Shell And Computer Modelling Group To Jointly Develop Reservoir Simulation Software

[Daily News] Shell International Exploration and Production BV and Computer Modelling Group Ltd. (CMG) announce they have entered into a joint research and development agreement to develop the next generation of reservoir simulation software.
"The agreement paves the way for the development of a new class of a large-scale, advanced reservoir simulator," said Kenneth M. Dedeluk, president and CEO of CMG.

"This project brings together CMG, a global leader in reservoir modelling software development, with Shell, a major oil company and industry leader in reservoir simulation technology. CMG contributes an experienced, highly specialized and industry recognized staff having significant software development capabilities. Shell brings its worldwide database of operational and subsurface knowledge and highly experienced reservoir simulation development staff."

This next generation reservoir simulation software, as currently envisioned, will represent a step change in performance from current industry technology with respect to such things as flexibility, speed and accuracy, ease of use, adaptive techniques, general-purpose physics and chemistry, scope and advanced scenario management.

"This software will lead CMG, Shell and the industry into the next decade of reservoir performance prediction," said Shell's Paul Ching, VP Technical R&D.;

"Clearly the industry is pursuing and developing ever more difficult to reach hydrocarbons with an ever increasing capital exposure. To unlock these resources and bring them to the consumer in a timely and sustainable manner requires a revolutionary improvement in production forecasting accuracy and speed. This software development project will play a key role in decreasing cycle time, quantifying and reducing uncertainty and improving decision quality."

The project will be implemented in two phases. In Phase 1, CMG and Shell will determine the development specifications for such things as the software, the software architecture and the resource requirements for Phase 2 software development execution. The terms of the agreement commit the parties to Phase 1 with Phase 2 proceeding with the mutual agreement of CMG and Shell. CMG will have the exclusive rights to commercialize the jointly developed software and Shell will have unlimited software access for its internal use.

CMG estimates that its funding commitment for Phase 1 will approximate $500,000 and that it will contribute a further $2 million annually for its portion of the aggregate project costs during Phase 2. CMG anticipates that this project will initially have a minimal impact on its revenues with the future potential being subject to the successful commercialization of the developed reservoir simulation software.

Computer Modelling Group is a computer software technology and consulting company serving the oil and gas industry. CMG has sales and technical support services based in Calgary, Houston, London and Caracas. CMG is the leading supplier of advanced processes reservoir modelling software in the world with a blue chip client base of international oil companies and technology centres in 42 countries.

Royal Dutch Shell plc is incorporated in England and Wales, has its headquarters in The Hague. Shell companies have operations in more than 145 countries with businesses including oil and gas exploration and production; production and marketing of liquefied natural gas and gas to liquids; manufacturing, marketing and shipping of oil products and chemicals and renewable energy projects including wind and solar power.
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