Revista E&P - Marzo 2012

E P MAG.
COM
MA R CH 2 0 1 2
2012 RECORDS:
DRILL BITS
RAISE THE BAR
Intelligent
Operations
4-D Seismic
Drilling Fluids
Artificial
Lift
Deepwater
Advances
Regional
Report:
WEST
AFRICA
991-994 HEPcoversMAR_Layout 1 2/23/12 1:39 PM Page 991
991-994 HEPcoversMAR_991-994 HEPcoversMAR 2/23/12 10:37 AM Page 992
LUI!f
Thermal Tou
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REGIONAL REPORT:
WEST AFRICA
INTELLIGENT OPERATIONS
Growing up in the digital age
Putting an end to successful failures
BP pioneers second generation of digital
oil fields
4-D SEISMIC
Is there a future for land 4-D?
First OBS-to-OBS time lapse results show promise
DRILLING FLUIDS
Specialized fluid system improves
horizontal applications
Fluid regime sheds new light on formation
damage in tight gas reservoirs
ARTIFICIAL LIFT
Delivering improved recovery rates through
digital gas lift
Going digital: Optimizing artificially lifted wells in
real time
DEEPWATER ADVANCES
New pipe design seeks industry uptake
ROV simulation training tool cuts operational
costs and risks
IndustryPULSE:
Spending increases in
2012 with a close eye
on certain challenges
Oil and gas industry leaders have forecast a year of
significant capital expenditure in 2012, but compa-
nies are prepared to cut back if the economy fails.
EXPLORATION & PRODUCTION
W O R L D W I D E C O V E R A G E
MARCH 2012
VOLUME 85 I SSUE 3
A HART ENERGY PUBLI CATI ON www. EPmag. com
34
Improvements highlight benefits of
advanced technology globally.
New bits, technology
raise bar on drilling
performance
6
WorldVIEW:
Portfolio combines
old, new assets
Breitling Oil and Gas is examining Chinese shales while
continuing to breathe new life into aging resources.
10
Unconventional: Canada
Canadian producers target
tight gas opportunities
The big news in Canada is tight gas, particularly in
northeast British Columbia, but markets and regula-
tions could temper the countrys gas future.
42
46
50
54
62
56
70
74
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84
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66
COVER STORY
Takoradi Port, Ghana. (Image courtesy of Tullow Oil)
01-4 TOC_MAR_01-4 TOC_MAR 2/23/12 10:29 AM Page 1
AS I SEE IT
New sensor listens to rock music 5
MANAGEMENT REPORT
Managing employee fatigue: A new approach
to a long-standing challenge 14
DIGITAL OIL FIELD
Bridging the communication gap in Iraq 20
MPC technology optimizes production in remote locations 23
EXPLORATION TECHNOLOGY
Data processing meets Cloud computing 29
WELL CONSTRUCTION
Fracturing technology is in the spotlight 31
PRODUCTION OPTIMIZATION
A capital idea Lets stick to the budget 33
TECH WATCH
Heat capture technology minimizes waste 86
TECH TRENDS 90
INTERNATIONAL SPOTLIGHT
Cyprus gears up for second offshore licensing round 94
INTERNATIONAL HIGHLIGHTS 100
ON THE MOVE/INDEX TO ADVERTISERS 102-103
LAST WORD
Taking the well construction conversation to total depth 104
E&P (ISSN 1527-4063) (PM40036185) is published monthly by Hart Energy Publishing, LP, 1616 S. Voss Road, Suite 1000, Houston,
Texas 77057. Periodicals postage paid at Houston, TX, and additional mailing offices. Subscription rates: 1 year (12 issues), US $149;
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Send address changes to E&P, PO Box 5020, Brentwood, TN 37024. Address all non-subscriber correspondence to E&P, 1616 S. Voss
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Hart Energy Publishing, LP, 2012. Hart Energy Publishing, LP reserves all rights to editorial matter in this magazine. No article may be
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Index and Engineering Index Inc. Federal copyright law prohibits unauthorized reproduction by any means and imposes fines of up to
$25,000 for violations.
DEPARTMENTS AND COMMENTARY
ABOUT THE COVER The industry is investing more in advanced drill bit tech-
nology, resulting in savings on overall project costs (Inset photos courtesy of Varel,
Drillformance, NOV ReedHycalog, Baker Hughes, and Halliburton). Meanwhile, opera-
tors in West Africa are looking west as they anticipate presalt riches analogous to
those offshore Brazil. (Photo courtesy of Tullow Oil; cover design by Laura J. Williams)
COMING NEXT MONTH The April issue of E&P takes a close look at risk ownership, manage-
ment, and mitigation as it applies to the upstream oil and gas industry and offers suggestions for improv-
ing exploration success and exploring in frontier regions. Land rig advances, subsea technology, and
service and supply vessels also receive special attention. Regional features include the Haynesville
shale and India. As always, while youre waiting for the next copy of E&P, remember to visit EPmag.com
for news, industry updates, and unique industry analysis.
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Additional results from Tano basin
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I
have been given the distinct honor of being asked to substitute for Judy Murray,
who has decided to pursue a challenging new opportunity, in this column. We
will miss her and wish her well. I hope my views do justice to the high standard of
journalism she has set.
As a technical person, I am always alert to new ideas. It may interest you to know
how a single fiber-optic strand can be a versatile tool in the hands of a trained
completions engineer. We have all heard how fiber-optic distributed temperature
sensors (DTSs) are used to identify the thermal gradient anomalies caused by
fluid flow in the well or even behind casing. Of late, the use of microseismic frac-
ture mapping from geophones located in offset wells has enabled the trained eye
to discern the propagation patterns of hydraulic fractures in near real time. In
some cases the information is available in the onsite data van in time to allow the
deployment of diverters to steer the fracture away from geohazards or into
untreated zones.
A new application for the ubiquitous fiber-optic cable is the distributed acoustic
sensor (DAS), where a fiber deployed in the well that is being stimulated can
detect the tiniest acoustic signals from the near-wellbore area. Not only can this
continuous listening device hear the microseisms generated as the rock fractures,
but it also can detect leaking external packers and the general behavior of fluids
over the course of the fracture treatment, including flowback. Who knew what a
symphony of sounds is emitted from a well under treatment?
Moreover, the DAS is enhanced when run in conjunction with the DTS; indeed,
they can be run in tandem using dual fibers. The complementary measurements
provide unprecedented insight into in-wellbore and nearwellbore activities. At
the very least, they will enable more effective fracture treatment designs to evolve.
This breakthrough was achieved under the leadership of Devon Canada Ltd. and
Pure Energy Services. It was supported in no small measure by Shell and QinetiQ.
The impact of this breakthrough could revolutionize fracture design. Hereto-
fore, engineers have defined success by comparing results of the current well with
previous wells, an understandable yet flawed approach. A story circulating the oil
centers tells of an engineer who brought in a well at 1,000 b/d of oil. He went
home, declared a success, and took his wife out to dinner in celebration, never
knowing that the wells actual potential was more than 3,000 b/d.
These are early days. The chief issues revolve around
reducing processing time for the huge datasets, now
about 70 terabytes. Second is the potential for damage to
the fibers in the downhole stimulation environment. But
initial results clearly show these challenges to be worth
the effort.
As I
SEE IT
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5
Read more commentary at
EPmag.com
DICK GHISELIN
Director,
Editorial Advisory Board
Senior Editor RHONDA DUEY
rduey@hartenergy.com
Senior Editor TAYVIS DUNNAHOE
tdunnahoe@hartenergy.com

International Editor MARK THOMAS
mthomas@hartenergy.com
Associate Editor NANCY AGIN
nagin@hartenergy.com
Corporate Art Director ALEXA SANDERS
Senior Graphic Designer LAURA J. WILLIAMS
Production Director
& Reprint Sales JO LYNNE POOL
Senior Editor/Manager,
Special Projects JO ANN DAVY
Executive Editor Online RICHARD MASON
Director of Business Development ERIC ROTH
Group Publisher RUSSELL LAAS
Editorial Advisory Board
CHRIS BARTON
Sr. VP Business Development, Oil & Gas., KBR
KEVIN BRADY
VP, Sales & Marketing,Verdande Technology Inc.
MIKE FORREST
Exploration Consultant, formerly with Shell
JOHN M. GILMORE JR.
Director of Global Industry Solutions Upstream
Oil & Gas, Invensys Operations Management
CHRIS JOHNSTON
VP & Managing Director, North America, Ensco
ULISSES T. MELLO
Manager, Petroleum & Energy Analytics, IBM
DONALD PAUL
Executive Director, University of Southern
California Energy Institute
EVE SPRUNT
Business Development Manager,
Chevron Energy Technology Co.
MANUEL TERRANOVA
Sr. VP Regional Operations & Global Sales,
Drilling & Production, GE Oil & Gas
RONNIE WITHERSPOON
Sr. VP of Marketing & Business Development,
Nabors Drilling USA LP
DENNIS A. YANCHAK
Sr. Geosciences Advisor, Apache Corp.
Vice President, Digital Media
RONS DIXON
Senior Vice President, Consulting Group
E. KRISTINE KLAVERS
Executive Vice President
FREDERICK L. POTTER
President & Chief Operating Officer
KEVIN F. HIGGINS
Chief Executive Officer
RICHARD A. EICHLER
05 AsISeeIt-MAR_05 AsISeeIt-MAR 2/23/12 10:30 AM Page 5
HARTENERG Y
O
IF 2
I-
T
his year has started on a positive note for the oil and
gas industry. Among a wealth of new developments,
ExxonMobil and Statoil confirmed that they will begin
planning production on the giant Julia deepwater oil
field in the Gulf of Mexico, while Valiant Petroleum
announced plans to embark on its most extensive explo-
ration and appraisal drilling campaign ever in 2012.
Despite concerns over global economic instability, a
sense of optimism for the year ahead prevails, and a new
Economist Intelligence
Unit (EIU) report on the
outlook for the sector in
2012 suggests that theres
no sign of it stopping.
Commissioned by GL
Noble Denton, the report,
Big Spenders, provides a
detailed examination of
major trends expected
across the worldwide
energy sector over the next
12 months, according to a
survey of nearly 200 indus-
try board-level directors
and policymakers.
An overwhelming 82%
of industry leaders sur-
veyed for the EIUs second
annual oil and gas industry
barometer are either
highly or somewhat confident about the business outlook
for their company in 2012, compared to a figure of 76%
last year. Just 8% of those polled described themselves as
pessimistic about performance in 2012.
According to those surveyed, North America will eclipse
Southeast Asia to become the region offering the greatest
business opportunities this year, while the Far East (includ-
ing China) is fast emerging as a potentially major future
source of unconventional gas.
Optimism feeds capital investment
Investment looks set to grow across the board in 2012, par-
ticularly in the upstream sector, where exploration has
emerged as the principal beneficiary of increased capital
expenditure. Of those polled, 56% of participants thought
that upstream activities will present the strongest source of
business growth in 2012, rising from 42% last year.
During an exclusive interview for the report, Shell CFO
Simon Henry said he sees strong opportunities for prof-
itable growth this year. Similarly, ConocoPhillips plans to
execute a US $28 billion capital program almost 90% of
which has been allocated to E&P activity and Chevron
continues to develop an unparalleled project queue this
year, according to the report.
While confidence for the year ahead has risen by more
than 10% across the industry compared to last year, find-
ings also reveal levels of investment vary significantly
depending on region.
In North America, 90% of respondents describe them-
selves as highly or somewhat confident, while in Asia
Pacific, this figure drops to 81%. In Europe, confidence
has dropped to 70%, sparking concern over the impact of
a potential Eurozone recession and a possible result of
recent increases in taxation on North Sea operators.
Promising regions are changing
Perhaps one of the largest changes in oil and gas execu-
tives sentiment over the past year is a shift in which region
companies see the greatest opportunities for revenue
growth. According to the report, North America has
placed first, indicating executives high hopes for strong
March 2012 | EPmag.com
6
industry
PULSE
Spending increases in 2012 with a
close eye on certain challenges
Oil and gas industry leaders have forecast a year of significant capital expenditure in 2012,
but companies are prepared to cut back if the economy fails.
Pekka Paasivaara, GL Noble Denton
The number of highly confi-
dent operators in the global
E&P sector has risen 8% over
those polled in 2011.
(Images courtesy of GL
Noble Denton; Source:
Economist Intelligence Unit)
06-9 IndPULSE-MAR_Layout 1 2/23/12 11:51 AM Page 6
06-9 IndPULSE-MAR_06-9 IndPULSE-MAR 2/23/12 10:30 AM Page 7
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ere at the beginning. Here for the future.
When you think of petroleum engineering and petroleum geology
/
geophysics
programs, the University of Oklahoma's Mewbourne College of Earth &
Energy might be the first college that comes to mind, and it should be.
Home to the world's first school of Petroleum Geology, granting the first
degree in 1904
Home to the world's first school of Petroleum Engineering
Alma mater to more petroleum engineers and petroleum geologists than
any program in the world
OU is alma mater to eight Society of Petroleum Engineers (SPE)
p idents, eight American Association of Petroleum Geologists
(A past presidents and five Society of Exploration Geophysicists
(
SEC Wgiresidents.
MEWBOURNE
COLLEGE OF EARTH&ENERGY
THE UNIVERSITY OF OKLAHOMA
#W-1I
Real education for the real world.
k.
- a
8
industry
PULSE
results from the growing
unconventional gas sector in
the US. The Far East has
moved up three places to
become the region identified
as having the second greatest
opportunities in the sector, with
Southeast Asia ranking third and Latin
America coming in fourth place.
Just 12 months ago, Southeast Asia topped
the list, with North America coming in second,
followed by the Middle East and North Africa
third and the Far East, including China, fourth.
Companies are not complacent
While the report paints an appealing picture of oil
and gas executives expectations for the industry this
year, it also indicates that companies are by no means
complacent about the tough challenges they are likely to
face in 2012.
The growing shortage of skilled professionals also is a
burgeoning concern for oil and gas executives across the
industry. This year, 34% of those polled identified it as a
barrier to growth, placing it second in the list, up three
places from 2011, when 25% of respondents identified it
as a key barrier to the success of their business. Some com-
panies are beginning to address this issue, according to
research participants.
In an exclusive interview for the report, Jon Tait, BPs
head of attraction, said that the company is making a con-
certed effort to break away from the cyclical nature of
staffing in the industry, which causes slow recruitment in
the sector when the price of oil becomes low.
BP takes a longer term view of its human capital strat-
egy nowadays, ensuring that it has the right pipeline of tal-
ent consistently entering the organization regardless of oil
price, Tait said.
Evolving attitudes towards risk
The challenge of balancing risk and return is tougher
than ever, as the oil and gas industry comes to terms with
operating in the post-Macondo era. The steady move into
deep water, in addition to the increasing trend of compa-
nies exploiting tight hydrocarbon formations and events
such as last years Arab Spring, also means oil companies
now have to confront an environment in which risk is far
more prominent.
According to the report, an overwhelming 82% of
respondents either strongly or somewhat agree that regu-
latory issues have become more important in the post-
Macondo period. Furthermore, 55% of participants think
that drilling permits have become more difficult to obtain
in the aftermath of the Deepwater Horizon tragedy.
Surprisingly, the US and Canada were identified as hav-
ing the most favorable regulatory climate in which to
operate in 2012 a possible result of more clearly estab-
lished operating guidelines in the region and a return to
drilling in the GoM.
For service companies, new sources of risk have also
been created, according to Schlumberger Chairman
Andrew Gould in an interview for the report. In the post-
Macondo operating environment, Gould said, there are
many oil company lawyers who now consider it their duty
to pass the catastrophic risk horizon arising from incidents
like Macondo onto contractors. It seems that trend is set
to continue.
Full steam ahead
The second annual EIU oil and gas industry barometer
sends a clear message for the year ahead: Companies are
preparing to spend big in 2012 despite concerns over the
future of the global economy.
But they are not resting on their laurels this year either.
They are cognizant of the challenges that lie ahead of
them, from rising operating costs to the worry of an
impending shortage of skilled professionals and an uncer-
tain regulatory environment in the post-Macondo era.
Although the GL Noble Denton-commissioned report
highlights oil and gas executives confidence to make sig-
nificant and much needed investment, they will do so
while keeping operating risks low during a period of pro-
longed uncertainty. Their success will be defined by an
ability to develop innovative approaches to operating
more safely, efficiently, and sustainably than ever.
Approximately 90% of the operators polled in 2011 say they were
most confident about North American activity through 2012.
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R .
Portfolio combines old, new assets
Breitling Oil and Gas is examining Chinese shales while continuing to breathe new life into
aging resources.
B
reitling Oil and Gas might appear to be just another
US independent active in unconventional as well
as conventional plays. But there is more to the company
and its outspoken leader, CEO Chris Faulkner, than
meets the eye.
At a time when even major companies have scaled
back on R&D, Breitling has invested millions of dollars
in new technology, devising such techniques as Geo3D
proprietary seismic filtering; CO
2
sand fracturing; and
EnviroFrac, a program established to determine the
environmental friendliness of fracture fluids.
Recently Faulkner talked to E&P about his companys
activities.
What does the industry need to know about Breitling as an
operating company?
Exciting opportunities are unfolding at Breitling Oil and
Gas, with some major operated plays that are driving
value creation. Our focus on financial stability, assets, and
people has allowed substantial progress as we shift from
conventional to unconventional assets and build capacity
in our organization. Breitlings asset base includes large-
scale, long-life resources, including working interests in
all the major basins within the US. Our production pro-
file is evenly balanced between crude oil and natural gas,
with a reserve life of more than 40 years on a proved-plus-
probable basis. We have a substantial inventory of current
well locations and an undeveloped land base. Breitlings
focus is to develop projects that represent excellent low-
cost, low-risk drilling opportunities that will provide
reserve replacement for a significant period of time.
What is the companys biggest investment to date?
Our investment into the Bakken shale play has been our
most significant capex thus far and holds the biggest
potential. We purchased a large acreage position in
McKenzie County, N.D., in the summer of 2011.
What types of plays are of most interest to your company?
The core business model of reestablishing production in
mature fields will remain our focus for the foreseeable
future. Using todays advanced technologies, companies
like ours can acquire these plugged fields and breathe
life into them, reestablishing production and rejuvenat-
ing them while creating excellent returns for our stake-
holders. Additionally, we are allocating large capex to
unconventional plays in our holding areas within Texas,
Louisiana, and Oklahoma.
How significant is the role of technology in your plans to
expand E&P?
On some levels, adopting new technology can be viewed
as an economic risk. The cost may be higher and the
result less certain than existing technology.
However, the payoff from a new technology can be
huge, both for the individual company and for national
energy security. It is widely acknowledged within the oil
and gas industry that technology has reduced the risk of
exploration and cut the time required to drill a well.
Those advantages alone are critical factors in the deci-
sion to adopt technology.
Chris Faulkner, CEO, Breitling Oil and Gas. (Photos courtesy of
Breitling Oil and Gas)
Rhonda Duey, Senior Editor
10
world
VIEW
10-13 WorldView-MAR_10-13 WorldView-MAR 2/23/12 10:30 AM Page 10
EPmag.com | March 2012
What are some of the companys biggest challenges?
First, uncertainty around energy policy and regulation. Government regula-
tions are constantly evolving, and doing business internationally complicates
things even further. This constant change and uncertainty means that oil and
gas companies must be ready to change business processes and conform to
new standards on an ongoing basis.
Second, price volatility. Like the uncertainty surrounding energy policy, con-
stantly fluctuating prices demand a level of agility that many smaller independ-
ent E&P companies do not have.
Third, human capital. With nearly half of the workforce in the oil and gas
industry expected to retire in the next 10 years, the big crew change should
be a major concern for companies in our industry.
Last, aging oil and gas infrastructure and the capital required to upgrade
that infrastructure. Keeping up with demand and meeting environmental reg-
ulations is becoming more difficult as physical infrastructure ages and breaks
down. Oil and gas companies have large amounts of physical capital invest-
ments (e.g. refineries, drilling rigs, pipeline, IT systems) that need to be main-
tained and upgraded over time, representing a huge cost investment for our
companies on a continual basis.
Is Breitling struggling like other oil companies to attract new engineers?
The short answer is yes. I think changing the perception of the oil and gas indus-
try is fundamental in addressing the skills shortage we are currently facing. I
firmly believe that in order to attract young talent to our industry, it is crucial that
the industry is perceived as the important, innovative, and interesting workplace
that it is. We try hard to remove any of the negativity that currently surrounds the
argument of peak oil, the downward trend of fossil fuels, the environmental argu-
ment surrounding fracing and unconventional resources, and anything else that
might cause potential talent to rethink entering the oil and gas industry. This
affects incoming talent from the time they are in university.
How are you addressing that challenge?
First, I think that many current students still lack knowledge of and exposure to
the oil and gas industry and perceive the industry as a low-tech, manual job. I
believe that students are influenced by their university and therefore their fac-
ulty, so Breitling works with the faculty in terms of projects, technology, and
development partnerships, including internships for students throughout their
education. We help drive curriculum if we can and give guidance to the universi-
ties on what topics students should be focusing on. We have spent serious time
and money building more strategic education partnerships and working with
11
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key universities to assist us in identifying the long-term tal-
ent pipeline.
How are you progressing in your China negotiations? What
has sparked your interest in that country?
We continue to explore joint venture opportunities in
China and are making great progress, albeit slower
than I would like. I really feel that China, given enough
time, is set for a shale gas revolution that will surpass
that seen in the United States. The most recent US
EIA report in 2011 showed China having 1,275 Tcf
of technically recoverable shale gas resources by far
the largest in the world, followed by
the United States with 862 Tcf and
Argentina with 774 Tcf. Chinas GDP
for 2012, while depressed, is still 8%+,
which gives them a robust domestic
energy demand and growth rate that
most countries with large shale deposits
do not have. Its great to have shale
gas and shale oil, but you need to h
ave a market for the product and infra-
structure to get it into the market
something Poland, for example, is
currently lacking.
What sorts of E&P investments are planned
for 2012?
Most of our E&P investments will be
allocated into unconventional basins
and will focus on liquids plays. I dont
see natural gas rebounding enough to
repurpose funds before the end of 2012.
Well continue to plow capex into our
drilling programs in the Bakken shale,
our midcontinent programs in Kansas
and Oklahoma, our positions in Eagle
Ford, and the emerging Three Fingers
shale while allocating funds to expand
into the Monterey shale in California.
What types of projects will Breitling invest in
over the next five years?
Hopefully more natural gas projects if
we get the commodity uplift that I
expect. I still feel that oil will remain
strong (above US $90) and will be the
major focus for Breitling. I feel confi-
dent that we can get LNG exports mov-
ing, develop a domestic energy policy
around natural gas vehicles in the trans-
portation segment, and reduce our mar-
riage to coal-fired power generation. If
we can accomplish just one of these
items in the near to mid-term we can
get natural gas above $5/Mcf and start
making money again.
12
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rom a safety and security standpoint, petrochemical
organizations have always been under a microscope.
Given the industrys importance on both a geopolitical and
environmental stage, the heightened level of scrutiny is
understandable. The critical nature of the end product also
ensures these industries are highly regulated, and each new
saber rattle from a leading oil-producing nation or news-
generating accident sends shock waves that ripple across
global commodity markets and regulatory bodies alike.
One of the most pressing concerns facing the E&P
industry, however, comes not from external forces but
from within organizations. In todays do more with less
economy, employee fatigue is on the rise and can have a
significant negative effect on business. From an increase
in unanticipated employee absences to serious accidents,
fatigue can damage profitability, productivity, and safety.
As a result, mitigating employee fatigue has become a pri-
ority for many oil and gas professionals. In some instances
it is even compulsory.
Background
Employee fatigue programs revolve around the concept
of fitness for duty. Studies have shown that working
while fatigued is roughly equivalent to working while
under the influence of alcohol. Judgment is impaired,
corners are cut, and the crisp focus and attention to
detail that is necessary in this field can be compromised.
Although there are many sources of fatigue, there are
certain working conditions or operational states that can
significantly increase fatigue risk. Individuals who work
overnight shifts, for example, operate in a manner that
runs counter to the bodys natural wake and sleep cycle,
also known as the circadian rhythm. When these natural
patterns are disrupted or when work schedules lack con-
sistently planned rest periods, fatigue becomes a factor. In
industries where entire communities could potentially be
placed in harms way through the actions of fatigued
workers, the need to mitigate this issue is most acute.
One of the first energy sector industries to tackle this
issue head-on was the nuclear power industry. In 2008,
the US Nuclear Regulatory Commission (NRC) defined
new safety standards to enhance existing programs at
nuclear reactors across the country, including a regula-
tion designed to mitigate the risk of workers being unfit
for duty due to fatigue. This regulation addresses several
safety concerns, from drug and alcohol use to workforce
scheduling, to help ensure employees are alert, focused,
and unimpaired while working.
The NRC regulation is relatively complex and addresses
different rules for different operational states of the plant
as well as different roles within the operational environ-
ment. It also is something of a living regulation, with
refinements and enhancements already under debate.
Despite its intricacies, however, it does serve as a back-
drop for comparing and contrasting the rules that are
emerging within the oil and gas industries.
Fatigue risk mitigation
In April 2010, the American Petroleum Institute issued an
initial set of fatigue risk mitigation guidelines under the
heading Recommend Practice 755 (RP 755). The guide-
lines were developed in response to heightened concerns
about fatigues impact on employee productivity, morale,
and safety, and they represent a significant first step
Managing employee fatigue: A new
approach to a long-standing challenge
An automated approach keeps workers alert and safe.
Mark A. Moschetto, WorkForce Software
14
management
REPORT
Employee fatigue reduces performance and increases the risk
of accidents.
14-17 MgtReport-MAR_14-17 MgtReport-MAR 2/23/12 10:30 AM Page 14
15
towards self-governance among the petroleum industry.
Federal mandates could still follow, but the industrys
demonstrated ability to develop and adhere to effective
fatigue risk mitigation strategies can go a long way toward
preventing further oversight.
RP 755s guidelines differ from policies and regulations
affecting other industries, as the policies are tailored to the
unique conditions of petroleum facilities. The rule also
defines ways to remain in compliance by offering distinct
guidelines for maximum work durations and minimum
breaks. Like the NRC regulation, RP 755 also is subject to
periodic assessments of its effectiveness and consequently,
it will likely change at some point in the future as the asso-
ciated practices are reviewed, evaluated, and refined.
Compliance through automation
As with most mission-critical processes, automation deliv-
ers a degree of efficiency and consistency: consistent appli-
cation of rules, consistent ways to prevent and contend
with violations, and consistent ways for evaluating fatigue
practices and ensuring they continually meet business and
safety needs. This closed-loop strategy is ideally suited to a
data-centric, automated approach.
Although automation is at the center of a fatigue risk
mitigation strategy, successfully implementing fatigue man-
agement typically requires three fundamental elements.
At the heart is the time and attendance system. These
systems have transcended the simplistic punch-in/punch-
out role for which they have been historically linked and
now offer a broad array of granular information on
employee activities, hours worked, what pay rates they
were entitled to, what projects they worked on, and a host
of other information.
Another component is scheduling, which helps define
who is going to work on what project, when they are going
to start and stop, and other vital pieces of information.
This is the stage in the process where most of the fatigue
management alerts and alarms will be presented, prevent-
ing a manager from trying to schedule an employee who is
fatigued or could be pushed into a fatigued state as a result
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of working a specific shift or shifts.
Finally, the rules engine, which tracks the rules, regula-
tions, and policies established to mitigate fatigue, creates a
snapshot of individual work routines and associated poten-
tial for fatigue and proactively contacts managers, HR, or
any other defined personnel when a fatigue mitigation pol-
icy is in jeopardy of being violated.
Working in unison, these elements create a dynamic
environment that safeguards organizations by proactively
avoiding worker fatigue in several areas. For example, if an
employee tries to begin his or her shift without having the
minimum required hours of rest between shifts, an alert
can be sent to the manager who can determine if a
replacement employee can be found or if a waiver needs to
be issued. The system also can be configured to deny the
employee the ability to clock in and begin a shift until
the minimum rest hours have been recorded. Additionally,
managers can be alerted that scheduling specific employ-
ees can lead to fatigue risk and be prompted to schedule
alternative employees in their place. Critically, an auto-
mated solution also will capture and store each of these
interactions and decision points, creating a detailed audit
trail that enables managers to confidently provide proof of
compliance when required.
Avoiding fatigue, enhancing the business
Mitigating the risks associated with employee fatigue
enhances the safety of workers, operations, and commu-
nities and delivers tangible, bottom-line benefits. A
well-rested workforce is more alert and productive and
consumes fewer healthcare services.
management
REPORT
In a recent survey, respondents agreed or strongly agreed that
workers are more fatigued and overworked than in previous
years. The most commonly cited reason was low head count.
(Graph courtesy of WorkForce Software)
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18
H
ermes Datacomms faced a challenge when BP
wanted a VSAT satellite communications network
for the start-up of new oilfield operations in Rumailah,
southern Iraq, in 2010. BP gave the company three
weeks to have WAN connectivity up and running for
the first 15 of 21 sites in the system.
For Nigel Green, Hermes account manager for the BP
contract, the project was a big request, even for a com-
pany experienced in providing VSAT/WAN solutions in
more than 54 countries representing 92% of the worlds
oil and gas reserves. After the contract was awarded,
Green said, we had 15 days to start installation of 21
sites in a hostile environment under extreme pressure.
Any delays would hold up BPs operational start date.
Within 11 days of contract award, Hermes started work
on the priority installations. Within two weeks all work
was complete, and the fully managed network was opera-
tional, allowing BP to move forward.
The project
The project consisted of installing 21 sites across
Rumailah, including life support camps, de-gassing
stations, and rigs. The network required Internet,
data, and voice capabilities over a fully mesh-managed
VSAT network using SkyFlex technology. SkyFlex is built
around the Comtech SkyWire MDX420 platform, which
provides the core time division multiple access connec-
tivity for remote nodes. Hermes BUC and LNB devices
provide the broadcast and receiver capabilities, with
Cisco routers providing the additional back-end man-
agement capabilities that enable companies to prioritize
and direct data, voice, and video traffic.
SkyFlex provides a comprehensive mesh TDMA solu-
tion enabling oil and gas companies to experience reli-
able, cost-efficient data and voice connectivity across a
number of remote sites within a country or region
where there is little or no fiber-based infrastructure.
According to Green, the team worked to ensure the
tight deadlines were met. The company faced pressure
because there was a significant rise in the number of
personnel who would require early use of the service
during the ramp-up to operations.
The first contract consisted of setting up 7 Mb of
satellite availability at 15 sites on Ku band, providing
connectivity for two life support camps and 13 rigs and
degassing stations. A second contract was awarded two
months later for a further six sites, again on 7 Mb Ku
band, for more rigs and degassing stations.
Complex logistics
The logistics of such a contract in Iraq were also chal-
lenging. A typical visit to a rig site in Iraq involves a lot
of planning. Shipping routes have to be adapted to
accommodate the size of the equipment and bypass
potentially hostile threats in the area of operations.
digital
OIL FIELD
Bridging the communication gap
in Iraq
Even hostile environments can be wired for operational needs.
David Allen, Hermes Datacomms
Dual satellite dishes provide full redundancy for the BP camp in
South Rumailah, Iraq. The dish in the background works on KU band
skywire technology providing 9 Mb of bandwidth, while the dish in
the foreground provides C Band 4 Mb upload/16 Mb shared down-
load across the camp in South Rumailah and the camp in North
Rumailah. (Images courtesy of Hermes Datacomms)
18-22 DOF-Hermes_18-22 DOF-Hermes 2/23/12 10:30 AM Page 18
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March 2012 | EPmag.com 20
Pre-visit briefings are held to ensure security team mem-
bers are aware of what is happening in the area; intelli-
gence reviews are carried out to identify any recent
incidents or threats; and safe accommodation is
arranged in the area, normally at the US military
base, although in this case the base had a record of
coming under fire.
When personnel are out on the ground, pre-deploy-
ment briefings are held to train personnel on what to
do in the event of a road side bomb or small arms
attack, Green said. We provide B6 armored vehicles,
and the personnel are accompanied by security compa-
nies, which cost around US $4,400 per day, to ensure
that all possible actions have been taken to keep person-
nel safe. We insist on everyone wearing bullet-proof jack-
ets and helmets.
BP awarded Hermes additional contracts to provide a
fully redundant VSAT system across its critical sites using
C and Ku band satellites, different teleports, and last-
mile routes that were on a separate infrastructure. This
system utilized EIGRP technology so that both VSAT sys-
tems were utilized to their full potential. Load sharing
was fully maximized to ensure all bandwidth was being
used. This means the client was not paying for band-
width in place in case of a critical failure on one of the
selected satellites.
Growth potential
Hermes has been operating in the Middle East for more
than 10 years, with an office in Dubai established in 2008
to meet the growing demand within the region and to
enable the company to provide its regional customers
with more in-depth, direct, and extensive support.
Kevin Thorley, Hermes CEO Middle East, said, We
expanded our Middle East office with a dedicated team
of engineers and a 24-hour help desk. From an office of
just two in 2008, we have now grown to 22. We see
tremendous growth in Iraq and across the region in the
next five to 10 years. Our mission is to ensure that we
are not only effectively established within the region,
but that we also are continuously developing and
strengthening our offering to cater for future demand.
The oil and gas companies are not just looking for
a VSAT provider; they are looking for a company that
offers an integrated solution, Thorley said. We are
working with partners to make sure we deliver turnkey
projects that would involve fiber and last-mile access in
addition to VSAT, fixed, mobile, and microwave services.
Technicians work at one of the Hermes network operation cen-
ters providing international coverage for all regions.
digital
OIL FIELD
EPmag.com | March 2012 21
Our approach is to manage the network end-to-end,
including licensing and logistics at both ends of the
satellite link. Partnerships with companies in Iraq
are helpful when attempting to establish operational
projects, he added.
One such company was Comtech EF data.
Comtech EF Datas Advanced VSAT Solutions
portfolio provides high-performance satellite-based
communication solutions for a diverse range of
applications including mobile backhaul, maritime
and offshore networks, corporate and enterprise
network, and emergency and disaster recovery.
Green has now been appointed head of security
and operations in the Middle East for Hermes. In
his new role Green is responsible for the security of
all Hermes personnel within the Middle East. He
implements audits on security companies, organizes
accommodation and methods of transport, and
liaises with client security companies.
More and more expats are visiting sites in Erbil in
North Iraq down to Umm Qasr in Southern Iraq,
Green said, and there is a need for command and
control for those personnel visiting these areas. It is
about mitigating threats of attack and being confi-
dent that all personnel can operate as safely as possi-
ble within these regions.
De-oiling of drain water with
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engineering for a better world
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pstream production operators face an assortment of
challenges when it comes to optimizing their facili-
ties. Increased maintenance costs, geographically dis-
persed operations, and day-to-day production challenges
all impact the bottom line for facilities. To complicate
matters, the use of modern technology, including subsea
tiebacks, flexible risers, and nonassociated field produc-
tion, has introduced new challenges such as increased
slugging, instability, and changes in the gas/oil ratio.
In other process industries, many facilities are leverag-
ing advanced process control tools such as model pre-
dictive control (MPC) to increase production rates,
decrease operational costs, and optimize facility opera-
tions. Recently, some of the more
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begun to follow the lead of other
industries and are deploying MPC
technology in their production assets
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Small production increases can
have huge benefits, and new opti-
mization techniques that maximize
production rates and enhance opera-
tions can significantly improve an
operations bottom line. Most assets
enable easy implementation of MPC
technology over the top of existing
controls infrastructure, which can be
accomplished for relatively little
investment when compared to alter-
native improvement options like
equipment upgrades.
MPC in upstream operations
As an IT-based technology, MPC is suitable for remote
collaboration and multi-asset scenarios that enable more
sophisticated optimization, improving productivity levels
across the whole asset supply chain.
MPC also can stabilize production and greatly reduce
the number of production trips. As a result, it should be
on the change management checklist for any facility or
asset transitioning to remote operations.
MPC can help optimize many aspects of facility opera-
tions, including:
Better operation of topsides, resulting in
reduced backpressure and increased production
at the wellhead;
Reduction in energy consumption, which
significantly reduces GHG emissions and carbon
tax payments;
23
digital
OIL FIELD
MPC technology optimizes
production in remote locations
Advanced process control tools can help facilities increase production, remotely collaborate
to improve issue support, and reduce operational costs.
B.A. Coward and John Colpo,
Honeywell Process Solutions
Advanced process control technologies for
offshore production facilities help decrease
operational costs and improve production.
(Image courtesy of Honeywell)
23-28 DOF-Honeywell_23-28 DOF-Honeywell 2/23/12 10:31 AM Page 23
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weatherford.com
r
ye
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Total Depth
digital
OIL FIELD
Mitigation of slugging and stabilizing production to reduce the num-
ber of topsides facility trips;
Optimization of gas lift rates in real time to achieve maximum liquid
production rates per well;
Optimization of constrained gas lift supply to achieve maximum pro-
duction across wells; and
Modulation of well production in excess of topsides capacity to
achieve maximum liquid production in gas/condensate fields.
The flexibility of MPC makes it a useful fit for many scenarios and can
help facilities increase production, remotely collaborate to improve issue
support, and reduce operational costs.
Challenges in slugging
Slugging flow regimes present a constant challenge to upstream operators
by creating periods of constant all-liquid or all-gas flow for equipment
designed to handle a continuous, three-phase flow of oil, gas, and water.
Terrain with subsea tiebacks used for production can cause this slugging
regime. Changes in a reservoir production profile can do so as well by cre-
ating specific conditions for the aggregating flow, which causes slugging.
Traditional ways to prevent slugging include controlling pressure pulses
from risers to avoid fluid agglomeration or controlling the riser choke
valve to stop gas and liquid slugs from arriving rapidly in the separator.
However, MPC technology presents an alternative option and can opti-
mize level control valves to improve the ability of separators to handle
surges in volume.
Remote support for geographically dispersed operations can optimize workflow at
upstream facilities.
1W
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drive from drillpipe to casing,
enabling simultaneous
rotation, reciprocation/
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of the casing string.
Drilling-with-casing (DwC")
systems can drill . run, set and
cement casing in a single trip. DwC
technology eliminates the risks of
tripping pipe and BHAs and protects
against drilling hazards with casing in
the hole all the way to total depth ( D).
Performance-matched Technology
Our Tactical Technology can be employed
in virt ually any drilling environment.
Equipped with an application-specific
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enhances safety and wellbore integrity and
reduces nonproductive time . Our Deft'er'
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penetration rates and durability in a wide
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digital
OIL FIELD
In any normal upstream production site, hydrocarbon material moves
through the sequential stages of three-phase separation, with each separa-
tor feeding the next. Each operates at a lower pressure, evolving more gas
and removing water from the reservoir fluids. Subsequent separators are
typically smaller than the preceding one, which results in level control
problems. Level control algorithms on the separators are typically tuned
for tight level control and maintain level stability at the expense of the out-
flow of liquid especially when the inflow of liquid is highly variable, such
as in a slugging situation. This results in rapid level fluctuations and regu-
lar trips in the last stage of separation.
MPC technologies can balance the inventories across the separators by
optimizing the level control valve position. This, in turn, can model and
control the relationship between the second- and third-stage separators,
which enables smoother and easier management of inventory across the
process. In advance of a slug of material arriving in the separator, the MPC
algorithm can reduce the level in the separators to accommodate the surge
in volume without approaching any of the trip limits. This results in defer-
ment reductions and production increases.
Providing support remotely
Upstream operations, as in any industry, need support and maintenance to
continue to operate as designed. Oftentimes, applications reside in remote
oil production sites, which can make maintenance a challenge. However,
the growth of remote access technologies now makes it possible to virtually
bring experts on site to provide issue support no matter how far or
remote the site is.This enables experts to serve more sites.
Leveraging this type of technology also enables experts to provide sites
with the right information at the right time to improve overall operations,
and facilities can achieve several objectives, including:
Increasing worker safety by keeping personnel out of harms way, both
at the operating facility and en route to and from the site;
Improving staffing and retention through work location flexibility;
Deploying expertise over multiple operating assets and avoiding time-
consuming trips to specific sites; and
Sharing best practices and centralizing expertise.
Implementing remote collaboration services correctly can achieve these
objectives and lead to significant increases in production, recovery, and
productivity.
Doing more with less
Challenges associated with slugging are just one of many optimization
issues that upstream facilities face on a daily basis. And production com-
plexes are often spread over vast geographical distances and hazardous
environments, so sharing best practices and receiving maintenance sup-
port can be troublesome.
With the availability of advanced process controls and remote collabora-
tion, optimizing production and collaborating across physical distances is
much simpler. Leveraging these technologies and services can help facili-
ties improve production capabilities and mitigate operational costs while
adequately addressing the challenges of diminishing resources and work-
force expertise.
TRANSFORMATION
- TIME FOR
DECISIVE ACTION
SPE Intelligent Energy
International 27-29 March
2012, is the world's leading
event examining and advancing
ways in which upstream
it & gas companies can
maximise efficiency and
optimise production through
streamlined processes,
innovative technologies and
integrated operations.
vwwd. i ntelligentenergyevent.com
Organised by
7 C
p
ie
SPE Intelligent Energy
27-29 March
Intemational 1 2012
M
A client in North Texas contacted Baker Hughes to acquire reservoir
data while drilling in their Barnett Shale operation.
ri.a
BAKER
HUGHES
we are the people o
Baker Hughes.
and we helped our
IF
client optimize their
operation through
accurate data acquisition.
Using the Baker Hughes StarTrak'"' high-definition imaging tool at normal
drilling ROP and RPM, we provided the client with a fully interpreted,
high-resolution wellbore image log of the reservoir. When compared to
3D seismic data, the StarTrak image identified previousl y undetected
wellbore faults, allowing the operator to adjust their completion strategy
for improved fracturing efficiency and enabled them to enhance the
construction of future wells in the area .
www.bakerhughes.com
2 2012 Baker Hughes Incor porated. All Rights Reserved. 32034
To find out how our data acquisition
technolog ies can help you identify your
reservoir 's characteristics and enhance
the recovery process for the life of
your well, contact your Baker Hughes
representative or visit us online.
YOU
w?-??w?r str RA
, ?v
N
Will
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1Q
f
As a result of continuous improvement and
innovation combined with technical and operational
experience, we are providing the market with
suprcmc surveys and ghost frcc data from the
broadest bandwidth available.
With a global position, local presence and a strong
and viable business model , our focus is to explore
and utilize the possibilities of today's market , to
the benefit of our clients business.
We take great pride in our achievements, knowing
that the strong will and ability that made us the
company we arc today will keep us continuously
focused and competitive in the future.
And most importantly; we always work tirelessly to
be your first choice.
A Clearer Image
www.pgs.com
y 5
??
Delivering results
O
nce in awhile a company comes up with a concept
thats so unusual that its considered disruptive.
The rationale, seemingly, is, Its so crazy it might just
work! And often it does.
Take Advanced Seismic. Company founders John
Almon and Leron Wells teamed up to develop a Win-
dows-based seismic processing suite that would provide
full integration from the cluster, the desktop, and the
Cloud using Microsofts 2008 server stack. While shop-
ping the concept to potential customers at a recent
trade show, they happened on a novel idea why not
sell the computing time and give the software away?
We are not talking about cheap software here. The
reverse time migration (RTM) algorithm, for instance,
can cost upwards of US $1 million to purchase, a daunt-
ing figure to a tiny processing shop. With Advanced Seis-
mics approach, these shops get expensive algorithms for
free, paying as they go only for compute cycles.
Its different because many of these companies cant
absorb the risk of buying expensive hardware and soft-
ware up front and then not knowing if theyre going to
get the processing jobs, Almon said. Our business
model is going to reduce the overall risk for the process-
ing companies.
Almon and
Wells began writ-
ing software and
developed a set
of technologies
to process data
with compute
power on
demand. The
Microsoft platform
allows small companies to scale
up to the Cloud in a streamlined fashion.
Instead of having 1,000 nodes for two to three
weeks, they can now run the job on 5,000 or even
10,000 nodes and have the job finished in an hour,
Almon said.
The company has adopted a service-oriented architec-
ture to ensure only computational sets get sent up by the
cluster for computation on the Cloud. No data is stored
on the Cloud, and that solves the security issue, he said.
Data are distributed across all available nodes, whether
theyre cluster-based, desktop-based, or Cloud-based.
What really sets Advanced Seismic apart from the com-
petition, Almon said, is the Windows integration piece
that also can run Linux code on the back end. A lot of
people have the science, he said. Its the modern Win-
dows-based GUI thats a leap forward with the 20- or 30-
year-old software thats out there.
And because its an open platform, we can take any
science and plug it into our system. This enables people
to take their code and very easily plug it in. Our system is
modular and open.
The company also is taking advantage of GPU comput-
ing, running both its RTM and radon demultiple algo-
rithms on GPUs. This helps streamline data processing.
If youre doing parallel programming, where every
core can process a stream of floating point numbers, you
have orders of magnitude difference in the ability to
process certain algorithms, he said.
In Almons mind, the data processing industry is more
than ready for this type of change. Theyve got a code
base thats so old, he said. It was written for UNIX
when memory was at a premium. Nowadays, storage is
cheap, memory is cheap, and hardware is cheap.
Its time for the industry to see something new and
refreshing. Even if people dont buy our software, I think
were shining a light on the darkness
of historical platforms that need to
be refreshed.
For more information, visit
Advancedseismic.com.
Data processing meets
Cloud computing
A new company is standing conventional seismic data processing on its
ear by offering its software for free.
EPmag.com
RHONDA DUEY
Senior Editor
rduey@hartenergy.com
29
exploration
TECHNOLOGY
29-30 ExpCOL-MAR_29-30 ExpCOL-MAR 2/23/12 10:31 AM Page 29
29-30 ExpCOL-MAR_29-30 ExpCOL-MAR 2/23/12 10:31 AM Page 30
CLEANER. FASTER. SMARTER.
Successful in over 600 North American wells, the Evolution
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the value we deliver to our customers. Hel
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CONSTRUCTION
A
mong the many presentations, case study
discussions, and overall swap of information
at the annual SPE Hydraulic Fracturing Conference,
held Feb. 6-8 in The Woodlands, Texas, the showcase
was the expanded availability of both proven and
newly designed technologies targeting the comple-
tions market.
Current estimates expect completion expenditures
to represent about 50% of overall well cost. Still quite
young by oilfield standards, hydraulic fracturing in
shale developments has opened a door for many tech-
nology companies as they continually develop newer
tools and improve on older designs through
research and development efforts.
From the show floor, one trait was
common everyone wants to do it
better. This improved potential
arises from several perspectives.
Doing things better can
imply lower cost, higher effi-
ciency, and relatively less
pressure on the natural envi-
ronment either through
safer chemicals, water reuse,
or decreased footprint
through better designs.
Halliburton stood out with its
Frac of the Future model.
Automation has now entered the
pumping operation in a new way. Sand
and proppant are necessary elements that
often are trucked in and stored in tanks onsite.
These take up space. Halliburton has designed what it
refers to as sand castles. Trailers have been designed
and outfitted with a hydraulic foot that, once on site,
can stand the storage unit on end. By grouping these
tanks in a tight, made-to-fit formation, the company
hopes to dramatically decrease the footprint of its stan-
dard pumping operations.
With so many components and parts to the process,
fracturing technology appears to be in bloom. The
advantage of having it housed into one conference
comes from seeing how these various parts come
together to make a whole.
The list of new advances made available at the con-
ference is too broad for a single page, but read-
ers will find many of these technologies in
the pages of E&P over the next few
months.
Now held annually, the confer-
ence will continue to display
the rapidly expanding applica-
tion of hydraulic fracturing.
Without doubt, fracturing
has revolutionized the shale
industry. While many of the
lessons learned are from
North American operations,
this technology is enabling
further shale developments
abroad. In Argentina, activity is
ramping up. Poland has been a
frontrunner for European shale,
although it is still in the proving stage.
Regardless, hydraulic fracturing has increased
in prominence. Despite the surrounding controver-
sies, it has found some stability in the shale market.
Much like deepwater operations, fracturing will con-
tinue to be refined as more operating companies
come to depend on its benefits. The
more this technology is high-
lighted, the sooner companies
will continue to build on
what has already been dis-
covered.
Fracturing technology
is in the spotlight
Given the wide array of available tools and services, fracing technology
is a major focus for many E&P companies.
EPmag.com
TAYVIS DUNNAHOE
Senior Editor
tdunnahoe@hartenergy.com
31
Doing
things better
can imply lower cost,
higher efficiency, and relatively
less pressure on the natural
environment either through
safe chemicals, water reuse,
or decreased footprint
through better
designs.
31-32 WellConstruction-MAR_31-32 WellConstruction-MAR 2/23/12 10:31 AM Page 31
31-32 WellConstruction-MAR_31-32 WellConstruction-MAR 2/23/12 10:31 AM Page 32
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33
I
ts not often a conference presentation gets an audi-
ble gasp from a battle-hardened audience, but thats
what happened during a talk that highlighted a dark
truth about the E&P business.
The subject of cost overruns on major projects is a
sensitive one and not normally a favorite conversation
topic in the upstream business. So it was laudable of
Chris Bird, technical director at Centrica Energy, to
highlight at the Subsea 2012 event in Aberdeen how
badly the sector is doing in some cases. Actually, in
rather a lot of cases.
The numbers speak for themselves, and at first, it
sounds good. In 2012, oil and gas capital expenditure
is estimated to be between US $500 billion and $600
billion. There has been a fourfold increase in capex in
the last 10 years alone. This year, compared to 2011,
national oil companies, which make up 50% of mar-
ket spend, are forecast to boost capex 15%. Independ-
ent oil companies, which make up 15% of market
spend, are expected to increase capex 21% year-on-
year. Integrated oil companies, with 35% of market
spend, are expected to raise capex 8%.
So it should be of extreme concern that 28% of
all last years large projects ran more than 50% over
budget, according to Bird.
Its been a worsening trend over the last 15 years in
1997, the percentage of large projects going more than
50% over budget was 10%. In 2005, it had risen to 15%,
and last year, it was 28%. By 2015, it is predicted to be
even worse, he said.
Project size plays a part as well. The figure for $5
billion-plus world class projects going over the 50%
mark is around 35%, while for those under $5 billion
the figure is around 25%.
Bird also highlighted that more than 70% of projects
fail to meet customers expectations.
How can an industry that prides itself on its expertise
and project management skills be so wide of the mark?
The key causes, according to Bird, are:
People & Organization. The difficulty of matching
the right skills with the right project challenges and
geography;
Technical Challenges. Operators tackling technology
challenges they are not equipped for; and
Governance. Top-down targets affecting project deci-
sions quality and accountabilities and objectives not
well-aligned across project phases.
He also mentioned the challenging global business
environment, the growing complexity of projects, peo-
ple more than access to capital becoming the bottle-
neck, and a supply chain that is stretched in many areas.
Theres not enough room to go into the solutions
he outlined as Centricas short-term priorities for
delivering world-class capital project performance. In
a nutshell, however, it came down to this: The indus-
try needs to take another look at how it delivers capi-
tal projects in the wider sense, considering how it
manages the business as well as the project; the
biggest issue is access to the right level of resources
with the right competency, capability, and capacity to
deliver effectively. The industry also needs to look at
potential future trends and ensure it has the best strat-
egy for the supply chain from a contractor manage-
ment and relationship management perspective. And
it needs to examine how it works together harnessing
the power of teams to deliver high performance in the
development phase.
Bird added that the industry needs relentless
focus at the development phase pre-final
investment decision.
For the E&P industry to do any-
thing other than try to turn
around this apparently spend-
thrift behavior would surely be
almost criminal.
production
OPTIMIZATION
A capital idea
Lets stick to the budget
Nearly 30% of large E&P capex projects suffered 50% cost overruns last
year, and the figure is still rising.
EPmag.com
MARK THOMAS
International Editor
mthomas@hartenergy.com
33 PRODcol-MAR_33 PRODcol-MAR 2/23/12 10:32 AM Page 33
34
A
chieving first production is the end goal for the
entire drilling process. The gap between spud and
total depth (TD) is a defining success factor for opera-
tions onshore and offshore. As operators continue to
push the envelope of viable production targets, technol-
ogy companies continue to set the pace for how deep
and soon a well can be drilled.
As tools become better defined and new parameters are
set, the cycle time for most drilling projects continually
decreases. And, in many cases, many tools and processes
become standard operating procedures once they are
proven in the field to be a viable way of reaching produc-
tion safer, faster, and with fewer costs related to nonpro-
ductive time (NPT).
In North America and abroad, several record-setting
applications have shown how operators are investing more
in advanced technology to save on overall project costs.
Hybrid technology
The benefits of combining multiple qualities into one
component or machine can create improved performance
without necessarily reinventing the wheel. Although the
concept was not new, Baker Hughes recently commercial-
ized its old idea of manufacturing a hybrid drillbit to com-
bine roller cone and PDC technology to produce a hybrid
bit with maximum durability and cutting efficiency in
tough and challenging applications compared to conven-
tional bit technology.
An operator in Norway contacted the company for
assistance with a planned exploration well containing a
demanding basalt interval.
While basalt drilling is uncommon in conventional
wells, Baker Hughes saw the Kymera hybrid drill bit as
ideal for this application. To validate the bits ROP and
its durability in igneous rock, the company identified a
potential geothermal application for a field test.
Baker Hughes drilled two different sections in the geot-
hermal test, 17-in. and 12-in., for a total of two runs
using the hybrid drill bit technology. Historically, the bits
used in the offset geothermal offset wells would drill to
TD but with reduced ROP. The driller achieved an aver-
age ROP of 10.8 m/hr (35.4 ft/hr) in the 173-m (567.6-
ft) 17-in. section to TD of 270 m (885.8 ft), which was
almost three times faster than runs in offset wells.
The company had proven that PDC bits were a viable
option in an Icelandic basalt application in a previous
12-in. run. However, controlling downhole vibration
was a challenge that resulted in severe cutter breakage
and overall reduced the cost saving potential compared
to conventional roller cone technology. The team used
the Kymera hybrid bit on a steerable motor and was able
to control ROP by reducing weight on bit (WOB). The
team drilled the 12-in. section 487 m (1,597 ft) to TD
with an average ROP of 21.3 m/hr (69.9 ft/hr). With
the resulting reduction in vibration, both Kymera bits
experienced minimal wear, proving the value of the
COVER STORY:
DRILLING ADVANCES
New bits,
technology
raise bar
on drilling
performance
Tayvis Dunnahoe, Senior Editor
Improvements highlight benefits of
advanced technology globally.
34-41 COVER-DRILLbitrecords_Layout 1 2/23/12 11:34 AM Page 34
PDC and roller cone concept in basalt-like formations.
The 12-in. interval achieved its directional objec-
tives, including build inclination from 0 degrees to 35
degrees. Drilling parameters were held back for both
sections to manage well integrity, yet the Kymera hybrid
bit drilled more than twice as fast as premium roller-
cone bits compared to offsets.
Shale development, proving ground
The vast amount of growth experienced in North Ameri-
can shale plays has provided ample room for a number
of record-setting achievements. Extended-reach drilling,
multilateral well bores, and building curve from vertical to
horizontal are not as challenging as they once were. How-
ever, continuous improvement is required to maintain low
costs while drilling. Reducing cycle times brings on the
completion stage sooner, which can account for around
50% of a well cost in most unconventional shale plays.
Bits are big news in the unconventional market.
Ulterra recently set a footage record for Roger Mills
County in Western Oklahoma with its new 12-in.
U616M six-blade matrix PDC bit using 16-mm cutters.
The bit drilled 2,153 m (7,065 ft) from surface casing
down to a depth of 2,474 m (8,115 ft) for an estimated
cost savings of US $44,500 versus the closest offset. This
savings increased to $88,500 when compared to the aver-
age of five offset wells. The companys latest generation
U616M is the result of extensive bit design and cutter
COVER STORY:
DRILLING ADVANCES
The Kymera, a hybrid drill bit using both roller cone and PDC
technology, drilled more than twice as fast as premium roller-
cone bits in a basalt formation in an Icelandic geothermal
application. (Image courtesy of Baker Hughes Inc.)
34-41 COVER-DRILLbitrecords_34-41 COVER-DRILLbitrecords 2/23/12 10:32 AM Page 35
SURFACE SYSTEMS
Frac Fact #1:
Valves
get the most wear and tear
in frac service
,
but do notget
the care they need.
With Cameron
'
s FracServ
"
program,
you get peace of mind.
4
'
a
Cameron's frac valves come with the industry's
most comprehensive care and maintenance.
Documented maintenance h story
Complete teardown, cleaning and inspections
Comprehensive care for optimum uptme
R A I S I N G P E R F O R MA N C E . T OGE T H E R T M
www.c-a-m.com/fracfacts
CAMERON
36
testing in the Granite Wash play and has continued to
set records in the area.
In January, the companys U616M 8-in. bit drilled
from surface casing to TD at a record pace of 28 m/hr
(93 ft/hr) in the Eagle Ford. The vertical, curve, and lat-
eral all were drilled with the same bottomhole assembly,
which reached TD without a trip out of the well. In all, it
took only 107 hours to drill 3,035 m (9,953 ft), represent-
ing a time savings of 37.5 hours over the fastest offset of
144.5 hours. Cost savings were estimated at $77,566 versus
the direct offset and $133,024 compared to the average of
five competitor offsets.
The bit was designed to increase slide efficiency and
reduce unnecessarily high slide percentages. It maintains
sharpness throughout all three drilling intervals, thereby
minimizing torque fluctuations and resulting in better
toolface control, minimized bit-induced stick-slip, and
reduced impact damage.
In the Bakken, Halliburton raised the bar for lateral
drilling. On a Williams County, North Dakota well, the
companys 6-in. FX64 drilled the entire 3,055 m (10,019
ft) of the lateral section on a high-speed motor to a TD of
6,316 m (20,709 ft) measured depth (MD) in only 95
hours. This proved to be the fastest lateral among the off-
sets with an average ROP of 32.1 m/hr (105.4 ft/hr).
This bit was the first to drill the entire lateral section, and
its performance provided the lowest cost-per-foot among
similar offset runs.
Longest running deepwater MPD
Drilling technology also is advancing offshore. In the
Makassar Straits of Indonesia, Weatherford in conjunc-
tion with Transoceans GSF Explorer has mounted what is
now the worlds longest running deepwater managed
pressure drilling (MPD) project.
Installation of the first MPD system integrated into a
marine riser below sea level provided a flexible solution
that enhanced drilling capabilities across multiple sec-
tions throughout the drilling campaign. The MPD system
improved safety and efficiency through early kick detec-
tion and control, riser gas handling, and two variants of
MPD: constant bottomhole pressure and pressurized mud
cap drilling. Constant bottomhole pressure is used in nar-
row margin drilling scenarios, and pressurized mud cap
drilling is used in total lost circulation conditions.
The companys deepwater MPD system is installed
above the intermediate flex joint in the riser and below a
standard slip joint. As a result of this configuration, the
riser can be used in a conventional manner with full-bore
access to the well. The entire system is installed through
the rotary table when the riser and BOP are deployed.
The 12-m (40-ft) MPD system provides riser gas han-
dling and early kick detection/control in drilling sections
when the BOP is connected to the well. The riser MPD
assembly used on the GSF Explorer comprises three main
components: the flow spool, operational annular preven-
ter, and rotating control device (RCD). The flow spool
provides the connection for the flowlines from the top of
the riser to the MPD manifold. Two 6-in. flowlines are con-
nected at the moonpool to allow returns to flow through
the MPD manifold to the shale shakers and mud pits. A
COVER STORY:
DRILLING ADVANCES
Managed pressure drilling is enabling drilling operations in oth-
erwise undrillable conditions while improving safety and effi-
ciency. (Images courtesy of Weatherford International)
COVER STORY:
DRILLING ADVANCES
21-in. subsea annular BOP is installed above the flow
spool. The annular BOP allows riser gas handling. If a kick
is detected in the riser, the annulus can be closed to pro-
vide controlled handling of a riser influx through the flow
spool and back to the surface. The Weatherford Model
7875 Below Tension Ring Seashield RCD is installed on
top of the annular BOP in the MPD riser joint. This RCD
enables pressure control for annulus gas containment and
drilling operations. Its principle use is to provide an annu-
lar seal around the drillpipe during drilling and tripping
operations. The inside profile of the RCD includes a
hydraulic latch assembly to receive, retain, and release the
bearing seal assembly. With the bearing seal assembly
removed, the 2,000-psi RCD system is capable of handling
the full-size 18-in. BOP tools.
This RCD currently is the only one in the world that can
be installed in a deepwater marine riser and support the
riser tension requirements while conforming to API 16
RCD drillthrough specifications. The ability to put the
RCD in tension with the riser allows it to become a stan-
dard component of the riser and enables installation
below the conventional slip joint.
Weatherford commissioned its MPD package in March
2010. As the project is nearing its two-year mark, the com-
pany is currently drilling the fifth well for the consortium.
Deepwater MPD using this configuration will soon be
deployed in Brazil as well as the West Coast of Africa, said
David Pavel, director business development, Drilling Opti-
mization Services, Weatherford. The diversity of E&P
operators using and requesting this technology in deep
water is evidence that there is a need for this key enabler.
At its onset, only one operator in the consortium agreed
to use Weatherfords system. The others were in a wait and
see mode, Pavel said. Upon initial success, the majority of
the consortium contracted the technology and the project
has continued for two years with additional wells to come.
Weatherfords project has confirmed the viability of key
technologies that comprise this system. Operators in the
consortium are evaluating other deepwater basins in
which to deploy this technology, Pavel said.
SURFACE SYSTEMS
Frac Fact #2:
The frac valve seal surf ace condition
goes unaddressed in typical
` f lush and test
"
maintenance.
wxaz
At Cameron, all seal surfaces are inspected
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fob.
Look to Cameron for the industry's most thorough
OEM rental , tracking and maintenance program.
l' aceabi l ty and repair hist ory
Fully verified tearcown, cleaning and inspections
Optimized integrity, reliability and peace of mind
R A I S I N G P E R F O R MA N C E . TOGETHER
TM
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CAMERON
38
COVER STORY:
DRILLING ADVANCES
H
ow the world has changed. One year ago, the Gulf
of Mexico (GoM) limped along at 46.5% utilization.
But utilization rose to 61.7% in January, the second
month in the last three that has witnessed utilization
above the 60% marker.
GoM utilization is up 10% since the most recent low
in August 2011. While the return to deep water is a fac-
tor, a second theme involves an improving jackup mar-
ket. Jackup utilization is up 13% to 56% since the low in
September 2011.
Furthermore, a boatload of recent transactions point
to a more active shelf in 2012. The surprise deal to
date is SandRidge Energy Inc.s US $1.275 billion take-
out of privately held Dynamic Offshore Resources LLC.
The transaction came out of left field for SandRidge,
the Oklahoma City company that got its start drilling
tight-formation gas wells in far West Texas.
SandRidge, fresh off a $1 billion joint venture with
Spanish multi-national Repsol, has pivoted to an oil-
focused onshore portfolio over the last two years with
transactions in the Permian Basins Central Basin Plat-
form as well as an aggressive campaign to amass acreage
in the Mississippi lime carbonate play along the Okla-
homa/Kansas border.
The Dynamic deal also was a surprise in part because
SandRidge had been scrambling to amass the capital
necessary to move forward with its ambitious onshore
oil development programs. Dynamic contributes pro-
duction of 25,000 boe/d (50% oil) from fields it oper-
ates in water depths less than 100 m (300 ft) offshore
Texas, Louisiana, and Alabama, and the company adds a
completely different aspect to the SandRidge portfolio.
The Dynamic acquisition is expected to generate
enough free cash flow to underwrite SandRidges
onshore efforts.
The SandRidge deal follows a proposed joint venture
between Saratoga Resources Inc. and McMoRan Oil and
Gas LLC for ultra-deep rights over a combined 10,000
acres targeting shelf Lower Tertiary targets, including
Saratogas Long John Silver prospect in the Vermilion
16 field in Louisiana.
Meanwhile, those ultra-deep subsalt shallow shelf wells
face several upcoming milestones even as the concept of
targeting Eocene and Paelocene objectives below the
salt weld expands beyond the shallow shelf. The
McMoRan-led group spudded an 8,845-m (29,000-ft)
onshore well in Cameron Parish, La., in December.
Curious about the price tag for those ultra deep sub-
salt shelf tests? To date, the McMoRan posse exceeds
$118 million for just three of the ultra-deep tests.
Elsewhere in the Gulf, Energy Partners Ltd. (EPL)
added to its core Main Pass 296/311 complex through
the $80 million purchase of Stone Energy Corp. assets
last October. The deal is a bolt-on acquisition for assets
EPL purchased from Anglo-Suisse Offshore Partners
LLC in February 2011.
Other evidence of a percolating shelf market includes
Quantum Energy Partners $300 million investment in
Houston-based Renaissance Offshore. The management
team plans to acquire and redevelop legacy oil produc-
ing properties on the shelf.
Additional GoM transactions are likely. Newfield
Exploration is looking at selling its Gulf assets in 2012.
New semisubmersible boosts fleet to 924
The global offshore fleet grew by one rig to 924 follow-
ing the delivery of a newbuild semisubmersible. How-
ever, contracted rigs fell by three to 664 as of the Feb. 3
reporting date.
Recent offshore data points show rig count expanding
in the Middle East and Asia-Pacific regions (up 14 rigs
combined in January), though rig count was off in Janu-
ary for Africa, Europe, and Latin America.
The tightest offshore market remains the North Sea at
96% utilization. Rowan Companies Inc. signed two new
North Sea contracts, including one with Xcite Energy
for a heavy-duty harsh-environment jackup to com-
mence development on Phase 1A of the Bentley field in
the UK North Sea.
The second contract covers a 15-well, $4 billion pro-
gram to develop the Luno oil field in the North Sea,
Transactions bring renewed life
to offshore drilling
The Gulf of Mexico and the jackup rig markets are the latest to exhibit evidence
of an improving 2012 offshore picture.
Richard Mason, Chief Technical Director, Upstream
34-41 COVER-DRILLbitrecords_Layout 1 2/23/12 11:37 AM Page 38
accessing a potential 186 MMboe in reserves after first
production begins in late 2015.
Similarly, Noble Corp. signed a $122,000/day,
one-year contract for the Noble Byron Welliver through
July 2013 in the North Sea. The new day rate marks
a 34% improvement over the previous charter. Noble
is reporting full utilization for its eight North Sea
jackups.
In other contract news, Atwood Oceanics Inc. will
relocate the Atwood Beacon jackup to offshore Israel on a
180-day contract at $151,000/day beginning in Septem-
ber. The new rate marks a $36,000/day increase, with
the operator paying for mobilization to Israel from its
current location in Latin America.
Offshore equipment manufacturers:
Record 2011 volumes
Combined new order volume fell sequentially to $3.6
billion during the fourth quarter for Cameron and
National Oilwell Varco (NOV).
Cameron, for example, reported a $6 billion
backlog at year-end. For 2011, Cameron experienced
a 35% increase in orders to $7.83 billion, a company
record.
NOV reported $10.8 billion in capital equipment
orders during 2011, outdistancing the companys previ-
ous high of $7.3 billion.
NOV completed one more acquisition in an effort to
build out its FPSO portfolio by acquiring NKT Flexibles
I/S for $670 million. NKT is a Danish manufacturer of
flexible pipe products and offshore production systems.
It is the third NOV transaction in the FPSO space over
the last 18 months.
Elsewhere, Sembcorp Marine will build a $792.5
million drillship for Sete Brasil Paraticipacoes SA. The
unit will be capable of operating in 3,000 m (10,000 ft)
of water and drilling to 12,200 m (40,000 ft). It marks
the first drillship order for the new Brazilian shipyard
as efforts expand in the development of presalt oil
fields.
EPmag.com
READ MORE ONLINE
There is more
to the story
SURFACE SYSTEMS
Frac Fact #3:
Sand and debris can
accumulate in frac service,
imp airing equipment operation.
Cameron gives fati gued frac valves the care
and maintenance they need to perform optimally.
`
.(dive history anc. irackinc
,
Thoroug h teardown , cleaning and inspections
Complete care for maximized frac time
R A I S I N G P E R F O R M A N C E . T OGE T H E R
TM
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e 11 111
It 11
CAMERON
Cameron conducts full teardown,
clean out and inspections.
40
COVER STORY:
DRILL BIT RECORDS
CUMULATIVE FOOTAGE
SIZE, IN. BIT STYLE TYPE FOOTAGE # RUNS LOCATION YEAR FIELD OPERATOR MANUFACTURER
3.25 Bicenter SRF3408M-A1-Z 6,554 6 North Slope Alaska 2012 Kuparuk ConocoPhillips NOV ReedHycalog
9.5 Bicenter QDMI4219PX 17,771 4 Santander, Colombia 2011 Multiple Multiple Smith Bits
9.5 PDC MDI519MHSPX 46,404 19 Veracruz, Mexico 2011 Multiple Multiple Smith Bits
9.5 Milled Tooth FDS 7,865 18 Yuma Co., CO, USA 2011 Multiple Multiple Smith Bits
10.25 PDC MDSI716TBPXCI 12,152 6 GoM, TX, USA 2009 Muliple Multiple Smith Bis
11 PDC M716VPX 58,709 24 Roberts Co., TX, USA 2010 Multiple Multiple Smith Bits
11.625 Milled Tooth XR+CPS 9,452 6 Kazakhstan 2010 Multiple Multiple Smith Bits
13.25 Bicenter QDR5316PX 6,889 4 Kern Co., CA, USA 2009 Multiple Multiple Smith Bits
14.5 Milled Tooth XR+ 11,237 3 Hidalgo Co., TX, USA 2010 Multiple Multiple Smith Bits
15.5 Milled Tooth XR+V 7,755 4 Irkutskaya, Russia 2011 Multiple Multiple Smith Bits
15.5 Insert GS10V 5,004 6 Krasnoyarskiy, Russia 2011 Multiple Multiple Smith Bits
16 Bicenter SHO716BPX 11,085 7 Brunei 2010 Multiple Multiple Smith Bits
16 Insert GS12BVQ 12,656 5 Kuwait 2010 Multiple Multiple Smith Bits
16.5 Milled Tooth XR+ 2,243 2 Turkey 2010 Multiple Multiple Smith Bits
17 PDC S519HPX 32,237 11 Turkmenistan 2010 Multiple Multiple Smith Bits
19.25 Milled Tooth DSJ 867 5 Krasnoyarskiy, Russia 2011 Multiple Multiple Smith Bits
23 PDC SI819VHBPX 2,089 2 Offshore, Egypt 2011 Multiple Multiple Smith Bits
26 PDC SI816PX 5,168 3 GoM, LA, USA 2011 Multiple Multiple Smith Bits
27.5 Milled Tooth DSJ 2,526 2 Malaysia 2011 Multiple Multiple Smith Bits
28 Milled Tooth MSDGH-7 7,339 5 Campeche, Mexico 2011 Multiple Multiple Smith Bits
30 Milled Tooth XR+VE 7,819 10 GoM, LA, USA 2011 Multiple Multiple Smith Bits
3 Bicenter SRR3408M-B7-Z 1,501 102.6 North Slope Alaska 2012 Kuparuk Conoco Phillips NOV ReedHycalog
3.25 Bicenter SRF3408M-A1-Z 919 69.6 North Slope Alaska 2012 Kuparuk Conoco Phillips NOV ReedHycalog
6 Bicenter MBC58 233 11.4 SAU 2010 ABSF Aramco Varel International
6.125 Bicenter MBC58 3,311 37.6 SAU 2008 Zulf Aramco Varel International
8.5 Natural Diamond K705TBPXXC 1,549 45.9 Waikato, New Zealand 2009 Rotokawa Mighty River Power Smith Bits
8.625 Natural Diamond K507QSTBPXC 883 7.7 Bryan Co., OK, USA 2011 Durant Wes XTO Smith Bits
8.875 Hammer H1512G1 1,511 302.2 Jackson Co., AR, USA 2010 B-43 Chesapeake Smith Bits
9.25 Bicenter PSDR5316S-A1 476 8.1 Northern Kuwait 2011 Mutriba Kuwait Oil Company NOV
sn E148002
9.625 Natural Diamond K705TBPXC 1,751 5.3 Caddo Co., OK, USA 2008 Verden Linn Operating Smith Bits
10.75 Bicenter PSDF4313M-A1 3,885 235.5 Bakersfield, Kern, CA, USA 2011 Elk Hills Occidental of Elk Hills Inc. NOV
16.375 PDC MDI619HSPX 4,182 213.3 GoM 2008 BHP-Billiton Smith Bits
18.5 PDC VTD619SH 4,707 81.76 MYS 2010 Bumi Carigali Hess Varel International
24 Milled Tooth XR+CPS 1,697 404 Deepwater, South East Asia 2008 Gumusut Kakap Sabah Shell Smith Bits
Petroleum Company
26 PDC SI816PX 3,327 173.6 GoM 2011 BHP-Billiton Smith Bits
34 Milled Tooth L3A 449 33.3 SAU 2010 HRDH Aramco Varel International
44 Milled Tooth L111 120 9.23 SAU 2011 ARBI-5 Aramco Varel International
3.25 Bicenter SRF3408M-A1-Z 1,709 52 North Slope Alaska 2012 Kuparuk ConocoPhillips NOV ReedHycalog
7.875 PDC MI616MNSPX 12,280 65.7 Hemphill Co., TX, USA 2010 Begert D10 Laredo Petroleum Smith Bits
8.25 PDC MDSI816LUPX 4,170 33.1 Iraq 2011 BP Smith Bits
8.625 Natural Diamond K507QSTBPXC 883 7.7 Bryan Co., OK, USA 2011 Durant Wes XTO Smith Bits
8.75 PDC MSi513 17,251 88.5 Fort Nelson Area - Horn River Basin 2011 Kiwigana EnCana Corporation Smith Bits
8.75 Natural Diamond K705BQTBPXC 3,257 17.4 Hemphill Co., TX, USA 2011 Himphill Devon Energy Smith Bits
9.5 Bicenter QDMI4219PX 7,473 80.4 Arauca, Colombia 2011 Cano Limon OXY Smith Bits
9.625 Natural Diamond K705TBPXC 1,751 5.3 Caddo Co., OK, USA 2008 Verden Linn Operating Smith Bits
9.625 Bicenter E1098-C1 3,973 110.4 Bakersfield, Kern, CA, USA 2011 Elk Hills Occidental of Elk Hills Inc. NOV
9.75 Hammer H1209D+ 5,155 122.7 Faulkner Co., AR, USA 2011 B-43 Chesapeake Smith Bits
9.25 Bicenter PSDR5316S-A1 476 8.1 Northern Kuwait 2011 Mutriba Kuwait Oil Company NOV
sn E148002
16.375 PDC MDI619HSPX 8,496 181.5 Gulf of Mexico (GoM) 2010 BHP-Billiton Smith Bits
17.5 PDC E1016 14,599 149 Sakhalin Island 2010 Odoptu ExxonMobil NOV
18.125 PDC MDI816LBPX 10,770 141 GoM 2010 BHP-Billiton Smith Bits
26 PDC SI816PX 3,833 118.4 GoM 2011 BHP-Billiton Smith Bits
28 Insert GS18BVQC 5,583 19.9 Kuwait 2011 North Kuwait Kuwait Oil Company Smith Bits
36 Milled Tooth XR+ 722 45.1 Comodoro, Chubut, Argentina 2009 YPF Smith Bits
44 Milled Tooth L111 120 SAU 2011 ARBI-5 Aramco Varel International
RATE OF PENETRATION
SIZE, IN. BIT STYLE TYPE FOOTAGE ROP, FT/HR LOCATION YEAR FIELD OPERATOR MANUFACTURER
SINGLE-RUN FOOTAGE
SIZE, IN. BIT STYLE TYPE FOOTAGE ROP, FT/HR LOCATION YEAR FIELD OPERATOR MANUFACTURER
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ntelligent energy technologies and solutions have come
through a tumultuous incubation phase over the past
decade to the point where they are now embedded in
many aspects of E&P operations.
However, there is still a spectrum of maturity levels
across the industry, from those still wrestling with adop-
tion to others who are exploring true business innovation
in this space. At present, even its most devout advocates
would admit there are still very few official standards that
have emerged, that the learning
curve for adoption has not
plateaued, and that infrastructure
and cultural inertia are still pres-
ent while the technology itself
continues to race ahead.
Many believe the oil and gas
industry is at an inflection point in
the cycle where decisions need to
be made on what defines the iden-
tity of intelligent energy, what cata-
lysts can propel it to a much wider
scale adoption, and whether it has
reached a plateau or the start of a
much broader journey.
These are key questions as the
industry moves forward and as
company leaders have very practical reasons for deploy-
ing intelligent energy concepts, technologies, and opera-
tions on oil and gas assets to address specific operational
issues and capture identified opportunities. There have
been many intelligent energy successes achieved, for
example, a growing and documented number of projects
benefitting from increased production, improved safety
performance, and reduced manpower.
But most agree that more needs to be done so that intel-
ligent energy concepts can help to maintain performance
levels in the face of todays significant operational pres-
sures and assist in the development of deepwater, harsh
environment, and remote resources that would otherwise
be technically or economically unfeasible.
This must be done at a time when the industry also is
dealing with skills shortages and the demographic change
to the next generation of its workforce as well as the
increased importance of cyber security in a digital world
and increasing regulatory scrutiny and requirements.
Digital enablement
According to Edwin Verdonk, vice president, Subsurface
Expertise and Technology Deployment at Shell, the indus-
try has a unique opportunity. While it is clear that our
industry has started along a path of transformation, it is
also clear that we do not yet share a common direction or
charter, he said. Operating and service companies devel-
oping the worlds resources today are all at very different
stages of digital enablement.
Many see digital enablement as
an intrinsic part of their technologi-
cal future but still struggle to articu-
late the business benefits and make
a case for investment and transfor-
mation. In this environment, we
have a unique window of opportu-
nity to transform the way we con-
duct and represent our business
before public opinion or govern-
ment regulations make those deci-
sions for us.
Verdonk said he wants the indus-
try to further explore what the
evolving digital hydrocarbon indus-
try will look like and how it can
accelerate the pace of implementation of intelligent solu-
tions, topics he will be raising in his role as co-chair of the
SPE Intelligent Energy International conference and exhi-
bition to be held March 27-29, 2012, in Jaarbeurs, Utrecht,
the Netherlands.
The event is well timed. Today the industry is in the
midst of another up cycle, albeit volatile, simultaneously
wrestling with a changing geopolitical landscape and sig-
nificant shifts in the regulatory environment. It also is in
an era of unprecedented change in technology espe-
cially in the areas of computing, telecommunications,
information, and social media. These changes are pro-
foundly affecting the choices of where and how the indus-
try conducts its business, allowing it to introduce business
models and workflows that can reduce human involve-
ment and accelerate automation of many critical activities.
42
INTELLIGENT
OPERATIONS
Growing up in the digital age
The industry needs to take decisive action if it is to take the next step and broaden its journey
toward widescale adoption of intelligent energy solutions.
Mark Thomas, International Editor
Many believe the
oil and gas industry is at
an inflection point in the cycle
where decisions need to be
made on what defines the
identity of intelligent energy,
what catalysts can propel it
to a much wider scale
adoption, and whether it has
reached a plateau or the start
of a much broader journey.
42-45 Intel-overview_42-45 Intel-overview 2/23/12 10:32 AM Page 42
REAL-TIME SERVICES
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Halliburton Consulting and
Project Management
You worry about safety and loss of well control . Delivering a well to plan. Decision support. Drilling
efficiency. And a lack of staff and communication. But not all real-time solutions are equally flexible
or effective. Vendor neutral , Halliburton offers customizable options that put your best interests
first . Ranging from basic well-site and downhole tool data streaming to business transformation ,
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What' s your real-time challenge ? For solutions , go to Halliburton .com/RT.
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Pa
er
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41
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44
But many fundamental challenges still remain:
Maintaining the safety and operational integrity of
facilities in ever harsher environments;
Pushing the frontiers of exploration and development
into deeper water, higher pressure environments,
more viscous oil plays, and sensitive areas such as arc-
tic developments;
Grappling with skills shortages and the demographic
change to the next generation;
Dealing with emerging economies such as China and
the increasing role of national oil companies versus
international oil companies;
Managing security in a digital world and coping with
cyber attacks;
Handling increasing regulatory scrutiny and require-
ments; and
Balancing manual control versus full automation.
Schlumbergers Sanjay Kanvinde is the chairman of SPE
Intelligent Energy Internationals program committee. He
described the industry as currently transforming itself
through three maturity stages:
Innovation. Companies start small-scale innovative imple-
mentations in an individual asset or region, usually
driven by local leadership. In many cases, technology or
service companies contribute to these specific successes.
These initial successes catch the attention of senior
management, and companies get organized to move to
the next stage. Often the leading asset or region contin-
ues to innovate with technology, processes, people man-
agement, and business models and feeds experiences
into the overall corporate program.
Adoption at Scale. In this stage, companies formulate the
corporate vision, align the initiatives with the business
strategy, and raise awareness about the programs. Exec-
utive leadership and support play a huge role in com-
mitting the organization to this transformative process.
The proper organization structure, change manage-
ment, and orchestration mechanisms are put in place.
Employees are trained and several large-scale pilots are
conducted to develop the standards and guidelines for
company-wide implementation. New internal and
external business models are developed to support the
implementations. The technology and service sector
gains confidence in the business potential and begins
to invest and proactively engage operators.
Sustainability. In this stage, companies create value at
scale through wide implementation of their intelligent
energy initiatives. Assets work in a highly integrated
manner, and intelligent energy practices become
business as usual, delivering a new level of perform-
ance. Business models and organization capabilities
continually improve to deliver sustained value.
Various companies, regions, and industry segments are
at different levels of maturity and are striving toward the
sustainability stage of making intelligent energy business
as usual, Kanvinde said.
He also highlighted three challenges to be met as the
industry goes forward: The accelerating decline rate of
existing reservoirs and the smaller size and complexity of
newer ones require increased technology intensity and
integration to enhance reservoir understanding, improve
production management, and increase recovery, he said.
Secondly, operations are ever more challenging as the
industry continues to move to deeper, harsher, or more
remote locations. Thirdly, to address the demographic
challenges in our industry, a large and more diverse num-
ber of employees will be hired into our industry and will
need to be trained, deployed, and supported.
The industry is constantly looking for means to improve
drilling operations; enhance production management and
recovery rates; mitigate risks; and improve safety, quality,
and efficiency. In addition, the industry needs to accelerate
the development of people while leveraging knowledge and
expertise across the breadth of oil and gas operations.
E&P is the official media partner for the SPE Intelligent Energy
International conference and exhibition to be held March 27-29,
2012, in Utrecht, the Netherlands.
...far-r
Tendeka has developed a specialized portfolio around a single key area of
focus: the near-wellbore region. Whatever you
'
re looking for-gauges, .DT
systems, modeling software, mechanical packers, swellables, inflow control
devices or sand control systems-Tendeka's focus on the monitoring,
modeling and control of near-wellbore multi
p
hase flow provides you with
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and increase overall recove .
See the whole picture at www.tendeka.co
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Its
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ell testing has been cited as one way to ensure that
the investment of a companys time and capital
has been justified and is sustainable in the future. With
accurate test data, acquired through an appropriately
designed testing program, the critical information nec-
essary to characterize a reservoir and establish well deliv-
erability is presented. But even the best information in
the world can be useless unless it can be presented to
key decision-makers in time and in the correct format.
Time is the keyword. The principle of well testing is to
produce a pressure disturbance in the reservoir, then
analyze its transient response. Many times a test that is
an operational success everything worked as intended
can turn out to be a practical failure, simply because
the dynamic pressure transient measurement was termi-
nated prematurely or prolonged unnecessarily. Test
data, if supplied in a timely fashion to reservoir engi-
neers, can allow them to recognize problems in the test
procedure or results in time to take
remedial action to recover from what
would eventually be described as a
successful failure.
North Sea scenario
illustrates the point
Centrica Resources Ltd. operates the
Grove gas field in the UK North Sea
approximately 133 km (83 miles) east
of Great Yarmouth. Discovered in
1971, Grove has been producing up to
50 MMcf/d of natural gas from two
wells since 2007. Because of increasing
demand, an extension of the field was
initiated in 2008 with a four-well
drilling program that targeted previ-
ously untapped reservoir volumes. A
concurrent well testing campaign was designed with the
objectives of cleaning up all the wells and determining
the reservoir deliverability as well as its extent.
Centrica and Schlumberger recognized that the
biggest risk to achieving the test objectives was inconclu-
sive data. Even if tests were designed with the best inten-
tions, only evaluating actual reservoir dynamics while
testing could provide the necessary confidence in the
results. Among the challenges were to improve produc-
tion handling capabilities and separation efficiencies,
enable real-time data monitoring and evaluation 24/7,
and provide the ability to change acquisition and test
programs on the fly to ensure that test objectives were
achieved. In essence, the company wanted zero incon-
clusive tests.
The scenario presented both technical and logistical
challenges. A clear benefit of real-time data acquisition
and transmission is the opportunity to concentrate
expertise at a single point to facilitate analysis and
the decision-making process. With the advantages of
global connectivity, the single point could be real or
virtual as long as seamless collaboration of critical
expertise was achieved.
46
INTELLIGENT
OPERATIONS
Putting an end to
successful failures
The difference between success and failure often lies in the ability to communicate
properly with key decision-makers in a timely fashion. Here is how one
North Sea operator ensured a successful success.
Shahbaz Sikandar, Centrica Resources Ltd.;
Yakov Shumakov, Sukru Sarac,
and Graham Hetherington, Schlumberger
Global connectivity facilitates real-time operations on a worldwide scale. (Images cour-
tesy of Schlumberger)
46-49 Intel-SLB_Layout 1 2/23/12 12:15 PM Page 46
47
Technology played a key role as well. The ability to
deploy the latest measurement technology allowed
experts to visualize the acquired data along with the
manual readings, which provided enhanced understand-
ing of actual well operation conditions. This allowed
adjustment of the test program to the actual well or
reservoir performance instead of blindly following a
pre-established program.
This approach does not de-emphasize the importance
of a well thought-out test plan, however. It provides a
way to detect and evaluate any deviation from the origi-
nal design or expectations, allowing users to facilitate
intelligent contingencies or take corrective action.
Real time is not a buzz word
The concept of providing data in real time, or near-real
time, had its origins in the early 1970s, driven largely by
the mounting costs of offshore rig time. Some of the
first users benefited from radio communication of well
log data direct from offshore rigs to offices onshore.
While moderately successful, the growing popularity
of the practice highlighted several challenges:
Software tools were not available to make efficient
use of streaming data;
Users experienced excessive time in manual data
preparation and difficulties in synchronizing trans-
mission with interpretation changing data into
actionable information;
Conventional well test interpretation used static test
data and could not handle dynamic data;
It was not possible to efficiently integrate streaming
test data into conventional reservoir engineering
software programs; and
There was a general lack of communication between
operations personnel and reservoir engineering
groups that seriously impeded timely decision-making.
It could be seen that merely providing real-time data
streams from the well site would not solve the problem.
There is an engineering approach to real-time opera-
tions that transcends data transmission.
Customizing practical workflows
Schlumberger presented to Centrica engineers a test-
ing infrastructure that was developed to handle, store,
and render all relevant data, including data from third-
party sensors.
High-speed secure Internet connectivity was supplied
by deploying satellite communications terminals to well
sites. The ability to deliver quickly the massive datasets
was provided by Schlumbergers global network connec-
tivity and collaboration system with more than 37,000
users around the world. This latter capability secured vir-
tual collaboration of experts from their individual loca-
tions in real time.
Special processes for handling the data were devel-
oped. These included integrated workflows to eliminate
the need to wait for final data, some of which are only
available after the test string is pulled out of the well.
Often there are indicators that a process needs chang-
ing before all the data are in, and bringing real-time
monitoring into play allows changes to be made on the
fly as requirements change.
In the test environment, early indicators derived from
real-time data can suggest the need to change choke
sizes or sampling times. Flow simulations across the sur-
face test spread can predict hydrate formation issues
and safety effects like erosion of pipework; hence, reme-
dial actions can be taken. In instances where real-time
bottomhole pressure and temperature are unavailable,
these parameters can be estimated using well-known
engineering software and streamed into the workflow.
This allows the test to be evaluated in real time. Later,
when actual data becomes available, it also can be inte-
grated into the models, allowing final interpretation to
be performed.
INTELLIGENT
OPERATIONS
Equipment layout and sensors are used to stream test data in
real time.
48
Where required, Schlumberger
can provide real-time operation
support centers (OSC) linked by
secure satellite communications
to support the concentration of
expertise. In certain cases, portable
OSCs can be set up in client offices
to provide temporary capabilities.
Knowledge management is the key
to successful real-time well testing.
Defined as the totality of relevant
knowledge on a subject, coupled
with global connectivity, knowledge
management takes the guesswork
out of complex processes and allows
parallel solutions to be implemented.
Testing campaign on the Grove field reservoir
Hydrate formation is always a major concern in a gas
and gas-condensate environment because potential risks
can lead to significant operational delays. Even though
well temperatures were generally above the hydrate for-
mation threshold, it was deemed prudent to monitor
temperature continuously and provide the capability to
inject methanol if needed. Required methanol injection
rates were determined on the spot to eliminate hydrate
formation problems.
While flowing the second well on a fixed
60
64-in. choke,
unstable production behavior was observed. This failed to
meet the stable flow criteria specified in the test program.
Without delay, the separator flow-rate measurements
were cross-checked using choke performance correla-
tions for dry gas. Following the recommendations from
the experts onshore, several base sediment and water
(BSW) manual readings were performed to confirm the
measurements at 20% to 30%.
Additionally, the water vapor content of the natural gas
and the expected condensed water rates were calculated
using various correlations. With all these data, the flow
production regime was simulated. The results indicated
a high-frequency slug flow condition existed. Experts
agreed that wellhead pressure and temperature could
not be stabilized to the level specified in the test design.
A collective decision was made to start surface sampling
immediately. By multitasking while pressures stabilized,
valuable rig time was saved that would have been lost had
operations been performed sequentially.
Obtaining real-time bottomhole flowing pressure
was another concern on this campaign. Sometimes the
downhole data cannot be accessed in real time, so provi-
sions can be made to compute bottomhole pressure with
reasonable accuracy using surface measurements. This
can be used to allow engineers to perform a quick-look
well test evaluation necessary to continue the test with-
out surprises.
On another well test, once the well was cleaned up,
it was shut in for buildup while the progress of the
calculated bottomhole pressure was monitored and
interpreted in real time. This allowed Centrica engi-
neers to optimize the test duration long enough to
provide conclusive results but not so long as to waste
valuable time.
The initial buildup interpretation was carried out, and
the results of forward modeling were compared with the
actual well performance during the three-step-rate test.
The good match added confidence in the initial inter-
pretation results. In light of the test results, the final
buildup period, which was planned to be 12 hours long,
was cancelled and the rig moved to its next location.
The ability to make rapid critical decisions is essential
in todays dynamic oilfield environment. These are facil-
itated by flexible workflows, real-time data acquisition
with backup procedures, and global connectivity. Estab-
lishment of a collaborative environment is crucial a
post-script to the successful success.
This article is based on paper SPE 127909, Remote Real
Time Well Testing Experience in the Grove Gas Field
in the North Sea. Data courtesy of Centrica Resources Ltd.
INTELLIGENT
OPERATIONS
Monitoring hydrate potential with
remedial methanol injection solutions
allowed engineers to be prepared to
deal with hydrates should they appear.
46-49 Intel-SLB_46-49 Intel-SLB 2/23/12 10:33 AM Page 49
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B
P Norge installed its first fiber-optic communications
link to the Valhall and Ula fields in the North Sea
in 1999. Since then, it has substantially developed the
implementation of its trademarked field of the future
program of digital technology, ranging from the first
advanced collaboration environments for drilling and
operations to the worlds first life-of-field seismic array on
the Valhall field using advanced remote monitoring tools.
In 2005, BP embarked on two major facilities projects.
The first was a new field center for the Valhall field and
the second a greenfield development for the Skarv field
based on an FPSO unit. These projects would enhance
BP Norges existing experience in digital oilfield technol-
ogy and create two second-generation fields of the future.
BP Norge, on behalf of its partners, operates three field
centers: the Valhall hub, consisting of the Valhall and
Hod fields; the Ula hub, consisting of the Ula and Tam-
bar fields; and BP Norges new Skarv field.
A digital infrastructure
The installation of low-latency, high-bandwidth fiber
optic-based telecommunications in 1999 underpinned
the successful implementation of the technologies in BPs
Ula and Valhall brownfield hubs and was a turning point
for the operation of BP fields.
The new Valhall process hotel platform development
includes the provision of a 294-km (179-mile) high-voltage
direct current power (HVDC) cable delivering 78 MW of
power to the Valhall field. BP augmented the HVDC cable
to include its own fiber-optic communications cable,
adding a new dimension to the robustness of the fiber-
optic communications to the Valhall field and opening up
the potential for remote control of the field from shore.
Fiber-optic communications were successfully imple-
mented in the southern part of the North Sea and con-
vinced the Skarv partners that it was important to provide
similar wide-bandwidth, low-latency communications to
the field.
New greenfield facilities challenges
Valhall Redevelopment Project. In late 2004, due to subsi-
dence at the seabed of the original processing facilities
leading to subsequent reduction in the air gap between the
bottom of the deck and the sea, work began on the front-
end engineering of a new production and hotel platform
for the Valhall field. This became known as the Valhall
Redevelopment Project. With a life expectancy of 2050 and
beyond, the project was considered a better way to resolve
the subsidence problem than jacking up the old facilities.
BP implemented the project as a field of the future facility,
making use of all the capabilities of the new digital technol-
ogy to facilitate remote monitoring and control.
The company developed a field-of-the-future automa-
tion blueprint outlining the project and what its contrac-
tors were expected to deliver to meet the companys
requirements. This was important to ensure that the engi-
neering contractors delivered the required sensors neces-
sary for best-in-class remote performance monitoring and
optimization of critical process plant and equipment. An
audit in 2006 proved its success with a high degree of con-
formance to expectations.
Skarv field development. Located 200 km (120 miles) west
of Sandnessjen, Norway, the Skarv field development
concept was based on an FPSO designed for the areas
harsh environment.
50
INTELLIGENT
OPERATIONS
BP pioneers second
generation of digital oil fields
BP Norge enhances its existing experience in digital oilfield technology by creating
two second-generation fields of the future.
Eldar Larsen and Paul Hocking, BP Norge AS
The Valhall field is shown with the new field center in the fore-
ground. (Images courtesy of BP Norge)
50-53 Intel-5thRing_50-53 Intel-5thRing 2/23/12 10:33 AM Page 50
51
It was agreed in the early stages of the engineering of
the project that a fiber-optic telecommunications infra-
structure to shore should be implemented on Skarv
based on positive experiences from Ula and Valhall.
The field of the future automation blueprint also was
successfully implemented and specifically updated for
Skarv to cover marine and subsea
aspects.
Since 2005, this blueprint document
has evolved into a set of company stan-
dards addressing automation, remote
performance management, advanced
collaborative environments, and digital
infrastructure, and it is now applied
globally to all new major projects
across BP.
Remote control
BP adopted a degree of remote control
management (RCM) for the Valhall
field from shore and combined it with
the extensive use of advanced collabo-
rative environment (ACE) technology.
The installation of a second independ-
ent fiber-optic communications link
associated with the HVDC provided
the robustness of communications
needed for remote operation.
Based on a review of value, risk, and
tactical considerations, all the primary
processes, surveillance, and control of
the safety systems remained offshore
while some specific functions, such as
controlling the wells, would be done
from shore.
The control room was designed to
reflect the same look and feel as an off-
shore facility, with the same access to
wireless communications and PA sys-
tems. A large video wall with high-qual-
ity audio equipment was provided
offshore and onshore to give staff the
feeling of being in the same room.
With more than 100 drilled wells
and approximately 100 wells yet to
drill, significant value is to be gained
through well optimization. Well man-
agement complexity is increasing due
to a shift from primary depletion
toward depletion based on waterflood-
ing, expanded gas lift, and the use of
more advanced wells. As a result, it is leading to more
fragile wells requiring scale management and careful well
surveillance. Well management was improved by strength-
ening communications between the onshore support and
operators, thus improving the well operators skills and
capabilities.
INTELLIGENT
OPERATIONS
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52
Valhall, with its lifetime expectancy of more than 40
years, is expected to remain a highly complex field to
operate. New technical capabilities and work practices are
constantly under development, and the general industry
trend is to move an increasing amount of the control and
administration functions from offshore to onshore. The
operational onshore control room will provide improved
flexibility for harvesting potential benefits from these new
capabilities in the future.
Skarvs ACE concept
The Skarv greenfield development saw the opportunity to
use ACE technology, but since it is an FPSO with associ-
ated marine operations, it was decided not to implement
RCM. Based on experience from BPs other assets, the
company coupled Skarv into the existing mid-Norway
fiber-optic communications network.
This enabled the full integration of onshore teams both
in Stavanger and Sandnessjen, with the offshore opera-
tion, including real-time data access to systems, CCTV
coverage, and links to other centers, providing a capabil-
ity for delivering business benefits in the areas of produc-
tion efficiency improvement, production increases, and
operating cost reduction. As in the Valhall project, the
Skarv development project uses mirror-image purpose-
built ACE facilities offshore.
Remote performance monitoring (RPM)
Valhall has 40 individual RPM applications, which have
been assessed as providing high value, whereas Skarv,
with more marine and subsea infrastructure, has 46 RPM
applications. Condition monitoring and RPM were recog-
nized as key components of the Valhall and Skarv proj-
ects. The systems and techniques that are being provided
under the projects fall into two broad categories:
Those that are well defined and understood and that
should be expected to work reliably and quickly and
be available from plant start-up; and
Those that are less well defined, where there is less
experience or where the facility is known to require
configuration/set-up/optimization during early
stages of operation (nominally the first 12 months).
Each requires its own management to realize the
expectations for the effectiveness of the techniques
employed and to identify additional opportunities. With
ACEs both onshore and offshore, the asset teams will
support the day-to-day business of the fields, while the
engineering support teams are responsible for following
up and operating the RPM tools using their own ACE
environment together with their specialist contractors.
Learnings and challenges
Installing some of the best technology available
on two new installations will enable BP Norge
to continue to develop and improve concepts
begun more than 10 years ago on its brownfield
installations. Many lessons have already been
learned, but certainly many are still to come in
the years ahead.
As one of the first companies in the world to try
to perform remote control on a major oil and gas
field, BP has found the projects challenging,
requiring a great deal of effort and attention to
detail. The company is confident, however, that
the safety benefits will justify the investment in
time and resources. It has been important for sen-
ior engineering staff responsible for RCM on the
new assets to align themselves with the key objec-
tives and truly understand what is envisioned to
deliver the desired results without deviation.
INTELLIGENT
OPERATIONS
Technicians work in the Valhall production onshore control room.
The Skarv FPSO has been equipped with a fiber-optic telecommu-
nications infrastructure to shore.
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our-D seismic technology has become a routinely
applied reservoir surveillance tool that is demon-
strated to increase reserves and recovery by locating
bypassed and undrained reserves, optimizing infill well
locations and flood patterns, improving reservoir char-
acterization, identifying compartmentalization, and
mapping permeability pathways. In addition, 4-D seismic
technology can help optimize field development plans
by decreasing operating costs with fewer dry holes and
reducing reservoir model uncertainty, which results in
more effective reservoir management.
However, the vast majority of 4-D surveys have been
offshore. Land 4-D surveys are far more limited. Most of
these surveys are designed to monitor enhanced recov-
ery processes, either thermal or CO
2
. These processes
are expensive, and surveillance is critical for efficient
reservoir management. Most land 4-D surveys have been
acquired over a relatively small area, many are research
or pilot studies, and results are mixed. Interpretations of
4-D data over thermal and CO
2
floods are most com-
pelling. Other applications can have less than convinc-
ing results.
Why has 4-D technology been so successful offshore and
so limited onshore? What are the technical and business
challenges that impact land 4-D application? And what
forces are at work to overcome these obstacles?
Data quality
Repeatability is a key factor in 4-D success, and land 4-D
has one distinct advantage over marine 4-D: source and
receiver positions can be repeated with a high degree of
accuracy. This is important because rapid near-surface
variations found onshore demand accurate source-
receiver repositioning to minimize differences in
backscattered, shot-generated noise. But near-surface
properties also are subject to seasonal and water-table
changes, making repeatable surveys challenging.
In general, land seismic data have poorer quality com-
pared to marine data, often dominated by ground roll
and refractions. Working oil fields have high ambient
noise. Infrastructure is more spread out than in offshore
fields and can impact a greater area of the survey.
New construction can prevent reoccupation of baseline
source and receiver positions on monitor surveys. There
also can be permitting issues that limit access to
parts of the survey area and, in some
fields, rough terrain. Because of
the size of land crews, there is
greater HSE exposure and a larger
environmental footprint compared to
marine surveys.
New technology
Developments in land seismic acquisition
could help overcome some of these
challenges. Cablefree recording sys-
tems result in more efficient field
operations with greater accessibility
and a smaller footprint. Increased
channel counts result in a higher sig-
nal-to-noise ratio. Limitations of the
near surface might be overcome by
permanent and continuous monitor-
ing systems and by concepts like the
virtual source. Indeed, results have
shown that with careful attention to
54
4-D
SEISMIC
Is there a future for land 4-D?
It is easy to justify 4-D surveys offshore. Land surveys provide a few additional hurdles.
David H. Johnston, ExxonMobil Production Co.
This map indicates the authors best guess at the locations of land 4-D projects to
date. These include repeat borehole seismic surveys. The concentration of 4-D proj-
ects in North America is associated with thermal recovery and CO
2
enhanced recov-
ery monitoring. (Images courtesy of ExxonMobil Production Co.)
54-55 4D-Exxon_54-55 4D-Exxon 2/23/12 10:33 AM Page 54
55
4-D
SEISMIC
detail in acquisition and processing, land 4-D seismic
data can be repeatable.
Still, onshore reservoirs present additional hurdles
compared to their offshore counterparts. Increasing activ-
ity in unconventional and fractured reservoirs will require
developments in rock physics to better understand the
relationship between field depletion and the 4-D seismic
response. The rocks in onshore fields tend to be older
and, in many parts of the world, dominated by carbon-
ates. As a result, the sensitivity of the onshore reservoirs
elastic properties to fluid saturation and pressure changes
is generally less than what is seen in offshore clastic reser-
voirs. But there have been many successful marine 4-D
surveys where the changes in elastic properties are as
small as those predicted for tight rocks and carbonates.
This suggests that if noise and data quality issues can be
overcome, the application space for 4-D onshore can
grow substantially.
Finding the value proposition
But the greatest challenge facing land 4-D application is
economic. It can be difficult to define the value proposi-
tion for land 4-D when the unit cost for land seismic is
significantly greater than for marine seismic and when
well costs are significantly less expensive. It is easy to jus-
tify a deepwater marine 4-D survey where individual
wells can cost more than US $100 million. It is harder
on land, where well costs might range from $3 million
to $20 million.
The global onshore resource base also is shifting away
from oil toward gas. Conventional gas has high recovery
rates, averaging 60%, which means there is less incentive
for seismic monitoring compared to oil fields. And while
passive microseismic monitoring of unconventional gas
development is commonplace, conventional 4-D seismic
monitoring of these reservoirs is nearly nonexistent.
There are, however, several forces acting in the indus-
try that could help overcome these economic hurdles.
Production costs associated with deple-
tion strategies used for many onshore
fields are higher than for offshore
fields. According to the International
Energy Agency (IEA), conventional oil
and gas (outside deep water and ultra-
deep water) costs about $5/bbl to
$40/bbl to produce. For CO
2
floods,
heavy oil and bitumen recovery, and
other EOR processes, production costs range from
$30/bbl to $80/bbl, requiring more efficient operations
and increasing the incentive for reservoir surveillance.
In situ production of heavy oil sands and bitumen,
which already represents the most common application
of land 4-D, is expected to grow from about 1 MMb/d in
2010 to more than 5 MMb/d in 2030. According to one
IEA scenario, enhanced oil recovery will similarly grow
from about 1.25 MMb/d in 2015 to 5.5 MMb/d in 2030.
These projects will mostly involve CO
2
injection and are
almost exclusively onshore.
Additional opportunities for land 4-D could be sub-
stantial. Onshore fields represent the bulk of the cur-
rent world resource base 55% of the fields but more
than 80% of the proved and probable reserves. The out-
look for the future is essentially more of the same. By
2030, the IEA estimates that more than 60% of daily pro-
duction is expected to come from onshore fields. And
carbonate fields will dominate this production. Their
inherent complexity practically demands 4-D seismic to
monitor fluid movements.
There is one additional incentive for land 4-D envi-
ronmental monitoring. There is likely to be a significant
increase in carbon capture and sequestration (CCS)
projects. Current CCS pilots are almost all located
onshore and are spurring the growth of 4-D seismic to
monitor the CO
2
injection, driven in part by regulatory
requirements. In addition, about 60% of Middle East gas
reserves have high H
2
S content, potentially spurring
demand for monitoring sour gas injection.
Is there a future for land 4-D seismic? There are cer-
tainly technical challenges and economic barriers. But
with increasing production from onshore fields, increas-
ing exploitation of heavy oil, increasing EOR, and the
increasing need for environmental monitoring, the
opportunities for land 4-D are significant. Perhaps we
are asking the wrong question. If there is a future for
4-D seismic, is it going to be on land?
Current applications for land 4-D projects
include CCS, which might increase due to
environmental monitoring regulations.
54-55 4D-Exxon_54-55 4D-Exxon 2/23/12 10:33 AM Page 55
I
n 2007, Shell acquired its first ocean bottom seis-
mometer (OBS) survey in the deepwater Gulf of Mex-
ico (GoM) Mars basin to obtain improved illumination
of structurally complicated targets. This was a success
and led to the discovery of the Boreas reservoir a couple
of years later. In 2010, building on the demonstrated
value of OBS, Shell embarked on a phased campaign of
OBS acquisition at several locations in the deepwater
GoM for exploration, development, and 4-D analysis.
Acquisition
The 2007 survey was acquired with roughly 800 Z3000
Fairfield Nodal nodes deployed on a hexagonal 400-m
(1,300-ft) grid. The source was towed 12 m (40 ft) deep
to ensure that low frequencies were generated strongly
enough to illuminate the subsalt targets. The full extent
of the receiver patch in 2010 was different than the 2007
survey and covered additional exploration objectives to
the northeast and south of the Mars tension-leg plat-
form (TLP). The source depth of the 2010 survey was
decreased to 10 m (30 ft) to obtain higher frequencies
for the shallow above-salt reservoirs.
As the number of nodes to be deployed was larger
than the number of physical units available, nodes were
rolled from one side to the other of the survey, which
was a first in the GoM. For both surveys, a dual-source
airgun boat was used. For the 2010 reshoot, differences
in sea current conditions made it unrealistic to attempt
to repeat the actual 2007 shot positions. Instead, the
2010 survey was designed to acquire the nominal 2007
shot grid.
Standard OBS processing
Each OBS node can be processed completely independ-
ently from the other nodes (apart from the coldwater
statics step). Processing can start as soon as the first
nodes are picked up from the seafloor, and partially
migrated images in the base and monitor survey can be
identically processed using the following sequence:
1. De-signature to a common wavelet whose maxi-
mum frequency lies below the notch of the 2007
survey;
2. Random noise attenuation;
3. Shear wave leakage removal;
4. Hydrophone-to-geophone calibration; and
5. Up- and down-going wave separation.
4-D specific OBS processing
The GoM is subject to large and rapidly varying water
temperature changes that impact the speed of sound
in the water. These variations create so-called coldwater
statics on the data. If not corrected, coldwater statics
will contaminate the time/depth shifts between base
and monitor, obscuring the link between these shifts
and geomechanics. It is thus essential to account for
this effect.
However, the task is complicated by the node internal
clock drift, and methods have been used to improve the
confidence of node timing corrections. To determine
the coldwater statics, the first arrival was picked on the
hydrophone data, and misfits with a ray-traced first
56
4-D
SEISMIC
First OBS-to-OBS time lapse results
show promise
A novel approach leads to new insights at the Mars field.
A. Stopin, P.J. Hatchell, and C. Corcoran,
Shell Global Solutions International B.V.; and
E. Beal, C. Gutierrez, and G. Soto,
Shell Exploration and Production Co.
The depth difference between the base and monitor surveys is
shown before (left) and after (right) coldwater statics correction.
Clear striping parallel to the acquisition direction can be seen
before the static correction. The differences reduce to nearly 0
after the static correction has been applied. Note that the static
correction is applied pre-migration. (Images courtesy of Shell)
56-59 4D-shell_56-59 4D-shell 2/23/12 10:33 AM Page 56
C7
ION. Creating unique answers to the industry's greatest challenges.
To overcome the safety and efficiency challenges associated with 4D marine seismic
acquisition
,
ION collaborated with a major oil company to develop a cost-effective solution.
By leveraging a unique combination of ION marine acquisition technologies and acquisition
optimization services, the client achieved over 20% infill reduction while exceeding repeat-
ability requirements for the survey. Whether you are sizing up the prospectivity of a frontier
basin or looking to extract maximum value from a mature reservoir, look to ION for break-
through innovations that help you achieve your most ambitious objectives.
AREAS OF EXPERTISE
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Basin Exploration
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58
4-D
SEISMIC
arrival in a reference water velocity were computed.
A least-square inversion of the misfits provided quality
control (QC) and an update of both the node and shot
locations as well as their static corrections. The node
corrections and shot statics were applied once for the
up-going energy and, after multiplication by a factor of
three, for the down-going energy. This procedure was
applied independently for the base and monitor surveys
after setting the node depth for the two
vintages to the same reference depth
based on a bathymetry map measured
by an AUV survey from 2008. To QC
the statics, a mirror migration of the
down-going wave energy for both vin-
tages was performed. The image of the
water bottom for the base and monitor
was then picked.
With streamer data, 4-D binning and
trace selection is an important step to
get to an optimal 4-D response. This
comes as a direct consequence of the
poor sampling of the wavefield in a nar-
row-azimuth survey. With the richness
of offsets and azimuths intrinsic to OBS
data, the 4-D binning and trace selec-
tion is simply reduced to selecting the
shots that are in both base and monitor
shot outline for every repeated node.
This ensures that the number of shots
and the offset and azimuth distribu-
tions are the same for both vintages.
Mars OBS 4-D time lapse results
The depth shifts required to align
the monitor to the base survey were
derived on both the down-going and
up-going images. The up-going wave-
field travels only once through the
water column and is hence not as
When comparing the amplitude map (left) of the H1 reservoir for the 2010 data and corresponding 4-D difference map (right) between
the 2010 and the 2007 surveys, a clear 4-D signal can be seen near the downdip well where water coning is occurring. Note the clear
correspondence between the 4-D signal and the depth contour.
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sensitive to the coldwater statics as the down-going
wavefield. The depth shifts derived from the up-going
energy are thus more reliable, and linear discontinuity
between the compacting basin and the nearly unpro-
duced area can be clearly seen. The production-related
effect from a single well that started production in 2008
also is better seen on the depth shifts measured from
the up-going wave.
Both base and monitor up-going and down-going
waves were migrated using a vertical transverse isotropy
reverse time migration algorithm up to a maximum fre-
quency of 45 Hz. After alignment of the base and moni-
tor, the difference between the two was generated, and a
normalized root mean square (NRMS) was computed. A
value of NRMS of 6% in zones where no time-lapse sig-
nal is expected was achieved, even close to the Mars
TLP, an area where streamer 4-D would be problematic.
Clear 4-D signal has been confirmed to be related to
water injection.
Further study
Proper correction of the shot statics related to
water temperature variations is essential if depth
shifts are used to infer geomechanical effects. Further
analysis (e.g. generating difference maps for every
reservoir) and integration with production informa-
tion as well as reservoir simulation is under way to
fully harness all the valuable information contained
in the data.
Acknowledgements
The authors wish to thank Shell International E&P, Shell
Upstream Americas, and BP Exploration and Production Inc.
for permission to publish this paper. The information in this
article was originally presented at the 2011 annual meeting of
the Society of Geophysicists and has been reprinted with the
authors permission.
References available upon request.
4-D
SEISMIC
Responsibly Securing Natural Resources
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nly recently drilled laterally in Kingfisher County,
Okla., the lower Mississippian series features beds
of shale, limestone, and cherty dolomite prone to bouts
with lost circulation. Farther north, in southern Kansas,
the Mississippian is encountered around 1,829 m (6,000
ft) true vertical depth (TVD) and is traditionally drilled
with water using polymer and lubricant sweeps for hole
cleaning and lubricity.
In Kingfisher County, the Mississippian series lies
deeper, at about 2,438 m (8,000 ft) TVD, and opera-
tional demands are more complex. The Oswego shale
formation immediately above the Mississippian and the
Morrow shale immediately below that target zone can
prove troublesome if drilled with water. Problems typi-
cally associated with drilling the production interval
include lost circulation in the Mississippians carbonate
beds, stuckpipe, and wellbore instability in the adjacent
shale formations. These issues have frequently resulted
in significant and expensive nonproductive time (NPT)
and costly remedial operations.
Offset horizontal well data is virtually unavailable as
extended-reach lateral drilling is new in the area, only
recently attracting operators collective interest as they
transition from natural gas to liquids-focused produc-
tion. In Oklahoma, only the distant Kay and Grant coun-
ties had seen the Mississippian drilled horizontally
before planning this well.
Drilling fluid selection criteria
The operator sought a lubricious and inhibitive fluid sys-
tem to efficiently drill the lateral production interval.
Targeted drilling fluid performance attributes critical to
this application included the ability to provide wellbore
lubricity and stability to foster efficient drilling or sliding
and trouble-free tripping while avoiding stuckpipe and
lost circulation experienced on offset Mississippian hori-
zontal wells in Kay and Grant counties.
After setting 7-in. intermediate casing through the build
section to horizontal in the Mississippian limestone, the
specified fluid would be used to drill a 6.25-in. hole from
the casing shoe at about 2,469 m (8,100 ft) measured
depth (MD)/2,347 m (7,700 ft) TVD to a total depth
(TD) of about 3,810 m (12,500 ft) with a final hole angle
of 90 degrees. Directional control would be critical
as a small target was defined and tight wellbore
path required. The system would be unweighted
and fluid density minimized to avoid fluid losses in
the Mississippian.
Potential lost circulation zones through antici-
pated carbonate beds in the Mississippian made
oil-based mud a less than ideal fluid choice for
this application. An economical water-based fluid
was sought to minimize fluid losses. Anticipated
bottomhole temperature would be approximately
49C (120F). Minimizing environmental impact
at the well site also was prioritized.
Drilling fluid system description
The Evolution drilling fluid system, a proprietary
water-based polymer system developed by New-
park Drilling Fluids, was specified for this interval
and was formulated to address its unique geologi-
60
DRILLING
FLUIDS
Specialized fluid system improves
horizontal applications
A lubricious and inhibitive fluid system can improve efficiency when drilling
lateral production intervals prone to stuckpipe and lost circulation.
Brett Bryer, Newpark Drilling Fluids LLC
Fluid lubricity was monitored at the well site throughout the interval, and
lubricity coefficient values held steady at .08 to .09 throughout the interval
following displacement. (Figure courtesy of Newpark Drilling Fluids LLC)
60-65 DrillFluid-Newpark_60-65 DrillFluid-Newpark 2/23/12 10:33 AM Page 60
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62
DRILLING
FLUIDS
cal demands. The system combines a rugged polymeric
viscosifier/shale stabilizer with an effective drilling per-
formance enhancer to provide efficient drilling penetra-
tion rates through hydraulics and lubricating
optimization. It is effective over a wide thermal range to
218C (425F) and is not adversely affected by common
wellbore contaminants. Fluid may efficiently be built on
location, and its environmentally sound formulation
requires no special wellsite fluid and cuttings handling
equipment or process, avoiding transportation cost associ-
ated with oil-based fluid.
The systems inherent lubricious capa-
bility yields a significant reduction in
drilling torque and drag, a critical
requirement to efficiently drill
extended-lateral sections. The shear
thinning characteristics provide low
effective viscosity at the bit to improve
penetration rates, with optimized low
shear rate viscosity in the annulus to
ensure adequate hole cleaning. This
water-based formulation is significantly
less prone to lost circulation than oil-
based mud. It contains no commercial
clays, providing minimal solids content
to protect production zones from solids
blockage.
For this application, secondary com-
ponents included NewPhalt, a sul-
fonated asphalt shale stabilizer, and
potassium hydroxide for alkalinity con-
trol. As a source of potassium ions to
increase osmotic pressure, it also effec-
tively enhanced shale stability through
dehydration.
Performance
The 6.25-in. lateral section through
the Mississippian proved to be hard
and abrasive, and weight on the bit was
limited to improve PDC bit life. Pene-
tration rates averaged 4.6 m to 7.6 m
(15 ft to 25 ft) per hour while rotating
in the abrasive limestone formation.
Rotating torque ranged from 10 ft-lbs
to 12,000 ft-lbs. Several bit trips were
required to drill the interval. All trips
were without incident, with overpull
weights at 10,000 lbs or less, and no
reaming was required returning to
bottom.
Fluid lubricity was monitored at the
well site throughout the interval, and
lubricity coefficient values held steady
at .08 to .09 throughout the interval
following displacement, comparing
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64
DRILLING
FLUIDS
quite favorably to those typical of oil-based mud.
The unweighted fluid was maintained at 8.5 lb/gal
throughout the interval, and the low solids formulation
helped minimize density. Rig shakers were fitted with 120
API screens, and a high-speed centrifuge was employed to
maintain low gravity solids below 3% by volume.
The horizontal section of the well was drilled to 3,810 m
(12,500 ft) MD without incident. Shuttle logs were run to
bottom and revealed a gauge hole throughout the approx-
imate 1,341-m (4,400-ft) lateral section. Logs also indi-
cated that 133 m (436 ft) of Oswego shale above the target
zone had been penetrated when the Mississippian was
exited and reentered, with no wellbore issues observed.
A 4.5-in. liner was run to bottom and set without exces-
sive drag. No tight spots were encountered in or out of the
well bore during tripping and casing operations, and the
horizontal interval was drilled in 21 days without incident.
Results
The water-based drilling fluid system provided ample
lubricity and stable gauge well bore throughout the hori-
zontal production interval to a precise target, enabling
trouble-free drilling, tripping, logging, and running casing
to TD. No fluid losses were experienced. Trip time and
time required to run casing were improved versus offsets.
Fluid rheology and filtration rates were efficiently con-
trolled within programmed parameters using only basic
system formulation and products to promote penetra-
tion rates and adequate hole cleaning throughout the
interval, satisfying operator goals for efficiency and total
well cost.
This first horizontal application of the high perform-
ance water-based drilling fluid system here in Kingfisher
County resulted in virtually zero NPT or fluid losses
while drilling/sliding, tripping, logging, and ultimately
running and setting production casing efficiently to TD.
Overall operational efficiency achieved by the operator
immediately established a rigorous standard by which
future Lower Mississippian horizontal projects will be
measured.
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60-65 DrillFluid-Newpark_Layout 1 2/23/12 1:07 PM Page 65
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R
ecent laboratory studies investigating production-
restricting formation damage provide constructive
data that support the acute water-sensitive nature of
these reservoirs and the importance of maintaining
excellent fluid loss control. This is especially important
when water-base drill-in fluids are used. The tests
emphasize the importance of pretest preparation of
core samples, which was shown to be essential in reduc-
ing formation damage in tight reservoirs. Further, labo-
ratory investigations confirm that ultrafine material
generated during the preparation of core plugs could
propagate artificial fines migration; therefore, strict
pretest cleaning procedures are critical to minimize
artificial damage.
RDF formulation challenges
Formation damage reduces formation permeability and
represents one of the most daunting problems in tight
gas reservoirs. Reduced permeability restricts produc-
tion and access to potential reserves. The primary con-
tributing factors of formation damage include fluid
invasion into the reservoir, the blocking of pores and
fractures, and changes in water saturation.
Low in situ permeability to gas, usually less than 0.50
mD, is intrinsic to tight gas reservoirs, which possess low
porosity with pores that are typically poorly connected
and highly reactive to water saturation. Most tight gas
reservoirs have low or near irreducible water saturations
near the well bore. Even a minimal decline in perme-
ability can hinder production. A tight gas reservoir with
permeability reduced by only 0.35 mD from an initial
value of 0.5 mD effectively has lost 60% of its original
permeability. Thus minimal changes in water saturation
also affect permeability.
Tight gas reservoirs also present challenges in the
design of RDF systems, including fluid loss control, fines
migration, and mud solids invasion into the formation.
Fluid loss control is a critical element in designing RDF
systems. Priority is placed on optimizing bridging parti-
cle distribution to control fluid loss and likewise restrict
solids invasion into pores, especially into fractures that
are vital fluid-flow channels in tight gas reservoirs.
To design drilling fluids that would minimize forma-
tion damage potential, it is important to first underst
and or evaluate the composition, structure, pore system,
and deformation of reservoir rocks. Typically, these
studies are conducted by observation using a petro-
graphic microscope, XRD analysis, and SEM analysis
among others.
Specific attention is given to the pore and fracture sys-
tems, including the relationship of pore to pore, pore to
fracture, and fracture to fracture. These pores and frac-
tures are the flow channels through which the gas must
travel between the reservoir and the well bore. It is
important to study the connectivity of these open chan-
nels, the pore sizes, and the fracture widths because
small materials such as clays, fines, or mud solids can
block the flow channels.
66
DRILLING
FLUIDS
Fluid regime sheds new light
on formation damage
in tight gas reservoirs
Tight gas formations pose a multitude of challenges in formulating reservoir drill-in fluids (RDF).
Stacy Franks, Russell Leonard, and Wenwu He,
M-I SWACO, a Schlumberger Company
This thin-section photomicrography of a tight gas reservoir shows
both interparticle pores and oversized pores. Pores (shown in blue)
are poorly connected. (Images courtesy of Schlumberger)
66-69 DrillFluid-MIswaco_66-69 DrillFluid-MIswaco 2/23/12 10:34 AM Page 66
67
DRILLING
FLUIDS
The addition of bridging materials in conjunction
with fluid loss control agents also demonstrates a reduc-
tion in fluid loss. The proper distribution of the sized
carbonates for bridging pore spaces is a critical step to
prevent mud solids and filtrate from invading the reser-
voir. Bridging particle sizes should be optimized accord-
ing to pore-size distribution and fracture width as some
tight gas reservoirs can have fairly large pores of 300
microns or greater that are not well connected.
A more natural mechanism for pore/fracture block-
ing is the presence of abundant clay or fines material.
Clays can block flow channels through displacement or
by a chemical reaction to water such as swelling. Clay
inhibitors or oil-base fluids can be used to help mini-
mize the effects of clay interaction.
Test sample preparation
Artificial formation damage can be attributed to the
core preparation process. One source of artificial forma-
tion damage is the introduction of ultrafine material
created during the core plug preparation process. Ultra-
fine material can be forced into pore spaces at overbal-
anced pressures, causing artificial formation damage
by blocking pore channels. When preparing a core
plug for a gas return permeability test, the core should
be cleaned by removing the fine dust material intro-
duced from sawing the core. Cleaning helps prevent
the artificial introduction of fines so
the results more closely represent
the particle sensitivity of the down-
hole formation.
For formation damage test prepa-
ration, careful attention must be
given to the initial water saturation,
which is vacuum-saturated in a syn-
thetic or connate brine solution. Fur-
ther, it is essential to centrifuge the
core plug at high rpm to near irre-
ducible water saturation to minimize
the effect of residual water on per-
meability a primary damage mech-
anism for tight gas reservoirs. Due to
the high initial water saturation, this
process helps reduce errors in test
result interpretation.
Test protocol
Once a core plug has been properly
cleaned and centrifuged, the sample
is loaded into a permeameter for
testing. Testing is conducted at reser-
voir temperature and elevated pressure to approach
downhole conditions. Humidified nitrogen is flowed
through the core plug in the production direction
at reservoir temperature and increased pressures to
establish a baseline permeability. Once a filter cake is
deposited, overbalance pressure is applied for a prede-
termined period, during which filtration data are col-
lected and recorded. Following the test fluid exposure
phase, permeability is reestablished in much the same
way as for the initial permeability phase.
Flow initiation pressure refers to the pressure
required to initiate flow of gas or fluid through the
reservoir rock after RDF exposure. Flow initiation
pressure, which is calculated by subtracting the stable
pressure from the maximum pressure when determin-
ing the final permeability, is recorded, with this data
possibly indicating damage. Reductions in regained per-
meability often are associated with higher flow initiation
pressures. Filtration values also can provide a clear indi-
cation of the extent of damage since higher fluid loss
often is associated with lower regained permeability in
tight gas reservoirs. All test results contribute to the
overall interpretation of formation damage, but the
most telling clue is the percent of regained permeability.
In one case study, test examples showed cores with
higher filtration of around 12.8 mL, 204% pore volume
having significantly lower regained permeability that cor-
An optimum bridging particle blend shows the target blend, which is related to pore size
distribution and optimized blend of sized calcium carbonate.
68
DRILLING
FLUIDS
responded with a greater reduction in regained perme-
ability by as much as 19.6%. The core samples with much
lower filtration demonstrated high return permeability.
Cases where return permeability values are
>100% are most likely a result of reduced
water saturations in the latter stages of the
test. This is particularly true in tests conducted
at very high temperatures where the core is
more likely to dry out. This effect is dimin-
ished in cores that have been centrifuged.
The tight fracture and pore spaces that
become more saturated with water develop
strong capillary forces that cannot be over-
come easily. Situations such as this result in
phase trapping. In many cases, the reservoir
becomes permanently damaged with fluid
invasion into the wellbore face, thereby reinforcing the
critical need to use all available technology and proce-
dures to minimize invasion at the onset.
After vacuuming core plugs, pores are more visible
and mostly clean of dust. Individual grains are
clearly seen.
66-69 DrillFluid-MIswaco_Layout 1 2/23/12 12:56 PM Page 68
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M
ore than 90% of the worlds producing wells cur-
rently use some form of artificial lift technology,
according to Schlumberger.
Spears & Associates October 2009 Oilfield Market
Report estimated that the global artificial lift market
was worth US $5.8 billion in 2009 a figure that is likely
to have increased over the last few years. In addition,
according to the OPEC Annual Statistical Bulletin
2009, there are 1.48 million producing oil wells, of
which only 30,000 are free-flowing.
While electric submersible pumping (ESP) techniques
have tended to lead the way, there also has been an
increase in popularity for gas lift, where gases such as
CO
2
, natural gas, or nitrogen are injected into the pro-
duction tubing to reduce the impact of the hydrostatic
pressure where reservoir pressures are not sufficient to
lift the hydrocarbons to the surface.
By reducing the density of the produced fluid column
and drawing down flowing bottomhole pressure, thus
encouraging reservoir liquids to enter the well bore at
higher flow rates, operators can enjoy improved well
performance. Gas lifts popularity also is often related to
its ability to handle gassy, sandy, and corrosive fluids in
deviated wells and its applicability to a wide range of
production rates.
Solution limitations
Todays solutions for gas lift come with limitations, how-
ever, particularly in regard to the information generated
and the often crude forms of intervention required. Moni-
toring gas-lifted wells, for example, is often limited to a
basic tick-box approach, focusing on wellhead pressure or
the occasional fluid level or downhole pressure reading.
The primary method of gas lift well completion still
depends on the use of side pocket mandrels, where wire-
line interventions are used to change injection depth
and make significant rate changes possible. Operators
have little information on pressures and temperatures at
the point of gas injection and limited control and flexi-
bility over altering injection rates in real time.
The side pocket mandrels host either temperature-
sensitive injection pressure-operated devices or a simple
orifice with fixed port size, both of which are prone to
unstable operation when annulus and/or tubing pres-
sures change. This can lead to unloading valves higher
up the production tubing opening and injecting gas. It
also can lead to gas injection at the wrong point and
potential valve failure as most unloading valves are not
designed for continuous injection.
The lack of flexibility and control in gas lift has paved
the way for ESPs to grow in popularity in recent years,
and it is a real challenge for the gas lift community. It also
comes at a time where there is a wide range of conditions
and fluctuating flow rates and pressures in many fields,
especially those linked by complex gathering system net-
works. The wider range of process conditions increases
the need for greater control over injection rates.
Remote field locations, growing water cuts, and fast-
changing reservoir and well characteristics are increas-
ingly common in reservoir operations, and the previous
assumption that a well will operate with a specific reser-
voir pressure and flow at a specific rate and water cut is
simply not sustainable.
70
ARTIFICIAL
LIFT
Delivering improved recovery rates
through digital gas lift
Greater flexibility of a real-time digital solution could produce
more than 1,000 b/d extra oil from a typical well.
Ian Anderson, Camcon Oil
The APOLLO solution is in direct response to operators needs to
have access to variable operating valve combinations and make
decisions and modifications in real time without the need for
intervention. (Images courtesy of Camcon Oil)
70-73 ArtLift-Camcon_70-73 ArtLift-Camcon 2/23/12 10:34 AM Page 70
71
The lack of information and difficulties over interven-
tion also have the potential to result in well instability,
leading to chronically suboptimal production rates; dra-
matic surges in liquid and gas flow, which can shut down
production separators and degrade field production
uptime; and concerns over the integrity of the casing
and tubing.
Need for greater innovation and flexibility
Camcon recently developed a digital solution for gas lift
called APOLLO. At the core of the technology is an
extremely low energy pulse control, which signals to
switch an actuator between two stable positions to digi-
tally operate a valve. The six electrically actuated valves,
opened individually or in specific combinations, allow
for real-time setting of injection rates not possible on
traditional gas lift technologies.
This eliminates the need for side pocket mandrels
and wireline intervention, with settings tuned as well-
bore conditions change throughout the life of the instal-
lation, providing downhole control of gas usage and
preventing instability.
The solution also provides operators with continuous
real-time information on pressure and temperature within
the annulus and the production tubing at the point of gas
injection. Having live information allows operators to opti-
mize operating parameters and minimize gas usage with-
out expensive and potentially risky slickline intervention,
resulting in higher oil production rates.
Putting the system to the test
The digital solution has been deployed in an onshore
well in Oman, and Camcon expects to publish well
results shortly. The deployment is part of a normal
workover program for a high-productivity well where the
intelligent gas lift method will be
used to improve the production per-
formance of the well. Although a test
installation, the equipment has been
selected as the chosen method of lift-
ing for the well.
Aside from this deployment, a
recent simulation modeling analysis
comparing the new solution to tradi-
tional side pocket mandrel units
already has provided the company
with positive results. The analysis
demonstrates that Camcons digital
solution can deliver as much as 1,000
b/d more oil from a typical well com-
pared to traditional gas lift equipment.
The simulation modeling was carried out by produc-
tion technology consultants Laing Engineering & Train-
ing Services (LETS).
LETS developed an example subsea well in moderate
water depths, drilled to 5,365 m (17,600 ft) measured
depth (MD) and with a 4.5-in. by 5.5-in. production tub-
ing string inside a 7-in. liner and 9
5
8-in. production cas-
ing. The oil was a light 38API fluid with a reservoir
temperature of 127C (260F). The key variables exam-
ined were the well productivity index, reservoir pres-
sure, and water cut, all expected to change over the
lifetime of the well.
LETS used the analysis software PROSPER to create
production system models with a number of well life
scenarios developed. These included early life cases of
one day and three months, where there would be high,
dropping to moderate, pressures and no water cut;
through to mid-life at one year, where there would be
water injection for reservoir pressure maintenance and
low water cut; and late life at three years, where the
reservoir is repressured and there would be a higher
water cut.
Using this range of potential life-of-well scenarios,
the test compared the performance of a standard, multi-
mandrel gas lift design with Camcons digital artificial
lift solution to identify the maximum practically achiev-
able production rates alongside the maximum practi-
cally achievable gas injection rates.
The analysis revealed a wide range of possible injec-
tion depths from 914 m to 5,182 m (3,000 ft to 17,000
ft) MD and a wide range of optimal gas injection rates
from 1 MMcf/d to 8 MMcf/d. To make the comparative
modeling exercise practical in multivariable scenarios,
however, 2 MMcf/d was selected as the allocated gas
injection rate for comparison.
ARTIFICIAL
LIFT
A comparison is shown between a side pocket mandrel gas lift completion and the digital
solution in regard to reduced intervention times and improved recovery.
When going through
the different well sce-
narios, the analysis
revealed that the bene-
fits of gas lift on day one
are relatively trivial and
the well would be left to
flow naturally without
any gas lift assistance.
The two scenarios
that derive most benefit
from gas lift are at the
early life stage after
three months and the
mid-life stage with water
injection support. Table
1 shows the b/d of oil
comparisons at the
three-month stage for three potential PI values, with
APOLLO starting to show increased b/d.
The mid-life stage is considered to be particularly
important where reservoir pressure has fallen to the
ARTIFICIAL
LIFT
72
PI Conventional Design Orifice Single Orifice APOLLO
b/d/psi at 2,064 m (6,770 ft) at 1,277 m (4,190 ft)
Oil: b/d Gas lift: Oil: b/d Gas lift: Oil: b/d Gas lift Depth of
MMscf/d MMscf/d MMscf/d Injection
7 2,865 2.0 2,360 2.0 3,125 2.0 10,555
14 4,625 2.0 4,060 2.0 4,650 2.0 6,970
21 5,895 2.0 5,330 2.0 5,920 2.0 6,970
PI Conventional Design Orifice Single Orifice APOLLO
b/d/psi at 2,064 m (6,770 ft) at 1,277 m (4,190 ft)
Oil: b/d Gas lift: Oil: b/d Gas lift: Oil: b/d Gas lift: Depth of
MMscf/d MMscf/d MMscf/d Injection
7 2,165 2.0 1,550 2.0 3,005 3.0 15,615
14 3,455 2.0 2,715 2.0 4,245 3.0 10,555
21 4,360 2.0 3,575 2.0 5,240 3.0 10,555
TABLE 2. Lifecycle stage: Mid-life Water injection support/Higher CHP (casinghead pressure)
TABLE 1. Lifecycle stage: Early life 3 months
1 ;
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COILED TUBIDG & WELL IRTERVERTIOD
27-28 March 2012
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extent that it cannot support natural production. As
Table 2 illustrates, the b/d comparisons are significantly
in favor of the new digital solution.
The ability to open and close the APOLLO units at
will and to vary the equivalent port size meant that
even greater production increments could be delivered
in the scenarios where additional casing pressure or
additional gas lift gas became available. For example,
a gas injection rate of 3 MMcf/d was modeled for the
mid-life liftcycle stage as illustrated in Table 2 with a
higher casinghead pressure as well. As can be seen,
the digital solution continued to deliver greater incre-
mental production. The conventional solution would
have required wireline intervention to increase the
port size.
At the late lifecycle stage with water injection support
and higher water cut, it was not possible to inject 2
MMcf/d with conventional gas lift design. This was due
to the concern that injecting through the unloading
valve might damage the valve. Subsequently, no injec-
tion took place. There was no such problem with the
digital gas lift solution with 2 MMcf/d being injected.
When LETS assessed the APOLLO units under these
lifecycle well scenarios and compared against single
point injection gas lift solutions, APOLLOs ability to
move injection depth up and down the well in response
to changes in well production characteristics such as
reservoir pressure and water cut was seen to yield
increased production. At times this incremental produc-
tion was worth more than 1,000 b/d of oil and in one
scenario represented up to 110% more production.
There is a genuine industry need for greater operator
control over gas lift operations a future where gas lift
operating parameters can be adjusted over a wide range
of variables without intervention to reflect changing
field characteristics.
The result for operators will be, as the simulation
models demonstrate, much greater flexibility and
improved recovery rates in comparison to conventional
gas lift equipment.
ARTIFICIAL
LIFT
73
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A
s technology and well count advances, the sheer
volume of data being generated is growing at an
unprecedented rate. Close analysis of problem wells
becomes difficult, and with streams of data arriving
over data transmission systems, operator workload has
increased dramatically. The ability to manage reservoirs
on a well-by-well basis can become compromised. Under
pressure, resources can become stretched due to the high
demands on the increasing numbers of wells.
Well surveillance
In response to increased need for intervention, Zenith
developed the Z-Sight automated well surveillance system
to improve production rates. The system takes the hard
work out of well surveillance by automating the process of
data analysis and optimization, recently increasing oil pro-
duction in one South American well by 39% and generat-
ing an additional US $45,900 revenue per day.
A single well lifted by an electrical submersible pump
(ESP) can have 20 or more key data streams associated
with its operation that can be updating more than once
per minute, resulting in potential overload. The Z-Sight
system provides real-time recommendations on how best
to operate the well to achieve optimum production within
the limitations of the lifting equipment. A comprehensive
model of the well and lifting equipment is referenced in
real time against measured data points from surface and
downhole pressure and temperature devices.
Intelligent algorithms judge whether the pumping sys-
tem is running within a desirable operating condition,
and the technology performs real-time sensitivity studies
to assess whether production can be improved.
Optimum production
The latest feature to be added is field-wide management.
When deployed field-wide, the system can be used to
quickly obtain the optimum balance of production from
the reservoir to maximize recovery and minimize water
cut. Bottomhole flowing pressure or flow rate targets are
chosen by the company reservoir engineers for each well
to achieve the overall drawdown on the reservoir. The sys-
tem uses these targets to automatically recommend the cor-
rect operating point for each individual lift system in real
time. As reservoir or flowline conditions change or targets
are adjusted, the system will automatically compensate the
operating points in real time, well by well, to ensure the
desired method for producing the reservoir is achieved.
Remote access through a secure Internet connection
facilitates surveillance and control of the lifting equip-
ment from anywhere with a standard web browser. Secure
log-in presents the operator with a field map of the wells,
each with a status flag. The status flag indicates a well is
not producing, has a pump or well problem that requires
attention, has potential for optimization with a recom-
mendation on potential gains, or is running optimally and
requires no further attention.
The operator can instantly recognize and priori-
tize wells requiring attention, make informed deci-
sions, and access the decisions quickly using the
remote control function to start, stop, or change
operation of the well.
By having remote access and control, operators
have complete control of their operations in an
instant. They are immediately notified by email or
SMS when a well shuts down and production is lost.
The operator then has the ability to resume produc-
tion immediately through secure remote control of
the ESP drive.
74
ARTIFICIAL
LIFT
Going digital: Optimizing artificially
lifted wells in real time
With 95% of the worlds wells now reliant on artificial lift, robust and effective well intervention is
key to prolonging and sustaining the life of oil fields.
Julian Cudmore, Zenith Oilfield Technology
55 HZ
Well test total liquid flow 935 stock tank barrels/day (stb/d)
Z-Sight system total liquid flow 971 stb/d (+3.8% variance from well test)
Well test water cut 22%
Z-Sight system water cut 19.5% (-2.5% variance from well test)
57 Hz
Well test total liquid flow 998 stb/d
Z-Sight system total liquid flow 1,031 stb/d (+3.3% variance from well test )
Well test water cut 22%
Z-Sight system water cut 19% (-2.5 % variance from well test)
74-77 ArtLift-Zenith_74-77 ArtLift-Zenith 2/23/12 10:34 AM Page 74
75
Impact on an already optimized well
In one case study, the production of a well was previously
thought to be fully optimized to the limits of the ESP. The
well was producing around 940 barrels of fluid per day
(bf/d). After installation of the real-time system, the auto-
mated analysis showed that the well was not achieving the
target bottomhole flowing pressure but
was close to the upper range limit of
the ESP while running at 55 Hz.
The real-time system predicted
through automated sensitivity studies
that the frequency could be increased
to 61.9 Hz while keeping the ESP
within its operational limits. The auto-
mated sensitivity calculations recom-
mended an additional 123 bf/d was
achievable by increasing frequency to
61.9 Hz.
Boosting the frequency resulted in
oil production increasing by more
than 71 b/d.
Impact on an
underperforming ESP
On another well, the automated ESP
diagnosis highlighted that the ESP
was underperforming by 30%. The
system recommended that the ESP
frequency could be safely increased
from 42 Hz to 46.7 Hz. The system
automatically showed that 46.7 Hz
was still not sufficient to achieve the
target drawdown because further
increases of frequency were limited
by the ESP pump range.
The bottomhole flowing pressure
stabilized at 1,267 psi. The target bot-
tomhole flowing pressure for the well
was 1,131 psi, providing scope for an
additional 1,142 barrels of fluid. The
ESP installed was not capable of pro-
viding this additional flow rate, so it
was resized based on the recommen-
dations of the real-time system. Draw-
down was optimized to the target
bottomhole flowing pressure, and
the flow rate was increased.
An automated diagnosis and fre-
quency optimization of the underper-
forming ESP provided an average
additional 200 b/d ($6.7 million) in
the 334 days of operation with the real-time system.The
ESP underperformance issue was highlighted as soon as
the automated system was implemented on the well. Fur-
ther increase in rate was limited by the upper flow range
of the ESP. Resizing of the ESP in January 2012 resulted in
an additional 455 b/d of production ($49,500/day).
EPmag.com
READ MORE ONLINE
There is more
to the story
74-77 ArtLift-Zenith_Layout 1 2/23/12 12:05 PM Page 75
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Hart Energy is
proud to introduce
our latest DUG Series
conference and exhibition . Together
with the Canadian Society for
Unconventional Resources (CSUR), we will bring the
latest insights on ti ght oil and gas resource plays to Calgary on June
18-20, 2012. Alongside spotli ghts by top operators in such plays as the Montney, Cardium, Exshaw,
Duvernay and others, detailed panel discussions will delve into the economics, costs, technologies and market
opportunities for these exciting resource plays.
FEATURED LUNCHEON SPEAKER
June 19, 2012
Peter Tertzakian is Chief Energy Economist of ARC Financial Corporation and
bestselling aut hor of "A Thousand Barrels a Second:
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1he Coming Oil Break Point
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For sponsorship and exhibitor information,
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Register today!Go to dugcanada.com for the complete agenda.
PRESENTED BY: HOSTED BY:
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UNCONVENTIONAL MIDSTREAM
H A R T E N E R G Y FOP Investor U5OIL & GAS CENTER 8. ,,,.r,
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FIVE PANEL DISCUSSIONS
TI
are
C
RI RESOURCE ABUNDANCE AND ASSESSMENT
TTO EDUCATE AND INFORM
The Montney, Cardium, Exshaw, Horn River, Duvernay and the Deep Basin
among the major unconventional plays operators are chasing in Western
Canada, as many firms tilt their portfolios toward light oil and liquids-rich gas targets. .
Canada also boasts unconvent i onal resource i ichcs in the rredcrtck Brook, (xrcen Poin t
and Utica shales. This panel will look at the depth and breadth of Canada
'
s new
unconventional plays, including key geological and geophysical parameters.
MONEY AND METRICS
Availability of capital and acreage can be constraints on activity and rising service costs are a concern.
Nonetheless, economics of the new-generation plays are robust. This panel investigates the metrics of the
Canadian unconventional plays and hi g
hli
ghts the challenges and opportunities.
COMPLETIONS AND COST CONTROL
Controversies surround the completion methods of choice as companies experiment with open-hole and
cemented liner designs. Frac fluid composition is another area of innovation, as companies work to
improve recoveries and reduce Costs. 'lhis panel features case studies and field experiences from operators
active in Canada' s resource plays.
ENVIRONMENT AND OPERATING EXCELLENCE
A minimal environmental footprint is a prime concern . Resource extraction must be accomplished while
protecting Canada' s precious natural environment. lessons learned from earlier unconventional
developments across t he continent are being applied to t he Canadian plays, which operate wi t hi n t hei r
own unique regulatory framework. Best practices for pad drilling, water treatment and handling, and
hydraulic fracturing are highli
g
hted.
EXPORT OPPORTUNITIES AND OPTIONS
Developing export markets for Canada ' s abundance of natural gas reserves is a key theme. With the
entrance of overseas firms , a true international effort is underway to secure both Canadian reserves and
knowledge. Efforts to construct and supp l y
I.NG export terminals have the potential to remake the
dynamics of the global gas market.
plZiMelip,
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M
uch of the past unconventional gas activity in the
Western Canadian Sedimentary Basin has focused on
coalbed methane (CBM) development in Alberta and tight
gas plays in northeast British Columbia (BC). Today, com-
panies are still drilling for CBM, but to a lesser degree due
to lower gas prices. Instead they are focusing on tight gas.
Hart Energy recently spoke with Mike Dawson, presi-
dent of the Canadian Society for Unconventional
Resources, about the various stages of development in
Canadian gas basins with a view to market forces.
Mostly Montney
The Montney resource play has traditionally focused on
tight gas in northeast BC, just west of the Alberta-BC bor-
der. Due to the nature of the rock, horizontal wells with
multistage fracture stimulations have produced good
results, with some wells yielding 5 MMcf/d to 6 MMcf/d
of gas. As technology has improved, companies have
expanded the play farther west, where the Montney is
considered more a shale gas type of reservoir.
Closer to the first thrust fault of the Rockies, companies
like Talisman Energy Inc., Progress Energy Resources
Corp., and Canadian Spirit Resources Inc. are actively
drilling the Montney. Dawson characterizes these wells
as closer to true shale gas wells, with finer-grained rocks
and less sand.
Results vary widely, with wells coming in at anywhere
from 2 MMcf/d to 15 MMcf/d. It is expensive drilling;
wells cost US $5 million to $10 million or more, according
to Dawson. But despite potentially high drilling and com-
pletion costs, companies continue to pay high land bonus
prices to lock up acreage positions.
Horizontal drilling in combination with multistage frac-
ing has allowed the sweet spot of the Montney to expand
beyond the original boundaries developed by ARC
Resources Ltd. and Encana Corp., he said.
Farther east, near the provincial border and in western
Alberta, low gas prices are prompting companies to look
at the Montneys NGL potential. Companies are adding
25 bbl to 35 bbl of NGL per Mcf in their production
stream, significantly impacting overall well economics. In
some cases, further eastward into Alberta, the Montney
play produces oil, presenting a new opportunity for tight
oil exploration.
There has also been a resurgence of drilling in the
Deep Basin part of northwestern Alberta, Dawson said.
Companies are having success in drilling vertical wells in
a number of Cretaceous- to Triassic-age formations that,
when commingled, produce attractive economics. This
success is due to fracturing technology as well as the pres-
ence of liquids.
Horn River and Lower Colorado
The Horn River basin, which captured the attention of
the oil and gas sector a number of years ago, continues to
move toward large-scale commercial development. Much
of the prospective land has been acquired, and activity has
shifted to exploration and pilot projects. Operators are
continuing to refine their wellbore designs to boost gas
production while lowering costs.
Companies are continuing to drill and complete their
science experiments in terms of optimizing structure, pro-
ductivity relative to cost (via multipad drilling), and fine-
tuning fluids, among other efforts, Dawson explained.
The major driver in developing the Horn River basin
remains new take-away opportunities like the proposed
Pacific Trails pipeline and the proposed facility at Kitimat
to export LNG (a project of Apache Corp., Encana, and
EOG Resources Inc.).
Compared to the Montney play, the Horn River is likely
to see a slower pace of development as operators concen-
trate on infrastructure in advance of widespread field
development.
Moving across Alberta, a shallow tight gas play, the
Lower Colorado, hosted some initial activity when natural
gas prices were more robust. But activity has slowed dra-
matically due to pricing of sub-$4/Mcf at the AECO Hub
combined with low production rates.
Some companies with well-established surface infrastruc-
ture, along with low finding and development costs, con-
tinue to operate in the region, but at a much reduced level.
78
UNCONVENTIONAL:
CANADA
Canadian producers target
tight gas opportunities
The big news in Canada is tight gas, particularly in northeast British Columbia,
but markets and regulations could temper the countrys gas future.
Brian K. Tully, Associate Editor, Oil and Gas Investor
78-81 UNCON-Canada_78-81 UNCON-Canada 2/23/12 10:35 AM Page 78
UNCONVENTIONAL:
CANADA
Quebec
In the Utica shale formation extending into Quebec, devel-
opment has slowed for a different reason. Companies such
as Talisman, Questerre Energy Corp., Gastem Inc., and For-
est Oil Corp. have assembled strong land positions and
entered the early stages of exploration over the past few
years. But that budding activity came to a halt when the
Quebec government put an interim moratorium on fracing.
The government calls it a pause where efforts to
understand the effects of hydraulic fracturing can be
undertaken, Dawson said.
A decision is anticipated within two years. The level
of activity that follows will be determined in part by the
studys results but also by conditions in the North Ameri-
can natural gas market.
According to Dawson, properties producing from the
Utica shale in the Quebec lowlands are ideally situated to
feed gas into eastern Canada and US markets, and the vol-
umes would command Nymex pricing rather than the lower
AECO value. Though attractive for that reason, the play is
very exploratory and lacks demonstrated commercial pro-
duction. Talisman has had encouraging results from early
wells, but much science and exploration work remains.
New Brunswick and Nova Scotia
Southwestern Energy Co. has a large land holding granted
by the government in a greenfield play in New Brunswick,
where it has been conducting seismic. The company plans
to drill the first exploratory well in 2012.
But, as in Quebec, there is public pressure against shale
gas development in the province because of fracing fears.
Dawson said he believes a communication and stakeholder-
relations initiative will be required as in Nova Scotia and
Quebec before exploration
can move forward.
This development is in its
infancy, so the upside is
unknown and will likely
remain so for the near term.
Natural gas plays in Nova
Scotia are smaller in order
of magnitude, but there are shale gas and CBM opportuni-
ties to be had, Dawson noted. Smaller companies are
exploring, but it is early days. Juniors wanting to develop
in this province will face headwinds from low commodity
prices and stakeholder relations issues.
Market considerations
Opinions vary as to where the natural gas market is head-
ing. Optimists point to the lower number of dedicated gas
drilling rigs as an indicator of reduced production and
higher prices on the horizon. While this trend is signifi-
cant, according to Dawson wells are being drilled faster
and with longer laterals, bringing more gas on stream with
less rig time required.
Others talk about the steep decline rates that shale gas
production faces, he said. While it is true that these types
of wells have steep early decline rates, it may not matter in
the overall project economics.
If a well in the Haynesville declines 70% to 80% in the
first year, as long as it pays out, I am not too concerned
about the decline.
Typically, the companies drilling these wells have a large
inventory of well locations.
Compression and other infrastructure costs are built
into infield well prices, resulting in the continued decline
of overall net finding and developing costs even in a
$3.50 to $4.50 price environment, he said.
Build in tight oil with associated gas as a byproduct, and
the potential for additional gas production into the North
American market is even greater.
Dawson also said without material changes to North
American gas demand, weak natural gas prices will persist.
Prices may be flat for a number of years until consolida-
Montney Trend
Horn River Basin
Utica
Formation
Appalachian
Basin
Anticosti
Basin Maritimes
Basin
Sydney
Basin
Bowser
Basin
Liard
Basin
Western
Canadian
Sedimentary
Basin
U.S.A.
CANADA
British
Columbia
Alberta
Saskatchewan
Ontario
Nova
Scotia
New Brunswick
Manitoba
Newfoundland
Quebec
Northern Territories
Yukon
Territory
Major Developing Resource Plays
Sedimentary Basins Containing
Potential Unconventional Hydrocarbon
Resources (excluding gas hydrates)
Tight Gas (sands and carbonates)
Shale Gas
Natural Gas From Coal
Thanks to the application of
technology, northeast BC tight
gas has made the region one of
the hottest plays in this vast,
resource-rich country. (Source:
Canadian Society for Unconven-
tional Resources; Map courtesy
of Oil and Gas Investor)
79
80
tion reduces drilling materially or significant political
moves happen, either for natural gas-powered vehicles
or electrical power generation.
Canadian producers will continue to be challenged to
operate at the tail end of the pipe in the North Ameri-
can market, making it difficult to compete in a price
environment of $4.50 or less.
The LNG option
There is not much gain for Canada in trading dollars
with the US on a break-even basis.
As a result, companies are looking else-
where. One option is putting natural
gas volumes into the Pacific Trails pipe
out of northeastern BC to export to
LNG facilities on the West Coast and
from there to Korea and Japan. LNG
export potential is intriguing and, on
its face, cost-effective, unlike the cur-
rent domestic market. But there are
obstacles.
There are many new LNG facilities
being constructed in Australia, and
Qatar continues to build additional
export capacity, Dawson said. There
is a lot of potential supply coming in,
and (Asia-Pacific) may not be the
unlimited market some people expect.
But there is a window of opportunity
for LNG export.
That window could close if natural
gas development stalls. Potential gas
exporters are trying to tie up long-term
sales contracts, and Canada needs to
move quickly.
Dawson is confident that the
pipeline to Kitimat will be built but
said he hopes construction does not g
o through delays that could negatively
impact the ability to obtain export
contracts.
Canadas long-term natural gas
outlook is good, but Dawson tempers
this positive outlook by posing a ques-
tion: How will the small, gas-centric
producers survive the next few years
while North American pricing lan-
guishes and infrastructure to connect
to global market opportunities is
being built?
The survival and sustainability of
a healthy natural gas industry is at
stake, he said, and it may be that
those who have will move forward
while those who dont will simply
drift away.
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ith new fields regularly being developed in ultra-
deep waters and increasingly remote locations,
long-distance export solutions for natural gas that can-
not be flared are becoming project-critical. A new con-
cept has been unveiled that could dramatically cut
pipeline construction and installation costs while also
representing a viable economic alternative to existing
transportation options such as floating LNG units.
According to DNV, its deepwater gas pipeline concept
could enable huge savings on the costs of constructing
and installing such lines by reducing the amount and
thickness of steel used without compromising pipeline
safety and integrity.
The X-Stream concept allows this reduction in
pipeline wall thickness by controlling the dif-
ferential pressure, therefore reducing the
time currently spent on difficult welding and
installation work carried out on deepwater
gas pipelines. It also uses only established
and field-proven technologies.
State-of-the-art gas pipelines for deepwater
and remote locations generally have large
diameters and high external hydrostatic pres-
sures that require thick walls to prevent them
from collapsing. This wall thickness, accord-
ing to DNV, makes it extremely difficult to
produce, with only a limited number of pipe
mills capable and available to do such work
due to quality and safety requirements. The
heavy weight of these lines also makes their
handling and logistics difficult, while the
thick pipe walls are difficult to weld.
The pipes also require extremely thick and
costly buckle arrestors, and by their nature
they can only be laid by a limited number of
pipelay vessels with prohibitive day rates. For
example, for very large diameter pipelines
(around 32 in. to 36 in.), the cost is estimated
at more than US $1 million/day.
Brainstorming session
Last year DNV with more than 65% of the worlds off-
shore pipelines designed and installed to its classification
standards gathered its young engineering talent for a
brainstorming session in Rio de Janeiro, Brazil, specifi-
cally to tackle this kind of challenge. The result was the
X-Stream concept, designed particularly with booming
areas such as Brazils presalt province, West Africa, the
US Gulf of Mexico, and Western Australia in mind.
DNV is a global provider of knowledge for identifying,
assessing, and managing risk, not an engineering or
construction house. As a result, it maintains the study
and solution are purely conceptual at this stage and will
need to go through basic and detailed design processes
before the concept can be undertaken on a real project.
But the company is introducing the idea within the
industry domain to spark feedback from both pipeline
82
DEEPWATER
ADVANCES
New pipe design
seeks industry uptake
Controlling differential pressure is the key to reducing wall thickness
and costs for deepwater gas export systems.
The DNV X-Stream solution maintains and controls the differential pressure
using multiple i-HIPPS installations. The main i-HIPPS would be installed above
surface at each end of the pipeline, while two further secondary i-HIPPS would
be installed on the seabed on either side of the main collapse-critical stretch
of line. According to the company, this could be anywhere up to 1,200 km
(746 miles) in length, although the concept is focused primarily on a 400-km
(250-mile) case study. (Image courtesy of DNV)
82-83 Deepwater-DNV_82-83 Deepwater-DNV 2/23/12 10:35 AM Page 82
83
contractors and oil and gas operators with the intention of
potentially working further in partnership with interested
parties to refine it, test it, and eventually hand over full con-
trol to them.
The exact reduction in the wall thickness of deepwater
pipelines will depend on the water depth, pipe diameter,
and actual pipeline profile.
Controlling the pressure differential
The crucial aspect of DNVs concept is to control the pres-
sure differential between the inside and outside of such
pipelines at all times. By controlling this pressure differen-
tial, the amount of steel and thickness of the pipe wall can
be cut by 25% to 30% and possibly more. This would make
it easier and cheaper to manufacture and install a typical
pipeline in approximately 2,500 m (8,202 ft) water depth.
The concept also is reliant on an innovative slant on the
established high-pressure protection system (HIPPS), of
which there are already more than 20 in use worldwide.
Asle Venas, DNV Global Pipeline director, said, By utiliz-
ing an inverted high-pressure protection system (i-HIPPs)
and inverted double block and bleed valves (i-DBB), the sys-
tem immediately and effectively isolates the deepwater pipe
if the pressure starts to fall. In this way, the internal pipeline
pressure is maintained above a critical level for any length
of time.
During installation, it is necessary to fully or partially flood
the pipeline to control its differential pressure. During oper-
ation, the i-HIPPS and i-DBB systems ensure that the
pipelines internal pressure can never drop below a safety
margin higher than the collapse pressure.
There are several other benefits if the X-Stream concept
becomes reality, according to DNV CEO Henrik O. Madsen,
costs would be saved through the ability for operators to
choose more competitively from a wider range of pipelay ves-
sels, while there also would be a resulting rise in lay rates and
a quicker welding process.
The competition element also would be improved because
operators would have a wider choice of pipe mills capable of
producing the deepwater pipe. Other bonuses include not
having to use extremely thick and costly buckle arrestors in
some cases, he said.
Madsen outlined the thinking behind DNVs initiative.
Deepwater oil and gas developments today are not allowed
to flare, so we need to find a gas solution. Floating LNG is
one solution, but its still a relatively new solution. So we have
come up with some new ideas, and we want to challenge
companies with these. This is the issue we challenged our
young engineers in Brazil with, to find a solution to bring
presalt gas to shore. We hope that designers in this industry
will take this idea and see if they think it is a good one.
EPmag.com
READ MORE ONLINE
There is more
to the story
82-83 Deepwater-DNV_82-83 Deepwater-DNV 2/23/12 10:35 AM Page 83
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raditionally, new ROV pilots have undergone basic
training offshore and on the job. The downside of this
was that more experienced pilots still needed to fly criti-
cal operations, resulting in precious stick time being
restricted for trainees. Pilots on contracts often move
from one contractor to another, which necessitates
refresher sessions or extra training to become skilled
in different ROV control interfaces.
Optimizing productive ROV work schedules is vital to
competitiveness, with training carried out onshore when-
ever practicable. Key to making this possible has been the
development of sophisticated simulators.
Realistic simulation
The DeepWorks ROV pilot training simulator provided
by the Fugro Subsea Services Ltd. Robotic Technologies
division uses realistic simulation to mimic the hydro-
dynamic response, collision behavior, and physical vehicle
characteristics of different types of ROVs. It also exposes
the underlying hydraulic and electrical circuits so that dif-
ferent ROV types and tooling solutions can be realistically
simulated and fine-tuned.
The simulator brings full force-modeled physics simula-
tion to subsea scenarios so ROVs and other movable sub-
sea assets respond realistically to operator demands,
environmental forces, and friction. Touch and feel
interactivity gives pilots the same graduated tactile
response as when actually navigating an ROV or deploy-
ing a tool such as a hydraulically activated nondestructive
testing measurement tool during a subsea inspection.
Rehearsing operations across a wide range of conditions
helps validate procedures and define the safe operating
envelope for successful inspection, maintenance, and
repair operations. Being able to rehearse specific tasks eas-
ily and repeatedly allows pilots to hone their skills quickly,
and it allows ROV supervisors to assess the job skill level
required and to grade pilots for specific operations based
on an objective assessment of their performance.
For planning purposes, running DeepWorks Engineer
on a desktop PC provides a sophisticated dynamic simula-
tion engine that models the true hydrodynamic responses
of offshore equipment when acted upon by environmen-
tal conditions. Engineers can drag and drop components
from extensive libraries to build subsea scenarios contain-
ing items like vessels, pipes, cables, and ROVs.
The real-time module allows live monitoring of the top-
side and subsea operations with equal transparency pro-
vided for offshore navigators, surveyors, and deck teams.
Shared visualization of field operations as they take place
improve work coordination.
DeepWorks Engineer Live takes input from real-time
systems including Fugro Starfix and NMEA Standard
inputs such as GPS, Gyro, and USBL data. A live 3-D
world view enables both management and offshore teams
to react more quickly to operational developments, giving
a clear and accurate picture of what is happening subsea.
Teams can combine live data, such as vessel location, with
simulated data, such as pipeline location, during a pipelay
operation.
The underlying circuits are fully modeled for training
in fault detection and repair. Training supervisors can
break individual circuits or components to test how well
pilots understand the equipment. The supervisor can
develop and repeat a problem scenario to test whether
84
DEEPWATER
ADVANCES
ROV simulation training tool
cuts operational costs and risks
With ROV support vessel costs increasing significantly over recent years, contractors are
examining their costs carefully to maximize value and identify performance benefits.
Simon Marr, Fugro Subsea Services Ltd.
In this simulation an FCV3000 ROV monitors the subsea deploy-
ment of a concrete mattress over a pipeline. (Image courtesy of
Fugro Subsea Services Ltd.)
84-85 Deepwater-fugro_84-85 Deepwater-fugro 2/23/12 10:35 AM Page 84
85
DEEPWATER
ADVANCES
the trainee responds correctly. The whole
dataset and 3-D world is recorded and can be
rewound to any point for review and detailed
behavior response analysis.
Simulation and control technologies now
give subsea operators an unprecedented
insight and ability to intervene directly in the
design, development, deployment, opera-
tion, and maintenance of subsea and seabed
equipment, minimizing risk and speeding up production.
Integrated vessel, crane, and ROV pilot training
In 2011, FSSL Robotics Technologies supplied Simsea AS,
the Norwegian marine simulator center in Haugesund,
with a DeepWorks ROV simulator. DeepWorks was inte-
grated to run synchronously with a Kongsberg Offshore
Vessel Simulator to provide a seamless operations training
platform for the launch, recovery, and operation of
ROVs. The control interface allowed the two systems to
share dynamic information to ensure they remained in
step during training missions and review.
For example, a trainee crane operator can drive the
Kongsberg crane simulator to put the ROV over the side
of the vessel, paying out umbilical cable from the winch.
The umbilical payout is passed to DeepWorks ROV, which
simulates lowering the tether management system (TMS)
to the right depth to perform the mission. The ROV pilot
then undocks from the TMS, pays out tether, and flies his
vehicle to carry out the mission, all the time staying in
constant communication with the crane operator and ves-
sel supervisor. Since the systems are dynamically linked, if
the crane operator makes a mistake or bad assumption
and winches in the ROV umbilical unexpectedly, the pilot
sees his ROV pulled in response.
So much of getting a good result offshore is not just
about an individual performing his task properly; a crane
operator might operate his crane excellently, but he has
to be able to communicate effectively with the skipper of
the vessel, the ROV pilot, and anyone else involved, said
Jason Tisdall, manager, Robotic Technologies.
In the crane simulator, the operator can see the vessel
and the sea moving. In the next room, the ROV pilots
have a display of what is going on as the vessel is lowered
into the water.
Improving communication and giving pilots and crane
operators access to the same positional information in
real time allows highly complex real-world training sce-
narios to be practiced in safety, measured, and replayed.
More and more oil companies are stipulating that a
dry run must be carried out in the simulator before a new
or challenging operation, said A Rune Johansen, manag-
ing director, SimSea AS. This reduces risk and is more
cost-effective than learning by failure in the field. It is
very expensive if you have to do things twice.
One important benefit of an ROV simulator, he added,
is that it gives competitive advantage to offshore opera-
tors by allowing them to train staff and practice difficult
maneuvers, particularly those involving difficult access
or working in confined spaces, without risk of damage to
either the ROV or expensive subsea infrastructure. It also
provides a safe environment for validating and improving
cross-team procedures for subsea survey, inspection,
maintenance, or repair.
LEFT: Rehearsing complex remote subsea intervention tasks with
an ROV is being stipulated increasingly by oil companies before
a new or challenging subsea operation. (Image courtesy of
Fugro Subsea Services Ltd.) BELOW: A Kongsberg Offshore Vessel
Simulator integrated with the DeepWorks ROV Simulator provides
a seamless training platform for ROV launch, recovery, and oper-
ation. (Image courtesy of Kongsberg Maritime)
84-85 Deepwater-fugro_84-85 Deepwater-fugro 2/23/12 10:35 AM Page 85
M
any industrial processes produce heat as a byprod-
uct that is wasted due to the inability or lack of
equipment to capture and use this heat in a productive
manner. The oil and gas industry generates such heat at
a number of upstream and midstream locations, and that
heat can be captured and converted efficiently with
portable units.
Geothermal heat from brine
The production of oil and natural gas is a complex
process. More than 1.7 million oil and gas wells have been
drilled in the US, and more than 350,000 of these wells
are at or deeper than 2,745 m (9,005 ft), according to
the Energy Information Administration (EIA). These
wells represent a vast resource for tapping hot brine still
trapped within sedimentary basins. This resource is only
beginning to be recognized as a new source for expand-
ing geothermal energy production.
While a new well may pro-
duce oil or gas on its own in
its youth, eventually pres-
sure drops within the reser-
voir, resulting in the
necessity to pump the
resource to the surface.
When this occurs, large
amounts of brine also can
be produced. If the water is
sufficiently hot and enough
water is produced (5,000
b/d or more), it becomes
possible to capture this heat
through a binary Organic Rankin Cycle (ORC) system
and generate electrical power. Such a commercial unit has
been active at a natural gas well in Louisiana where water
is being produced to extract the accompanying gas.
In an ORC system, hot water passes through an intake
pipe into a heat exchanger. Heat transfers across the heat
exchanger into a working fluid whose temperature is
raised prior to entering a turbine-generator combination
to produce electricity. The exiting (working) fluid, com-
monly used refrigeration fluid that has dropped in tem-
perature and pressure, is further cooled by air, liquid, or a
hybrid system prior to passing through a variable speed
pump to reenter the heat exchange system. The hot brine
exits the heat exchanger and is injected back into natu-
rally occurring subsurface brine aquifers.
Gas compression
The EIA lists more than 480,000 km (292,320 miles) of
pipeline throughout the Lower 48 states of the US. This
natural gas pipeline network relies on more than 1,200
natural gas compressor stations to maintain the continu-
86
Heat capture technology
minimizes waste
Capturing produced heat at various stages in the energy supply chain helps
provide onsite electricity.
Richard Erdlac and Bruce Erbele, Access Energy
tech
WATCH
An ORC system captures the
heat from hot brine, which is
then reinjected into the reser-
voir. (Images courtesy of
Access Energy)
86-89 TechWatch-MAR_86-89 TechWatch-MAR 2/23/12 10:35 AM Page 86
87
ous flow of gas between the supply area and consumers.
These compressor stations generally run 24/7/365. Not
only do they help clean the gas from any solids and
unwanted liquids, but they also increase the pressure of
the gas, allowing it to flow through the pipeline. Increas-
ing the gas pressure within the line results in the expul-
sion of heat, which can be captured with an ORC system
to generate electricity on site.
Amine gas treatment
Amine gas treatment, also called gas sweetening and
acid gas removal, is a process that uses aqueous solutions
of various alkylamines (or amines) to remove hydrogen
sulfide and carbon dioxide from gases. This process
includes an absorber unit and a regenerator unit along
with accessory equipment. In the absorber, the amine
solution absorbs the H
2
S and CO
2
from the sour gas to
produce a sweetened gas stream. The enriched amine
is then sent into a regenerator that strips out these mate-
rials so that the amine can be reused. The stripped gas
from the regenerator is concentrated H
2
S and CO
2
that
can be disposed.
Typical operating ranges for the absorber are 35C to
50C (95F to 122F) and 73 psi to more than 3,000 psi,
while the regenerator is in the range of 115C to 126C
(240F to 260F) and 20 psi to 25 psi at the bottom of
the regenerator tower. Heat given off during this
process can be captured and converted into usable elec-
trical power.
Gas incineration
Incineration is a process
involving the combustion
of various materials that
require destruction at
high temperature, such as
organic waste from hospi-
tals. In the oil and gas
industry, a gas flare is often
used at an oil or gas pro-
duction site to eliminate
waste gas that is otherwise not
feasible to use or transport. Rather
than the conventional flare system,
the waste gas can be combined with
oxygen to generate heat, CO
2
, and water as final byprod-
ucts. Some companies that already incinerate this waste
gas suggest a reduction in CO
2
emissions of 7.6 tons/day
by venting to 1.0 tons/day for 99.99% combustion effi-
ciency. Even at 80% efficiency the reduction is 2.3
tons/day of CO
2
. The heat can be captured through an
ORC system to generate usable electricity at the site of
incineration.
Portable ORC system
With multiple applications available within the oil and
gas industry for heat-to-electric production, the develop-
ment of portable ORC systems provides an easy method
for transport and insertion within existing infrastruc-
ture. Technologies that include a high-speed permanent
magnet generator, magnetic bearings, and power elec-
tronics are improvements over past ORC systems. The
magnetic generator and bearing components effectively
eliminate the need for lubrication and vastly decrease
the wear on parts, decreasing maintenance costs. The
power electronics not only allow for offsite monitoring
of the system but work to maintain frequency and volt-
age match between produced electricity and grid power.
These improvements boost heat-to-power efficiency to
12%. A quick return on investment and a 20-year life
for the equipment help provide a 15% to 24% rate of
return on equipment investment. With availability of
such equipment, the industry can realize significant
savings on electricity costs.
The Procore Module is a skid-mounted unit sold
and serviced by Access Energy, a subsidiary of Calnetix
Technologies LLC. It is easily shipped to any location for
heat-to-electric generation.
tech
WATCH
Production operations platform
integrates engineering analysis
The Schlumberger Avocet 2012 production operations
software platform features advanced workflow automa-
tion, online artificial lift management, predictive data
analysis for candidate selection, and web-based key
performance indicators (KPIs) visualization for a com-
plete view of operations. It also connects directly to engi-
neering simulation models and analytical applications,
providing insight into the root causes of production
shortfalls and further improving production operations
management in a broad range of asset disciplines, the
company said.
The engineering analysis platform effectively inte-
grates well operations and production management sys-
tems, including capturing and validating field data,
production, and equipment surveillance and tracking
specialized oilfield operations. According to Schlum-
berger, this unification of data and engineering models
in a single environment allows users to identify prob-
lems more quickly, minimizing downtime and enabling
continuous production optimization.
Regardless of asset location, the Avocet platform
offers a view of asset performance and KPI monitoring
as well as visualization of relevant information that can
ultimately affect production and impact performance.
Slb.com/avocet.
Remote gas well monitoring system
makes environmental grade
A remote gas well monitoring system has been devel-
oped by an NETL and university consortium research
partnership (NETL-RUA), which is funded by the US
Department of Energy (DOE), to help operators comply
with environmental requirements related to shale gas
extraction. The technology is currently undergoing field
trials at a Marcellus shale site in Washington County, Pa.
According to the DOE, the project is significant because
it streamlines a process to monitor shale gas wells at
remote drilling sites where the terrain and lack of nearby
power and phone lines make traditional monitoring diffi-
cult. The system comprises a series of wireless monitoring
modules used to measure volatile organic compounds,
dust, light, and sound. Each module consists of a radio
transceiver, a 12-volt battery-powered monitoring device,
and a battery. A 2-ft by 5-ft solar panel maintains the bat-
tery charge, and a base station module featuring a note-
book-sized computer with a cell phone modem receives
the monitoring data, which can be accessed from a com-
puter in another location. Fossil.energy.gov.
New resin-coated sands
reduce frac sand footprint
Preferred Sands has debuted the first environmentally
sustainable resin-coated sand product, when compared
with traditional phenolic-based coated sands, to service
the North American frac sand industry. According to
the company, the nonphenolic resin-coated sands do
not leach any chemicals or create dust and are manufac-
tured at lower process temperatures, requiring less
energy and reducing the transmissions found in tradi-
tional coating operations. Preferredsands.com.
PDC reamer resolves horizontal
shale drilling issues downhole
The Stabil Drill Ghost Reamer is a solution for doglegs,
ledges, and cutting beds for application in horizontal
shale drilling. The eight-bladed PDC reamer allows the
wellbore to be cleaned and cleared either by back-ream-
ing on rigs that have top drive or rigs without top drive
by pulling out to the top of the curve and then rotating
forward until reaching total depth. According to Stabil
Drill, a Superior Energy Services company, the flexible
reamer eliminates wiper trips, effectively saving time and
money. At the time of publication, the tool had been
used in more than 100 shale applications with positive
results, the company said. Stabildrill.com.
90
tech
TRENDS
The Avocet production operations software platform provides a
wide range of solutions for integrated operations-to-engineer-
ing surveillance and analysis, such as delivering KPIs on the
performance and analysis of PhaseWatcher permanent multi-
phase flowmetering with Vx technology. (Image courtesy of
Schlumberger)
90-93 TechTrends-MAR_90-93 TechTrends-MAR 2/23/12 10:36 AM Page 90
91
tech
TRENDS
New current profile simulator
provides 3-D monitoring
The Fugro Robotic Technologies division has intro-
duced the 3-D sea current profile simulator to the com-
panys DeepWorks product line that depicts currents as
they vary with depth and location, providing more realis-
tic environmental conditions for training ROV pilots in
station-keeping, navigation, performing intervention
operations, and mitigating diver umbilical cable haz-
ards. It also enables users to model various current set-
tings in more accurate scenarios, such as across large sea
areas, in shallow water, and while working around
inspection targets, according to Fugro.
The simulator features a user-friendly interface on
which an operator can easily modify values for the dura-
tion of the simulation mission. The user can define the
strength, heading, and elevation of currents at different
geographic coordinates and depths as a series of current
profiles in 3-D simulation. Each current is defined as a 3-
D vector. A set of the vectors defines a complex current
profile from the sea surface to the seabed, while full hor-
izontal and vertical interpolation is supported, allowing
the currents strength and direction to be calculated
and monitored at any point in the current field, the
company said. Fugrogrl.com.
Rigless ESP technology
improves bottom line in Middle East
Artificial Lift Co. has installed the first rigless electrical
submersible pump (ESP) string at a Saudi Aramco-oper-
ated field in the Middle East, resulting in cost savings on
rig utilization and electricity expenditures, decreased
downtime, and less oil deferment, the company said.
The operation comprised a 134 HP rigless ESP system
with a 6,000 b/d pump. The system, which includes the
Artificial Lift Permanent Magnet Motors and Wet Con-
nect system, was installed at a depth of 1,865 m (6,119
ft) and also included the installation of a downhole ESP
gauge, packers, and subsurface safety valve assemblies to
optimize production at the well site. Alcesp.com.
Subsea pile-stabilizing template
takes on challenging soil conditions
The first offshore pile installation operation using the
StabFrame subsea pile-stabilizing template has been
completed without incident and ahead of schedule in
the OGX-operated Waimea field in the Campos basin
offshore Brazil.
According to joint developers Large Diameter Drilling
Ltd. and MENCK GmbH, the StabFrame, which is
steered via a work-class ROV, can stabilize piles in all
depths required for underwater pile driving and can
accommodate various soil conditions. The StabFrame
hydraulic release mechanism enables the pile to be
driven further into the seabed, if required, before open-
ing the frame, which allows the template to adjust to
unpredictable and challenging seabed conditions.
For this operation, MENCK had to drive 10 84-in.
mooring piles in up to 140 m (459 ft) water depth using
an MHU 500T hydraulic hammer. The piles were required
for installation of an FPSO mooring system during the ini-
tial EWT phase of subsea development on the Waimea
field.
Nancy Agin, Associate Editor
Fugros 3-D current simulator can predict where subsea risers
and umbilicals are in real time based on the currents flowing,
helping to improve safety and reduce costs. (Image courtesy of
Fugro Subsea Services Ltd.)
The StabFrame template completed its first offshore pile installa-
tion operation in the Campos basin despite strong currents, esti-
mated at times to be more than 2.5 knots. (Image courtesy of
Large Diameter Drilling Ltd.)
94
international
SPOTLIGHT
A
ttracting exploration interest following a recent
giant gas discovery in the countrys offshore area,
the Republic of Cyprus has opened its second offshore
licensing round in 1Q 2012.
The country is in an exploration hotspot with borders
to major hydrocarbon producers Egypt and Israel. Huge
gas discoveries have been found in the world-class Levan-
tine basin, in particular Tamar (9 Tcf) and Leviathan (20
Tcf). The Aphrodite well was spudded by Noble Energy
in Cyprus Block 12 in September 2011, and in Decem-
ber 2011, the results from the 5,860-m (19,227-ft) deep
well were presented: high-quality multiple Miocene sand
intervals, 94 m (308 ft) net pay, and a natural gas vol-
ume of 7 Tcf.
Cyprus wanted to open its second bid round after
the announcement of the first exploration well, and
the government officially opened the second licensing
round February 11, 2012, having submitted the neces-
sary documentation to Brussels for official translation
by the European Commission. The government said
the round will be a three-month process during which
expressions of interest will be submitted by potential
energy companies. The Council of Ministers will grant
licenses for Blocks 1-11, and 13. Model production-shar-
ing contracts will be awarded from the Republic of
Cyprus for the selected applicants.
The exploration area of 51,000 sq km (19,690 sq
miles) is part of Cypruss exclusive economic zone and
is divided into 13 exploration blocks. Noble Energy was
awarded Block 12 in 2008 after the first licensing round.
The company received a three-year exploration license
with defined exploration commitments. After three
years, 25% of the block was relinquished, and the
released acreage was included in Blocks 9 and 11.
On average, the exploration blocks are approximately
4,000 sq km (1,544 sq miles) and span an area from the
Herodotus basin in the west to the Levantine basin in
the east. Block 1 and the northern parts of Blocks 2 and
3 are closest to the island and cover the Cyprus Arc and
its deformation front. Blocks 4, 5, 6, and 10 are situated
in the Herodotus basin. Blocks 7 and 8 and the western
part of Block 11 cover the Eratosthenes Continental
block and the west Eratosthenes basin. Finally, the
southern parts of Blocks 2, 3, and 11, together with
Blocks 9, 12, and 13, cover the Levantine basin.
PGS is the official data provider and has provided
Cyprus with a dense multiclient (MC) seismic data
grid. The survey MC2D-CYP2006 was acquired for the
first licensing round with a 10-km by 20-km (6-mile by
12-mile) coverage. MC2D-CYP2008 infills the previous
survey to provide a seismic data coverage of 5 km by
5 km (3 miles by 3 miles) on average. The most recent
seismic survey used GeoStreamer technology to obtain
the best possible data quality and, following reprocess-
ing in 2011, the original conventional data grid also has
high data quality. Block 3 has the greatest MC seismic
data coverage with MC 3-D data coverage in part of the
block. Geological interpretation reports based on the
PGS MC data including hydrocarbon assessments also
are available through the Ministry of Commerce, Indus-
try, and Tourism.
A map of the exploration area offshore Cyprus is overlain by
the structural map of the seabed. The Aphrodite gas discovery
is marked in Block 12. (Image courtesy of PGS)
Cyprus gears up for
second offshore licensing round
Giant gas discoveries have spurred interest in this part of the Mediterranean Sea.
ystein Lie, Petroleum Geo-Services
94-95 Spotlight-PGS_94-95 Spotlight-PGS 2/23/12 10:36 AM Page 94
94-95 Spotlight-PGS_94-95 Spotlight-PGS 2/23/12 10:36 AM Page 95
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A
growing realization has set in among companies
operating in the West African offshore sector
despite having been a producing region for more than
50 years, its participants have only scratched the surface
in terms of its reserves potential.
The continents western coastline has been dominated
by the established oil-producing giants of Nigeria and
Angola since Shell first found crude in the Niger Delta
and started producing in 1958.
But the whole of the region is now emerging from the
shadows as a presalt province in its own right, inspired
by the outstanding success being experienced across the
Atlantic offshore Brazil and assisted by improved seismic
technology, better reservoir understanding, and more
efficient deepwater exploration drilling techniques.
The regions presalt potential appears to stretch 1,500
km (932 miles) further north along the coast from the
traditional oil-prone areas such as Angola, with compa-
nies such as Anadarko Petroleum, Tullow Oil, and Kos-
mos Energy seeking to extend the so-called Jubilee trend
in the West African transform margin from emerging oil
superpower Ghana to frontier areas offshore Sierra
Leone and Liberia.
Angolan presalt potential recognized
The most recent licensing round offshore Angola was a
clear illustration of the industrys awareness of its presalt
potential, with companies such as Statoil, BP, Total, and
Eni picking up key operatorships and interests in blocks
in the Kwanza and Benguela basins.
Statoil paid US $1.4 billion for an operating interest in
presalt Blocks 38 and 39 and partner positions in Blocks
22, 25, and 40.
Angola already plays a bigger role in the Norwegian
companys current portfolio than many realize. The
Angolan continental shelf is the largest contributor to its
production outside Norway, with equity production from
Blocks 15, 17, and 4/05 yielding 173,000 boe/d in 2010
34% of its total international oil and gas output.
With 20 years of experience in Angola and a position
as one of the largest producers in the country, becoming
an operator of two presalt licenses is an important mile-
stone for Statoil. The Angolan presalt is a frontier play
with high potential, believed to be analogous to presalt
Brazil, said Tim Dodson, executive vice president for
exploration. Early access to a multiple-block portfolio in
exploring this new play gives Statoil exposure to signifi-
cant upside potential should the play be proven.
BP also expanded its position, gaining access to five
deepwater exploration blocks to result in interests in
nine blocks offshore Angola covering 32,650 sq km
(12,600 sq miles). It signed production-sharing contracts
(PSCs) for four blocks covering 19,400 sq km (7,490 sq
miles), including operatorship of Blocks 19 and 24 as well
as separately farming in to a 40% stake in the Petrobras-
operated, 4,840 sq-km (1,869 sq-mile) Block 26 in the
Benguela basin. The five new blocks cover a total area of
24,000 sq km (9,267 sq miles) in 200 m to 2,500 m (656 ft
to 8,202 ft) water depth, and they increase BPs total
Angolan acreage by 275%.
Total collected three new deepwater blocks in the
Kwanza basin. The company will operate Blocks 40 and
25, and it also has a minority partnership interest in
Block 39. Block 40 covers an area of 7,604 sq km (2,936
sq miles), Block 25 spans 4,842 sq km (1,870 sq miles),
and Block 39 covers 7,831 sq km (3,024 sq miles).
Total said its main objective is to explore for presalt
deposits in the companys offshore West Africa blocks,
which it believes share promising geological similarities
with the Santos and Campos basins offshore Brazil. Over
an initial five-year exploration period, the company will
acquire 14,000 sq km (5,405 sq miles) of 3-D seismic and
plans to drill five exploration wells with presalt objectives
in aggregate over the three blocks.
Eni, meanwhile, signed a PSC as operator for Block 35,
which covers 4,900 sq km (1,892 sq miles) in the north-
ern Kwanza basin. The contract encompasses the drilling
of two presalt wells and the acquisition of a 3-D survey of
2,500 sq km (965 sq miles) in the first five-year period.
Cameia discovery derisks region
The optimism of these companies has been boosted
with recent success by Cobalt International Energy,
REGIONAL REPORT:
WEST AFRICA
Extending the West African play
The emerging presalt potential offshore West Africa and its similarity
to Brazils giant reserves indicate that, despite decades of production,
operators have seen only the tip of the iceberg.
96
96-99 RR-WestAfrica_96-99 RR-WestAfrica 2/23/12 10:36 AM Page 96
which reported that it has substantially derisked
Angolas presalt play.
Cobalt has a new phased floating production project
on the drawing board for Angolas deepwater presalt
province after it confirmed its latest frontier wildcat had
made a world-class light oil discovery that far exceeded
predrill expectations. The operators Cameia-1 well in
Block 21 was drilled in 1,682 m (5,518 ft) water depth to a
total depth of 4,886 m (16,030 ft). According to the com-
pany, an extensive wireline evaluation program was con-
ducted that confirmed the presence of a 360-m (1,180-ft)
gross continuous oil column, with more than 75% net-to-
gross pay estimate.
An extended drillstem test also has been performed on
the well to provide additional information. The test
flowed at an unstimulated sustained rate of 5,010 b/d of
44API gravity oil and 14.3 MMcf/d of associated gas
(approximately 7,400 boe/d) with limited drawdown.
The flow rate confirmed the presence of a very thick,
continuous, high-quality reservoir saturated with light oil.
Internal preconcept development plans are being pro-
gressed by Cobalt, with the development model following
a phased approach similar to Tullow Oils strategy on its
Jubilee field offshore Ghana. Subsea concepts and design
specifications have been developed and are being vali-
dated. The company is now exploring opportunities
for accelerating vessel access for early production with
third-party facility providers, although this will be better
defined once results from the next appraisal come in.
Joseph H. Bryant, Cobalt chairman and CEO, said the
Cameia discovery, which has the potential to flow at more
than 20,000 b/d of oil, has increased the companys con-
fidence in its West Africa presalt exploration inventory.
Cobalt and its partners have initiated an appraisal
drilling program to further assess the size and extent of
the discovery and to drill deeper objectives. Other multi-
ple presalt prospects in Block 21 and the adjacent Block
20 include Lontra and Cameia North, and these, along
with the Bicuar prospect, are expected to be drilled in 2H
2012 through 2013. Cobalts Loengo prospect in Block 9
further south offshore Angola also is being targeted dur-
ing the same period.
Cobalt officials also said the discovery has increased
their understanding of the deepwater Gabon presalt play,
97
REGIONAL REPORT:
WEST AFRICA
Approximately 120 million years ago, Cobalts Kwanza basin blocks offshore Angola would have been around 80 km (50 miles) from
the Whale Park Complex in Brazils Campos basin and in the same depositional basin. (Map courtesy of Cobalt International Energy)
98
which already is proven onshore and near-shore, and that
they plan to drill a wildcat well in the Diaba block in late
2012 or early next year.
West Africa-Brazil link
Experts at Cobalt long have been believers in the presalt
link between West Africa and Brazil, which has a single
geologic history and setting. Go back 120 million years,
and Brazils prolific 2.5-3.5 Bboe Whale Park Complex
and surrounding area in the Campos basin (containing
discoveries such as Jubarte, Cachalote, Itaipu, and Wahoo)
existed some 80 km (50 miles) from Cobalts Kwanza
REGIONAL REPORT:
WEST AFRICA
By Country (US$m) 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Grand Total
Angola 7550 3853 1496 3680 8707 6815 8383 7188 7045 10186 64904
Nigeria 3752 4121 4621 1348 2336 2526 4408 3984 5762 8596 41454
Ghana 15 30 82 2007 422 580 1417 1988 1018 837 8397
Congo (Brazzaville) 973 933 367 400 92 626 1231 1589 712 1058 7981
Equatorial Guinea 71 80 133 277 939 1021 1211 1188 1003 1252 7175
Gabon 447 284 144 141 236 348 197 299 336 234 2666
Cameroon 15 15 110 319 197 64 19 367 584 1689
Ivory Coast 84 1 49 90 248 325 216 120 95 1229
Sierra Leone 158 573 731
Benin 6 25 131 0 21 37 219
D.R.Congo (Ex Zaire) 23 15 0 38
Grand Total 12,930 9,317 6,857 8,018 13,166 12,493 17,237 16,472 16,543 23,451 136,483
By Segment (US$m) 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 Grand Total
Subsea Completion 5483 4432 4148 2380 5061 3019 6740 5752 4881 8071 49967
Pipeline 3801 2044 915 3225 4935 5678 5716 5359 5557 8696 45925
Platform 3030 2554 1719 2123 2738 3425 4088 4783 5312 5788 35561
Single Point Mooring 388 212 47 148 228 102 358 331 562 512 2888
Control Line 228 75 27 142 203 268 336 247 231 384 2141
Grand Total 12,930 9,317 6,857 8,018 13,166 12,493 17,237 16,472 16,543 23,451 136,483
Source: Infield Systems Aberdeen
West African Offshore Capex including EPIC and Drilling
West Africa is an offshore powerhouse in terms of
planned investment by oil majors over the next five years.
Exclusive figures for E&P from Infield Systems Aberdeen
forecasts total capex, including drilling and engineering,
procurement, installation, and construction (EPIC) activity,
of more than US $86 billion between 2012 and 2016. For
the previous five-year period between 2007-2011, the
equivalent figure is approximately $50 billion.
Angola leads with a forecast total of nearly $65 billion
over the whole 10-year period from 2007 to 2016. Nige-
ria is second with more than $41 billion forecast for the
same period, with Ghanas relatively sudden emer-
gence seeing it rise to third place with more than $8 bil-
lion forecast for the 10-year period.
In terms of infrastructure, subsea is the top expendi-
ture item, with nearly $50 billion forecast to be spent
between 2007 and 2016, out of which more than $28 bil-
lion is expected to be invested between 2012 and 2016.
Spending on pipelines is not far behind at nearly $46
billion for the 10-year period from 2007, with a large pro-
portion of that ($31 billion) forecast to be spent in the
2012-2016 period.
According to Infield, deep water will dominate the off-
shore picture. A capex total of $100 billion is forecast on
West African projects in more than 500 m (1,640 ft)
water depth over the 10-year period, with nearly $60
billion of that concentrated in the second five-year
period to 2016.
West Africa spend trends
99
basin Blocks 20 and 21 in the same depositional basin.
The companys analysis has confirmed that the Campos
and Kwanza basins share similar presalt histories and
characteristics, with the exploration history of the Cam-
pos basin serving as an appropriate analog for the
Kwanza basin.
Meanwhile, Anadarko, Kosmos, and Tullow are striving
to establish the presalt trend farther north, working
closely to extend and replicate the success achieved off-
shore Ghana with their Jubilee field, now fully producing
from its first phase. The $1.1 billion Phase 1A is expected
to come online later this year.
To the north is Sierra Leone, where Anadarko as oper-
ator with partners Kosmos and Tullow had encouraging
success in 2009 with the deepwater Mercury discovery
and, more recently, the Venus find in SL Block 07-10.
These discoveries have endorsed and enhanced their
strategy to extend the Jubilee play around the Gulf of
Guinea to the Liberian basin, where the consortium has
other multiple prospects.
Tullow also recently confirmed a hydrocarbon discov-
ery at its Jupiter prospect in the same block as Mercury.
The Transocean Discoverer drillship will return to complete
drilling the Mercury-2 well by the end of March 2012.
Ghana: The jewel in the crown
Ghana remains the crown jewel for all three companies
at present. They are already forging ahead with the
next fast-track development in the Deepwater Tano
Block after hitting better-than-expected oil reserves in
the license, and like Jubilee, it will be developed using
an FPSO.
The latest appraisal well, Ntomme-2A, firmed up further
commercial reserves, with Tullow reaffirming that it envis-
ages the Greater Tweneboa, Enyenra, and Ntomme (TEN)
fields will be most efficiently developed in an integrated
development scheme via a single production facility.
A plan of development for the TEN cluster is
expected to be submitted to the government of Ghana
in 3Q 2012 alongside a formal declaration of commer-
ciality. First production from the project is anticipated
30 months after approval.
Anadarko, Tullow, and Kosmos are working to extend the Jubilee
trend from Ghana more than 1,120 km (700 miles) along the
coast to the frontier waters of Sierra Leone and Liberia. (Map
courtesy of Anadarko Petroleum)
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Africa
Eni hits gas offshore Mozambique
Eni has discovered an estimated resource potential of 7.5
Tcf of gas in place at its Mamba North 1 prospect in Area
4 offshore Mozambique. The discovery well was drilled in
1,690 m (5,577 ft) water depth and encountered 186 m
(614 ft) of gas pay in multiple high-quality Oligocene and
Paleocene sands. Mamba North 1, which flowed 35.3
MMcf/d, increases the potential of the Mamba Complex
in Area 4 to approximately 30 Tcf.
Algeria green lights North Reggane Project
The Algerian national agency for hydrocarbon resources,
ALNAFT, has authorized the US $3 billion development of
six fields in the North Reggane Project in the Algerian
Sahara Desert. A total of 104 wells across the six develop-
ment areas will be developed by a consortium consisting of
Repsol, Sonatrach, RWE Dea, and Edison. Production,
slated for mid-2016, is expected to reach 282 MMcf/d of
gas the first 12 years, with field life estimated to be 25 years.
Orange basin 2-D survey under way
Spectrum, in partnership with CGGVeritas and the
National Petroleum Corp. of Namibia, has initiated a new
2-D multiclient seismic survey in the deepwater Orange
basin offshore Namibia. The program includes the acquisi-
tion of 7,000 km (4,350 miles) of long-offset data via the
Seabird Exploration M/V Northern Explorer seismic vessel.
Final deliverables are expected to be available June 2012.
Sonangol kicks off offshore Angola survey
TGS is in the process of acquiring a 3-D multiclient seis-
mic survey covering approximately 12,497 sq km (4,825 sq
miles) offshore Angola for Angola state oil company
Sonangol. The survey includes Blocks 36 and 37, which
are part of a highly prospective deepwater presalt hydro-
carbon play in 2,000 m to 5,000 m (6,560 ft to 16,400 ft)
water depth, and is expected to be completed in 3Q 2012.
Asia/Pacific Rim
Santos turns on taps at Indonesia gas field
Santos has started gas production from the Wortel project
on the Sampang production-sharing contract offshore
East Java in Indonesia. Gross output from the combined
Oyong and Wortel fields is expected to be 85 MMcf/d.
Chevron to boost Tengiz production
Chevron affiliate Tengizchevroil LLP (TCO) expects
to enter FEED in 2012 for a trio of projects, including
sour-gas injection, that will expand daily production from
the Tengiz field in Kazakhstan by 250,000 bbl to 300,000
bbl at an estimated cost of up to $25 billion.
Chevron hits 13th discovery offshore Australia
Chevrons Australian subsidiary encountered 74 m
(243 ft) of net gas pay at the Satyr-3 well in the Exmouth
Plateau area in the Carnarvon basin offshore Western
Australia. The well, located in the WA-374-P permit area,
was drilled to 4,075 m (13,369 ft) TD in 1,124 m (3,688 ft)
water depth.
Europe/Russia
Ukraine well starts producing at more than 1.5 MMcf/d
Kulczyk Oil Ventures has confirmed that its partially
owned subsidiary KUB-Gas LLC has started commercial
production from the Olgovskoye-6 (O-6) well in Ukraine
at a rate of more than 1.5 MMcf/d, increasing total field
production to more than 18.5 MMcf/d (13 MMcf/d net).
Meanwhile, the O-8 well, which was fraced after O-6, is
expected to begin producing in March.
Barents Sea 3-D multiclient EM campaign begins
EMGS has begun a multiclient 3-D electromagnetic cam-
paign in the Barents Sea ahead of Norways 22nd explo-
ration licensing round. Data acquisition will begin in
March using the Atlantic Guardian vessel. Preliminary data
deliverables will be available from April 2012, and 3-D
inverted data will be available May 2012.
RWE Dea spins bit at Clipper South
RWE Dea UK has spudded the first development well
for the Clipper South gas field in Blocks 48/19 and 48/20
on the UK Continental Shelf. The #48/19a-C1 well is tar-
geting a tight Permian-age Rotliegend reservoir at a depth
of 2,500 m (8,250 ft) and is the first of up to five extended
horizontal wells with multiple hydraulic fractures. The
field contains approximately 500 Bcf of gas in place, and
production is expected in summer 2012.
First spar platform to be installed on NCS
Statoil and its partners will develop the deepwater Luva
field in the Norwegian Sea using a spar platform the first
EPmag.com
READ MORE ONLINE
For additional
information on
these projects
and other global
developments:
100
international
HIGHLIGHTS
100-101 Highlights-MAR_100-101 Highlights-MAR 2/23/12 10:36 AM Page 100
101
international
HIGHLIGHTS
of such developments on the Norwegian Continental Shelf
(NCS). The concept includes two subsea templates with
four wells on each and one satellite template with one well.
The platform will include a gas processing facility with
capacity of 812 MMcf/d. Luva, expected to come online
in 2016, is in 1,300 m (4,290 ft) water depth.
Snhvit field reserves raised by 706 Bcf
Statoil reports that recoverable reserves from the Snhvit
field have been increased by 706 Bcf to 7.4 Tcf. The adjust-
ment corresponds to an increase of 125 MMboe in relation
to the resource estimate that was prepared in the plan for
development and operation. Original recoverable resouces
were estimated at 6.7 Tcf and 113 MMbbl of condensate.
South America
Total divests onshore Colombia assets
Sinochem has agreed to acquire TEPMA, a fully owned
affiliate of Total, which holds a working interest in the
Cusiana field as well as participation in the OAM and
ODC pipelines in Colombia, for $1 billion. Totals share
of production in Cusiana is approximately 7,000 boe/d.
In Colombia, the company retains a 55% interest in the
Mundo Nuevo block, a 50% interest in the Niscota block,
and a 5.2% share in the Ocensa pipeline.
Franco Northwest proves additional oil reserves
Petrobras has confirmed the extension of oil reserves
northwest of the Franco discovery well in the Santos basin
presalt area offshore Brazil. The #3-BRSA-944A-RJS (#3-
RJS-688A) well, which was drilled in 1,860 m (6,138 ft)
water depth, encountered 28API oil samples from 5,460
m (18,018 ft).
Hydrocarbon find may confirm new Solimes cluster
Petrobras has discovered oil and natural gas at the 1-
BRSA-961-AM well in the Solimes basin on Block SOL-T-
171 in Amazonas state onshore Brazil. The well Igarap
Chibata Leste was drilled to a final depth of 3,295 m
(10,873 ft). Tests indicate production capacity of 1,400
b/d of good quality oil (41API) and 1.6 MMcf of gas in
the Juru formation.
North America
Kitimat LNG project moves ahead
The National Board of Canada has approved an application
by BC LNG Export Cooperative LLC for a license to export
36 million metric tons (MMmt/y) of LNG per year from
Kitimat, British Columbia, primarily to Asian markets over a
20-year period. The maximum annual quantity allowed for
export will be 1.8 MMmt/y of LNG.
Shell drills successful Appomattox appraisal
Shell has confirmed a successful appraisal at the Appomat-
tox discovery in Mississippi Canyon Block 348 in the deep-
water GoM. The appraisal well was drilled to 7,879 m
(25,851 ft) TD and encountered approximately 46 m (150
ft) of oil pay. Plans are in place to continue the appraisal
program in 2012 by drilling a well in the southwest block
and a sidetrack appraisal in the northwest fault block.
Anadarko proves Heidelberg discovery
Anadarko Petroleum has reported a successful appraisal
well in Green Canyon Block 903 in the deepwater GoM.
The Heidelberg-2 appraisal well was drilled to 9,458 m
(31,030 ft) TD in 1,524 m (5,000 ft) water depth and
encountered 76 m (250 ft) of oil pay in high-quality
Miocene sands. The company plans to sidetrack the well
and initiate pre-FEED activities to prepare for sanctioning
a field development project.
Middle East
Iran suspends oil exports to UK, France
At press time, Iranian Oil Minister Rostam Qassemi was
calling on European member states to make a final deci-
sion on oil imports from Iran following their decision to
impose strict sanctions against the country, including freez-
ing its central back assets and planning an oil embargo for
July. In response, Iran has imposed a ban on oil exports to
Britain and France. The 27-nation EU accounts for approx-
imately 18% of Irans oil exports.
Gulf Keystone completes Shaikan well tests
Gulf Keystone Petroleum has completed the testing pro-
gram for its appraisal well #2-Shaikan in the Kurdistan
Region of Iraq. Following an August 2011 Triassic dis-
covery in the Kurre Chine C zone, the company con-
ducted nine well tests that targeted the Triassic and
Jurassic, with a maximum aggregate flow rate of 18,900
b/d. Shaikan has gross oil-in-place volumes of 8 MMbbl
to 13.4 MMbbl, with a mean value of 10.5 Bbbl.
Noble strikes gas at Tanin prospect
Noble Energy has discovered natural gas at its Tanin
prospect in the Alon A license, the companys sixth consec-
utive hydrocarbon find in the Levant basin offshore Israel.
The well was drilled to 5,551 m (18,212 ft) TD in 1,555 m
(5,100 ft) water depth and encountered 40 m (130 ft) of
gross gas pay in high-quality Lower Miocene sands.
100-101 Highlights-MAR_100-101 Highlights-MAR 2/23/12 10:36 AM Page 101
102
on the
MOVE
On page 84 of our February issue, this chart appeared with incorrect information.
The corrected chart is shown below. E&P regrets the error.
Correction
People
Kuwait Emir Sheikh Sabah Al-Ahmad
Al-Sabah has appointed Hani Hussein,
a former CEO of Kuwait Petroleum
Corp., as oil minister.
The Canadian Society of Petroleum
Geologists has elected Robin Mann
president for 2012.
Thierry de Rudder has stepped down
as Total board director and has been
succeeded by Grard Lamarche.
Halliburton has named Murry S.
Gerber to its board.
Crosco has appointed Tomislav Tadic
CFO. Tadic and Peter Szekely also have
been appointed to the companys man-
agement board.
Maria das Graas Silva Foster has taken
the reins as CEO, Petrobras, replacing
Jos Sergio Gabrielli de Azevedo.
Adil Toubia (right) has
succeeded Tom Blades as
CEO, Oil & Gas Division
at Siemens Energy.
Fugro Robertson Inc. has
named Guy M. Oliver (left)
president.
Energistics has elected Duncan Junor,
senior director of Strategy and Corpo-
rate Development at Halliburton, as
chair, and Steve Roberts, vice presi-
dent of the Field of the Future Flag-
ship Program at BP, as vice chair of
the board.
IADC has promoted Mark Denkowski
to vice president, Accreditation and
Certification Programs.
Perry A. Harris has accepted the posi-
tion of president, J-W Wireline Co.
Geomage has welcomed Marianne
Rauch-Davies as its new vice president,
Applied Technology.
Reservoir Group
has named Wade
McCutcheon (left)
COO and Etienne
Roux (right) managing director.
Average cumulative production versus time charts on Viking horizontal wells at Harmattan East/ Crossfield East in
Alberta, Canada, illustrate how GasFrac has performed favorably compared to offset production wells. (Chart courtesy
of GasFrac)
102-103 Onthemove-MAR_102-103 Onthemove-MAR 2/23/12 10:37 AM Page 102
ADVERTISER INDEX
Allmand . . . . . . . . . . . . . . . . . . . . . . . . 58
Baker Hughes Incorporated . . . . . . . . 27
Cameron . . . . . . . . . . . . . . . . . . 35, 37, 39
Checkers Industrial Safety Products . 99
CNPC Greatwall Drilling Co. . . . . . . . 69
Dearing Compressor . . . . . . . . . . . . . . 75
Dragon Products, Ltd. . . . . . . . . . . . . . 17
E&P . . . . . . . . . . . . . . . . . . . . . . 76, 88, 92
EAGE . . . . . . . . . . . . . . . . . . . . . . . . . . 59
FMC . . . . . . . . . . . . . . . . . . . . . . . . . . . 81
Forum Technologies . . . . . . . . . . . . . . 19
Frontier Wellhead . . . . . . . . . . . . . . . . . 65
Fugro Jason . . . . . . . . . . . . . . . . . . . . . . 79
Halliburton . . . . . . . . . . . . . . . . . . . . 4, 43
ION . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
J&J Truck Bodies & Trailers . . . . . . . . . 15
John Crane Production Solutions Inc . . 9
McPhar International . . . . . . . . . . . . . . 83
Mewbourne College
of Earth & Energy . . . . . . . . . . . . . . . . . 7
M-I Swaco . . . . . . . . . . . . . . . . . . . . . . . . 2
ModuSpec . . . . . . . . . . . . . . . . . . . . . . 64
Momentive . . . . . . . . . . . . . . . . . . . . . . 73
National Oilwell Varco . . . . . . IFC, 13, 49
Nauchers Alpine . . . . . . . . . . . . . . . . . 68
Newpark Drilling Fluids . . . . . . . . . . . 30
Oilfield Improvements . . . . . . . . . . . . 11
P2 Energy Solutions . . . . . . . . . . . . . . . 51
PGS Exploration (UK) Ltd. . . . . . . . 28, 53
R360 . . . . . . . . . . . . . . . . . . . . . . . . . . . 62
Reed Exhibitions/
SPE Intelligent Energy . . . . . . . . . . . . 26
Rockwater Energy Solutions . . . . . . . . 63
Schlumberger . . . . . . . . . . . . . . . . . 3, BC
Society of Exploration Geophysicists 95
Society of Petroleum Engineers . . . . . 72
Spacecom . . . . . . . . . . . . . . . . . . . . . . . 16
TAM International . . . . . . . . . . . . . . . . 22
Tendeka . . . . . . . . . . . . . . . . . . . . . . . . 45
Tetra Technologies . . . . . . . . . . . . . . IBC
TGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
V&M . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
Varel International . . . . . . . . . . . . . . . . 41
Weatherford International, Ltd. . . . 24, 25
GEA Westfalia Separator
Group GmbH . . . . . . . . . . . . . . . . . . . 21
Zeeco . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Bjrn Jalving has been named execu-
tive vice president, Subsea, at Kongs-
berg Maritime and a member of
the companys management group,
replacing Rolf Arne Klepaker, who
is now working with strategic projects
at the company.
James Tuppen has joined
Wild Well Control as man-
ager, International Well
Control Operations.
Expansions
DNV has launched a Deepwater
Technology Center in Singapore.
TAM International has set up its first
Latin American regional office in
Bogota, Colombia.
Cactus Wellhead has constructed two
new facilities, one in the Haynesville/
Bossier shale area in Center, Texas,
and one in the Eagle Ford shale area
in Pleasanton, Texas.
Select Energy Services has established
a new base for its Utica shale opera-
tions in Carroll County, Ohio.
Peak Well Systems has opened its first
Malaysia office in Kuala Lumpur, which
will be headed by Irwan Halik, techni-
cal sales manager, South East Asia.
Freudenberg Oil & Gas has inaugu-
rated a 1,300-sq-m (14,000-sq-ft)
Materials and Products Testing
facility in Northwest Houston.
Well Control School (WCS) and
AXON Energy Products have devel-
oped a new deepwater drilling opera-
tions course, which is IADC Wellcap
Plus accredited, at the WCS Training
Center in Houston, Texas.
Group Publisher
RUSSELL LAAS
Tel: 713-260-6447
rlaas@hartenergy.com
Associate Publisher
DARRIN WEST
Tel: 713-260-6449
dwest@hartenergy.com
United States
Canada / Latin America
1616 S. Voss Road, Suite 1000
Houston, Texas 77057 USA
Tel: 713-260-6400
Toll Free: 800-874-2544
Fax: 713-627-2546
Regional Sales Manager
JULIE B. FLYNN
Tel: 713-260-6454
jflynn@hartenergy.com
Regional Sales Manager
HENRY TINNE
Tel: 713-260-6478
htinne@hartenergy.com
Advertising Sales Representative
ERIC MCINTOSH
Tel: 713-260-6471
emcintosh@hartenergy.com
Sales Manager
Eastern Hemisphere
DAVID HOGGARTH
Tel: 44 (0) 7930 380782
Fax: 44 (0) 1276 482806
dhoggarth@hartenergy.com
Advertising Coordinator
CAROL NUNEZ
Tel: 713-260-6408
cnunez@hartenergy.com
Subscription Services
E&P
1616 S Voss Road, Suite 1000
Houston, Texas 77057
Tel: 713-260-6442
Fax: 713-840-1449
custserv@hartenergy.com
List Sales
MICHAEL AURIEMMA
Venture Direct
212.655.5130 phone
212.655.5280 fax
mauriemma@ven.com
MARKETING | SALES | CIRCULATION
103
on the
MOVE
102-103 Onthemove-MAR_Layout 1 2/23/12 1:34 PM Page 103
E P
,
T
he conversation about casing running is growing into
one that shifts the focus from making connections at
the rotary to life-of-field, total-depth well integrity. Inspir-
ing this deeper conversation is a new way of thinking
about old challenges that combines traditional services
with relevant new technologies.
When top drive casing running systems were introduced
in the 1990s, the focus was on a rig floor competency
making connections at the rotary. Acceptance and appli-
cability of the technology expanded as drilling equipment
and connections evolved to withstand the demands of vari-
ous formation strengths and geology. Yet the focus
remained on the rig floor.
During the early 2000s, the push for wellbore architec-
ture that could replace traditional telescoping wells with
large-bore hydrocarbon conduits from surface to the
producing formation spawned significant technology
developments, such as Weatherfords drilling-with-casing
(DwC) and drilling-with-liner systems. These systems
enable casing to be run, set, and cemented in a single
trip. They accelerate well construction, reduce cost and
risk, and make it possible to successfully drill through
trouble zones where problems such as lost circulation
zones, pressure transitions, and unstable formations can
have a negative impact on overall success.
The OverDrive casing running and drilling system
became the companys catalyst to take a new approach
to tubular running services. Tubular running specialists
saw the capability of the system to simultaneously rotate,
circulate, and push casing strings as an excellent way to
improve traditional tubular running operations. Yet those
capabilities had further implications, and a longer and
closer look presented an opportunity to apply a strategy
that could add value to clients operations while creating a
new growth market for the upstream oil and gas industry.
The capabilities that the casing running and drilling
system brought to DwC operations required downhole
engineering requirements outside the scope of tradi-
tional rig-floor competencies. For example, rotating
and pushing casing introduced torque and drag, cyclic
fatiguing, bending, and compressive loading that require
complex analyses. To fully integrate the new capabilities
into the existing offering would require multi-discipline
expertise and understanding. Equally apparent was that
the resulting competency and a broad portfolio of
enabling technologies could add real client value by
widening the perspective from traditional tubular run-
ning to a total depth solution more closely aligned with
operators overall wellbore objectives. Instead of focusing
on making connections at the rotary, the focus would
shift to bringing high-integrity casing strings with the
planned diameter to total depth and securing the well-
bore over the life of the well.
A dedicated, multi-discipline well engineering and
optimization approach was formed to help develop this
new total depth competency. The total depth specialists
understand the entire well construction process and
how the associated technologies work together.
In the brief time since the new total depth well con-
struction offering was launched, the service company-
client conversation has begun much earlier in the field
development process and has focused on a preemptive,
engineered approach that delivers a secure wellbore over
the life of the well. Early case histories from throughout
the world are impressive, from pushing casing to total
depth in a record-length extended-reach well offshore
California to economically constructing multiple wells
from a single site in Uganda to successfully casing and
cementing multiple strings in previously problematic
wells in the Caspian Sea.
It will be interesting to see where the conversation
goes next.
Taking the well construction
conversation to total depth
Total depth engineering is fast becoming a deep conversation in the well
construction sector.
Phil Vollands, Weatherford International Ltd.
last
WORD
104
104 LastWord-MAR_104 LastWord-MAR 2/23/12 10:37 AM Page 104
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Revista E&P - Marzo 2012

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