Carbonate reservoirs have more complex structures than silicate reservoirs because of depositional and diagenetic features. Secondary porosity enhancements due to fracturing or dissolution processes result complex porosity systems and thus complex flow patterns. Carbonates may contain not only matrix and fracture but also the vugs and cavities that are irregular in shape and vary in size from millimeters to centimeters in diameter. Although many of these vugs appear to be isolated from fractures, the mechanism of oil recovery from vugs in such a system is highly dependent on the location of the vugs and connections of the vugs to the matrix. Studies on pore network models of carbonate rocks available in literature generally consider regular grain lattices, disregarding secondary porosity features. In this study, two phase flow in vuggy carbonates was studied by developing a novel pore network model. The constructed model consists of matrix and vug subnetworks. Matrix blocks were constructed by pores with triangular cross-section and pore throats with circular cross-section where as vugs were represented by square cross-sections. By distributing pore and pore throat radiuses randomly, a spatially uncorrelated model was developed. It was observed that the novel model can successfully simulate primary drainage and secondary imbibition recovery processes like snap-of, piston like advance and pore body filling. Comparison of pore network results and several published experimental results showed the uses and applications of the proposed pore network model. It was concluded that this novel pore network model design successfully represents two phase flow in a vuggy carbonate rock.Copyright 2008, European Association of Geoscientists and Engineers.