A methodology is proposed that integrates historical production data into large reservoir models by the local updating of the permeability field. The focus is on conditioning a proposed initial model to injection/production rate and pressure history in an iterative fashion. Integrating flow simulation and kriging algorithms within an optimization process based on linearized formulas of reservoir behaviour with property and numerically calculated sensitivity coefficients constitutes the proposed methodology. This method makes it possible to condition the permeability distributions to injection/production rate and pressure history from large reservoirs with complex heterogeneities and changes of well system at the same time. Discussions show that sensitivity coefficients change with time/iterations and that using the linearized formula to get the optimal property changes at all master point locations is a valid strategy.