Reservoir simulation has become the de facto design and analysis tool to plan, develop, and manage oil and gas assets. With increasing complexity of flow networks and advanced recovery mechanisms in the fields, the model description and features of the reservoir simulator have also been progressively advancing.

The goal of a single, evolving, life-cycle model for oil and gas assets has many benefits for effective and efficient field development and exploitation. However, the size and complexity of the reservoir models often require characterization at several resolutions, thus ranging from full field strategic models to short range operational models. Full field strategic models can be used to evaluate various production scenarios and development strategies and to estimate future drilling and facilities requirements. Short range operational models concentrate on issues such as rate requirements, production decline analysis, etc. However, the approach to integrate and maintain these separate reservoir models while describing the same field is often ad hoc and many times, inconsistent.

This paper describes a new methodology for enhanced and effective use of reservoir simulation. Specifically, the application of a new method is presented to consistently integrate the full field strategic models and the short range operational models using a parametric system identification approach. The measurements from the field are used to continuously update the short range operational models over a moving time horizon, while simultaneously preparing the data for a history match of the full-field, strategic model. This hierarchical model structure at different scales avoids frequent and costly history-match runs of the larger strategic models without compromising on short term accuracy, for example, those required by production optimization. In addition, the hierarchical model structure improves effectiveness and efficiency in carrying out the simulation objectives. A case study of a full-field performance is presented to highlight the benefits of the method.

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