An accurate well modeling capability is important for both production and reservoir engineering calculations. Ideally, the models used for these two applications should be related in a logical manner. Multiscale methods allow varying degrees of resolution and can therefore provide a natural linkage between production and reservoir models. In this work, we present a coupled wellbore-reservoir flow model that is based on a multiscale mixed finite element formulation for reservoir flow linked to a drift-flux wellbore flow representation. The model is able to capture efficiently the effects of near-well heterogeneity in the reservoir and phase holdup and pressure variation in the wellbore. The formulation presented here is for oil-water systems. The basic reservoir-wellbore linkage is described and validated through comparison to results from an existing simulator. The multiscale methodology is then applied to a heterogeneous reservoir model. Both vertical and deviated wells are considered. Comparisons of the multiscale solution to the fully resolved (fine-scale) solution demonstrate the high degree of accuracy of the method, for both reservoir and wellbore quantities, as well as its efficiency.