The seven-month project involves building a flexible software package to make it easier to build geometric models.
These models can then be used to look at whether there is further resource contained in mature or existing fields which can be extracted on commercially successful terms.
According to Glasgow-based Sciencesoft – which specialises in 2D and 3D visualisation and analysis software – a typical human led modelling system for just one well can take several weeks to build.
The software being developed could potentially reduce that process to minutes.
Lindsay Wood, Sciencesoft's director of research and development, said: "When most oil fields are not economic to produce there is still well over two-thirds of the oil still down there.
"So people are looking at ways of artificially trying to get another 15% to 20% of recovery.
"They are looking at enhanced oil recovery where, for example, they can inject chemicals to bring the oil to the service and they have to use specialist simulation tools.
"At the moment if someone wanted to do this job by hand it would take three or four weeks to build a model for a single well, so it is a very labour intensive and time consuming task.
"We reckon we can automate 99% of this task and get people to where they want to be in 20 minutes as opposed to several weeks.
"If you can recover an extra 15% of the total oil in place then it adds up to billions of pounds."
The initiative has received a £75,000 grant from the UK Government-backed Technology Strategy Board.
Three members from Sciencesoft's research and development team are working on it with a similar number from the university.
Mr Wood said the main software package used for oilfield modelling is an academic rather than commercially focused one. He added: "We want to make a much more flexible product.
"Oil companies are our customers so we know people looking to do these kinds of processes."
Professor John Chapman, head of the college of science and engineering at the University of Glasgow, said: "We are bringing together leading edge expertise from engineering and earth Sciences to address real challenges in the oil sector."
Sciencesoft, which specialises in 3D visualisation software for the oil and gas industry, makes around 90% of its sales overseas and its products are used in more than 80 countries. Last year it spent £120,000 expanding its Glasgow headquarters to create a suite for energy sector professionals to receive training on its products.
In September, the Scottish Government launched a £10 million oil and gas innovation fund in partnership with Scottish Enterprise, Highlands and Islands Enterprise and the Oil and Gas Industry Technology Facilitator.
At that time David Rennie, director of oil and gas at Scottish Enterprise, said: "Scotland's hugely successful oil and gas sector has a crucial role to play in our economic success and increasing and accelerating innovation in the industry will be key to this.
"We know that many of our assets in the North Sea are already – or are close to – operating beyond their original design life.
"To ensure we capitalise effectively on the future potential we know exists in Scotland's oil fields it's vitally important that our assets are secure for the future."