Fractured reservoirs have gained continuous attention in oil and gas industry since a huge amount of reserves are stored in such reservoirs. Fractures add complexity in reservoir models and thus have potentially large effects on the reservoir simulation results. Though a lot of fine scale fracture models for reservoir simulation have been developed to capture the fracture effects, they are generally complicated and time consuming for the cases with large number of fractures and problems (for example, some inverse problems and optimization problems) where lots of forward simulations are required. Upscaling is a method to fasten the flow simulations by constructing reduced models in coarse scale to approximate the original fine scale models. It is important to construct coarse models in a proper way since the approximated models will generate errors as opposed to the fine scale models. Therefore, a new upscaling method is proposed in this work to capture the effects of fractures in fractured reservoir. First, two hypothetical flow problems are presented to provide pressure solutions for calculation of parameters in coarse models. Unsteady state method, one of these two flow problems, is firstly introduced in this work to obtain reasonable pressure solutions for reservoirs without source term. Second, we developed two partitioning methods to associate coarse grids with fine grids. Since these two partitioning approaches are suitable for different types of fracture networks, we proposed a multi-level partitioning method that is a general approach and could capture fracture effects of different fracture patterns. Third, we developed an efficient time-stepping algorithm for the unsteady state problem to reduce the computational efforts of upscaling process. The applicability of the new upsclaing methodology is verified from numerical tests of different types of reservoirs with different fracture patterns and well configurations. Errors of pressure solution, oil saturation, and production solutions are generally limited below 5% in coarse scale. Furthermore, speedup of simulation is significant in all of the presented numerical testsPetroleum and Geosystems Engineerin
