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The localization of oil reserves in water-flooded areas is considered. Despite a high watercut of 90% or more well production, individual regions of the reservoir can retain recoverable oil. These reserves may have rather high (up to initial) oil saturations. Developing these reserves even partly will deliver a valuable incremental field production. Oil field development experience shows that recovery factor can be comparatively low, even at the late development stage. The issue of additional recovery is illustrated by the Bavly oil field experiment which ran for 30 years. This experiment included high watercut wells that were shut-in for a long time and subsequently brought back into production, and some of the wells yielded tens of thousands of tons of crude. Moreover it was established that remaining reserves can be located in certain areas. So, the problem of finding the location of such areas needs to be solved without resort to large-scale experiments like this. If we could do this, the scope of late stage infill drilling could be reduced thus preventing wells being drilled in swept zones. Currently the issue of finding high oil saturation zones is generally solved through reservoir modeling. The issue of the accuracy of modeling oil saturation distribution is of primary importance for a reservoir engineer. There are a variety of numerical methods for modeling oil and gas field development processes widely in use, but are not sufficiently reasonable for this goal. In the general case, heterogeneous media cannot be described by averaged equations with scientifically based pseudorelative permeabilities. The inconsistency of using pseudo relative permeabilities for simulation of the heterogeneous reservoir development is illustrated by numerical experiment. The pseudo relative permeabilities technique enables forecasting the field production and injection rates and cumulatives only. The reliability of the prediction of the oil saturation distribution turned to be unsatisfactory. This means that currently used pseudo relative permeabilities techniques do not allow reliable detection of bypassed oil. At the moment, the only efficient method of locating unrecovered oil reserves is integration of advanced reservoir study methods combined with geological modeling and reservoir simulation.