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In the traditional numerical reservoir simulations, the internodal transmissibility is usually defined as the harmonic mean of the permeabilities of the adjacent grids. This definition underestimates the phase flux and the speed of the saturation front, especially for the strong heterogeneous case. In this article, the internodal transmissibility is recalculated according to the nodal analytic solution. The redefined internodal transmissibility can be used directly to calculate the multiphase flow in the numerical reservoir simulations. Numerical examples show that, compared to the traditional numerical methods, the proposed scheme makes the convergences much faster as the refinement parameter increases, and the accuracy is independent of the heterogeneity. calculated from the relation (21) rather than the traditional harmonic mean algorithm. NUMERICAL EXAMPLES Example Ia test from SPE comparative solution projectA test from SPE Comparative Solution Project [11] is performed here. The model is a two-phase (oil and gas) flow, where fluids are assumed to be incompressible and immiscible. The oil is displaced by the gas from the injection well to the producing well. The simulation area is 762 m long, 7.62 m wide and 15.24 m thick. The grid system is of 100 × 1 × 20 uniform cubic cells. Thus, Δx = 7.62m, Δy = 7.62m and Δz = 0.762m. It is in fact a 2D case. Other conditions, such as the permeability distribution, porosity, viscosities, densities and the relative permeability curve, can be found in the corresponding website (http://www.spe.org/web/csp/datasets/set01.htm). The gas is injected from a well located at the cell (1,1,10) and the dead oil is produced from a well located at the cell 84 X.-L. ZHENG ET AL.