Two phase fluid flow through a naturally-fractured reservoir is investigated. The naturally-fracturedreservoir is characterized by two superimposed continua, with the fluid flow coupled via a fluid exchange term. The Galerkin-Newton method is used to discretize and solve the coupled differential equations. Problems associated with the representation of wellbore and induced fractures are initially evaluated. Steady state as well as time-dependent fluid flow around a wellbore is examined. It is demonstrated that curved isoparametric elements in the vicinity of the well with rectangular elements in the remainder of the reservoir can be used to obtain accurate solutions. Eight noded elements yield improved accuracy over four noded elements for single phase fluid flow through a porous medium. These elements also realistically model the flow field near induced fractures, for both single and two phase fluid flow cases. Langmuir's theory is used to model the sorption phenomenon in naturally fractured reservoirs. A onedimensional model is used to demonstrate the proposed procedure for dual permeability representation of naturally fractured reservoirs. The rapid convergence of solutions reveal the effectiveness of the finite element method in reservoir simulations. However, additional research on the presented methodologies is necessary.

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