Accurate up-scaling is an essential part of creating a valid reservoir coarse scale dynamic model. In this article, unstructured discretization of spatial domain is accompanied by numerical permeability up-scaling in order to construct an accurate coarse scale model. A new technique for generating a course scale triangular mesh is presented in which the density of elements in key flow regions is kept high to capture accuracy. The fine scale permeability map is investigated using image processing techniques, especially steerable filters, and the results are converted into a high-resolution element size map. This element size map will be refined by the integration of other important factors such as well-position effects and used to construct a coarse triangular mesh. The combination of flux-continuous pressure approximation and mass conservative, total variation diminishing finite volume schemes have been considered to solve two phase flow equations on the control volume finite element mesh. Fine scale simulations results are compared with the coarse scale ones for a series of water flooding examples to investigate the efficiency and accuracy of the presented gridding methodology. This method is developed for 2D cases, but can be easily extended to 3D problems.
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