# Japan Oil, Gas and Metals National Corporation (JOGMEC)

• Hirobumi Kawano
Chapter

## Abstract

In this article, how tasks are theorized, quantized, or transacted in various fields and areas of petroleum and natural gas exploitation is described. The requirements for future mathematical development are also explained. Firstly, a brief description of the features of petroleum and natural gas exploitation is given.

## Keywords

Methane Hydrate Carbon Dioxide Flooding Rock Layer Petroleum Exploitation Miscible Flooding
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.

## The Role of Mathematics in the Petroleum and Natural Gas Exploitation Industry in Japan

### Introduction

In this article, how tasks are theorized, quantized, or transacted in various fields and areas of petroleum and natural gas exploitation is described. The requirements for future mathematical development are also explained. Firstly, a brief description of the features of petroleum and natural gas exploitation is given.

#### What Are Oil Fields and Natural Gas Fields?

A schematic view showing oil and natural gas fields is given in Fig. 1. The green-colored area is often described as an oil reservoir, and the figure may be interpreted as an underground cave filled with crude oil. The reality, however, is that the green-colored area is a rock layer as seen in Fig. 2. In many cases, the rock that collects oil or gas is sandstone or limestone (see Fig. 3). There are very small continuous cavities inside them, and collectively they constitute 20–30% of the volume of all rocks. Inside the cavity, there may be oil, gas, or water, and together they form an oil field or a natural gas field.

#### The Origin of Oil Is Not Where It Exists Today

Plankton that accumulates at the bottom of seas and lakes is sedimented deep into the ground through siltation. During this process, the increasing ground temperature and pressure with depth causes some portion to change into sources of petroleum and natural gas (i.e. hydrocarbon compounds). Rock generated by sedimentation of plankton with soil, typically mudstone, is called source rock. Because of the difference in specific gravity from the surrounding water, the source of petroleum and natural gas thus generated drifts in the rock layer for millions of years until it reaches its present position, forming an oil or natural gas field.

#### Method of Oil Field and Natural Gas Field Exploitation

As the specific gravity of petroleum and natural gas is generally lower than that of the surrounding water, the probability of their sedimentation is higher in convex-shaped, low-permeability, dense rock with an upper rock layer which acts as a cap (the dark-colored seal layer in Fig. 4), a rock layer caused by dislocation or by protrusion of rock salt. Thus, petroleum exploitation begins with a search for the aforementioned rocks and rock layers deep in the earth. Exploration for rocks and rock layers capable of petroleum sedimentation at depths of a few thousand meters underground and of several hundred meters underwater is primarily done using seismic waves (see Fig. 5). Vibrations generated by dynamite or an air gun propagate underground and reflect at the interface of rock layers. The underground structure is then analyzed using data, such as elapsed time, phase, and amplitude, from the received reflected wave. The principle resembles that of ultrasonography used in medical practice (see Fig. 6). There are great differences, however, between searching through subcutaneous fat in a human body, typically on the order of few centimeters thick under the skin, and through rock(s), which may contain salt water or oil, typically on the order of few thousand meters under the surface of the earth. There are many cases in which a slight error may cause considerable changes in the interpreted profile of the underground structure.

#### Method of Direct Petroleum Exploitation

Even when a rock layer that may be an oil–gas field is found, there is no current technology to determine whether the rock layer a few thousand meters underground contains crude oil, natural gas, or just water. The presence of crude oil or natural gas can be only found by drilling a well into the rock layer. Drilling an exploratory well costs 100,000,000 to 1,000,000,000+ yen, and may take 3–6 months or more.

#### Risk Evaluation Accompanying Oil–Gas Field Development

Once crude oil or natural gas has been found by drilling some wells, an estimation of the size, extent, and quality of the reservoir, calculation of reserves, and development expenditure is made using the limited amount of information. In oil exploitation, a huge investment is made initially, and return on the investment is sought during the production period, which may last for several decades. The rough shape and extent of the oil reservoir rock is obtained from the seismic exploration. Porosity and the oil/water ratio is estimated from the electrical and acoustic properties of rock samples taken from the wells and from the approximately 1 m well-hole made by dropping a logging tool into the well. The average fluidity of the oil inside the reservoir is estimated from test production and pressure data. Putting the information together, an oil reservoir model is constructed. The future crude oil and natural gas production for various exploitation conditions is estimated by numerical simulation, and basic data for calculating the economic viability of oil field development is determined (see Fig. 7). The technology and know-how manifests itself in performing production estimation with high accuracy from limited amounts of information.

### The Role of Mathematics in the Petroleum and Natural Gas Exploitation and Development Industry

#### Features of Information (Data) Treated

Numerical simulations are carried out for various problems, ranging from exploitation to development and production of petroleum and natural gas resources. In general, handling strata a few thousand meters underground and the fluids contained within them comes with a high level of uncertainty and differences in scale, resolution and amounts of data. For example, though seismic exploration data may capture the vertical and horizontal extent of reservoirs, it has a rough resolution on the order of dozens of meters, and is called soft data. Data from wells, on the other hand, is obtained from rock samples from the oil–gas reservoir, and is on the order of a few centimeters. In the case of a well into which a logging tool is dropped, electrical, acoustic and density data around the well wall is obtained every 30 cm vertically. The interval of wells, however, is on the order of a few kilometers. Consequently, the so-called hard data is very discrete. A geological strata model is constructed by using these data appropriately and applying statistical methods. Estimation of the behavior associated with development and production is carried out over several decades in time scale by numerical simulation of the oil reservoir (see Fig. 8). From the mathematical point of view, various methods are also applied to the proper use of these data and the evaluation of uncertainty included in the result.

#### Related Fields During Exploitation/Development Stage and Utilization of Data

1. Exploitation/underground structure evaluation stage:

Three-dimensional seismic exploration data processing and analysis; uncertainty evaluation using geostatistics for oil reservoir characterization; electromagnetic data processing and analysis; oil generation/drift/sedimentation simulation; etc.

2. Oil–gas reservoir reserves/production behavior estimation stage:

Flow behavior estimation using numerical simulation of oil reservoir (multicomponent, thermal recovery); application of genetic algorithm to oil reservoir simulation/history matching; micro-flow simulation using lattice Boltzmann method; methane hydrate melting/flow simulation; coupling of flow simulation and rock compaction; sand behavior simulation; geomechanics evaluation simulation; visualization of three dimensional data; etc.

3. Development/production stage:

Multiphase flow analysis using distinct element method; oil–gas–water management process design; unsteady multiphase flow analysis in pipeline; offshore production system mooring/riser tensioner behavior analysis; dynamic behavior analysis of floating production system with dynamic positioning system on board; etc.

#### Specific Cases

##### [Three-Dimensional Seismic Exploration]
One of the major achievements in petroleum and natural gas exploitation in recent years is three-dimensional seismic exploration. In conventional two-dimensional exploration, with data on a lattice grid at intervals of 500 m to a few kilometers, data inside the gridlines is estimated using various interpolation methods, such as spline interpolation or kriging. However, there is a high degree of uncertainty in underground structure, which makes accurate evaluation difficult. Moreover, the uncertainty is further affected by the surrounding underground structure, leading to false images. Three-dimensional seismic exploration is implemented by placing seismometers on a finer lattice with intervals of 12.5–15 m and recording the reflected wave from every direction across the plane. This method can eliminate the uncertainty accompanying interpolation, and increases the accuracy of underground structure imaging by placing false images in the right position. However, capturing the reflected wave on a plane increases the amount of seismic wave data recorded considerably. A single survey conducted offshore from Abukuma over an area of 70 km ×30 km by the three-dimensional geophysical survey vessel “Shigen”, introduced by the Ministry of Economy, Trade and Industry (METI) in 2007 and operated by JOGMEC, produced 12 terabytes of data. Optimization of parallel computation and the algorithms used became essential to many processes, such as noise reduction in the data, deconvolution to eliminate the effect of the hypocenter (dynamite or air gun), and migration, which is a method for describing underground structure based on seismic wave data (Fig. 9).
##### [Oil Reservoir Simulation]
A numerical simulation of the oil reservoir is used in the geological model construction process to analyze changes in pressure inside the oil reservoir and in the saturation rate of fluids (water, oil, and gas) during production. This model is then used to optimize the production plan (see Fig. 10). In oil reservoir simulation, physical phenomena governing the flow inside the oil reservoir, such as viscosity, capillary tube pressure, gravity, and expansion of fluids and rocks, are often expressed using nonlinear partial differential equations, which are then solved computationally. The oil reservoir is modeled by dividing the space into a finite number of cells, and the behavior of each portion of the reservoir is estimated by solving the mass transport equations between cells for gas, oil, and water phases using Darcy’s law. Multicomponent simulation is used for the more complex interactions of carbon dioxide flooding and hydrocarbon miscible flooding, treating the fluid as a mixture of several components and permitting component transfer between gas and liquid. In addition to calculating oil and gas phase flow between cells, phase equilibrium calculations are performed. Variants of this type of simulation include the thermal flooding model, which requires energy balance equations, and the chemical flooding model, which expresses various chemical phenomena. When it comes to multicomponent calculations with the order of a few million cells requiring fast calculation and large memory, the calculation time is large even with parallel computers. There are still problems with determining the proper upscheduling, comparisons with actual production history, and automatic and high-accuracy parameter calibration. A recent example of successful development of a numerical simulator is a Japanese model that performed excellently in an international competition for simulating the production of an unconventional natural gas resource (methane hydrate). In this model, new routines were incorporated to reproduce specific phenomena that had not been treated, such as melting gasification of solid hydrate, rehydration, and consolidation of the unconsolidated sand layer and changes in permeability.

#### Development and Application of Mathematics Expected in the Future in the Petroleum and Natural Gas Industry

Applied mathematical problems concerning the aforementioned exploitation methods are as follows.

1. (a)

Solving large matrix systems: Problems in petroleum exploitation can be reduced to discretizing nonlinear partial differential equation, building a large system of equations, and solving them. In the case of physical exploitation, only a slight perturbation (error) in the observed data may cause considerable changes in the output (underground structure). To overcome this problem, we adopt the Tikhonov regularization method and study stable solutions from matrix calculations. More efficient and stable large matrix calculations are desirable.

2. (b)

Inverse problems: Optimization of inverse problem calculation is a major problem in migration speed analysis, full wave inversion, history matching and well test analysis.

3. (c)

Statistics is used to quantify uncertainty, and it would be desirable to improve the accuracy using Bayes’ theorem and other mathematical methods.

These are the mathematical methods we, at JOGMEC, use in actual petroleum and natural gas exploitation and development.

#### Company Profile of Japan Oil, Gas and Metals National Corporation (JOGMEC)

In 2004, the Japan National Oil Corporation (JNOC) and the Metal Mining Agency of Japan (MMAJ) were integrated to establish Japan Oil, Gas and Metals National Corporation (JOGMEC) and ensure a stable supply of oil and natural gas, as well as metal and mineral resources. Its primary roles are to implement exploitation projects and technology development programs for promoting the exploration and production of these resources, to provide necessary funding for exploration, and to secure a stable supply of natural resources and energy through storage of petroleum, natural gas and rare metals. JOGMEC also deals with protection of public health and conservation of the living environment through mine pollution control measures, and contributes to the sound development of metal mining.

#### A Brief Biography of Hirobumi Kawano, JOGMEC

Hirobumi Kawano was born in Tokyo in 1946. Following graduation from The University of Tokyo with a B.D. in Economics, he joined the Ministry of International Trade and Industry, which was the predecessor of the Ministry of Economy, Trade and Industry (METI). After holding director’s posts in the Petroleum Division and the Basic Industries Bureau in the Agency for Natural Resources and Energy (ANRE), he became Director-General of ANRE in 1999 until his retirement from METI in 2002.

Kawano became an external director of Sony Corporation in 2003 and a senior corporate officer of JFE Steel Corporation in 2004. He has been President of JOGMEC since 2008.

His hobby is yacht racing. He is Vice President of the Japan Sailing Federation.