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Abstract
Low permeability reservoirs attract increased attention from most oil companies due to increased demand and limited reserves in the conventional reservoirs. Most scientists and leaders of the petroleum business agree that worldwide production decline from conventional hydrocarbons will have to be compensated by the development of low permeability oil and gas reserves to satisfy growing demand.

In Western Siberia, Russia low permeability oil and gas formations may become an increasingly important source for petroleum production in the near future. In Yamalo-Nenetsky Autonomous region alone there is an estimated 100 billion bbl of oil in place of marginal reserves or contingent resources. These resources are much more challenging and require a comprehensive and technically complex approach from the operators to be effectively developed. Development of these resources is additionally complicated by climate conditions due to closeness to Polar circle. However, compared to development of resources of Russian Arctic offshore fields or the fields in Eastern Siberia with a very limited or non-existent transportation, production and service infrastructure these low permeability resources can be quite attractive.

This paper presents a case study of a pilot development of Jurassic reservoir of Palnikovskoe oil field. The reservoir rock is shaly sandstone and siltstone with about 14% porosity and 0.1 md permeability. Vertical wells in this area, even being hydraulically fractured, still produce below economic limits. Horizontal wells with multiple transverse hydraulic fractures have been shown to produce much more than vertical wells and were successfully applied in low permeability reservoirs in Texas, Bakken Shale USA, Danish sector of North Sea.

Multiple technologies we applied in Russia for the first time on this project. Fracture mapping, advanced image logging while drilling, reservoir modeling and updating while drilling the horizontal borehole, expandable packers and specialized completion tools. The well has been producing for 15 months now. The production is about 5 times higher post-frac production rates compared to conventional vertical wells in the area.

Introduction

The Concept of «Resources pyramid” Is based on the hypothesis that mineral resources are distributed log-normally. The resources of minerals like gold, diamonds, silver, uranium honor this distribution. High quality reserves of these minerals are very scarce and small. Resources of lower quality are vast, however, exploitation of these resources are often just marginally economic. Two factors can help to shift these resources into the profitable exploitable reserves: resources prices in the market and technology improvements that may significantly lower the costs.

The same concept is valid for the hydrocarbon reserves as well. Prof. Stephen A. Holditch (The Head of the Petroleum Engineering Department of the Texas A&M University, member of Russian Science Academy of Natural Sciences and member of the US Academy of Engineering), worked out this concept in application to oil and gas reserves evaluation. Figure 1 shows that volume of high quality reserves in high permeable and homogeneous reservoirs are scarce in comparison to the ones of lower quality. The pyramid concept is very important since it helps the oil companies to take the right strategic decisions regarding the mature petroleum provinces.