521 0 61,872 A,C

295 202 9/67 P 308 82 40,480 A,B,C

When these data are merged [combined] and printed out it might be
appropriate to flag with X's those wells with excessive service time or low
remaining reserves that, nevertheless, have reasonable. workover prospects.

TABLE 3
COMMONLY USED CALCULATIONS THAT CAN
USEFULLY BE COMPUTERIZED
Example Formula or Actual FORTRAN
No. Item Expression [IBM 1130] Version

1 Bottom-hole
Pressure
Buildup Cal- DI/[TI + DI] DI/[TI + DI]
culation of
time Parameter
2 Ultimate oil
reserves for [Pl - P2 1365
different Q. l.JJg [1 - D) Q = [Pl - P2]*365/ALOG[1.O-D]
decline rates
and production
limits

3 Oil line
throughput S = (. V j1.85 S = [V/(1.318*C*[R**0.63])]**1.85
calculations O
\1. 318CR •63)
[Williams
and Hazen]