An upscaling approach appropriate for the generation of coarse scale simula
tion models of horizontal wells is developed and applied. The method entail
s the solution of a general, single-phase, well-driven flow problem over a
limited fine scale domain. Coarse scale simulation parameters (transmissibi
lities and well indexes) are computed from this solution using either an av
eraging procedure or, to achieve higher degrees of accuracy, an optimizatio
n procedure, The method is applied to single- and three-phase flow problems
in several different heterogeneous permeability fields. Global coarse scal
e simulation results using the near-well upscaling procedure are shown to b
e in consistently close agreement with the reference fine grid simulation r
esults. Results using standard coarse scale models (with no near-well upsca
ling) an shown to be in considerable error in many cases. The overall upsca
ling method can be generalized to more complex, deviated and multilateral w
ell configurations. (C) 2000 Elsevier Science B.V. All rights reserved.