Reserves Considerations: Interview with W. John Lee

“Geologists should know the assumptions and limitations of the engineering input to reserves estimations, and should remember that geologists play just as important a role as engineers in reserves work,” asserts W. John Lee, Ph.D., well-known reserves expert and professor at the University of Houston. Dr. Lee will be giving a short course and making a presentation at AAPG-DPA’s Reserves Forum and JCORET Short Course, Oct 31-Nov 1 in Houston.

Welcome to an interview with Dr. W. John Lee.

1.  What is your involvement in the oil industry?  How did you get started? What do you do now?

I am currently a professor of petroleum engineering at the relatively new program at the University of Houston, which graduated its first undergraduate class in several decades last May. I got started with a summer internship with Humble Oil & Refining Co.’s (now a part of ExxonMobil) production research division in 1959, and went from there to a permanent job in 1962 and later to a job with the Humble operating company as a reservoir engineer. Among other assignments, I supervised integrated reservoir studies of some of Exxon’s largest domestic reservoirs in the early 1970’s before integrated studies became standard practice. I started teaching at Texas A&M in 1977, and, while there, I worked with the petroleum consulting firm S.A. Holditch & Associates, from which I retired in 1999 as Executive Vice President.

Dr. W. John Lee Reserves Estimates

W. John Lee, Ph.D.

2.  You’re very respected for your work in reserves estimations. What should geologists know about estimating reserves today?

Geologists should know the assumptions and limitations of the engineering input to reserves estimations, and should remember that geologists play just as important a role as engineers in reserves work. If we don’t know the size and characteristics of our hydrocarbon container, our work becomes more art than science. Good reserves estimation is based on good geoscience. When I was a young pup in Exxon’s Kingsville operating district, the district reserves manager was a geologist. When I later worked in Houston on major East Texas Reservoirs, the same geologist was East Texas Division reserves manager.

3.  How can geologists make better decisions?

Probably the single most important thing for geologists to do is  learn how engineers are making reserves estimates. Just about as important is to share with engineers the geoscience input into reserves — principles, results, limitations.

4.  What makes you excited about the industry right now?

Unconventional resources, led by shales, are a real game changer. They have the practical importance of possibly leading the U.S. to energy independence, and also leading the world to more, and therefore less expensive, energy. On the fun side, these unconventional resources are devilishly difficult to understand, and it’s a real challenge to figure out what’s going on. It’s taking an even more integrated effort to characterize the resource and to forecast future production and reserves with confidence.

5.  What area do you think most geologists tend to overlook in their training and professional development?

Many geologists, but certainly not all, tend to overlook or downplay the importance of some basic reservoir engineering principles. Many, but certainly not all, avoid some of the quantitative skills that are a necessary part of reserves estimation procedures — just as many engineers avoid big-picture reservoir characterization issues and focus instead on details. Collectively, we need to learn more about how to understand each other’s specialties better.

6.  Where do you see technology having another breakthrough in the next 5 or 6 years?  What will the impact be on reserves in plays such as the Bakken?

We will learn how phase changes in oil shales, as we drop below the bubble point, and in retrograde gas shale reserves, as liquids drop out, affect long-term reservoir performance. Currently, we are just guessing, because we don’t really understand, on a fundamental pore level basis, how hydrocarbons are stored and transported in shale reservoirs. That ignorance will bite us before the truth enlightens us.

6.  Where do you see technology having another breakthrough in the next 5 or 6 years?
I believe that the industry is poised for… a whole lot of baby steps. We have individual, case specific, technical issues which we will continue to pursue. We will continue to see improvements in unconventional drilling and completion, especially where liquids are concerned. The field of high-pressure high-temperature exploration is progressing nicely and will have breakthroughs. Outside our industry is where I see the biggest changes occurring. It may not be within the next 5-6 years, maybe the next 10 to 20 years, but there are some fairly impressive discoveries being worked out in the area of Low Energy Nuclear Reaction (LENR). If current efforts are successful, our lives will change.

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