Many low-efficiency hydrocarbon reservoirs are productive largely because effective reservoir permeability is controlled by faults and natural fractures. Accurate and low-cost information on basic fault and fracture properties, orientation in particular, is critical in reducing well costs and increasing well recoveries. This paper describes how we used an advanced numerical modelling technique, the finite element method (FEM), to compute site-specific in situ stresses and rock deformation and to predict fracture attributes as a function of material properties, structural position and tectonic stress. Presented are the numerical results of two-dimensional, plane-strain end-member FEM models of a hydrocarbon-bearing fault-propagation-fold structure. Interpretation of the modelling results remains qualitative because of the intrinsic limitations of numerical modelling; however, it still allows comparisons with (the little available) geological and geophysical data. In all models, the weak mechanical strength and flow properties of a thick shale layer (the main seal) leads to a decoupling of the structural deformation of the shallower sediments from the underlying sediments and basement, and results in flexural slip across the shale layer. All models predict rock fracturing to initiate at the surface and to expand with depth under increasing horizontal tectonic compression. The stress regime for the formation of new fractures changes from compressional to shear with depth. If pre-existing fractures exist, only (sub) horizontal fractures are predicted to open, thus defining the principal orientation of effective reservoir permeability. In models that do not include a blind thrust fault in the basement, flexural amplification of the initial fold structure generates additional fracturing in the crest of the anticline controlled by the material properties of the rocks. The folding-induced fracturing expands laterally along the stratigraphic boundaries under enhanced tectonic loading. Models incorporating a blind thrust fault correctly predict the formation of secondary syn- and anti-thetic mesoscale faults in the basement and sediments of the hanging wall. Some of these faults cut reservoir and/or seal layers, and thus may influence effective reservoir permeability and affect seal integrity. The predicted faults divide the sediments across the anticline in several compartments with different stress levels and different rock failure (and proximity to failure). These numerical model outcomes can assist classic interpretation of seismic and well bore data in search of fractured and overpressured hydrocarbon reservoirs. (C) 2000 Elsevier Science B.V. All rights reserved.