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VOLUME 04 ISSUE 03-APRIL 2011
ISSN 1757-2134 April 2011 Volume 04 Issue 03
Copyright
©
Palladian Publications Ltd 2011. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or
transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the
copyright owner. All views expressed in this journal are those of the respective contributors and are not necessarily the opinions of the
publisher, neither do the publishers endorse any of the claims made in the articles or the advertisements. Printed in the UK.
On this month’s cover >>
Oilfield Technology is audited by the Audit Bureau
of Circulations (ABC). An audit certificate is
available on request from our sales department.
contents
| 49 | THE CASE IN QUESTION
Scott Beattie, Weatherford International Ltd, USA, looks at
the benefits of a subsea drilling-with-casing system.
| 53 | FIGHTING FATIGUE
Kenneth Bhalla, Stress Engineering Services, USA, explains the
importance of riser and subsea fatigue damage monitoring.
| 57 | GREAT INTEGRATIONS
Vincent Vieugue, Emerson Process Management, Norway, explains
the growing need for greater integration and intelligence in subsea
operations.
| 61 | PIPE DREAMS BECOME REALITY
Cobie Loper and Mark Kalman, DeepFlex Inc., USA, introduce a new
generation of lightweight, corrosion resistant flexible pipes.
| 64 | CHECKLIST FOR PRECOMMISSIONING
Richard Shirley and Dan Vela, Mustang Engineering, USA, run through
the process of precommissioning offshore facilities.
| 69 | SWITCHING TO ELECTRIC
Jon Robertson, Saab Seaeye, UK, looks at the benefits of electric
ROVs in comparison with hydraulic vehicles.
| 73 | ELIMINATING THE GAPS IN US OFFSHORE REGULATIONS
Jogen Bhalla (USA) and Stephen Gale (UK), AMOT, and Ian Harrison,
Pyroban, UK, highlight the importance of ignition source elimination
and the differences in approach across the world.
| 78 | COMPANY NEWS
| 80 | AD INDEX
| 03 | EDITORIAL COMMENT
| 05 | WORLD NEWS
| 10 | BACK ON TRACK
Gordon Cope, Oilfield Technology Correspondent, explains how
technological innovations have opened up new plays in North America
and expanded old ones; but environmental concerns and other factors
complicate the future of this sector.
| 18 | DEEP WATER AHEAD?
John Wishart, GL Noble Denton, USA, examines the future of the oil
and gas industry and the challenges that lie ahead.
| 24 | SEAS OF OPPORTUNITY
Luke Davis, Infield Systems Ltd, UK, considers the prospects of the
offshore wind sector and its implications for the offshore oil and gas
industry.
| 29 | AN ILLUMINATING EXPLORATION...
Duane Dopkin, Paradigm, US, points out how full azimuth
decomposition, imaging and illumination enhances deepwater
exploration.
| 33 | IMPROVED IMAGING
Gary Rodriguez, Sherry Yang and Laurie Geiger, TGS, USA, present
a project to improve imaging in a low velocity trench area in the
Gulf of Mexico.
| 38 | THE ROAD TO RECOVERY
Brian Skeels, FMC Technologies, and Lars Farestvedt, MPM, US,
consider solutions for maximising reservoir recovery in this issue’s
cover story.
| 44 | LIFTING EXPECTATIONS
Ian Anderson, Camcon Oil, UK, explains how artificial gas lift can
assist in developing a long term strategy for subsea extraction.
FMC Technologies’ subsea well intervention system (RLWI) onboard the Island Wellserver in
the North Sea. Workers connect a control umbilical to a well control package while the wireline
lubricator is suspended in the foreground. This system enables subsea workovers at half the cost
and in half the time of the traditional method performed from a rig.
Blue is the New Green
A NATURAL FIT FOR THE ENVIRONMENT
KUDU has one of the most environmentally friendly
artificial lift products in the industry. KUDU’s Progressing
Cavity Pump solutions typically use less energy than
other artificial lift methods and take up less space. Leak
proof Driveheads, sound attenuated Power Units and
energy saving optimization systems, ensure you get the
most from your well in the best possible way.
With over 20 patents using Progressing Cavity Pumps in
the artificial lift field, KUDU continually strives to reinvent
the status quo. With locations around the world, we’re
just around the corner, offering the best service standard
in the industry.
Learn more about Progressing Cavity Pumps by emailing
articles@kudupump.com to receive the free e-article Top
Ten Must-Knows About Progressing Cavity Pumps.
www.kudupump.com
Alberta Export Award Winner
for Oil and Gas Manufacturer.
Calgary Manufacturing
Industry’s Best Employer
for Medium Sized
Manufacturers.
Bringing Solutions to Surface
James Little
Managing Editor
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comment
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J
ust in case anyone was in any doubt, recent events
have once again provided a poignant illustration of the
significance of crude oil and its indisputable position as
the world’s most important traded commodity. The increasingly
fine balance between supply and demand, driven by a number
of rapidly expanding Asian economies, most notably China
and India, coupled with a deep seated fear of supply disruption
amongst energy traders, mean that any event that risks an
outage, inevitably leads to a marked upswing in the price of
crude. With much of the world still struggling to regain its feet
after the recent global recession, an escalation in the price of
crude oil has exerted considerable pressure on the fragile global
economic recovery. Brent crude stood at US$ 122 at the time of
writing, up from just below US$ 95 at the close of 2010.
This pattern is of course not unfamiliar. Let’s not forget,
crude prices rose rapidly over a very short timeframe on the
back of increasing Asian demand in 2008 to a high of US$ 147.
However, events of the past year have been akin to a ‘perfect
storm’ for the energy industry. From the Deepwater Horizon
drilling rig explosion on 20 April 2010, and the ensuing
moratorium on drilling in the Gulf of Mexico, to the ongoing,
and far from resolved, chaos in the Middle East, and finally the
devastating earthquake, tsunami and nuclear catastrophe in
Japan, the energy industry has been thrown into an acute state
of uncertainty and governments are being forced to re-evaluate
their energy policies.
Whilst Opec has been able to compensate for the
1.6 million bpd of lost crude production from Libya, its overall
spare capacity is fast being eroded. It is also struggling to match
the high quality light crude that Libya was producing causing
more pain for refiners who are forced to compete for scarcer
resources. If problems within the region persist and spread to
other nations across the Middle East and North Africa, then
Opec’s available reserves will quickly dwindle. Saudi Arabia,
Opec’s largest producer and source of the majority of
crude reserves, looks vulnerable at present with developing
disturbances among many of its near neighbours including
Bahrain, Jordan, Oman, Yemen, Syria and Jordan. So far, Saudi’s
solution to internal strife has been the populist measure of
providing hand outs to its citizens and boosting public spending.
An action that will cost Saudi Arabia a total of US$ 129 billion or
the equivalent of half of the country’s 2010 oil revenues. Whether
this works remains to be seen, but without doubt it will lead
to higher oil prices as Saudi seeks to finance this huge public
expenditure, plus there is the danger of less investment in future
production capacity, again leading to higher prices.
Price rises have not been limited solely to crude oil, with
significant increases being seen in natural gas rates as Japan,
the world’s largest buyer of LNG, has boosted imports following
the damage to its Fukushima nuclear facility. With radiation
still leaking from the plant, this crisis remains critical and has
potentially set the nuclear industry back years. Germany, the US
and even China have each put their nuclear programmes on hold
which can only put more pressure on future oil and gas prices.
An end to the turmoil in the Middle East is vital to a stable
oil price. Why? Because according to the IEA, the Middle
East and north African region will contribute 90% of crude oil
production growth over the course of the next 10 years, and if
crude oil is the world’s most important traded commodity, then
this region holds the key to crude production. For the first time,
Opec, largely comprised of members from the region, will amass
US$ 1000 billion this year in export revenues if the price of crude
remains above US$ 100 a barrel. My guess is that it will achieve
this milestone and more. Let’s just hope that the fledgling global
economic recovery can withstand the pressure of an extended
period of higher oil prices.
O T

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world news
OILFIELD TECHNOLOGY
April 2011
05
inbrief
CGGVeritas has inaugurated a new
open processing and imaging centre
in Muscat, Oman, at a ceremony
attended by clients and a delegation
from the Omani Ministry of Oil and
Gas. The new centre complements
the company’s activity in the country
and offers clients access to the latest
processing and imaging technology
and services.
Tailored to address the geologic
challenges of the region, services are
focused on the CGGVeritas unique
3D land seismic portfolio, including
ultra high-resolution wide-azimuth
technologies.
The centre also operates as a
CGGVeritas University training centre,
developing and delivering training
initiatives with the Sultan Qaboos
University, the Omani Ministry
USA
Dow Oil & Gas, a business unit of
The Dow Chemical Company, has
introduced UCARSOL™ Shale H-100,
a specialty amine blend designed
specifically for treating natural gas from
the Haynesville shale. This is the first in
a series of new specialty amine blends
Dow Oil & Gas is developing for the
treatment of shale gas in North America.
ANGOLA
VWS Westgarth, a subsidiary of
Veolia Water Solutions & Technologies
(VWS), has been awarded a multi-million
dollar contract by Daewoo Shipbuilding
& Marine Engineering Co. (DSME) for
the design, supply and delivery of an
Ultrafiltration system and a Sulphate
Removal Package (SRP) system. The
two treatment units, designed for
DSME’s Floating Production Storage
and Offloading vessel (FPSO), will be
installed in the Cravo-Lirio-Orquidea-
Violeta (CLOV) Fields, located Offshore
Angola. The project completion is
expected in January 2012.
IRAQ
Petrofac, the international oil and gas
facilities service provider, can confirm
it has been awarded a contract, in
excess of US$ 240 million by Shell
Iraq Petroleum Development B.V. for
developments in the Majnoon Field,
Southern Iraq. Under the competitively
tendered contract, Petrofac is providing
engineering, procurement, fabrication
and construction management services
for the development of a new early
production system comprising two
trains each with capacity for 50 000 bpd
of oil, along with upgrading of existing
brownfield facilities. Work on the project
began in mid-2010 and is expected to
complete during the fourth quarter of
next year.
// Cuadrilla Resources // UK shale fracking
// CGGVeritas // Opens new centre in Oman
The first UK shale gas fracking
operation is now under way at the
Preese Hall shale gas well, near the
seaside resort of Blackpool in North
West England.
Cuadrilla Resources, an
independent UK energy company
undertaking the project, has said
that fracking will take place in bursts
throughout April, after which time the
company will look to study how much
gas subsequently flows from the test
well.
Cuadrilla has asked to carry out
operations at five sites, and has
not required a permit for its current
fracking operations, because there is
not deemed to be any possible risk
to water supplies. Campaigners have
raised concerns that the extraction
process can contaminate local
ground water, but an inquiry into
possible risks at the site found that
no unacceptable risks were being
taken.
France has imposed a moratorium
on shale gas drilling, while the
German state of North Rhine
Westphalia has asked ExxonMobil
to cease fracking work until later
this year while an expert opinion is
prepared on possible impacts.
of Oil & Gas and international
training organisations. In this
way, CGGVeritas will step up its
participation in the development
of highly qualified Omani
professionals; a key national
programme.
Colin Murdoch, Executive Vice
President, Processing, Imaging
and Reservoir, CGGVeritas, said:
“With over 35 years of experience
in Oman, CGGVeritas has
considerable knowledge of the
region’s E&P challenges. Our new
open centre will provide training and
services of the highest standard,
customised to help our clients
maximise the return on investment
they are currently making in very
high-channel-count exploration and
reservoir optimisation programmes.”
world news
06
OILFIELD TECHNOLOGY

April 2011
diarydates
2 - 5 May
OTC
Houston, TX, USA
E: registration@spe.org
www.otcnet.org
23 - 26 May
EAGE Conference and Exhibition
Vienna, Austria
E: eage@eage.org
www.eage.org
15 - 16 June
World Drilling Conference and Exhibition
Copenhagen, Denmark
E: peggy.kersten@iadc.com
www.iadc.org
30 August - 1 September
3P Arctic 2011
Halifax, Nova Scotia, Canada
E: 3p@oesallworld.com
www.3parctic.com
6 - 8 September
SPE Offshore Europe
Aberdeen, Scotland
E: oeteam@reedexpo.co.uk
www.offshore-europe.co.uk/palladian
25 - 28 September
MEOS 2011
Bahrain
E: jwebster@oesallworld.com
www.meos2011.com
4 - 8 December
20th World Petroleum Congress
Doha, Qatar
E: info@20wpc.com
www.20wpc.com
// Statoil // Oil and gas discovery in Norway
ExxonMobil is likely to start oil
exploration off the central coast of
Vietnam towards the end of this month,
according to a recent statement from
state-run oil firm PetroVietnam.
The company has worked with the
authorities of Danang city on safety
issues surrounding the drilling and will
begin work at Block 119 off Danang city.
The drilling will be part of an agreement
signed between ExxonMobil and
PetroVietnam in 2007.
PetroVietnam has previously formed
partnerships with Russia and several
other countries to exploit the reserves
in these offshore oilfields. Other close
by nations, such as Malaysia, Brunei,
Taiwan and the Philippines all hold
claims in the region. Worryingly, it has
been claimed that Chinese patrol boats
often harass and intimidate explorers
in the area, having laid claim to the
South China Sea and the area in which
ExxonMobil intends to explore. However,
US Defense Secretary, Robert Gate, has
voiced his objection to any ‘intimidation’
of US energy companies operating in the
region.
After a few recent dry well exploration
failures in Norway, Statoil and Eni SpA
have potentially made Norway’s biggest
oil and gas discovery in 10 years at the
Skrugard prospect in the Barents Sea.
With as much as 250 million bbls of
recoverable reserves, this discovery may
prove bigger than the current holder of
‘Norway’s largest find’ title – Goliat.
Tim Dodson, Executive Vice
President for exploration at Statoil, has
been quoted as saying: “This opens
a new oil province that can provide
additional resource growth,” adding
that the find was the “most important”
exploration event in Norway in 10 years.
It is hoped that this new find will
help meet targets to maintain Norway’s
output and make the development of
a second gas hub in the Norwegian
Sea more likely. Statoil plans to drill a
delineation well in the area in 2012, as
well as another exploration well in the
same license. The company is currently
considering the possibility of drilling
more wells in the area this year.
The overall production of oil and gas
in Norway is expected to decline from
2015 onwards, and has already fallen
by 30% since 2000. The Norwegian
Petroleum Directorate estimates that
only 40% of the oil and gas on the
Norwegian shelf has been produced,
and that in 20 years time 40% of
the production on the Norwegian
continental shelf will come from
resources that are as yet undiscovered.
In the North Sea, half of the oil and gas
has been produced; in the Norwegian
Sea less than a quarter; while Snøhvit
currently operates to exploit the
resources in the Barents Sea.
// ExxonMobil // Vietnam oil exploration
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world news
08
OILFIELD TECHNOLOGY
April 2011
// Technip // Awarded North Sea contract
// Cupet // Expanding
Cuban exploration in the
Gulf of Mexico
Cuba currently depends on Venezuela
for approximately 100 000 bpd of oil
imports, and produces in the region of
21 million bbls a year of domestic oil,
which supplies around half of its energy
needs every year. After a long established
position of energy dependency, Cuba has
announced plans to drill five deepwater oil
wells in the Gulf of Mexico beginning this
summer, expressing confidence that its
effort in exploration will be rewarded with
major new hydrocarbon discoveries.
“We’re about to move to the drilling
phase,” said Manuel Marrero, an official
with the government authority tasked
with overseeing Cuba’s oil sector. “We’re
all really hopeful that we will be able to
discover large reserves of oil and gas,”
said Marrero, who added that the ventures
would be undertaken with the help of
unspecified foreign companies.
He said the deepwater wells were
to be drilled between 2011 and 2013,
and would be in waters ranging in depth
between 400 m and 1500 m. State oil firm
Cupet has said that the country is currently
awaiting a platform constructed in China
for one of its offshore projects, and has
made assurances that any offshore well
development will be handled with safety
at the forefront. Cuba’s economic zone
in the Gulf is geographically very close
to the US state of Florida, and is divided
into 59 blocks. 20 blocks are ventures
with Repsol (Spain), Hydro (Norway), OVL
(India), PDVSA (Venezuela), Petrovietnam
and Petronas (Malaysia). Petrobras (Brazil)
recently pulled out and Sonangol (Angola)
recently signed on.
Studies estimate Cuba has probable
reserves of between 5 and 9 billion bbls
of oil in its economic zone in the Gulf of
Mexico.
// Suncor //
Investment in oil sands
Canadian energy company, Suncor,
has received all requested approvals
needed to finalise its strategic alliance
with Total E&P Canada Ltd. The
company aims to more than double
its oil sands production in the next
decade.
Suncor will receive approximately
US$ 1.75 billion from the transaction,
and has acquired a 36.75% working
interest in the Total-operated Joslyn
joint venture with Total now holding
38.25%.
ConocoPhillips will also move
towards a focus in oil sands
production in Canada. In response to a
long period of relatively low natural gas
prices, ConocoPhillips, the third largest
natural gas producer in Canada, cut
the number of new gas wells it plans
to drill and will shift investment into
increasing its oil sands output.
Technip has been awarded a full
EPIC contract by RWE Dea, for the
Clipper South gas field development
in the North Sea. The field is located
70 km northeast of the Bacton gas
terminal in 25 m of water.
The contract covers full project
management, detailed pipeline
design, installation and tie-in of a
15.5 km 12 in. production line and
3 in. methanol piggyback line from
the new Clipper South platform to
the existing LOGGS (Lincolnshire
Offshore Gas Gathering system)
platform.
UK and Saudi energy ministers have met
recently to call on international energy
markets to recognise that the high price of
oil does not reflect the realities of supply
and demand in the market.
In his first visit to the Middle East
since taking office, UK Energy and Climate
Change Secretary Chris Huhne met with
Saudi Oil Minister Ali Ibrahim Al-Naimi.
Mr Huhne said: “There could be no more
important time to be in Saudi Arabia,
whose response to events in recent months
has been crucial for keeping the market
supplied to meet global demand. There is
no shortage of supply, and yet the price
has remained high. International energy
markets should understand that the current
price of oil does not reflect the realities
of supply and demand. Building greater
understanding between consumer and
producer countries is more important than
ever in these present circumstances.”
// UK and Saudi Arabia //
Discuss supply/demand
The contract builds on past experience
with RWE: in 2008 Technip provided pipelay
and umbilical installation for the Topaz field
development, located in the Southern gas
basin.
Technip’s operating centre in Aberdeen
(Scotland) will execute this contract, which
is scheduled to be completed in the fourth
quarter of 2011. Genesis; a Technip Group
company providing upstream oil and gas
consultancy services, will also play a part in
executing the contract through the provision
of detailed pipeline design. Vessels from the
Technip fleet will be used for the offshore
installation campaign.

A N Y WH E R E . A N Y T I ME . E V E RY T I ME .
Nantes, France
sales.nantes@sercel.com
Houston, USA
sales.houston@sercel.com
www.sercel.com
Gordon Cope, Oilfield Technology Correspondent,
explains how technological innovations have opened
up new plays in North America and expanded old
ones; but environmental concerns and other factors
complicate the future of this sector.
o
n

t
r
a
c
k
B
A
C
K
10
T
he oil and gas sector is sending
a clear message: North America
is back on track. In the US,
full year oil production for 2010
averaged 5.49 million bpd, compared
with 5.36 million bpd in 2009. In
2011, operators are expected to drill
44 714 wells, up from an estimated
43 038 wells in 2010. Service company
Baker Hughes predicts that active US
rotary rigs will average 1620 rigs per week
this year, up from 1515 in 2010 and 1087
in 2009.
In Canada, the Conference Board of
Canada noted that oil company profits
jumped to C$ 8.5 billion in 2010, up from
C$ 1.7 billion in 2009, and will continue
a healthy growth into the C$ 20 billion
range by 2014. Alberta’s lease sales
netted C$ 2.38 billion in 2010, exceeding
the record set in 2005, and more than
tripling the level from 2009. Husky, based
in Calgary, raised its 2011 capital budget
more than 20%, to C$ 4.86 billion. The
Petroleum Services Association of Canada
expects a total of 12 250 wells to be drilled
in 2011, up from 11 350 in 2010.
In addition to a recovered economy,
the oil and gas sector is riding high on
the benefits of two major advances in
technology; horizontal drilling and hydraulic
fracturing. Thanks to advances in horizontal
11
12
OILFIELD TECHNOLOGY
April 2011
well technology, for instance, the average length of wells in
Canada has grown 33% in the last three years, from 1200 m
to 1600 m. And the number of fractures in some plays has
advanced from one or two per well to over a dozen, dramatically
increasing the ultimate expected recovery per well. Not only
does this mean more hydrocarbons at less unit cost, it also
opens up uneconomic plays that were once thought marginal
due to economics.
Shale gas
Nowhere is this more evident than in shale gas. Geoscientists
have long known that the dense, black rocks found throughout
most basins in the world contain copious amounts of gas -
often more than 100 billion ft
3
per square mile - but that the
impermeable nature of shale made it very difficult to produce
economically. Less than a decade ago, however, exploration
companies in Texas managed to combine a number of
technologies, including horizontal drilling and hydraulic
fracturing, in order to economically release the gas from the
Barnett shale underneath Dallas, Fort Worth. According to
the US Geological Survey, the success of the technology has
more than doubled the 1300 trillion ft
3
of existing reservoirs in
North America, adding 1200 trillion ft
3
of shale gas in the US and
500 trillion ft
3
in Canada.
The Barnett shale play has plateaued at around
5 billion ft
3
/d, but several other new plays are gaining traction,
including Louisiana’s Haynesville shale, the Fayetteville shale of
Arkansas, and Pennsylvania’s Marcellus shale. Shell agreed to
acquire the business of privately owned East Resources Inc. for
US$ 4.7 billion in a deal that includes a major land position in
the Marcellus shale play. ExxonMobil Corp. paid US$ 41 billion
in an all-stock acquisition of XTO Energy Inc. Chevron acquired
Atlas Energy and its extensive Marcellus gas play holdings for
US$ 4.2 billion. By 2035, the EIA estimates shale gas could
make up as much as 25%, or 16 billion ft
3
/d, of the country’s
expected 64 billion ft
3
/d production.
Canada is just beginning to produce from shale gas.
Petroleum companies are building infrastructure to handle
up to 1.8 billion ft
3
/d from the Horn River Ordovician Muskwa
formation and the Montney shale, located in northwest Alberta
and northeast British Columbia. The Canadian Society for
Unconventional Gas (CSUG) estimates that the entire country’s
shale gas production could reach 5.3 billion ft
3
/d by 2020.
Shale oil
Shale oil, the cousin of shale gas, is also growing into a major
unconventional source of hydrocarbons. The Bakken shale rests
in the Williston basin that straddles North Dakota, Saskatchewan
and Manitoba. The USGS estimates there are 3.65 billion bbls of
recoverable crude oil in the Bakken. Thanks to rotary steerable
systems (RSS), operators can target thin, high-grade veins
that run for thousands of metres laterally. Hydraulic fracturing
then releases the oil to the wellbore. With the current pace of
drilling, the US Department of Energy predicts that North Dakota
will soon overtake Alaska as the leading producer in the US,
pumping up to 700 000 bpd by 2017.
The Eagle Ford shale formation in South Texas runs north from
the US/Mexico border for several hundred miles. The average
thickness of the shale is about 475 ft. The formation produces
gas, gas condensate and oil, but it is the latter liquids that have
made the Eagle Ford one of the hottest plays in North America.
The Macondo tragedy
On 20 April, 2010, the world’s largest man made oil spill
occurred in the Gulf of Mexico. Transocean’s Deepwater
Horizon semi-submersible rig, situated approximately
40 miles off the Louisiana coast, had just finished drilling an
18 000 ft well into BP Exploration’s Macondo prospect in
the Mississippi Canyon block. Suddenly, a large volume of
gas and oil raced uncontrollably up the riser, resulting in an
immense explosion and fire. 11 crew members were killed,
and over a dozen injured. The stricken rig eventually sank,
crashing to the ocean floor 5000 ft below.
The blowout preventer (BOP), a 25 t, five story device
designed to prevent runaway wells, failed to close. Around
50 000 bpd of thick crude began to spill out onto the
seafloor and make its way to surface, threatening wildlife,
beaches and protected habitats. BP, state and federal
authorities launched a massive clean-up campaign. BP also
tried to staunch the well. After several failures (including
attempts to activate the BOP, massive containment caps,
and the injection of debris and mud), the well was finally
sealed on July 15, 87 days after it first began to spew.
US government agencies estimate that approximately
4.1 million bbls of oil escaped.
In the wake of the tragedy, President Obama imposed a
drilling moratorium on all federal leases at depths exceeding
500 ft. Thousands of employees were temporarily laid off.
Lease sales were also cancelled, and lawsuits were brought
against BP, rig operator Transocean, and service company
Halliburton. While the oil clean-up proved mercifully short,
the legal repercussions to the industry are expected to
reverberate through the courts for several years.
The Macondo tragedy has resulted in a new focus
on personnel safety, environmental and regulatory
compliance in the offshore sector. Formerly, the MMS
had been responsible for promoting offshore oil and gas
development, enforcing safety regulations, and maximising
revenues from oil and gas to the Treasury. Secretary of the
Interior Ken Salazar reorganised the Department of the
Interior’s Minerals Management Service (MMS), into the
Bureau of Ocean Energy Management, Regulation and
Enforcement (BOEMRE).
After the reorganisation, revenue collection was assigned
to the Office of Natural Resources Revenue (ONRR).
Offshore oil and gas development duties were assigned
to the Bureau of Ocean Energy Management (BOEM).
Regulatory enforcement was assigned to the Bureau of
Safety and Environmental Enforcement (BSEE).
The new structure will allow the agency’s permitting
engineers and inspectors greater independence, more
budgetary authority, and clearer senior leadership focus.
It will also allow several new and enhanced compliance
strategies, including inspection of rigs to ensure safe
and environmentally responsible operations, real-
time monitoring of the highest risk operations, such as
deepwater drilling, and better inspections and enforcement
tools to increase inspection coverage and efficiency.
A separate Energy Safety Advisory Committee (Safety
Committee) will advise BOEMRE on a variety of issues
related to offshore energy safety, including drilling and
workplace safety, well intervention and containment, and
oil spill response.
OT_10-17_April2011.indd 12 08/04/2011 09:27
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OILFIELD TECHNOLOGY
April 2011
Apache, EOG, Petrohawk, ExxonMobil and Chesapeake are all
investing heavily in the region. Drilling permits in the Eagle Ford
jumped from 94 in 2009 to over 1000 in 2010, and the torrid pace
is expected to continue through 2011. International companies
are eager to invest. China’s CNOOC paid US$ 1.1 billion for a
33% stake in Chesapeake’s Eagle Ford acreage, and India’s
Reliance spent US$ 1.3 billion to buy acreage and form a joint
venture with Pioneer Natural Resources Co.
Oil sands
The oil sands are another major unconventional play benefiting
from advances in technology. With over 170 billion bbls of
recoverable bitumen, the oil sands of Alberta form one of the
largest deposits of crude in the world. For the last several
decades, oil companies have spent tens of billions to boost
production to current levels of 1.65 million bpd. Traditionally,
the majority of production has been through open-pit mining,
where the mix of sand, clay and tarry bitumen is dug up,
separated with warm water, then upgraded to high quality
synthetic crude. Mining is only good where the bitumen
rests within 75 m of the surface, however. Around 80% of
recoverable bitumen requires in-situ methods of recovery.
Over the last decade, thermal processes have come to the
fore.
Steam assisted gravity drainage (SAGD) involves two
horizontal wells being drilled, one above the other. Steam
is injected into the top well to melt the bitumen, which then
drains into the lower well and is pumped to surface. Advanced
horizontal drilling using RSS allows extremely precise placing
of the wells, maximising steam patterns and optimising
recovery. Currently, mining production stands at 856 000 bpd
and thermal in-situ at 794 000 bpd. By 2021, CAPP expects oil
sands to produce 3 million bpd, (1.277 million though mining
and 1.724 million through in-situ).
Problems
In spite of recent successes, the North American oil and gas
sector faces a spectrum of challenges. In 2010, the world’s
largest man made oil spill occurred in the Gulf of Mexico when
the Transocean Deepwater Horizon semi-submersible rig
suffered an immense explosion and fire (see sidebar).
Environmental concerns also remain front and centre. Over
the last 150 years, the amount of greenhouse gases (GHGs) in
the atmosphere has risen from 280 ppm to 384 ppm, primarily
due to the burning of fossil fuels. The UN’s Intergovernmental
Panel on Climate Change (IPCC), an international consortium
of environmental scientists, has concluded that this is causing
global warming.
Most nations around the world signed the Kyoto protocol,
agreeing to an emissions reduction to 6% below 1990 levels
by 2012, and have since agreed to pursue more ambitious
plans. The US, however, has followed its own path. Over the
last several years, numerous bills in the Congress and Senate
have come up with various targets, including instituting a cap
and trade system to reduce emission by as much as 80% by
2050. Although the prospects of comprehensive environmental
legislation have abated since the Republicans gained control
of Congress, regulatory strength against emissions has been
growing. Empowered by a Supreme Court ruling that GHGs
fall under the jurisdiction of the Clean Air Act, starting this
year, the Environmental Protection Agency (EPA) is requiring
new power plants and refineries to consider GHG-reducing
technologies, as well as major modifications to existing ones.
The growth of shale gas faces public concerns over
hydraulic fracturing. During the process, several million litres
of water are forced at high pressure down the wellbore and
into the shale to create a network of tiny fractures that allow
the gas to escape. In order for the water to penetrate further,
it is treated with proprietary chemicals that decrease its
viscosity. Some of the chemicals have been associated with
cancer, and officials are worried that they may contaminate
adjacent aquifers and drinking supplies. In August, acting
under a directive from Congress, the EPA requested chemical
lists from nine major service companies, including Halliburton
and Schlumberger. There have also been calls to regulate
hydraulic fracturing under the federal Safe Drinking Water Act.
In Pennsylvania, protestors are organising to seek curtailment
of shale gas activity in their state.
The oil sands are also under heavy pressure. Mining
projects require large amounts of water in order to flush bitumen
from a matrix of sand and mud. It taxes the hydrological
system in the region, creates large tailing ponds, and threatens
residents with trace toxins. Recently, Syncrude was fined
C$ 3 million after 1600 ducks died in a tailing pond. Aboriginal
groups situated downstream from the development have
also long complained of higher incidences of rare diseases.
Environmental groups have dogged provincial politicians and
invaded facilities, claiming that it is ‘dirty oil’ due to the energy
needed to clean and upgrade the bitumen. Various lawsuits are
lodged against proposed pipelines designed to carry oil sands
production south to the US and west to Asia.
But one of the major concerns is the persistent low price
for natural gas. For the last several years, gas has consistently
lingered around US$ 4/ million BTU, well below the replacement
level of US$ 6 - 7 for many exploration regions. Unless
production decreases or demand increases, the price outlook
for the next several years is bleak.
The future
Energy suppliers are looking for ways to reduce GHG
emissions. One such technique is carbon capture and
sequestration (CCS) in which large carbon emissions from
stationary facilities, such as power plants, refineries and oil
sands upgraders, are fitted with equipment that gathers CO
2

so that it can be shipped to underground storage facilities for
permanent isolation. The government of Alberta, for instance,
has established a C$ 2 billion fund to help develop major CCS
facilities that will capture and sequester up to 5 million tpy
by 2015. Shell’s Quest project will see the Scotford oil sands
upgrader in central Alberta capture 1.2 million tpy of CO
2
,
transport it 10 km, and inject it 2300 m underground as part of
an enhanced oil recovery (EOR) programme.
In the US, the Department of Energy will provide
US$ 350 million to support the Texas Clean Energy Project,
which will capture up to 2.7 million tpy of carbon from a
proposed electric power plant near Midland-Odessa, Texas, and
transport it to the Permian basin, where it will also be used in
EOR.
In order to address concerns regarding hydraulic fracturing,
the Pennsylvania Independent Oil & Gas Association (PIOGA)
and the American Petroleum Institute (API) have formed a
Marcellus shale public education alliance to provide facts about
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the tight shale gas resource’s energy and economic potential.
The API is also working with industry groups and states to
create a state-based voluntary chemical registry of hydraulic
fracturing chemicals that would ensure effective regulation while
protecting trade secrets.
Oil sands operators are striving to reduce environmental
impact. Shell introduced a technique called ‘atmospheric
fines drying’ that reduces the drying time for tailings pond
material from decades to weeks. Canadian Natural Resources’
Horizon oil sands plant is injecting CO
2
into its tailings pond
water, which causes the silt to separate much faster. The clear
water is then recycled back into the plant, reducing freshwater
takeaway from the nearby Athabasca River. Syncrude has
installed three large centrifuge machines, much like those
already used in sewage treatment plants. The centrifuges
separate clean water from the tailings ponds, producing an
earth-like clay-cake.
Some oil sands producers are moving toward water-free
extraction processes. Petrobank Energy & Resources,
Calgary, has received approval for large scale
production of in-situ bitumen using toe-to-heel air
injection (THAI). The process involves igniting air that
has been injected into the toe of a long horizontal well.
Unwanted portions of bitumen partially ignite, warming
higher grade bitumen, which is then collected at the
heel of the well and pumped to surface.
Firming up the price of natural gas will be one of
the greatest challenges. Producers could simply shut
in uneconomic wells, but the recent global recession
has left many petroleum companies too weak
financially to turn off the cash flow.
The second option is to drill for less new gas.
Companies with oil plays are focusing their budgets
on high-priced crude, but the rush to acquire land
for the shale gas play has left many companies
with commitments to drill or lose exploration rights.
Industry groups estimate that at least 150 rigs would
have to be retired from the current 950 US rigs
dedicated to gas drilling in order to bring long term
gas production into line with demand.
There are several opportunities to increase
demand. Gas could be exported as LNG.
Cheniere Partners recently announced it is negotiating
a long term contract with a Chinese firm to add
liquefaction facilities to its terminal in Sabine Pass,
Louisiana. The plan is to build up to four liquefaction
trains, each with a capacity of 700 million ft
3
/d, or
3.5 million tpy. The LNG would be shipped to Chinese
gasification facilities run by ENN Energy, which
owns the distribution rights to 45 million potential
customers. Liquefaction plants are expensive,
however, and take several years to build; Cheniere
envisions first shipments in 2015.
A viable option for increasing demand is
gas-to-power, or GTP. The US consumes about
19 billion ft
3
/d to generate electricity. Although there
is a surplus of gas-fired plant capacity throughout the
country, the cost of GTP electricity is generally about
twice that of coal, and is primarily used to supply peak
load demand, due to the relative ease of start-up and
shut-down. At around US$ 3/ million BTU, however,
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gas can compete with coal on a price basis for baseload
demand. Some shale gas production is profitable within this
range, and operators would have the option of locking in large
volumes of production for extended periods.
Switching to gas also reduces a utilities carbon footprint;
coal produces approximately twice as much CO
2
per unit of
electricity than gas. The main roadblocks to GTP growth are the
state commissions that have the power to set electricity pricing.
If a long term contract is more expensive than spot market
prices, regulators may not pass the cost on to consumers, and
the utility company takes the loss.
Thanks to a confluence of new technologies, massive
unconventional resources and a renewed economy,
North America’s oil and gas sector faces a promising future.
But the challenges that remain, including carbon reduction,
environmental protection, regulatory restrictions and legislative
oversight, guarantee that the next few years will be replete with
many a twist and turn in oilpatch fortunes.
O T

Figure 1. Healthy investment:
the GL Noble Denton
sponsored report predicts
healthy investment in new
exploration and marketing
opportunities over 2011.
18
F
ollowing a year of slow economic
recovery, unstable price fluctuations
and damaging incidents in the
Gulf of Mexico and China, the oil and
gas industry is predicting healthy
investment in new exploration and
market opportunities over the next
12 months, according to a new report on
the future of the sector published by the
Economist Intelligence Unit and sponsored
by GL Noble Denton.
Despite concerns over tougher industry
regulation and increased operating costs,
the 194 board-level executives and
policymakers from some of the industry’s
leading international companies that were
surveyed for the report are optimistic
that 2011 will be a key turning point
for the industry, as operators prepare
to drill deeper in new geographies.
Indeed, 76% of respondents to the
Economist Intelligence Unit’s research
19
20
OILFIELD TECHNOLOGY

April 2011
described themselves as either ‘highly’ or ‘somewhat’ confident
about their company’s business outlook, compared with only
8% describing themselves as ‘highly’ or ‘somewhat’ pessimistic.
This renewed confidence in industry growth is largely
thanks to a period of relative price stability, particularly in
North America and the fast-growth economies in Asia. The
largest proportion of industry executives surveyed (32%) saw
South East Asia as offering the greatest opportunities for their
business in 2011, while nearly a third (30%) of respondents to
the Economist Intelligence Unit’s research saw North America as
the most significant region. Additionally, emerging regions such
as China and Brazil are underpinning oil demand as a result of
their robust markets, with strong growth also predicted for India
and the Middle East this year.
Uncertainty over regulation
It is positive to see that the industry still values the potential
of North American production and, for larger oil companies in
particular, the US Gulf of Mexico remains an attractive province,
according to the Economist Intelligence Unit’s report. As we
face the first anniversary of the Deepwater Horizon incident,
the potential impact of the regulation following the biggest oil
disaster in US history continues to feature heavily in industry
debate, and the results of the Economist Intelligence Unit survey
reinforce the industry’s feeling of uncertainty towards the effect
of future legislation.
Figure 2. Challenge: rising demand for energy resources means
companies are increasingly having to develop resources in more
challenging environments, such as the deepwater offshore.
According to the report, the oil and gas industry recognises
that increased regulation will follow the Macondo incident,
but respondents to the Economist Intelligence Unit’s survey
seem unclear when new legislation will appear and what effect
it will have. A very large proportion (72%) of respondents to
the research said that they expect regulation to become more
stringent in North America in particular, while a substantial
majority (68%) expects cost increases in general.
During a round-table discussion on the findings of
the Economist Intelligence Unit’s report, organised by
GL Noble Denton in London recently, European industry
leaders voiced concern over how the increased cost of
post-Macondo regulatory compliance may price smaller
operators out of the market. A senior representative from
an international oil company suggested that potential
new regulation put into place after Macondo might have a
pendulum effect, where operating costs will start off high
before settling to a more manageable level.
The report also acknowledges that rising costs are likely to
be more problematic for smaller E&P firms. Nearly two thirds
of production in the Gulf of Mexico is accounted for by such
companies, and proposals to raise the US$ 75 million cap on
liabilities related to offshore oil spills will most likely hit them
hardest as insurance becomes impossible or too costly to
obtain.
Rising demand for energy resources means that
companies are also increasingly required to develop resources
in more challenging environments, such as the deepwater
offshore. Reserves in these areas are becoming an increasingly
prominent feature in global oil and gas production. With
20% of major oil firm portfolios now coming from deepwater
positions, this will clearly have an additional impact on
spending.
The longer term impact of Macondo however, looks set
to be on companies’ operational strategy, with the report
suggesting that their safety record will become a more
important factor in gaining access to global reserves.
Participants in the recent round-table discussion felt
that a non-prescriptive approach to legislation would be
preferable to a rigid regulatory response to Macondo from the
US government, helping operators to reduce risk through more
effective mitigation processes.
Following the Piper Alpha disaster in the North Sea in
1988, the UK government’s response was to separate the
regulator from the Department of Energy and ask operators
to identify and reduce risks to ‘as low as reasonably
practicable,’ in addition to justifying their actions to the UK
Health and Safety Executive (HSE). This regulatory model
was subsequently adopted in Australia and West Africa, but
it seems that debate continues over whether it would work in
the US.
Natural gas: a global ‘game changer’?
Natural gas has gained a reputation as a relatively low-carbon
‘transition fuel’ in recent years. The global demand for LNG
has grown as countries in Asia and Europe have sought to
increase their supply options.
According to the Economist Intelligence Unit’s report,
the emergence of large reserves of ‘unconventional’ gas in
North America has proved highly attractive to oil and gas
companies looking to replace declining production and,
E
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22
OILFIELD TECHNOLOGY

April 2011
instead of an anticipated decline in the region, extraction has
increased dramatically as new technologies have helped to
unlock vast tight gas resources.
But some of the industry’s key players have disagreed with
the report’s findings, which dub natural gas as an industry ‘game
changer’. They suggest that companies may find that the cost
of extracting unconventional gas from reserves such as those in
the US will result in a weaker return on investment than originally
expected.
The regulation of energy sources such as shale gas may also
add cost to the process of extraction, with concerns being raised
by some around the best practice for the controversial process
of hydraulic fracturing. Currently regulated in North America
by the individual states, the report highlighted the concerns
of those worried that the potential addition of a further federal
layer of regulation could slow operations in addition to resulting
in subsequent price rises. The report also notes that there is an
expectation for closer scrutiny of the environmental impact of
unconventional gas, due to the fact that the techniques required
to access it are still not fully understood.
Overall, the majority of the industry executives polled by the
Economist Intelligence Unit expect a modest shift upwards in
natural gas prices; especially as global demand is forecast to
increase steadily over the next decade. Nearly one half (48%)
expect an increase of at least 10% in gas prices, compared with
just 7% who think prices will fall by 10% or more. Most of the rest
(35%) expect prices to fluctuate around the current price range.
Developing the next generation
The increasing shortage of technical skills across the
industry is another topic close to the hearts of many oil
and gas professionals, and was raised among sector
leaders at the recent round-table discussions on the
Economist Intelligence Unit’s report. Now we are faced with a
period of investment and expansion, there is an overall feeling
that the sector will come against challenges as a result of its
failure to attract, recruit and retain highly talented people.
There are a number of reasons why the oil and gas industry
is likely to experience a skills deficit within the next 15 years; the
success of the finance industry - pre-credit crunch - to recruit
talented graduates through the promise of high
salaries and quick career progression have
been detrimental to the oil and gas industry’s
recruitment of ‘fresh blood’. The negative
impact of the Macondo disaster on the industry
has also played a role, alongside scepticism
over the oil and gas industry’s efforts to support
more environmentally friendly approaches to
energy production and distribution among
younger generations.
Before the recent economic crisis, when
investment into the oil and gas industry was
last at its peak, initiatives were implemented
by players from across the industry, who
came together to introduce and develop
emerging talent in a co-ordinated manner.
Alongside the economic downturn came
sweeping budget cuts and this good work
has likely been halted, but if a period of
investment comes to pass, as forecast by
the Economist Intelligence Unit report, the
industry could soon find itself returning to a situation in which
demand for technical resource outweighs supply.
Participants in the round-table discussions agreed that the
industry needs to work more closely together to address the
skills problem, rather than trying to pursue each others’ technical
staff. One industry association leader felt that the sector had
lost its appeal to university graduates over the last 20 years,
and while a number of oil and gas companies operate graduate
programmes, the industry needs to do more to educate students
at an even younger age about the innovations being developed
to drive the sector forward.
Technical consultancies such as GL Noble Denton were also
recognised as becoming increasingly important to the industry,
in that they are able to provide the industry with consistent
knowledge and advice during periods of talent deficit. Emerging
nations such as India and China may also be depended upon
more heavily to provide resource where more mature regions
have difficulties in generating new industry talent.
With activity set to rise in the sector, companies need to
focus on recruitment now, ensuring that the right talent is in
place for the right price.
Cautious optimism
It is clear from the Economist Intelligence Unit’s report, and the
debates that its findings have sparked since its publication that the
oil and gas industry is extremely focused on its future challenges. It
understands very well the need to find more innovative solutions to
operating more safely, sustainably and efficiently.
It’s encouraging to see that industry executives expect to see
an upturn in investment into the sector, despite fears of tougher
regulation and a more costly operating environment. But it is
also clear that the industry still has hurdles to overcome if it is to
realise the full potential of that market growth.
The demand for energy is taking the exploration, production
and distribution of oil and gas to tougher extremes of geography
and climate; pushing the boundaries of the industry’s technical
knowledge to its very limits. The success of key players in the
industry in finding more innovative solutions to mitigate risk while
remaining resourceful and sustaining activity will define their
position and reputation in the market this year.
O T
Figure 3. Natural gas: fast emerging as an attractive option for oil and gas companies
looking to replace declining production - but is natural gas a global ‘game changer’?
L
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24
E
ver since oil and gas exploration and
production activities kicked off in the harsh
waters of the North Sea during the late
1960s, the region has been a major part of the
global offshore energy supply chain. Indeed, with
the demanding needs of North Sea operators as
the primary driver, contractors have established
themselves as leaders in their respective fields and,
over the last 40 years of operation, generated a
wealth of knowledge and skills within the region.
Today, oil and gas production in the North Sea
is in decline and though E&P activities are set
to continue apace, driven in no small part by
the rising oil price, the offshore wind industry is
beginning to make the headlines.
This article discusses the prospects for the
offshore wind sector and the competition and
opportunities that exist between this nascent
industry and its older, more mature cousin, the
offshore oil and gas industry.
Offshore wind
Market potential and hurdles
Thanks to a number of meteorological and
oceanographic characteristics, the North Sea and
the adjoining Baltic and Irish Seas are among
the best suited and extensive offshore wind
development regions in the world. Indeed, when
examined on the global level, the region’s vast
25
26
OILFIELD TECHNOLOGY
April 2011
areas of shallow waters with high, sustained wind speeds
make the area quite remarkable.
Today, the European offshore wind industry is poised for
rapid and sustained growth. Bound by ambitious renewable
energy targets, EU member states have placed considerable
emphasis on the rollout of offshore wind to derive 20% of its
energy from renewable sources by 2020. Indeed, backed by
government subsidies and incentive mechanisms, current
developer aspirations and announced project plans are
indicative of surging growth within the industry. Infield Systems’
cumulative installed capacity forecast highlights the rapid
expansion of offshore wind going forward to 2015. Initially
slow to take off, with little growth between 2000 and 2007, the
industry is now gathering a strong head wind.
Quantitatively speaking, offshore wind offers enormous
opportunities; in the UK alone there is currently a pipeline
of projects nearing 50 GW, consisting of over 6500 potential
turbines and supporting infrastructure spread across
36 developments. In Europe, this figure rises to over 150 GW,
equating to over 25 000 turbines.
The capital required to deliver offshore wind on such a
scale is staggering. Indeed, by 2015, Infield estimates an
industry capex of around US$ 20 billion in Northern Europe
alone. However, despite this robust outlook, the industry
remains constrained by supply chain limitations and a lack
of preconstruction finance. Given the youth of the offshore
wind industry and the lack of confidence in the long term
performance of the market, such constraints are not
surprising. However, these bottlenecks may also be attributed
to the relatively low exposure to offshore wind of those
players servicing the market. Indeed, many contractors realise
a far greater proportion of their revenue from the oil and gas,
civil marine and telecommunications industries compared to
offshore wind.
Competition
Offshore wind vs. oil and gas
In many respects, the offshore wind industry sits at the same
stage of development as North Sea oil and gas did during the
late 1960s and early 1970s. However, the wind sector may
benefit from the decades of accumulated knowledge that the
oil and gas industry has produced. Concurrently however,
with oil prices breaking the US$ 100/bbl mark and E&P
activity starting a new up-cycle, offshore wind may also find
itself in direct competition with the industry that holds the key
to unlock the barriers to growth the sector is facing.
Indeed, many of the contractors servicing the oil and gas
and wind industries are exposed to both markets. This is of
particular significance for substructure fabrication, power
cable manufacturing and offshore construction assets such
as cable laying, heavy lift and transport vessels. Moreover,
demand for these services in the Northern European oil and
gas markets is expected to increase. The capex forecast
illustrated in Figure 2 highlights the growth in both industries
up until 2015.
The forecasted growth in demand for offshore oil and
gas services given in Figure 2 excludes the requirement for
decommissioning work. Given the vast network of ageing oil
and gas infrastructure in Northern Europe, decommissioning
demand is expected to coincide with increased demand for
wind farm installation services, creating further competition
for heavy lift vessels between the two industries.
Offshore construction and installation services should be
regarded as one of the key bottlenecks in the offshore wind
industry. The substantial capital required to increase capacity
for offshore vessels, combined with a lack of confidence in
the long term performance of the offshore wind industry,
has made investors cautious in financing newbuild vessels
targeted to offshore wind, nevertheless the success of
contractors such as Seajacks and MPI Offshore is noteworthy.
To date, this has meant that wind farm developers have
often used oil and gas assets, such as those operated by
Seaway Heavy Lift and Heerema, for installation services;
however, competition for suitable vessels has been tough.
As a result of this stiff competition, developers have
sought to vertically integrate in order to secure capacity
within the supply chain. This has been achieved through the
acquisition of contractors, such as DONG Energy acquiring
A2Sea in 2009, or through the construction of assets such as
RWE building its own installation vessels. Further down the
supply chain, Scottish and Southern Energy bought a 15%
stake in BiFab, the UK based fabricator of offshore structures.
A developer’s access to guaranteed construction capacity
will make projects more attractive to third party investors and
increase the developer’s chance of securing preconstruction
finance for the project.
Aside from competition for assets within the supply chain,
the two industries will go head to head in a battle to attract
Figure 1. Northern European offshore wind cumulative growth
forecast (Infield Systems).
Figure 2. Offshore wind versus oil and gas: Northern European
infrastructure capex forecasts (Infield Systems).
and retain a skilled and experienced workforce. The presence
of a skills gap in the oil and gas industry is certainly nothing
new. Indeed, it is a key constraint that will be exacerbated
by the development of the offshore wind industry. The
wind sector is acutely aware of this potential shortfall and
programmes such as the Beluga Offshore Training Academy
are being developed to address the issue. This is of particular
importance as contractors in the wind industry may struggle
to compete with the deeper pockets found in the oil and gas
sector.
Synergies and opportunities
Oil and wind in harmony
Despite the competition for services, the petroleum industry
will undoubtedly play a pivotal role in the development
of offshore renewables. The oil and gas influence is first
observed at the operator level. Oil companies are not only
developing wind farms, they are also one of the major driving
forces behind innovation in the industry. Indeed, companies
such as DONG Energy, RWE, E.ON, Vattenfall and Centrica
have all invested significantly in both offshore wind and
upstream E&P. Moving further down the supply chain, these
synergies continue with a host of contractors including
engineering firms, fabrication yards and offshore construction
companies having the knowledge and expertise to drive the
industry forward.
An excellent example of oil and gas’ influence within
the offshore renewables market can be found in Statoil’s
development of the Hywind project. Inaugurated on
8 September 2009, Hywind is the world’s first, full-scale
deepwater floating wind turbine. The project epitomises
the synergies between oil and gas and offshore wind on a
number of levels. To begin with, the project was conceived
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and developed by an international oil company, Statoil,
whilst substructure engineering, fabrication and installation
was undertaken by the subsea engineering contractor,
Technip. Moreover, the technology employed for Hywind is
a traditional floating platform design transferred from the oil
and gas industry. The so called ‘Spar’ hull was fabricated
at Technip’s Pori Yard in Finland, the same yard that has
developed large oil and gas platforms including the Tahiti,
Mad Dog and Holstein spars that have been installed in the
US Gulf of Mexico.
Statoil is not the only oil company spearheading the
development of offshore renewables; Shell has made
a valuable contribution having developed the wind
and solar powered Cutter platform, while Talisman and
Scottish and Southern Energy completed the far-from-shore
deepwater Beatrice wind farm. The former showcases
the opportunities to marry the world of renewable energy
and offshore E&P in the economic recovery of marginal
hydrocarbons, while the latter underscores ‘big oil’s’ ability
to push the operational boundaries of offshore wind energy.
Technological pushes from the oil and gas industry
do not stop at the operator level. Indeed, the wealth of
operational expertise that has been nurtured in the oil and
gas sector during decades of offshore E&P activity provides
a solid platform on which offshore renewables can be
developed.
Indeed, Technip has recently launched a programme
to develop a vertical-axis wind turbine. Known as
Vertiwind, the project will see Technip, alongside Nenuphar,
Coverteam and EDF, develop a vertical-axis floating wind
turbine. This innovative project has the potential to reduce
the cost of floating wind energy due to the simplistic design
that negates the requirement for a large tower, nacelle,
yaw system, pitch system and gearbox. Moreover, the
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design would allow the entire turbine and substructure to be
assembled in the yard, thus reducing offshore construction
time. With the Hywind project successfully completed,
Technip is positioning itself as a major player in the floating
wind energy market and significantly contributing to the
sector’s development.
There is also significant opportunity for existing
technologies to be transferred from the oil and gas industry
to the offshore wind sector. Indeed, as wind farm developers
move into deeper waters, the traditional monopile foundations
will be replaced by jackets, tripods and trusses. Demand
for these structures will create opportunities for oil and gas
contractors from initial design through to fabrication and
installation. Contractors such as the UK’s BiFab and the
Netherlands’ Heerema have already taken advantage of these
opportunities. BiFab was initially involved in the development
of the Beatrice project and has since won a £12 million
contract to design and manufacture two substation foundation
structures for RWE’s Gwynt y Mor wind farm offshore Wales.
The yard has also secured an agreement with Scottish and
Southern Energy to rollout at least 50 jacket substructures for
wind turbines on an annual basis from 2014 onwards.
Conversely, offshore wind could stimulate the
development of the oil and gas industry. One example is
the cogeneration of offshore wind and gas assets. Such a
project would involve the development of traditional thermal
generating capacity, albeit in a marine environment, alongside
offshore wind. In such a scheme the wind farm would provide
the infrastructure, and hence the economic incentive, to
develop a marginal gas field, the product of which would fire
an offshore gas turbine. Power generated from both assets
would be exported to shore via the wind farm’s transmission
system. Cogeneration of this nature would tackle one of
the key problems with wind energy; resource intermittency.
An example of such a scheme, but one that fell by the
wayside was Eclipse Energy’s Ormonde project. Ormonde
cogeneration plant was to be developed
in the East Irish Sea but the project was
re-evaluated, and subsequently reverted to
a traditional wind farm following Vattenfall’s
acquisition of Eclipse Energy in 2008.
Opportunities also exist to reuse existing
offshore oil and gas structures within
the renewables industry. Indeed, such
structures have the potential to become
integral components of the offshore wind
infrastructure. Existing oil and gas platforms
could be used as supply bases, operation and
maintenance platforms or substations for a
North Sea grid. The reuse of these structures
would have obvious benefits to both parties.
Conclusion
The rollout of offshore wind at the pace
desired by EU nations will create stiff
competition for supply chain capacity and
skilled workers within the oil and gas industry.
Head to head battles for engineering,
fabrication and offshore construction services
may be the consequence unless the market
sees increased investment in wind specific
assets such as turbine and foundation
installation vessels.
At the same time, however, the oil
and gas and offshore wind industries will
complement one another. E&P companies
and their contractors are highly experienced
in the offshore environment. As such, they are
highly capable of developing solutions to new
problems in addition to transferring established
technologies and practices from one industry
to the other. Moreover, the development
of offshore wind will create a substantial
and sustained demand for engineering and
construction services. Contractors that
position themselves correctly will stand to
benefit from the huge investment that is
required if renewable energy targets are to be
met.
O T

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An illuminating exploration...
Duane Dopkin, Paradigm, US, points out how full azimuth decomposition,
imaging and illumination enhances deepwater exploration.
F
aced with replacing critical oil and gas reserves,
energy companies are focusing exploration
efforts in areas of challenging operational and
technical complexity. To conduct successful seismic
programmes in these areas, substantial investments
are being made to acquire wide and rich azimuth
seismic data. These rich azimuth acquisitions, in
turn, are combined with the latest seismic imaging
technologies (e.g. Reverse Time Migration) to
improve prospecting and return on investment for
these costly seismic programmes.
Geophysicists ask a lot from their seismic data.
Subsurface structures (e.g. salt, basalt) can be the
genesis of multiple wave types (e.g. converted waves,
multiples) and complex wave phenomena which
distort the seismic image to the point where many
iterations of velocity model building and seismic
migration are required before selecting defensible
prospects and drilling targets. In the deepwater
regions such as the Gulf of Mexico, this imaging
problem is compounded by salt geometries that
are highly irregular in shape in three dimensions.
These salt bodies may be overlain or truncated by
shale sequences that give rise to additional imaging
problems as they often introduce a ‘directional’
velocity dependency referred to as anisotropy. Proper
lateral and depth positioning of reflected seismic
events below these anisotropic generators require
advanced velocity procedures to measure and model
these parameters.
In the past decade, the industry has made huge
investments in planning and acquiring seismic
acquisitions that are both rich and wide in azimuth.
These acquisitions are needed as geoscientists seek
better reservoir definitions in deepwater regimes
impacted by the geologic conditions described
above. Benefits from these rich acquisitions
have been acknowledged and documented, and
29
OILFIELD TECHNOLOGY
April 2011
31
integrity and are limited in their capacity to
extract subsurface attributes with azimuthal
dependency.
Although there are many ways to
decompose recorded seismic data,
ray-tracing procedures provide a vehicle to
simulate the subsurface ‘camera’. However,
unlike traditional ray tracing procedures
that are carried out from the acquisition
surface, we need a rich ray tracing engine
that can be initiated from any or every
image point in the subsurface. This rich
ray tracing ‘shoots’ rays in all angles and
all directions so that we can ‘capture and
preserve’ seismic data in an azimuthally
continuous manner. It is carried out in a
special reference system, referred to as
the Local Angle Domain (LAD). By carrying
out the ray tracing in this domain, we
can decompose seismic data into two
independent but complementary sets
of full azimuth gathers. The first set of
gathers (reflection) contains a continuous
(360˚) sampling of reflectivity (amplitude)
information as a function of reflection
(opening) angle. These gathers provide
the data structure to detect and measure
velocity anisotropy, to predict lithology,
to detect stress directions, and to update
velocity models. The second set of gathers
(directional) contains a continuous azimuthal
sampling of the total scattered energy as
a function of the dip and azimuth of local
reflecting surface. Since the total scattered
energy contains both continuous (specular)
and discontinuous (diffracted) energy, we are
able to easily differentiate and create images
that emphasise these two components
(Figure 1).
The combination of the two angle
gathers, together with the ability to handle
the full azimuth information in a continuous
manner, enables the generation and
extraction of high resolution information
about subsurface angle dependent
reflectivity in real 3D space. The complete
set of information from both angle gather
types expands our knowledge about
both continuous structural surfaces and
discontinuous objects, such as faults and
small-scale fractures, leading to accurate,
high-resolution, high-certainty, velocity
model determination and reservoir characterisation.
Enhancing deep reflectors
Full azimuth directional angle gathers represent a seismic
decomposition of the total scattered energy wavefield into dip/
azimuth angle bins at all subsurface points. These gathers
contain information about both specular and diffraction energy.
Specular energy is associated with reflectors from continuous
interfaces. Diffraction energy is associated with non-specular
Figure 2. Comparison of conventional seismic depth image (left) and seismic depth image
generated with full azimuth decomposition, imaging and specular weighting.
Figure 3. Point-diffraction ray tracing from a subsalt reflection image point. See text for
expanded explanation.
directivity originating from local heterogeneities such as
channels and fractures. The ability to decompose the specular
and diffraction energy from the total scattered field allows for
the creation of enhanced feature images from the fully recorded
wavefield.
In the deep waters of the Gulf of Mexico, for example,
the interpretation of subsalt reflectors is often challenging
because of wave interference (e.g. multiples, converted waves),
attenuation, ambiguities in velocity model definition, and
complex wave phenomena. To compensate, we can use the
30
OILFIELD TECHNOLOGY

April 2011
include improved multiple suppression, noise suppression
and illumination of target areas. However, while the resulting
seismic images inherit many of the benefits of rich and wide
azimuth acquisitions, the application of current seismic imaging
technology can fall short in exploiting the full potential of these
acquisitions.
While advances in seismic imaging continue at a rapid pace,
most of the solutions are limited in their ability to properly deal
with the rich azimuthal sampling of data recorded at the surface.
What is needed is a solution that allows us to better qualify
and even quantify the expenditures that we make in seismic
acquisition and imaging. The solution should assist us not
only in understanding the implications of our assumptions and
simplifications in dealing with wide and rich azimuthal data, but
also help us assess where we can make changes that will have
the most impact on our seismic programmes.
To achieve this objective, we need to give proper attention to
the issue of mapping rich azimuthal data recorded at the surface
to image points in the subsurface. Recognising the full potential
of rich and wide azimuth seismic data acquired in deepwater
exploration areas requires a significant ‘upgrade’ to our seismic
imaging, characterisation and interpretation technologies. Much
like a camera equipped for continuous recording at all angles
and directions, this upgrade would provide a comprehensive
decomposition of the recorded seismic data into physical
domains that recover and preserve subsurface illumination in all
orientations and angles in a continuous manner. If successful,
we will introduce new seismic data representations that allow
us to better understand subsurface illumination, to better qualify
seismic images, to reduce the non-uniqueness of the seismic
method, and to better describe the critical parameters of the
velocity model.
Limitations of azimuthal sectoring
Much like the benefits of capturing images from a continuously
revolving and pivoting camera, the benefits of sampling the
subsurface with continuous azimuth are well understood.
Azimuthal sampling of seismic data allows us to better detect
and measure velocity anisotropy, to identify and separate
different wave types, to
predict lithology from
more meaningful seismic
signatures, to detect stress
orientations and intensity,
and to understand the
dependency of seismic
acquisition on image quality
(illumination). However,
unlike the camera analogy,
capturing seismic data at
every subsurface point in
all angles and directions
(azimuths) is much more
problematic. Computational
and operational barriers often
limit the solution to surface
acquisition interpolation
schemes followed by course
acquisition sampling of
surface azimuths (sectoring)
rather than the desired
decomposition and imaging of seismic data to continuous
subsurface azimuthal datasets.
Although intuitively attractive, the surface sectoring
approach has severe drawbacks. Sector decisions (size and
number) are often taken independently without consideration
given to the subsurface. Instead, decisions are often taken out of
convenience to accommodate project deadlines and application
limitations of dealing with multi azimuthal data. More importantly,
sectors formed over a range of surface azimuths lack the
resolution and accuracy to properly use the entire recorded
wavefield to uncover the information and data listed in the
previous paragraph. This is particularly true when long offsets
are involved. Finally, while easy to create, sectored datasets are
processed independently and subsequently must be analysed
and interpreted. Extracting a holistic interpretation from the
analysis of these independent datasets is not straightforward.
To resolve these issues, we introduce a new seismic
decomposition procedure that replaces images constructed
from sectored source to receiver offsets and azimuth with
data structures and images constructed from in-situ angle and
azimuth data at any or all subsurface image points. The rich
information from all angles and azimuths ensures more reliable
analysis and significantly reduces reflector position uncertainty.
The solution is designed to deliver a complete set of data
containing accurate subsurface velocity models, structural
attributes, medium properties, and reservoir characteristics.
A new seismic perspective
All seismic imaging methods decompose seismic data into
organised domains of subsurface data that provide the pathway
for other data analysis procedures including velocity analysis,
AVO(A), and other seismic characterisation solutions. These
organised data domains (pre-stack gathers) can take many
different forms with vertical sampling in time or depth, and
spatial sampling in surface offset or subsurface angle. There are
other representations of pre-stack gathers depending on the
seismic imaging technology being used. However, other than
forming gathers with the sectoring approach described above,
all of these pre-stack gathers carry no directional (azimuth)
Figure 1. Decomposition and imaging in the local angle domain. Ray tracing reference (left), full azimuth
reflection angle gather (centre) and full azimuth directional angle gather (right).
32
OILFIELD TECHNOLOGY

April 2011
energy values computed from the full azimuth directional angle
gathers as weighting factors in the creation of the final image.
The high ‘energy’ values associated with the specular directions
sharpens the image of the deeper reflectors (Figure 2) at the
expense of the scattered or non-specular energy in the data.
Additionally, the focusing of the specular energy we observe in
the directional gathers serves as an indicator of velocity model
error and accuracy. This full azimuth subsurface decomposition
of the recorded wavefield into directional gathers provides the
means to more precisely unite the fields of seismic imaging and
interpretation in areas of complex wave phenomena.
Resolving anisotropic ambiguities
Modelling anisotropic velocity behaviour in deepwater
exploration basins is critical for a more accurate lateral and
depth positioning of reflected events beneath the anisotropic
generating formations as well as for the creation of more
interpretable seismic images. Full azimuth reflection angle
gathers allow geoscientists to visualise the influence of
anisotropy on the moveout of reflection amplitudes sampled
continuously over all azimuths. The analysis of anisotropic
behaviour can be visualised in three dimensions so that the
sources of anisotropy can be better understood and the strength
of anisotropy better appreciated. When coupled with the
information and data contained in the full azimuth directional
angle gathers, geoscientists are better able to differentiate
between different types (e.g. VTI and TTI) of anisotropy.
Resolving illumination ambiguities
Subsurface illumination analysis is a widely used technique
in deepwater exploration areas to better understand the
dependency of the seismic image on the seismic acquisition
and velocity model description. When used properly, it can
deliver information about imaging reliability, help define optimum
imaging parameters, enhance acquisition geometry, and validate
Figure 4. Rose diagrams of ray-pair illumination intensity captured at acquisition surface (top) and
subsurface image points (bottom). See text for expanded explanation.
prospects selected on the
basis of amplitude or amplitude
continuity.
Illumination analysis is
routinely carried out with ray
tracing procedures. Here, the
rich ‘bottom-up’ ray tracing
procedure described earlier
is used to secure a uniform
illumination of the subsurface
and establish a mapping of
subsurface angle parameters to
surface geometry parameters.
The result of this ray tracing
procedure is a rich set of
illumination factors (angle
dependent) and physical ray
parameters (e.g. geometric
spreading, reliability factors)
that are essential for quality
control of imaging results,
especially below complex
structures such as salt bodies.
Figure 3 shows an example of
point-diffraction rays traced
from a subsalt reflection point,
where only a subset of the rays arrive to the surface within the
given aperture (green rays).
The full benefit of this type of illumination can be
appreciated by the generation and evaluation of illumination
Rose diagrams. Figure 4 (top) shows the ray-pair illumination
intensity from three subsurface image points arriving at the
surface from different distances and azimuths. The narrow
azimuth acquisition geometry is clearly noted. Figure 4
(bottom), on the other hand shows the same ray-pair
illumination intensity, this time at the subsurface, as a function
of opening angle and azimuth. Note the poor correlation of
orientation at crossline 325, reflecting a large translation in
azimuth as rays pass from the surface through the salt. This
provides a strong visual argument against using surface
azimuthal sectoring as a procedure to deal with wide azimuthal
data.
Conclusions
Full azimuth decomposition, imaging, and illumination provide
deepwater exploration professionals an additional and powerful
tool to evaluate subsurface complexities. The full power of the
solution is realised in its ability to decompose the recorded
seismic wavefield into the physically meaningful domains of
reflection angle and reflection dips over a full and continuous
range of azimuths. The solution is a well needed complement
to a portfolio of existing deepwater seismic imaging
technologies that collectively remove imaging uncertainty and
improve the non-uniqueness of the seismic experiment.
O T

References
1. Koren, Z., I. Ravve, E. Ragoza, A. Bartana, and D. Kosloff, 2008, ‘Full
Azimuth Angle Domain Imaging: 78th Annual International Meeting,
SEG’, Expanded Abstracts, 2221-2225.
2. Zvi Koren and Igor Ravve, ‘Full-azimuth subsurface angle domain
wavefield decomposition and imaging, Part 1: Directional and reflection
image gathers’, Geophysics, Vol. 76, No. 1 January-February 2011; P.
S1–S13.
H
igh quality seismic imaging is a key to successful
hydrocarbon hunting. The creation of such
images can be especially challenging in
geologically complex areas. This article presents a
case study of an anisotropic prestack depth migration
(APSDM) project that used high resolution, shallow
tomography and anisotropic model building to solve
complex imaging challenges for a large depth migration
project in the Gulf of Mexico. Compared to previous
processing in the area this enhanced work flow resulted
in higher quality images and more accurate placement
of events. The project consisted of approximately
553 OCS blocks of data in the Mississippi Canyon,
South Timbalier, Ewing Bank, Grand Isle, Grand Isle
South Addition and Ship Shoal South Addition areas
(Figure 1).
The goals of this project were to improve the imaging
of steep dips, salt boundaries and subsalt events, and
produce a more accurate velocity model that would
enhance event placement. A solution to the problems
posed by the low velocity South Timbelier trench was
critical to the success of the project. To this end the
IMPROVED IMAGING
Gary Rodriguez, Sherry Yang
and Laurie Geiger, TGS, USA,
present a project to improve
imaging in a low velocity trench
area in the Gulf of Mexico.
trench area, which was addressed in previous processing
efforts with refraction statics, was modelled using high-
resolution tomographic velocity inversion to produce a more
accurate shallow velocity field. Additionally, APSDM was
employed to better tie the seismic events with well information.
Background
The survey is located in an area of the Gulf of Mexico with
many complex surface structures and geologic challenges.
To overcome these challenges, the previous processing used
long period refraction static corrections and short period
surface consistent static corrections applied in the time
domain prior to migration. Figure 2 shows the bathymetry of
the data area, with the trench area highlighted by the white
box.
Traditional refraction statics solutions use static shifts
to address the time delays caused by shallow velocity
anomalies. However, the refraction solution causes sags in
the resultant seismic image due to the longer travel times
through the slow velocity layer. The refraction solution solves
the travel time delay induced by the layer and applies a
static shift to the traces so as to minimise the resultant time
33
34
OILFIELD TECHNOLOGY
April 2011
sag. While these static shifts generally produce much improved
time images deeper in the section, the time static applied is
not kinematically correct for depth migration. In particular, this
could lead to velocity distortions when solving for the depth
velocity field. These distortions could affect the entire velocity
model.
Therefore, when planning the velocity modelling approach for
this project, it was decided that a high resolution tomographic
inversion would be attempted to more correctly model the
velocities in the South Timbalier trench area. If correctly
modelled, a more stable velocity field and a more accurate depth
image should be expected.
Since tomography cannot resolve the high frequency
component of the shallow velocity variation, this part of the static
solution, which derives from surface consistent residual statics,
was retained.
The other key enhancement to the previous processing flow
was the use of APSDM. Through the use of abundant check
shot velocity information and anisotropic parameter estimation,
well-calibrated velocities were used for migration. The use of a
calibrated velocity field should ensure better well ties with the
seismic data.
Initial anisotropic model building
A total of 539 check shots were analysed for use as a starting
point for building the initial velocity model. The check shot
velocity functions were analysed and spurious trends edited.
These edited check shot velocities were gridded, interpolated
and smoothed to generate the initial vertical velocity model (Vz).
An isotropic Kirchhoff migration was run using the Vz model.
The resultant image gathers were used in a two-parameter
semblance scan. The semblance cube that was generated had
three axes: depth, epsilon and delta (two of Thomsen’s weak
anisotropic parameters)
1
. The maximum semblance on each of
the depth slices occurs at the epsilon and delta values that best
flatten the gather at that depth. A semblance cube was generated
for each of the key well locations. The semblance cubes were
automatically scanned to estimate the optimal epsilon and delta
trends. These epsilon and delta values were then smoothed,
interpolated and gridded to populate the 3D model. To verify the
integrity of the epsilon and delta fields, these fields were used to
remigrate the data, this time using anisotropic Kirchhoff prestack
depth migration. Gather flatness, event focusing and well ties were
checked. Another iteration of parameter estimation was run to
refine the epsilon and delta fields, after which the initial anisotropic
sediment model was complete.
High resolution trench tomography
The resultant Vz, epsilon and delta fields were then used as a
starting point for tomographic velocity updating. A full volume
high resolution anisotropic prestack depth migration was
run over the trench area. Typical model building runs output
10 m depth steps with 300 m between output offsets (input
offset increment of 150 m). In order to correctly derive residual
curvature estimates for the shallow data, a finer offset and
depth sampling were deemed necessary. Consequently, for
these iterations a depth step of 5 m was used, and the output
offset increment was 150 m. Furthermore, the tomography
inversion cell size was decreased compared to that of a typical
work flow. Additionally, these early iterations were limited in
depth to 4 km.
Figure 2. Water bottom showing trench area within the white box.
Figure 3. Map view of residual curvatures over low velocity trench.
Figure 1. Project area.
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36
OILFIELD TECHNOLOGY
April 2011
The APSDM gathers were scanned for residual curvature.
Figures 3 and 4 show the auto-picked residual curvature
estimates that were put into the tomography velocity inversion.
Over time, the deep trench, as shown in Figure 2, was filled
in with slow velocity mud. The red residual curvature values
in Figure 3 relate to positive move-out (increase in reflection
depth with offset), implying that a velocity decrease is needed
in this area. The curvature values along with derived dip fields
were input into the first tomographic inversion. In evaluating the
residual curvature picks it was noted that there was a strong
correlation between areas of positive residual curvature and the
previously derived refraction statics solution. A positive residual
curvature requires a slowdown in velocity in order to flatten
gathers. A shallow slow velocity region is exactly what one
would expect in the unconsolidated Timbalier trench area.
Figure 5 shows the velocity perturbation that was output
from the tomographic update. The green region of this display
is an area of negative velocity updates (velocity slowdown).
Figure 6 shows the seismic data migrated with the initial velocity
model. The white circle indicates the trench area. This correlates
well with the regions of negative velocity updates that are shown
in Figure 5.
Figure 7 shows the result of migrating with the updated
velocity model. Below the trench area much better event
continuity is evident. Faults are better imaged and reflectors
appear more geologically realistic. The red arrow seen in
Figure 6 highlights an event sag that is induced by the slow
velocity anomaly. The red arrow in Figure 7 shows the same
area after tomographic velocity updates. The sub-trench events
do not have this velocity sag. This is contrasted with the image
obtained by migrating with the data that had refraction statics
applied before migration and velocity updates. This image is
shown in Figure 8. The original migration using refraction statics
appears to have false structures induced by distortions in the
velocity model.
Velocity model updating
The anisotropic sediment model was further updated with two
passes of grid based tomography. These iterations went to a
total depth of 12 km and were output with a 10 m depth step
and a 300 m offset increment. For each of the tomography
iterations, 3D anisotropic prestack Kirchhoff depth migration
was run, and residual curvature analysis was performed on
the resulting image gathers. Automatic dip estimation was
performed on the stack volume for use in the tomography
ray tracing steps. A new dip field was created for each of the
iterations that were run. Any rays travelling through salt were
not used in the tomography matrix solution. Vz was updated
from the inversion results, and well ties was rechecked and
recalibrated. After recalibration of the velocity field, the epsilon
and delta fields were then adjusted in order to preserve both
flatness of the resultant gathers and the ties to the check shots.
Accounting for the shallow trench area allowed for better
imaging and placement of events around this region. Because
the imaging was more accurate, sub-trench structures, including
Figure 4. Inline view of residual curvatures through low velocity
trench.
Figure 5. Velocity update output from tomography.
Figure 6. Prestack depth migration with initial model.
Figure 7. Prestack depth migration after shallow, high resolution
tomography.
salt, were more correctly shaped and positioned. This in turn
allowed for a more accurate dip field. All of these improvements
led to a more accurate migration in the shallow region, which,
in turn, resulted in better tomographic velocity updates and
improved imaging below the trench and throughout the project.
Salt model building
The salt geometry was quite complex. In order to correctly
define salt overhangs, the salt geometry was defined using four
passes of APSDM. Initially, top of salt was picked on the image
produced by migration with the final supra-salt sediment velocity
field. At this stage, salt boundaries interpreted from the seismic
images were checked against top salt events picked from well
data. Vz, epsilon and delta were then adjusted accordingly
in order for salt tops to image at the proper depths, while
simultaneously preserving the image gather flatness.
The first base of salt was interpreted on seismic images
produced after APDSM using the recalibrated salt flooded
velocity model. A migration was then run with the first top and
base of salt inserted into the model, and second (deeper or
overhung) salt tops were interpreted. Next, APSDM was run,
which flooded below the second top salt. The second base salt
was then interpreted, and the final salt model was constructed
using these four surfaces. The data was then migrated with the
interpreted salt geometry.
Subsalt velocity model updates
A final tomography pass was performed for the subsalt areas. In
this iteration, sedimentary regions of the model, both under salt
and away from salt, were updated. Tomography inverted for the
velocity updates, which were subsequently added back to the
previous sediment model. Salt was inserted back into the final
sediment model to produce the final salt velocity model.
The final imaging step was run with the anisotropic prestack
Kirchhoff depth migration using an increased aperture. Turning
rays were also used in the migration to better image steep dip
salt flanks.
Conclusion
The enhanced workflow for this project included using a
well-tied anisotropic sediment model, anisotropic prestack
Kirchhoff depth migration, modelling of salt bodies with
overhangs, and iterations of both supra-salt and subsalt
tomography, including two shallow, high resolution iterations.
This methodology resulted in a high quality image with more
accurate event placement and geologic structures. Salt
boundaries and steep or overturned events were imaged much
better than in previous processing. Deep structures and subsalt
events were more geologically sensible and had increased
continuity. Addressing the slow velocity zone using tomography
rather than using a refraction statics solution resulted in better
focused shallow faults and more realistic structures in the
Timbalier trench area and beyond.
O T
Acknowledgments
The authors would like to acknowledge Diane Yang, Quincy Zhang
and Steve Hightower who worked on this project. The authors
would like to thank those who helped review this paper, including
Simon Baldock, Michael Ball, Connie Gough, Bin Wang and
Zhiming Li. Thanks also to TGS for allowing this work to be
published.
Figure 8. Previous isotropic WEM with refractions statics.
References
1. THOMSEN L., ‘Understanding Seismic Anisotropy in Exploration and
Exploitation,’ 2002 Distinguished Instructor Short Course, Number 5,
SEG, Tulsa, OK, USA.
Bibliography
s RODRIGUEZ G., YANG, S., YANG, D., ZHANG Q., and HIGHTOWER, S.,
‘Anisotropic Depth Migration and High Resolution Tomography in Gulf
of Mexico: A Case History,’ 72
nd
EAGE Conference and Exhibition,
Expanded Abstracts, 2010.
s RODRIGUEZ G., YANG, S., YANG, D. , ZHANG, Q., and HIGHTOWER, S.,
‘Improved Imaging through Anisotropic Depth Migration and High
Resolution Shallow Tomography In Lieu of Refraction Statics in South
Timbalier Trench Area of Gulf of Mexico: A Case History,’ 79
th
Annual
International Meeting, SEG, Expanded Abstracts, 2009.
s WOODWARD, M., FARMER, P., NICHOLS, D., and CHARLES, S.,
‘Automated 3D tomographic velocity analysis of residual moveout
in prestack depth migrated common image point gathers: 69
th
SEG
Expanded Abstracts,’ 1218 - 1221,1999.
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The road to recovery
[COVER STORY]
F
or offshore oil and gas fields, well intervention and
drilling sidetracks are methods to increase the
oil production from existing wells. Operators can
significantly improve offshore hydrocarbon recovery from
both greenfield and brownfield reservoirs by installing
subsea processing systems. Subsea processing
presents significant potential for cost savings by moving
some of the traditional topsides fluid processing to
the seabed. Subsea separation and local re-injection
of produced water and/or gas to the reservoir or to a
dedicated disposal zone will allow flowlines and topside
processing equipment to be used more efficiently.
Subsea gas/liquid separation and liquid boosting can
increase the production rate in low energy reservoirs.
Treating the production flow at the seabed provides
many opportunities to achieve more effective exploitation
of oil reservoirs around the world. Subsea separation
and boosting allows marginal reservoirs to be developed
economically, and in some cases, can eliminate the
need for surface host facilities. This is important as
38
Brian Skeels, FMC Technologies, and Lars Farestvedt, MPM, US, consider
solutions for maximising reservoir recovery in this issue’s cover story.
the industry must turn to reservoirs that are not easily
accessible in order to maintain energy supply.
The focus is now on addressing the challenge of how
to cost-effectively produce oil and gas from offshore
fields located in deeper waters and more remote areas.
The traditional way of improving asset value using
subsea processing has been through installing a
multiphase pump close to the well. Subsea multiphase
pumping is an effective means to improve the economics
by reducing back pressure on the reservoir, which
increases well flow rates and total recoverable reserves.
However, it has been limited to applications in shallower
water with shorter tieback distances. This is primarily
because of the limitations in the pumping technology
itself.
As offshore production moves to deeper, harsher
environments, the use of surface structures is becoming
prohibitive due to complexity and cost. This has led to
subsea processing, which has created a new emerging
market for processing equipment.
39
40
OILFIELD TECHNOLOGY

April 2011
Riserless light well intervention
With the rising number of ageing subsea wells in the North Sea,
the demand for efficient subsea light well intervention service
continues to grow. Such service has been in operation in
the Norwegian sector for the past six years and is currently
experiencing exponential growth with the addition of several
more intervention systems spurred by continued long term
commitments.
FMC Technologies’ second generation Riserless Light Well
Intervention (Mark II) makes interventions feasible in deeper
water by reducing weight, optimising the size of pressure
control and closure devices, and upgrading the control
systems. It uses a compact, electric, ROV-style optic-electrical
umbilical cable that can be disconnected quickly and safely
without ROV assistance and stands up to rigorous heave
compensation winches. Reconfiguration between wells and/or
tasks is much easier and more efficient than it used to be.
Principles from the first generation were largely maintained
for well barriers and overall system philosophy. To improve
operational efficiencies, the control system architecture was
updated, mitigating the possibilities of time lost due to handling
of the large diameter IWOCS electro-hydraulic umbilical.
The approach was to remove on-deck based surface power
generation equipment while replacing the maze of hydraulic
hoses and fittings associated with the cumbersome IWOCS
umbilical with the ROV-style cable. The subsea IWOCS
controls powered by the cable feature the same distributed
control architecture found on newer work class ROVs, taking
advantage of IP routing and control.
Field operators have concluded that the intervention
cost for individual production wells is paid back in less than
20 days of increased production. With strong HSE focus,
comprehensive planning and training and the right technology,
the RLWI operations have proven to be a cost-efficient
increased oil recovery tool, which enhances the value of the
operators’ assets in subsea fields.
Mark II has experienced success in water umbilical
management, safer deck handling, efficiency from remote
in-situ fluid delivery and hydrate control. Improved well control
‘barrier’ equipment now accommodates a third longer length
wireline tools, as well as electric powered control system
architecture by using the ROV-style cable. Autonomous grease
injection capability, subsea monitored chemical injection
and fluid exchange/flushing capabilities have reduced fluid
wastage and contingency tankage requirements. These
accomplishments are all due to the recommendations and
lessons learned from first generation RLWI systems.
Through tubing rotary drilling
As the number of fields drilled with subsea developments
increases and the need to increase production remains ever
present, innovative technology to help operators produce more
hydrocarbons out of existing reservoirs remains one of the
industry’s top priorities.
FMC Technologies’ Through Tubing Rotary Drilling (TTRD)
system makes it possible to enter a well and drill a sidetrack
from the parent well without having to pull the tubing. A
sidetrack well can be drilled from deep within the current well
through the installation of a whipstock at the selected depth
and the milling of a window in the liner. Since sidetracks
are drilled below the production packer with the drill pipe
conducted through the tubing, neither the tubing nor the
Christmas tree needs to be removed.
Both the whipstock installation and the window milling can
be achieved in one run. The TTRD system configuration allows
drilling, well testing and completion to be performed through
one system, compared to traditional methods that require the
installation of two individual systems. The TTRD configuration
consists of a tree adaptor, lower riser package, emergency
disconnect package, Merlin riser, surface BOP, marine riser slip
joint and surface flow tree.
Once the TTRD rig is mobilised, both TTRD and well
interventions can be performed. The new stack configuration
opens the door for improvements in other operational
sequences and may also adapt to new drilling techniques in
the future.
In subsea wells, damage to horizontal subsea trees has
been a persistent problem. The TTRD system features
fit-for-purpose protection sleeves for the seal areas in the
completion, non-abrasive hard banding, bottom-hole assembly
Figure 1. Through Tubing Rotary Drilling (TTRD) system makes it
possible to enter a well and drill a sidetrack from the parent well
without having to pull the tubing.
Figure 2. MPM 3D Broadband technology detects accurately and
rapidly to determine how the liquid and gas is distributed throughout
the pipe.
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42
OILFIELD TECHNOLOGY

April 2011
designs that are not aggressive to the completion, and the
Christmas tree and a crown plug with elastomer.
Typical costs for a new subsea well can range from
US$ 40 – 50 million. The new drainage points created
for one FMC customer using TTRD are estimated to cost
US$ 10 million. Smaller reserve pockets are suddenly more
economical and existing wells will have a longer life and a
longer revenue stream. Additional benefits of TTRD include
reduced fatigue exposure to the wellhead and more efficient
operations with less handling of heavy equipment.
Multiphase meters
The MPM multiphase meters employ tomographic technology
to significantly improve measurement accuracy and
measurement range for multiphase
meters for topside and subsea
applications. The self calibrating
feature implemented in the MPM meter
is a step change from conventional
multiphase meters. This new feature
is achieved through implementing
salinity measurement functionality
in combination with the in-situ fluid
property verification. The MPM meter
works equally well for multiphase
and wetgas applications, for gas void
fractions of 0 – 100% and water cut of
0 – 100%. The 3D Broadband
®

technology is employed to accurately
and rapidly determining how the liquid
and gas is distributed throughout the
pipe, while at the same time determines
precise flow rates of oil, gas and
water. For slugging flow regimes, the
MPM meter will automatically switch
up to five times per second between
the multiphase and wetgas modes,
bridging a gap previously not covered
by multiphase meters. The MPM subsea
multiphase meter has been qualified
through the stringent DNV RP-203
qualification process to an impressive
15 000 psi working pressure and 480 ˚F
working temperature. The MPM meter
has also been designed for 11 500 ft
water depth.
MPM Subsea Multi Phase Meters
utilise patented (seven patents)
technology achieving significantly
improved real-life measurement of oil,
gas and water on the seabed. Through
using the DualMode
®
automatic
switching between multiphase and
wetgas measurements, one meter can
be used for the full field life even if the
wells change from predominantly oil to
predominantly gas, and as the water
cut increases from close to zero to
close to 100% in late life. The meter’s
unique self calibration functionality
furthermore automatically measures and
compensates for changes in the water salinity, eliminating the
need for costly subsea sampling to calibrate the meter.
The MPM meter allows the operators to improve reservoir
monitoring and increase recovery. Measuring miniscule
amounts of water in gas wells extremely accurately (down to
0.002%), the operator can optimise and significantly reduce the
amounts of chemicals injected to mitigate hydrate formation.
With its significantly lower sensitivity to fluid property changes
and the in-situ self calibration functionalities found in the
MPM meter, the operator can reduce and often eliminate the
need for subsea sampling. Not having to bring a sampling
bomb to the surface from a 10 000 ft deep high pressure
subsea well not only significantly reduces cost, but also
removes a potential safety hazard.
O T
Figure 3. Riserless Light Well Intervention makes interventions feasible in deeper water.
We put you first.
And keep you ahead.
The low-hanging fruit is long gone. Every day it’s more of a challenge to increase oil and gas
recovery and production from aging, under-producing fields and complex new ones: arctic
and ultradeep subsea fields; tight sands, shale and thermal oil sands; HP/HT, long distance,
deepwater complex pre-salt or lower tertiary formations. Whatever the need, we have
the technology – rigorously proven in the world’s toughest situations – to raise your
recovery factor and production to unprecedented heights. Not some day. Now.
Schilling Robotics’ HD
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ROV
sets new remote intervention standards
with 1-hour maintenance, industry-leading
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T
here is little doubt that too often over the past
two decades, subsea oil and gas production
strategies have been guided by short-term
decision making – predominantly by fluctuating oil and
gas prices.
It is, of course, vital to ensure that production in
fields adheres to strict economic criteria. There is no
sense, for example, in operating a field for many years
that has reached its economic limit - namely when the
production rate no longer covers the expenses incurred
extracting the hydrocarbons.
Operators, however, are often quick to leave existing
fields when they have reached recovery rates of around
30% (the recovery factor being the ratio of producible oil
reserves to total oil in place for a given field), sacrificing
these fields in the relentless search for ‘new oil’. And
this is not helped by their ‘economic limit’ being a
moving target – fluctuating due to the influences of
worldwide supply and demand.
The North Sea is an example of operators not doing
enough to maximise their assets. How often has it been
said over the past few years that North Sea oil is running
on empty? And that we are dealing with the very dregs
of the reservoir.
Yet, despite this, the last few years have seen
renewed interest, albeit often from smaller players.
According to the Norwegian Petroleum Directorate
(NPD), there were 16 new discoveries on the
Norwegian Continental Shelf (NCS) in 2010, with the
NPD estimating that more than 50% of oil remains in
Norway’s fields.
The same is the case on the UK Continental Shelf
(UKCS) where the latest 26
th
licensing round led to the
largest number of bids since the first round in 1964.
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s
Ian Anderson, Camcon Oil, UK, explains
how artificial gas lift can assist in developing
a long term strategy for subsea extraction.
44
Oil and Gas UK, the trade association for the UK offshore
oil and gas sector, believes that up to 25 billion bbls
remain to be won from the UKCS.
It is these kinds of figures that leads one to the
conclusion that many of the larger operators were
premature when deciding to take leave of the North Sea
in search of richer potential assets elsewhere – mainly due
to a short term production strategy. It is also possible that
incidents, such as the Macondo spill, may turn out to be
an example of fast-tracking the search programme and
pushing out the boundaries of oil and gas exploration too
quickly.
The focus on EOR
The last few years have seen more operators looking
to next generation enhanced recovery techniques as
a means of trying to meet and then alter the economic
limit of their fields. With new frontier regions increasingly
remote, geologically complex and expensive, there is also
an element of ‘needs must’.
In the North Sea, Norwegian operator, Statoil is a
good example of how recovery rates can be significantly
improved. The company has a target recovery factor of
65% for platform operated fields and 55% for
subsea-operated fields and is starting to make good on
these goals.
Similarly in the Middle East, ambitious targets are
being set. Saudi Aramco’s President and CEO,
Khalid A. Al Falih, has released a target recovery rate
of 70% from its major existing fields and in Oman, oil
production has actually increased by 17% over the last
two years with much of this due to EOR techniques.
1
Yet there is clearly more to do and few are satisfied
with the current, albeit improving, levels of recovery.
45
46
OILFIELD TECHNOLOGY
April 2011
Even in Norway, which boasts some of the highest recovery rates
in the world, there is a concern over the inability to maximise oil
and gas reserves. Bente Nyland, Director General of the Norwegian
Petroleum Directorate, said in a recent press release: “We are still
not satisfied. If we manage to recover just 1% more, this would
mean revenues in the hundreds of billions for Norway.”
And these potential windfalls of enhanced recovery are
clear worldwide. According to Oil & Gas Journal, an increase
of 1% in recovery rates would replace three years of global oil
consumption.
Closing the subsea information gap and
countering well instability
So how can effective oil recovery strategies be employed, while still
increasing these rates?
In answering this question, it is also important to tackle another
issue – the widening recovery gaps between topside and subsea
wells, with the latter generating average recovery rates of up to
15% less than their topside counterparts.
The high costs and risk profiles of subsea intervention are major
contributors to this gap as are two ongoing threats - well instability
and the lack of information on subsea wells.
Well instability can be due to a number of reasons, including
water breakthrough; slugging – the accumulation of water, oil or
condensates in the pipeline; or increased pressures in the well.
While well instability rarely results in catastrophic scenarios, it can
still be a major impediment to reservoir performance and recovery
rates.
Linked to this is the lack of information from which many
operators suffer, with regard to their subsea wells and key variables,
such as temperature, gas flow or the amount of water or sand
in the production flow. This information gap often translates into
a production gap. The twin themes of well instability and the
importance of generating vital, real-time information will be constant
themes throughout the rest of this article.
Improving oil recovery strategies
There are a wide variety of technologies on the market today trying
to address oil recovery challenges – technologies normally coming
into effect once primary and secondary recovery methods have
been exhausted.
These include chemical injection, where chemicals such as
alkaline or caustic solutions, are utilised; thermal injection where
techniques are used to heat crude oil to reduce its viscosity; and
newer technologies such as microbial injection.
Probably the most common form, however, is gas injection,
where gases, such as CO
2
, natural gas or nitrogen, are injected into
the reservoir in order to either push gases through the reservoir or
decrease viscosity within the oil. Probably the most common form
of gas injection is artificial gas lift.
The importance of artificial gas lift
Artificial gas lift consists of injecting gas into the production tubing
to reduce the impact of the hydrostatic pressure where the reservoir
pressures are not sufficient to force the hydrocarbons to the
surface. By reducing the density of the columns, reservoir liquids
can enter the wellbore at higher flow rates. Artificial gas lift normally
sits beside other forms of artificial lift, such as beam pumping,
electric submersible pumps, and hydraulic pumps.
Whereas in the past, it might have been considered a
secondary or tertiary technique, today, artificial gas lift can be, and
often is, employed at any time during the productive life of the fields
– sometimes even from the outset.
10% of wells in the US, for example, use some form of
artificial gas lift
2
and in Bahrain, 60% of oil wells use some form of
artificial lift to generate 50% of the Kingdom’s total oil production.
3

Spears & Associates estimated that the total global artificial lift
market was worth US$ 6.9 billion in 2008.
While there are clear benefits to what has become an
established technology, there are also limitations to artificial gas lift,
many of which come back to the lack of information.
Operators usually have very little information on pressure and
temperatures at the point of gas injection, as well as no control or
flexibility to alter injection rates as production variables change.
The primary method of gas injection is still to be found in the
‘side pocket mandrel’ configured completions, where wireline
interventions are used to change the operating valve when injection
rate changes are necessary. Such interventions can be a long and
cumbersome process, leading to damage to existing infrastructure
(if the wire snaps, for example) and the halting of production as a
new side mandrel unit is installed. These side mandrel tools also
have no instrumentation onboard.
This lack of information and flexibility means that rather than
providing more control of the stability of wells, artificial gas lift can
actually cause greater instability.
This is due to the potential for artificial gas to increase the
probability of dramatic flow fluctuations, unpredictable surges in
liquid and gas production rates, and increased concerns over the
integrity of the casing and tubing, leading to burst or collapsed
Figure 2. The Camcon digital artificial lift solution – APOLLO.
Figure 1. Key internal elements of Camcon’s digital artificial lift
solution.
is easy
Bringing you the power of information
Energy Global
48
OILFIELD TECHNOLOGY
April 2011
casing strings and, in the worst case scenario, oil or gas
migrating vertically towards the surface along the outside of the
casing. While these issues could be dealt with if the artificial gas
lift process was closely monitored at the point of gas injection
onwards, the fact that the operator is ‘flying blind’ increases the
risk.
Whereas in the past, incremental changes might have been
suggested to meet these limitations, it seems clear that there is
a genuine industry need for greater operator control over artificial
gas lift operations. Operators need to have access to variable
operating valve combinations, where decisions and modifications
can be made in real time without intervention and without threats
to well stability.
So if there are clear limitations here, why are companies not
surfacing with new technologies?
One slightly conspiratorial answer is that this is exactly how
the large integrated oil service companies like it – reduced risks
and expenditure and a focus on developing their current business
lines rather than embracing innovation. The results are products
that simply squeeze better performance from an existing concept
for short term gain and increased market share without tackling
the fundamental long term challenges.
It is reasonable to conclude, however, that the opportunity
to use ‘old’ technology solutions in different, new ways has now
been exhausted.
Digitising artificial gas lift
It is against this global context and against some of the industry
limitations already described, that Camcon Oil is in the process
Figure 3. Digital lift can be deployed in a wide variety of challenging
geologies.
Figure 4. A comparison of the optimum performance of the dial
solution compared to a side pocket mandrel system.
of developing a digital artificial lift solution that addresses many of
the issues described above. Figure 1 provides an overview of the
system, while Figure 2 outlines the product.
The solution is based around binary actuation technology (BAT),
a technology that has been developed over the last few years and
which also has applications for the automotive, manufacturing and
life sciences industries. Central to the technology is a low energy
pulse control that signals to switch an actuator between two stable
positions to digitally operate a valve. Particular benefits include high
switching speed and low power consumption.
This technology has now been customised for artificial gas
lift and, as Figure 3 illustrates, can be deployed in a wide variety
of challenging geologies and a wide variety of completion string
geometries – far more than for a conventional gas lift.
The actuator is coupled to a gas flow control valve to enable
that valve to be opened or closed remotely. This eliminates
the need for side mandrel units and wireline intervention and is
particularly important in bringing digital technology to artificial gas
lift. Trials of the new solutions are currently taking place with a major
oil operator who is providing support and access to its rig and
multiphase test facilities.
The series of digitally operated valves enable the real time
setting of injection rates and the extremely low power consumption
ensures that all control signals are at low voltage. The technology
can also be fitted straight into the tubing so it can be deployed far
more flexibly – in fish-hook wells or where there are highly deviated
sections. In this way, it can go where side mandrels cannot, as well
as being superior in operation.
What the solution therefore achieves is to allow operators
to vary injection rates in real time without wireline or slickline
intervention, meaning no lost uptime, continuous production and
reduced risk for operators. Figure 4 shows this comparison with the
traditional side pocket mandrel.
As opposed to conventional gas lift, where operators have no
knowledge of operating conditions at the point of injection, the
live information allows operators to optimise extraction conditions,
minimise gas usage across the reservoir, enhance oil recovery, and
protect the wells from instability.
Taking into account the reduced cost of well interventions, the
loss of production, wireline and slickline intervention incidents, and
optimal usage of gas and associated compressor equipment, it
should be possible to deliver an ROI of at least 20, and potentially
increase recovery from individual wells by up to 30%.
The ability to alter conditions remotely and without intervention
should have the capability to address the performance gap
between topside and subsea wells. A digital artificial lift installation
in a subsea well can have the downhole conditions remotely
monitored, and injection conditions altered without the need to
touch the wellhead. The result is a huge increase in operating
flexibility.
This article has described just one element of a sustainable
enhanced oil recovery strategy for the future. It is by embracing
these new technologies that information gaps can be closed and
recovery rates increased. Operators can also have more control of
their subsea wells, and fields can become more economically viable.
It is advances such as these that may lead to the future operators
focusing on the long term development of resources.
O T

References
1. ‘EOR Enhanced Oil Recovery Worldwide’, SBI Reports, April 2010.
2. www.rigzone.com.
3. Inauguration of 2009 Middle East Artificial Lift Forum.
D
etermining operational
and economic success
in deepwater wells is
dependent upon shallow hazard
mitigation. The industry’s first
subsea drilling with casing
(DwC™) system provides a
unique solution to shallow
hazards in deepwater drilling by
expanding an already proven
technology. Operators drilling in
subsea environments can now
effectively manage typical
top-hole issues such as caverns,
collapsed holes, fluid losses,
ledges and rubble zones.
With testing complete and
subsea operations at hand,
the commercial introduction of
Weatherford’s SeaLance™ DwC
system is generating interest
across global deepwater basins.
The system enables a 20 in.
casing string and its high pressure
wellhead housing to be drilled to
depth, cemented and released in
a single run.
In doing so, the system
extends the wellbore construction
advantages of the DwC system
to the physical and economic
extremes of subsea operations.
Because the system has the
ability to drill through trouble
zones, it offers significant value
in costly deepwater applications.
T
h
e

c
a
s
e

i
n

q
u
e
s
t
i
o
n
Scott Beattie, W
eatherford International Ltd, USA, looks at
the benefits of a subsea drilling-with-casing system
.
Figure 2. The SeaLance
system extends the wellbore
construction advantages of the
DwC system to the physical
and economic extremes of
subsea operations.
49
50
OILFIELD TECHNOLOGY
April 2011
In this environment, where the SeaLance system is aimed at
mitigating multiple hazards in the upper portion of the well, the
rewards include significantly reduced risk, improved efficiency
and lowered costs.
Mitigating drilling hazards
As the industry takes on increasingly challenging reserves,
with most ‘easy’ prospects having already been drilled, the
approach must be altered. At times, newer technologies must
be deployed to minimise non-productive time (NPT) and make
these reserves economically viable.
In areas where hole instability, loss zones or sloughing
shales are a concern, DwC technology has been implemented
to mitigate these problems that are expected with
conventional methods. Having the casing constantly on
bottom while drilling creates an environment where there is
a mechanical smearing of cuttings against the wellbore by
the large surface of the casing, thus reducing the previously
mentioned hazards.
An estimated 10 – 40% of expenditures are still spent
drilling trouble zones. It has been proven, however, that
trouble zones can be drilled, and sometimes avoided, if new
drilling practices are used. To be successful, drilling hazards
and associated potential risks must be understood.
Concept development
The company entered a technology agreement with ENI in
2007 to collaborate on the development of a new deepwater
technology with the unique capacity to mitigate shallow
hazards. Such a technology would mean major improvements
in the cost and capabilities for subsea drilling. It is a new
mindset, a new way of doing things.
The project began as an endeavor to explore the idea
of applying DwC in subsea application. Early development
prospects for the system were supported by more than
1000 jobs and 10 years of DwC deployments in land, platform
and other surface applications where performance has shown
a 20 – 50% reduction in drilling time. But subsea operations
offered significantly different demands on the technology.
Figure 1. The world’s first subsea DwC system mitigates shallow hazards in deepwater environments.
The process began with internal brainstorm sessions
and consultations with ENI to pull the concept together.
Continued collaboration and a significant investment in
research and development greatly matured the design
and brought it to the point of creating a prototype. The
subsequent subsea solution the company produced is
a promising multifaceted enabler for drilling deepwater
prospects.
System components
The system’s design draws on a diverse scope of
resources. It combines proven DwC drill bit technology
with an innovative running tool that enables deployment
of the system below the rotary table for the first time and
a retractable shoe joint (RSJ) adapted from the company’s
cementing products.
The drillable casing bit is a proven technology frequently
applied in land and shelf-type wells where a surface blowout
preventer (BOP) is used. This bit enables cement operations
to begin almost immediately after bottomhole casing-setting
depth is reached. Building a drive mechanism for the subsea
system involved creation of a running tool.
This resulted in the first DwC system that can be
deployed below the rotary table. Much like a liner hanger
system, the tool locks into a dedicated setting sleeve below
the wellhead, helps maintain casing tension and creates a
torque path from the drillpipe through the casing to the bit.
This process enables the entire string to be rotated to make
the hole.
The RSJ enables the wellhead housing to be soft landed
without rotation. This process is important because the hole
must be drilled before the wellhead housing can be set.
With surface DwC systems, the hole is drilled to total
depth (TD) with the casing and wellhead separate. Once on
bottom, the string is pulled back and a joint or two of pipe is
laid down. Then a joint with the wellhead is picked up, made
up to the string, run and cemented.
In subsea operations, the same process does not work.
The string would have to be pulled back to surface 1000 m
or more, and pulling casing out of the wellbore defeats a major
reason for drilling with casing in the first place.
To gain room at the bottom of the hole for landing the high
pressure wellhead housing, the subsea DwC system required a
means of drilling to TD and then somehow collapsing the string
below the housing.
Applying the RSJ provided a starting point for approaching
this obstacle. If fill or some other restriction is encountered a few
feet from bottom, the RSJ can collapse a land without having to
ream or disturb the sediment.
The outcome of these combined components extends
beyond putting together a few widgets - it introduces a new
way of drilling subsea wells that reduces risk and improves
efficiency. In deepwater drilling, the tendency is to apply the
same methodology used in a conventional well - a very limiting
approach.
Global deepwater solutions
In 2010, the system’s trials were successfully completed in a test
well at the Weatherford Technology & Training Centre in Houston,
Texas, USA. Plans are now being made for trials in deep water.
Prospects range from the Gulf of Mexico to the
South China Sea, and offshore Africa, Brazil and Australia. The
scope is broad because every deepwater basin has potential
applications.
Subsea advantages
While changing the drilling methodology for subsea wells
presents challenges, the system is already attracting attention
with some unique incentives and opportunities in the form of
well integrity enhancements and cost savings.
While batch drilling may not be an instinctive technique
in deepwater development, the system provides some strong
new capabilities for achieving significant savings. Combined
with the advantages of shallow hazard mitigation, this approach
is ideal for reducing the overall costs of subsea development
programmes.
Shallow hazard mitigation capabilities cover several
problems that have long vexed subsea drillers. These top-hole
issues include caverns, collapsed holes, fluid losses, gas and
water flows, ledges and rubble zones. The system ensures the
ability to land a long 20 in. string and have a better cement job
as a result of being able to rotate it. By drilling, cementing and
landing the high pressure wellhead housing in a single trip, NPT
is reduced and the general integrity of the well is improved.
The system also promotes safer operations. By eliminating
dangerous operational steps such as tripping pipe, personnel
safety is enhanced. Since its design allows the surface casing
and high pressure wellhead housing to rotate during subsea
deployment, the system provides an inherently safer cement
barrier, enhancing the foundation of the well.
Moving the DwC system into the subsea environment
provides advantages in exploration and development
applications. The new SeaLance system is designed for
mitigation of shallow drilling hazards that significantly reduce
the risk and NPT to help control costs and enhance well
integrity. The result is a new way of looking at deepwater
operations and economics.
O T




Triple eccentric
Butterfly Valves

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Double Block and Bleed

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www. zwick-valves.com
Zwick Armaturen GmbH - Egerstr. 1 - D-58256 Ennepetal - Germany
Tel.: +49-(0)-2333/9856-5 - Email: m.zwick@zwick-gmbh.de
10th Middle East Geosciences Conference and Exhibition
Bahrain International Exhibition Centre
4 – 7 March 2012
The Middle East's Premier Geoscience Event
Under the patronage of His Royal Highness Prince Khalifa bin Salman Al Khalifa
Prime Minister of the Kingdom of Bahrain
www.aeminfo.com.bh
FIGHTING
Kenneth Bhalla, Stress Engineering Services, USA,
explains the importance of riser and subsea
fatigue damage monitoring.
A
s offshore drilling and production facilities are
pushed to operate in deeper waters, the equipment
used in these facilities is exposed to harsher
environments. Moreover, as reservoirs with high pressure
and temperatures are being developed, it is of the utmost
importance that the integrity of each system used to drill
and produce any field be maintained.
Given these concerns, accurate assessment of the
present operating state and future life of equipment
in these environments is essential for site safety and
operation. Stress Engineering Services (SES) recently
developed a data acquisition instrument - the subsea
vibration data logger (SVDL), specifically to monitor
dynamic structural response and fatigue in deepwater
applications.
Providing assurance
Vibration, and hence fatigue monitoring of drilling risers,
completion risers, production risers, flowlines, jumpers,
manifolds and wellheads are critical and can provide
assurance that ongoing and future operations can be
performed safely.
Vibration can be in the form of wave-induced motions,
vessel induced motions, vortex induced vibration (VIV), or
flow induced vibration (FIV).
When performing drilling from mobile operating drilling
units, such as semi-submersibles and drill ships, a wave
fatigue assessment is performed by using requirements in
API RP 16Q,
1
which limits the significant dynamic stress
range. In this case, no actual wave fatigue analysis is
performed. VIV analysis or assessment may be performed
to determine the damage rates on the drilling riser system
from high currents; mitigation usually involves pulling more
tension on the drilling riser or even utilising fairings.
Fatigue design and assessment for production risers are
based on requirements in API RP 2RD,
2
API RP 1111,
3
and
API RP 2A.
4
Similarly, other API codes are utilised for the
completion risers, wellhead, and subsea equipment.
53
54
OILFIELD TECHNOLOGY
April 2011
A fatigue assessment is based on metocean data (wind,
wave, current); statistical analysis is performed to determine
annual and extreme events. However, if a location experiences
an active storm, hurricane or loop current season; then it would
be prudent to reassess the metocean data. If the metocean data
is modified, then any previous fatigue assessment or design
must be re-evaluated.
Additionally, fatigue design includes conservatism. Excessive
conservatism can result in reduced operational windows and
shorter service life, leading to increased operational costs and
lost revenue.
Safe operation
Additional inspection costs can be mitigated by vibration
monitoring and fatigue damage estimation from vibration
measurements. Vibration measurement ensures safe operation
by allowing monitoring of fatigue critical components, especially
during inclement/extreme conditions, and allows rig crews
to make prudent decisions based on actual fatigue damage
estimates of a component. It is not sufficient just to take data
using instrumentation. In addition, it is prudent to perform
an analysis that predicts the expected mode shapes and
fundamental frequencies of the system prior to deployment of
the instrumentation. The instrumentation must be fit for purpose
and packaged so that it will measure the expected/appropriate
response without excess noise or offsets.
After deployment, proper data interpretation is a key
component in understanding the quality of the collected data.
Thorough data processing techniques and data quality checks
have been developed by SES.
High quality data
SES has developed a number of accelerometer and strain gauge
based tools to measure and assess fatigue damage. The SVDL
is a new tool in the SES suites of solutions; it was developed
to service the emerging need to collect high quality vibration
data for extended periods under increasingly stringent subsea
environments.
Housed inside the unit is a high quality tri-axial
accelerometer. The accelerometer is constructed using a
state-of-the-art MEMS process to achieve unprecedented
sensitivity and resolution. Signals are passed through an
aggressive low-pass analogue filter prior to being digitised by a
high resolution analog-to-digital converter. In addition to signal
filtering, oversampling techniques are employed to maintain the
highest digitised signal quality. The long battery life, low power
consumption, and large memory storage are well matched to
maximise the deployed logging duration.
The data logger and clamping devices feature a low mass
and high mechanical impedance structure. This ensures that
the vibration signals collected by the logger are not distorted
Figure 2. Subsea manifold.
Figure 3. Modal deflection of a jumper system. Figure 4. Instrumented riser joint.
Figure 1. Subsea jumper.
by the mechanical characteristics of
the logger system itself, even at high
measurement frequencies of 50 Hz or
greater.
Through a suitably designed
clamping device, the SVDL may be
mounted by an ROV to any structure
of interest. Figure 6 shows an example
of a low moment-of-inertia clamp
developed for jumper pipe monitoring
applications.
The data logger specifications
include:
x Sensors and electronics fully
enclosed in a one-atmosphere
aluminium subsea housing with
redundant o-ring seals at each
closure.
x Depth rating: 10 000 ft seawater.
x Exterior dimensions: 3.1 in dia.
x 18.25 in. long (24 in. long
including ROV handle).
x Mass: less than 10 lbm.
x Weight in seawater: less than
6 lbf.
x All exposed aluminium surfaces
hard-anodised.
x Sensor is hard mounted to
housing end cap to maximise
coupling stiffness to measured
structure.
x Ported for nitrogen back-fill;
includes pressure relief valve.
SES is in the process of developing
a real-time fatigue monitoring system
that will provide immediate assurance
of operations; this system will be
operational in autumn this year.
O T
References
1. API RP 16Q, ‘Recommended Practice
for Design, Selection, Operation and
Maintenance of Marine Drilling Riser
Systems’, 1
st
edition, November 1993.
2. API RP 2RD, ‘Design of Risers for
Floating Production Systems (FPSs) and
Tension-Leg Platforms (TLP)’, 1
st
edition,
June 1998.
3. API RP 1111, ‘Design, Construction,
Operation and maintenance of Offshore
Hydrocarbon Pipelines’, 3
rd
edition, July
1999.
4. API RP 2A, ‘Recommended Practice for
Planning, Designing and Constructing
Fixed Offshore Platforms – Load and
Resistance Factor Design’, 1
st
edition,
July 1993.
Figure 5. Subsea vibration data logger.
Figure 6. SVDL data logger clamp.
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Avoid completion NPT and
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T
here is little doubt that operators have a great deal
to think about it when it comes to subsea operations
today.
There is the remoteness and challenging conditions of
the fields themselves – conditions that are often underlined
by highly complex subsea production systems. The growth
in popularity of smaller and older fields in the North Sea,
which are often tied into existing infrastructure with long
distance tiebacks, are one example of this increased
complexity.
Other examples of challenging conditions include the
deepwater fields of offshore Africa and Brazil with production
and geological challenges, such as high pressure, high
temperatures and sub-salt; the sour gas fields of the
Middle East; and the rise in increasingly complex ownership
structures with commingled streams and royalty allocations
that must be measured by subsea systems.
Finally, there are the age-old threats to production and
well control of water breakthrough, hydrates, sand erosion
and corrosion – challenges that, if anything, are increasing.
Information and integration
The level of investment in subsea operations over the last
few years has been steadily increasing. Industry analysts
Douglas Westwood forecast back in 2007 that US$ 25 billion
will be spent annually in deepwater capital expenditure by
2012, with Africa accounting for 40%, North America 25%
and South America 20%.
Great integrations
Vincent Vieugue,
Emerson Process Management,
Norway, explains the growing
need for greater integration and
intelligence in subsea operations.
57
58
OILFIELD TECHNOLOGY
April 2011
In terms of more specific subsea operations,
Douglas Westwood predicted that more than 1000 additional
multiphase meters – many of them subsea – will be deployed
by 2015 and, in another report, that annual expenditure on ROV
operations is likely to reach US$ 3.2 billion by 2014. According to
one of the authors of the report, this is mainly down to ROV being
“a more mature and advanced technology.”
While such levels of investment and recent technology
advances should be encouraged, the sheer amount of data derived
from subsea instrumentation has meant that some operators are
reeling from the amounts of reservoir data that are produced.
According to IBM Global Services, a single oil or gas field can
generate up to one terabyte of data per day
1
- data that must be
collated, interpreted and used as input into further decision making.
And yet, while some levels of the reservoir are producing
gigabytes of data, there are other important
areas of the reservoir where the operators are
quite literally ‘flying without instrumentation.’
For example, the detection of sand in the well
stream is often based on approximations and
guesswork around flow rates, pressure drops
and temperature distributions.
There are also other areas of the subsea
production system that are ‘no go’ areas to
operators, once production is underway. One
such example is the B annulus within the
casing of an oil well, which is not accessible
following the sealing and cementing of the
casing.
Undetected high pressure behind the
casing can lead to poor or deteriorating
cement sealing and a loss of casing integrity
which, in a worst case scenario, can result
in oil or gas migrating vertically towards the
surface and increasing the risk of a shallow
blowout. To compensate for this, operators
have spent millions of dollars shutting down
wells, mainly due to their lack of information
on pressures and inability to verify the barrier
integrity.
Too often, the very technologies that
are supposed to bring control to subsea
production are viewed as commodities,
procured in an ad hoc manner, and with no strategy as to
where they fit in with other activities. Whether it is the downhole
monitoring of wells, hydrate inhibition strategies, corrosion or sand
erosion, or flow measurement, there is often a lack of integration
across subsea production systems.
So how can we restore the balance and bring greater control
to subsea production? How can we better manage the information
that is created, yet ensure that there are no blind spots? And
how can we ensure a more intelligent and integrated approach to
subsea production?
While these may appear lofty ambitions, there is cause
for optimism in areas such as hydrate control and corrosion
monitoring, downhole monitoring, the management of information,
and intelligent metering.
Hydrate control and corrosion monitoring
Hydrates – the crystals that are formed in high pressure and low
temperature gas flows where water and natural gas are present –
are a significant obstacle to production control. They can cause
blockages in tubing, flow lines or pipelines.
The rise in deepwater wet gas fields, with high pressures and
temperatures and deposits, such as methane-based hydrate
deposits in the Gulf of Mexico, also means that hydrates are on the
rise.
The good news is that there are tools to combat hydrates,
principally thermodynamic inhibitors such as methanol and ethylene
glycol (MEG) and low dose hydrate inhibitors (LDHIs).
These inhibitors require a subsea system that tells the operator
when the field is vulnerable - when there is a water production
in the wet gas well, for example – and also provides an effective
distribution system for their accurate injection. The latter is essential
– LDHIs, for example, work at very low injection rates, whereas
thermodynamic inhibitors tend to require higher injection rates and
concentrations. Get the dosage wrong and there
is even a danger of increasing the likelihood of
hydrate formation.
To this end, Emerson is paving the way for
a greater integration between Roxar subsea
multiphase and wet gas meters, which can
detect the early onset of formation-water
production in the gas flow, and injection valves,
responsible for the flow and chemical dosage
rates of hydrate inhibitors. The result is an
integrated subsea production system and
greater subsea control. Figure 1 shows a photo
of the latest chemical injection valve.
There is also a need for greater integration
of corrosion monitoring. Corrosion can lead to
production losses, metal loss (which reduce the
life of production and storage equipment), or
safety and environmental setbacks, due to the
corrosion of key infrastructure.
Today, Emerson’s corrosion monitoring
activities, such as the company’s intrusive
(probes and coupons installed with flow lines)
and non-intrusive solutions (which are directly
installed on the pipe walls) are also integrated
with sand monitoring, pig detection and other
downhole measurements instruments.
One example is Statoil’s Heidrun field on the
Norwegian continental shelf, where, according
to the Norwegian Petroleum Directorate (NPD), “continuous efforts
are being made to find new methods to increase oil recovery.”
The field makes extensive use of both intrusive corrosion
probes and intrusive sand/erosion probes and also has a few
locations with combined corrosion and sand/erosion probes. With
a recent increase in sand production, Emerson has been working
with Statoil to increase the field’s sand monitoring capabilities
through a new sand management module. The module will allow
Statoil to respond faster to changes in sand production conditions
and establish maximum sand free production rates for production
optimisation.
An intelligent downhole network
These hydrate and corrosion monitoring solutions are part of an
increase in predictive intelligence and integration across reservoir
production monitoring.
Emerson’s Roxar downhole monitoring systems are now
deployed in production, injection and observation wells, as well as
Figure 1. Roxar subsea chemical
injection valve.
60
OILFIELD TECHNOLOGY
April 2011
in conjunction with the instrumentation of highly complex
multi-zone intelligent wells.
Emerson’s intelligent downhole network, for example, allows
operators to install 32 instruments on a single cable, with the
network acting as a hub for downhole choke position indicators,
additional third party sensors, and for the transmission of power
and data. In this way, downhole reservoir monitoring can provide
crucial information not only on temperature, pressure and water
cut, but also gas fraction, sand rate, and flow velocity.
Multiphase meters are another example (Figure 2). Such meters
are not only an effective alternative to well testing, providing critical
real-time information on a well’s capabilities during production, but
they can also have a significant impact on reservoir management
across production operations. When integrated with gauges,
sensors and other intelligent devices, the multiphase meter has the
Figure 2. Roxar third generation multiphase meter, the MPFM 2600.
Figure 3. A real-time multiphase measurement and subsea sensor
system.
potential to become a critical component in measuring flow and
production rates, and contributing to real-time decision making.
Decisions such as choke setting and artificial lifts, for example,
can then be based on all the necessary information.
Emerson recently installed its Roxar subsea multiphase
meter on the Cascade and Chinook fields in the Gulf of Mexico.
These meters will work alongside combined sand erosion
and pressure and temperature sensor systems to provide
the operator, Petrobras, with accurate and continuous online
monitoring and valuable, real-time production information on the
reservoir. Figure 3 shows an example of a real-time multiphase
and subsea measurement system.
Improved information management
No matter how well an operator integrates their instrumentation,
they still need a system that not only brings all the information
together, but also provides the necessary analysis tools to
rigorously interpret that data.
With this goal in mind, Emerson has developed a
Windows-based field monitoring system, which comes with a
series of modules that cover many facets of operators’ subsea
production systems, including flow assurance, sand and
erosion, corrosion, simulation, production control, and virtual
flow metering.
At the heart of the new system is a server that consists of
algorithms and models for data validation, data conditioning,
smart alarm handling and virtual instruments. Real-time sensor
data is then fed and converted into visualisation tools for viewing
and analysis.
The software provides an interface to all the instrumentation
and the scalable architecture also allows remote connectivity,
enabling multiple users to draw upon the same data and
instruments. In this way, the operator can gain access to
everything from individual data series from an instrument to
complex expert guidance for choke settings.
The field monitoring system is also proving an important
means of bringing greater intelligence to instrumentation. For
example, through the self-diagnostics application within the
field monitoring system, operators can configure flow meters,
monitor status and alerts, troubleshoot from the control room,
perform diagnostics, and manage calibration from a single
application.
Another recent solution that has reached the testing stage,
and which could be integrated into a field monitoring system
in the future, is a wireless instrument that tracks pressure in
the B annulus inside the well casing in subsea production
wells. Through the field monitoring system, operators can track
pressure, confront potential threats to well integrity, and ensure
that no area of a subsea production system is a ‘no go’ area.
While this article has covered a number of different elements
of the reservoir management and production process, there is
one clear, overriding message – that there is a growing need for
greater integration and intelligence in production operations.
It is encouraging that, while the subsea challenges continue
to remain challenging, progress is indeed being made towards
these goals, putting the operator where they should be – in even
greater control of their production operations.
O T
References
1. ‘Meeting the Challenges of Today’s Oil & Gas Exploration and Production
Industry’, IBM Business Consulting Services.
U
nbonded flexible pipes with steel pressure and
tensile reinforcement have been in operation for over
30 years but are facing serious challenges in deep
and ultra-deepwater as well as corrosive environments due
to top tension limitations and corrosion fatigue. DeepFlex
has developed a unique composite reinforced flexible pipe
technology that overcomes these issues and supports
subsea developments as they move to more demanding
environments. Testing and qualification of an expanding
operating envelope, in addition to proven field performance,
will address the future challenges of the industry. In offshore
project developments, Flexible Fiber Reinforced Pipe
(FFRP™) is a lightweight, composite reinforced solution that
offers reduced risk, capital and operational costs.
A typical FFRP pipe structure includes the following pipe
layers:
x Liner: smooth bore conduit for conveying internal fluids.
HDPE, PA 11, PA 12 or PVDF thermoplastic materials are
employed for the liner, with the selection based on the
application and temperature.
x Anti-extrusion layer: prevents liner from deforming into
gaps in the overlying non-interlocked hoop strength layer.
x Hoop strength layer: provides internal pressure hoop
resistance, external hydrostatic collapse resistance and
resists radial compression installation loads. Either glass
or carbon fibre composite reinforcements are used for
this layer, also selected based on the application and
temperature.
x Anti-wear layer: prevents wear of composite reinforcement
due to contact/relative movement between adjacent
layers. The innermost anti-wear layer may also provide a
conduit for the flow of permeated gases to a vent at the
end fitting.
x Membrane (intermediate sheath): prevents seawater
intrusion into underlying layers, allowing the hoop strength
layer to bear the external hydrostatic pressure. HDPE,
PA 11 or PA 12 are employed for this layer, depending on
the application and temperature.
x Tensile reinforcement: provides tensile capacity; two
layers wound in opposite helical directions assure
torque balance. Either glass or carbon fibre composite
reinforcements are used for this layer.
x Jacket (outer sheath): protects the FFRP™ structure
against abrasion and mechanical damage. HDPE for static
service and PA 11 or PA 12 for dynamic service.
Value proposition
The FFRP value proposition in the development of deep and
ultra-deepwater harsh environments includes:
An enabling technology allowing more cost-effective
development of deep and ultra-deep water oil and gas
reserves. The composite flexible pipe products offer the
necessary resistance to both internal and external pressures,
as well as the structural capacity to resist tension and bending
in deep water. The pipe’s lightweight and high tensile strength
combine to allow installation in water depths up to and
beyond 3000 m. The reduced weight offers significant project
61
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OILFIELD TECHNOLOGY
April 2011
savings for floating production systems including reduced cost
of new build FPSOs, relocating shallow water FPSOs to deep
water, disconnectable turret optimisation and low payload on
existing deep water hubs allowing for more production within
tension capacity limits.
Lowers installation costs and reduced project schedule risk.
The FFRP™ provides a significant weight advantage over steel
reinforced products. This weight advantage reduces the size and
capacity of the equipment on the deck of the installation vessel,
particularly the equipment known as ‘top tensioners’, which
supports the weight of the pipe and controls its movement as it
is lowered into the water. Larger top tension equipment requires
larger installation vessels, which are fewer in number and have
substantially higher operating costs. The lighter weight solutions
allow for a greater number of potential installation vessels and
a wider range of opportunities to secure a more cost-effective
vessel at the required time. The greater number of vessels
allows project flexibility and reduces schedule risk in the event of
project delays.
Resistance to corrosion fatigue that reduces full life-cycle
costs. Steel reinforced flexible pipe is susceptible to corrosion
fatigue due to seawater ingress into the steel reinforcement
layers especially when combined with the presence of H
2
S and
CO
2
that permeate through the inner thermoplastic layers. If the
outer sheath of a steel reinforced flexible pipe is damaged in the
splash zone, where cathodic protection is ineffective, the tensile
armour reinforcement will corrode very rapidly, requiring rapid
replacement of the pipe. With proper material selection, verified
by comprehensive testing, the FFRP composite reinforcement is
resistant to seawater and the annulus environment resulting from
permeated gases condensing in the annulus, and can lower full
life-cycle costs relative to competing steel-based pipe.
Technology development
Technology development is focused on the following three key
areas to support the development and qualification of the FFRP
for deep and ultra-deepwater offshore production environments:
x Composite material development and testing.
x Pipe structure qualification testing.
x Model development and calibration.
x Technology development is reviewed by an independent
verification agency.
x Composite material development and testing.
FFRP has been successfully deployed in applications where
DeepFlex’s fiberglass reinforcement is qualified including low/
moderate pressure and temperature applications. A comprehensive
material testing programme is being executed to expand the
operating envelope of materials for high pressure and high
temperature. Fiberglass and carbon fibre composites are being
tested to verify the characteristic resistance values, verify the partial
safety factors used in the pipe design calculations, and address
the potential failure modes and mechanisms based on the loads
and environments that the material may be subject to over the
FFRP service life. In order to develop the test plan to qualify these
materials, DeepFlex used the following approach:
x For each FFRP composite layer, load cases are identified. For
each load case, the environment (fluid), temperature, loads,
operating condition and layer stresses are determined.
x Based on the previous point, and the guidelines in section 6
of DNV OS C501,
1
and the layer geometry, construction and
materials employed, define the potential failure modes and
mechanisms that might be experienced as a result of those
loads and environments.
x Based on the previous point, and the guidelines in section 4
of DNV OS C501,
1
define the tests needed to evaluate the
material performance against the failure mechanisms.
Table 1. Planned test programme
Quantity of tests
Burst - straight 1
Burst - bent to minimum OBR 1
Axial tension with internal pressure 1
Collapse 5
Crush strength 5
Combined bending with tension 1
Bending stiffness 1
Torsional stiffness 1
Axial compression 2
Dynamic test - topside jumper loads 1
Dynamic test - FPSO catenary riser loads 1
Figure 2. The Urugua project.
Figure 1. The Afren Okoro Setu project.
OILFIELD TECHNOLOGY
April 2011
63
Laboratory tests are performed
on unidirectional composite strips
and laminates, and on anti-extrusion
tapes. The general approach is to:
x Perform a variety of tests on
unexposed samples.
x Expose to fluids that are
representative of fluids for
offshore production for durations
at design temperatures.
x Test the exposed samples and
analyse the results.
The analysis results are used to
verify resistance of the composite
reinforcement to potential failure
modes, and update and validate the
characteristic resistance and partial
safety factors used in the design
methodology, and fatigue data to
be used in the service life analysis
methodology.
Pipe structure qualification testing
The FFRP has been successfully deployed in shallow water
operating environments and deepwater temporary applications.
Qualification testing for these applications includes burst, collapse,
tensile and bend tests. In addition, small-scale tests and
mid-scale tests, which simulate the combined loading experienced
in the critical anti-extrusion layer and hoop strength layer, are being
conducted.
To expand DeepFlex’s operating envelope, a detailed
qualification programme to API RP 17B
2
is being executed to
qualify deep and ultra-deepwater flowlines and risers for high
temperature and high pressure applications. The programme will
qualify the FFRP for 7 in. 5000 psi flowlines and riser in water
depths of 2000 m and temperatures up to 90 ˚C. The testing
programme is highlighted in Table 1.
Model development and calibration
Part of the overall qualification process for flexible pipes is the
ability to accurately predict the mechanical and physical properties
of the structure. These models are developed in-house and are
calibrated by small scale, mid scale and full scale testing. Design
methodology verification goals include:
x The pipe performance and associated failure mode are
predicted by the design methodology.
x Potential failure modes based on expected in-service loads
and environments are addressed in the design methodology.
Field deployments
The FFRP has been successfully deployed in all major offshore
operating basins around the world. Some of the key applications
are summarised in Table 2.
Two of the most demanding project deployments are the
Afren Okoro Setu and Saipem Urugua projects. Some key elements
of the projects follow:
Afren Okoro Setu
FFRP risers have been successfully operating for over two and
a half years in extreme dynamic service on the Afren Okoro Setu
project offshore Nigeria. The field architecture for Okoro Setu
includes a well head platform connected to an FPSO with DeepFlex
product.
The 4, 6 and 8 in. internal diameter dynamic risers connected
to the FPSO are operating in a double wave riser configuration in
a water depth of 19 m. Production at Okoro Setu has averaged
17 841 bpd and total gross cumulative production from the
field (since start-up) at 30 June 2010 is 11.4 million bbls. During
this period, a process uptime of 99.6% has been maintained,
reflecting the excellent operational efficiency of the flowlines and
risers.
Saipem, Urugua
The Urugua project included the successful deployment by Saipem
of a downline solution for the commissioning of an export pipeline
offshore Brazil. The FFRP delivered to Saipem was used in the
commissioning of the 174 km, 18 in. Urugua export pipeline 160 km
off Brazil in the Santos basin.
The FFRP downline offered a unique lightweight solution for
this challenging deepwater commissioning project by lowering
deployment costs and reducing operational risk. The 3 in. internal
diameter downline was deployed in 1500 m of water by one of
Saipem’s installation vessels, the Norman Cutter. The downline was
connected to a subsea commissioning structure for over 40 days
and operated successfully in very challenging weather conditions
including seas of 5 – 7 m.
Conclusion
The FFRP solution offers substantial value for deep and
ultra-deepwater environments. The light weight and corrosion
resistance of DeepFlex pipe offers project and operational
cost savings. The product has been proven in demanding field
conditions and a comprehensive material and full scale test
programme is ongoing to expand the operating envelope. The
product offers a new tool to the design kit of subsea engineers to
meet the challenges of deep and ultra-deep water offshore field
development.
O T
References
1. DNV OS C501, Composite Components.
2. API RP 17B, Recommended Practice for Flexible Pipe.
Table 2. DeepFlex projects
Project name Customer Deployment
region
Pipe size
(in.)
Design pressure
(psi)
Water depth
(m)
Deployment
year
Petronius Chevron Gulf of Mexico 4 5000 N/A 2006
Bourbon Opale Maritima de
Ecologia SA
Bay of
Campeche
3 5000 N/A 2006
Genesis Chevron Gulf of Mexico 2 5000 N/A 2007
Mardi Gras BP Gulf of Mexico 2 5000 800 2007
Okoro Afren Nigeria 4 5000 14 2008
Okoro Afren Nigeria 6 5000 14 2008
Okoro Afren Nigeria 8 5000 14 2008
Arthit EMAS Thailand 8 2500 80 2008
Lyell CNR North Sea 4 5000 146 2008
Aries Swan
Workover Vessel
Crossmar Mexico 4 5000 150 2008
J Ray McDermott Petro SA South Africa 4 1250 120 2008
Urugua Saipem Brazil 3 2900 1500 2009
Genesis Chevron Gulf of Mexico 2 4000 N/A 2010
PRECOMMISSIONING
CHECKLIST FOR
Figure 2. The precommissioning team is
vital to maintaining project schedule.
64
E
ffective precommissioning (PC) planning
and initiation of PC activities provide a
necessary bridge between earlier project
execution phases, including mechanical
completion, and the final commissioning and
startup of the facility. PC can be an essential
mark between the transition from a
discipline-based approach, to one that verifies
the functionality of systems, regardless of
their location on the facility. The planning
required for an efficient PC of an offshore
facility is typically started during the early
stages of detail design and commences
immediately after mechanical completion (MC)
has been achieved, which itself follows the
engineering design and construction phases.
Prior to initiating the PC actual work stage, the
supervisor of the MC phase creates a formal
document transferring the complete dossier
of all activity of the system for handover to
the PC team, along with a register or punchlist
that indicates any remaining MC work that still
needs to be completed or closed out.
Systems driven
Whereas mechanical completion includes the
non-functional testing of equipment to confirm
the integrity of its fabrication and installation to
the intended design, PC verifies the mechanical
completion, the functionality of the system
as well as calibration of the instrumentation
to the facilities’ controls and control systems.
Richard Shirley and Dan Vela, Mustang Engineering, USA, run
through the process of precommissioning offshore facilities.
65
66
OILFIELD TECHNOLOGY
April 2011
While MC is completed by area or discipline, the PC phase will
be turned over to specialists who can address confirmation
by system, ensuring that it is complete and ready for final
commissioning and startup. This phase can best commence
efficiently after all of the components are in place so that
systems, rather than individual pieces, can be verified. The PC
contractor also engages the design engineering firm, vendors,
manufacturers and operating personnel for support and their
expertise. During the PC effort, there can be many activities
completed during the onshore phase and then moved offshore
for completion of the system checkout. Where practical, piping
should be power flushed and dried; communication systems
tested to the fullest extent possible; instrument and electrical
loops will be verified; instruments will undergo initial and final
calibration; pumps can be operated where possible; motors
verified for proper rotation and can be run and tested (burned
in); and rotating equipment can receive initial (cold) alignments.
The PC phase is vital to schedule adherence of the project
and a necessity in helping to minimise cost overruns. Ideally,
PC activities should be planned as part of the construction and
earlier project execution strategy so there can be a smooth
transition from structural, mechanical, electrical, instrumentation
and controls fabrication to systems checks where scheduled
work is maximised. This point in the project is when potential
flaws of construction, uncompleted tasks and system
inadequacies can come to light and be addressed early enough
to minimise schedule delays. Without a thorough PC effort,
potentially time-consuming and expensive modifications can go
undone onshore, only to be addressed in a much more difficult
offshore environment.
Organisation and planning are key
The selection of a PC team is one of the most important
milestones that will need to be addressed. The team will be
responsible for planning and supplying the critical support and
leadership during this project phase. The leadership, as well
as team members, should, therefore, be experienced with the
planning, tasks, schedule and project drivers regarding startup,
as well as its complexities.
After the project has determined the scope of work, the
overall project schedule and startup drivers, an organisation
chart needs to be established, defining the overall hierarchy of
how the PC team fits within the overall project management
team. Additionally, a roles and responsibilities matrix required
for the upcoming activities should be established. There will
need to be separate designators in organisational charts created
indicating location for the onshore and offshore PC work due to
potential differences in contractual arrangements, transportation,
personnel housing, parts availability and numerous other issues.
Only after the scope of work and organisational plan is in place
can the initial schedule be prepared, establishing the critical
milestones for handing off systems to the commissioning and
operations teams. These milestones are often how the PC team
and their progress will be measured.
The responsibility matrix is important to complement the
organisation definitions. The level of the matrices vary from
broad to detailed, but its main use is to identify not only the
scope of work and supply, but also the responsibility and
simultaneous operations (SIMOPs) that may occur. For the
purpose of this discussion, getting to the matrix level of PC
and MC interface, along with the other SIMOPs is wise early
enough to best identify any potential holes during the different
phases of work. As discussed previously, identifying the location
of the PC work plays an important role in the responsibility of
certain activities and interfaces. For example, due to contractual
limitations as well as schedule drivers, the onshore MC work will
take priority and the facility where the work is being performed
would be the driver. Whereas offshore the MC work may still
be the priority, the driver would be the operator. The matrix,
therefore, can identify not only the task, but the responsibility of
the work, whereas the details of the work are identified within
the PC procedures and tracking database.
In the initial planning of the PC stage, a critical path should
be evaluated to establish the procedures that will be optimal
to success. Although the best laid plans always have their
obstacles, a plan must be established as a starting point.
A detailed list of required activities would be created by the
PC team and coupled with the data developed earlier in the
project by engineering and managed through an electronic
project information management system. The PC contractor
is responsible for maintaining the database, tracking progress
critical for adhering to schedule and determining the status of
the various activities.
Reference data provided by engineering and the other
delivery teams will need to be organised by the PC contractor
according to the identified systems and should reside in a
location accessible to all who will be utilising it. Data includes,
but is not limited to, PFDs, P&IDs, mechanical, electrical motor
Figure 3. Deck space and personnel management are critical parts
of offshore PC activities.
Figure 1. Precommissioning addresses readiness by system rather
than by individual pieces of equipment.
68
OILFIELD TECHNOLOGY
April 2011
and ISA data sheets, instrument and electrical loop drawings,
wiring plans and elevations for skids and modules, as well as
the manufacturer’s final data manuals for purchased equipment.
A potential shortcoming is in not obtaining the interface data
from outside of the topsides delivery team, e.g. subsea, export
pipeline, communications, hull fabricators equipment. The key
will be to provide a conscious effort to close these gaps early
within the project so as not to impact the planned startup date.
The PC work normally is broken down into discreet,
manageable systems. The systems are separated according to
the logical process flow, rather than by a package vendor. For
example, a heat media system might include a fired unit, heat
recovery unit, storage unit and pumps, along with interconnect
piping, instrumentation, controls and electrical, all of which have
likely been supplied by different vendors and reside on separate
skids. This systems breakdown is the logical process to verify
construction, confirm the integrity of the design, and prepare the
system for handover to operations as the phase goes forward.
The organisation also allows for the commissioning of
sub-systems within a system, without having to initiate work on
the entire system. This avoids having to work around a finish
to start on a system scenario, thus pushing the overall startup
schedule past the desired outcome. The PC of utility systems is
typically the first to be addressed and completed. This allows life
support for the offshore personnel in addition to minimising the
need for additional components to PC the process systems later.
It is essential that good record keeping and a detailed
preventative maintenance plan be initiated and carried out
through handover to operations during the PC phase. A job
or activity card system is an output of the existing database
system, resulting as an archive to the work performed as an
as-built record. Task sheets record the subsystems and systems,
which have been completely precommissioned and ready for
handover to be integrated into the facilities operating systems.
In the overall PC work plan and prior to initiating the PC
work, a meeting schedule should be established so that
overall planning and progress can be regularly discussed and
understood by all parties. Each of the participants should have
a schedule that can be owned by them, reviewed intermittently
by the team and adjusted accordingly, so that
progress coincides among all team members.
The critical path should be reviewed at least
weekly and recovery plans generated or
updated as necessary.
POB management
An important consideration in
precommissioning is planning for the required
number of personnel needed to undertake
the offshore PC activities, the transportation
requirements for the crews and their supplies,
and the allocated personnel onboard (POB)
space to accommodate them. While working
during the onshore phase space is somewhat
unlimited with the exception of interfaces
with construction, offshore work presents a
whole different set of challenges. Offshore,
the PC team will have to work closely with
all of the different work scopes onboard
to understand each other’s schedules and
manpower requirements. These would
include topsides hookup and commissioning
(HUC), subsea flowline installation and testing contractors,
and the export pipeline installation and testing contractors, as
well as third party vendors, communications personnel and
operations. During the offshore phase, depending upon timing
and the hull type, a habitability inspection will be conducted by
the US Coast Guard or similar regulatory body. The work plan
will include in the overall schedule identifying work onshore,
work offshore, work to achieve quarters habitation, Temporary
Certificate of Inspection (TCOI), Final Certificate of Inspection
(COI), and Handover to Operations. A variety of systems must
be carefully planned for and put in place in order for approval
of these various milestones. For TCOI these may include
sufficient living quarters; temporary power generation; fire
fighting, fire detection and suppression equipment; emergency
evacuation equipment; potable water and sewage treatment
provisions; and communications equipment. Planning for and
precisely scheduling manpower is critical. If sufficient facilities
are not available on the platform, ‘floatels’ or other means
for housing personnel might be required at a significant extra
cost. The critical nature of the work being performed offshore
compared with the other activities along with the schedule must
be evaluated in depth to determine the cost/schedule benefit
and work plan for utilising a floatel. This also means weather
limitations and transfer of personnel risks must be evaluated.
Similarly, working space and delivery areas must be closely
planned to accommodate the simultaneous operations (SIMOPS)
being conducted during the precommissioning and subsequent
commissioning operations.
Conclusion
In order for the PC segment to be successful, a good and
detailed precommissioning/commissioning plan should be
developed as early in the project as possible and good interface
between all groups must be established. An experienced team,
equipped with the necessary tools, database, organisational
structure, defined responsibilities and procedures, can assure
that the precommissioning segment is efficient and can keep
costs and schedule in-line with expectations.
O T

Figure 4. Successful PC work relies on detailed planning and defined responsibilities.
Jon Robertson, Saab Seaeye, UK, looks at the benefits
of electric ROVs in comparison with hydraulic vehicles.
S
marter and more powerful electric ROVs are increasingly
taking on the work of hydraulic vehicles. They bring significant
savings to the oil and gas industry because they cost less,
require less deck space, fewer crew, are easier to use, and quicker
to deploy. Driving this development are significant breakthroughs in
electric ROV technology - power has been boosted, and control and
redundancy have been enhanced. This means more power intensive
tasks can be tackled because power is cleverly divided between
thrusters and tooling, without loss of power to either. This is an
advantage over hydraulic vehicles that can typically only use one or
other at full power, but not both.
More power means that a new generation of electric ROVs has,
for instance, enough tooling power to run a Merlin excavator on
maximum load, while still operating its thrusters at full force, keeping
the vehicle steady while driving it along.
For such a cable-laying dredging task,
an operator would typically need a 150 HP
hydraulic ROV that would take up twice
the deck space.
A doubling of thruster power on top of
the range electric vehicles means that the
newest generation of vehicles are serious
competitors to the hydraulic ROV systems
and they can also operate to depths
greater than 6000 m.
Power myth
All this contests the myth that only 100 HP
and above hydraulic vehicles have the
power for work class operations, whereas
the truth is that the power rating relates only
to the shaft power of the prime mover, not
the power available to both thrusters and
tooling, and so useful
power is overstated
on a hydraulic vehicle
when compared with an
electric vehicle.
Hydraulic propulsion
is also very inefficient
as the electrical power
delivered to the hydraulic
ROV needs converting
through a three phase electric motor to hydraulic power, then back
to rotary power before turning the propellers – a process that loses
over 30% of shaft power. Power in electric ROVs is not shared and is
therefore available in full to thrusters and tooling at all times. The use
of high efficiency brushless DC motor technology also means there is
no significant loss in the transfer of electrical power to thrust.
The hydraulic vehicle also needs more power to counteract its
high mass, and the higher drag on its meatier tether.
Performance
With a lift capacity of 240 kg, an electric work ROV can do all the
tasks of 100 or 125 HP hydraulic, except heavy construction,
although it can still play a valuable support role during such work.
Routinely, tasks carried out by electric work ROVs may include:
hot stab connection and disconnection, dual point docking and
free flying stab-plate connection, pre and post drilling site survey,
guidance and orientation for BOP and riser connection, depth and
orientation of wellhead and BOP stack, cleaning wellhead and bulls
eyes, and changing out AX wellhead gaskets. It is ideal for IRM as
access is easier; and for survey work, results can be more accurate
when compared to using an acoustically noisy hydraulic work
vehicle.
Switching to electric
69
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OILFIELD TECHNOLOGY
April 2011
Resident power and intelligent control means that the electric
ROV can be fitted out with a host of tools and systems. These include
a seven function position feedback manipulator and heavy duty
five function grabber, a fluid injection skid, hydraulic hot stab, linear
actuator override tool, quad actuator tool, torque tool, flying lead
orientation tool, AX/VX ring change out tool, single or dual point TDU,
Figure 2. Thruster touchscreen page. An interface for control,
configuration, statistics and diagnostics of a thruster. Statistical and
diagnostic information is accessible remotely.
Figure 3. Primary flight screen. Gives the pilot feedback on
navigation, auto-pilots, primary sub-systems and any critical errors or
faults.
Figure 1. Smart and powerful electric work ROVs like the
Saab Seaeye Jaguar are taking on the work of hydraulic vehicles.
6 in. rotary or 4 in. anvil cutter, HP water jet or cleaning brush tools, zip jet
suction tool, along with custom tooling as required.
Reliability
When comparing electric and hydraulic ROVs, reliability is a key issue:
there is less to go wrong with electric. Typically, the top end electric ROVs
also have dual redundancy systems. This means the whole system is
duplicated and should one complete system fail, it is backed up by a
second complete system, meaning the ROV can be kept working, and
recovered safely afterwards. Self-diagnostics clearly display to the pilot
any fault and the necessary remedial action to be taken.
Thinking for itself
It is possible to configure intelligent electronic devices such that they can
be interrogated remotely over the internet. This concept has been added
to the latest fully distributed control system for electric vehicles, branded
Intelligent Control of Nodes (ICON) by engineers at Saab Seaeye.
ICON allows each device within an ROV to think for itself and talk
remotely to operators and engineers through a gateway into the heart
of the vehicle. It means that through an enabled remote web interface,
operators across the world can manage diagnostics, software upgrades
and system inventory directly onboard the ROV wherever it is located.
Engineers can also remotely interrogate devices onboard, and help the
ROV operator resolve configuration issues in live time.
Buddying
Electric and hydraulic ROVs are not mutually exclusive. Each has a role
to play and they often work together. In particular, a growing trend is to
buddy a smaller electric ROV with a heavyweight work ROV. An operator
can use the nippier electric ROV to swim about to give a clear view of
the back and sides of the working area, adding to the safe and efficient
completion of the task in hand. Additionally, it can act as a standby,
low-cost resource, ready to help recover the work ROV should it get into
trouble. It can guide a recovery strop, or untangle a snagged umbilical,
and possibly complete or contain an interrupted task while the stricken
ROV is repaired. This could bring considerable savings in time and cost
by avoiding the need to outsource an expensive ROV/vessel for recovery
of the hydraulic vehicle or completion of the task.
As a bonus, the operator gets a small yet powerful and intelligent
resource that can also be used for a variety of other tasks including
observation, manipulation, cleaning, inspection, mapping, profiling and
monitoring.
Launch and recovery
Safe launch and recovery of the ROV in various sea-states is vital during
operations. Also, it is essential that under the waves, equipment does not
get tangled up. This is especially true when the ROV is operating from a
tether management system (TMS) and other ROVs are sharing the same
patch of seawater. The current can cause problems: it can drift the TMS
about until, when the ROV is due to return to the TMS, everything is the
wrong way round. This problem has been solved by fitting the TMS with
its own thrusters, along with a management system that controls the
position of the TMS and also ensures it remains orientated to the ROV as
it flies about its task.
A significant benefit is that multiple ROV systems can be launched
from a single vessel without the fear of entanglement.
Vital role
The vital role that electric ROVs now play in the industry means that
growing operational demands will continue to extend their capability
through innovation and increasingly intelligent power resources.
O T

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highlighttheimportanceof
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acrosstheworld.
H
igh levels of uncertainty require larger margins
of safety. The potential combinations of fuel-
hydrocarbons, oxygen-air, and energy-ignition are
highly complex, making exact predictions of what is safe and
unsafe, difficult and often impractical. The science needed to
prove conclusively if combinations near explosive limits will be
safe is not yet available.
The elimination of ignition sources is a well-known
strategy to protect people, investments and the environment
from fire and explosions because without the energy to ignite
flammable gases, a hydrocarbon release (HCR) incident is far
less likely to develop into a catastrophic failure situation.
This is not to say that ignition source elimination strategies
should act alone. Indeed, elimination of ignition sources must
form part of an overall safety strategy, which would also
include gas detection, emergency shutdown protocols and
evacuation strategies.
The objective of this article is to highlight the importance
of ignition source elimination and the differences in approach
mandated by law in different jurisdictions around the world.
The physics of how an explosion or fire is initiated cannot be
disputed: simply put, fuel + oxygen + sufficient energy will
lead to a fire. The elimination of the energy (ignition source)
can avoid a serious hydrocarbon release becoming a fire and
explosion. Current proven technologies can greatly reduce
this risk. These technologies have been employed by leading
oil and major companies outside the US both onshore and
offshore for decades, but no effort has been initiated within
the US.
Every organisation involved in the upstream oil and gas
industry is responsible for ensuring its knowledge of and
adherence to the most current applicable regulations and
standards, wherever it conducts operations. Regulatory
compliance, however, only represents a starting point for
improved safety regarding fires and explosions. The real
requirement is for a constructive means of ensuring that
practical improvements and preventative measures are
adopted.
Following the events of the Deepwater Horizon
catastrophe, the oil and gas industry, particularly within the
US OFFSHORE REGULATIONS
73
74
OILFIELD TECHNOLOGY
April 2011
US, must evaluate its current principles, processes, policies and
practices and determine how they can be improved.
Deepwater Horizon accident investigation hearings clearly
indicated that a catastrophic loss of containment leading to a
large hydrocarbon release was likely to have been ignited by the
primary diesel generators located on the platform.
The elimination of ignition sources is a well known approach
used in an overall safety strategy to protect people, investments
and the environment from fire and explosions offshore. However,
where the approach should be applied on an oil platform and
what type of equipment requires protection varies significantly
dependent on geographical location, country, the oil company or
even the oil platform.
Current practices for the determination of
hazardous areas offshore
Strategies to reduce hydrocarbon releases have been applied
admirably throughout the world for the last 15 - 20 years with
some effective results; however, the reality within the oil and gas
industry is that significant releases still occur.
Area classification is applied to offshore platforms to
determine the probability of an explosive atmosphere developing
from hydrocarbon releases (i.e. determining hazardous area
zones (IEC) and divisions (US)) and consequently where explosion
proof equipment requires installing. Areas outside of these zones
are defined as ‘non-hazardous’, while classifications in the US
and rest of the world differ in terminology (Table 1), as does the
definition of what equipment is deemed necessary to provide
protection, the fundamental principles of classification remain very
similar.
The main limitation of area classification is the general
exclusion of the type of event that occurred on the
Deepwater Horizon, as it is considered a catastrophic,
unforeseeable or unpredictable release.
These kind of low probabilities and high consequence events
in many cases have the potential to propagate the migration of
flammable gases and vapours beyond classified areas where
ignition sources are not controlled, hence the potential for
ignition is high; a particular concern in these circumstances
is the continued operation of internal combustion engines. In
these circumstances, many jurisdictions, particularly Europe,
employ legislation to implement platform fire and explosion risk
management strategy. This determines the required level of
active and/or passive protection to ensure equipment does not
present an ignition hazard. However, the US federal regulations
and associated enforcement agencies have not demonstrated
the commitment to cover offshore platform safety in these
situations.
Differences in standards of equipment
Throughout the world, the types of equipment requiring ignition
protection within hazardous areas can vary from country to
country. Explosion protection regulations and standards in the US
are very similar to European equivalents for electrical installations
but largely ignore risks associated with non-electrical ignition
sources. Thus, in Europe and other parts of the world:
x Both electrical and non-electrical equipment must be
considered.
x The principle of ignition risk assessment of equipment within
a legislative framework rather than compliance with standards
allows best available technology and processes to be applied
to equipment, providing ‘safer ‘solutions for industry.
x Differences in the standards can be further clarified by
focusing on the standard of ignition hazard protected diesel
engines in the US, compared to the standard provided in
many other locations throughout the world.
Typical European installation
Currently within the US Federal Regulations, explosion protected
equipment standards and particularly major incident fire and
Table 2. Ignition hazard protected diesel engine requirements
Typical
US
Typical
European
(EN 1834-1)
X Exhaust flame traps 9 Exhaust flame traps
X Exhaust spark arrester 9 Exhaust spark arrester
X Exhaust temperature
monitoring
9 Exhaust temperature
monitoring
X Exhaust gas cooler 9 Exhaust gas cooler
X Water-cooled turbo
charger
9 Water-cooled turbo
charger
X Coolant temperature
monitoring
9 Coolant temperature
monitoring
X Water-cooled exhaust
manifold
9 Water-cooled exhaust
manifold
X Explosion protected
electrical components
9 Explosion protected
electrical components
9 Engine overspeed
monitoring and shutdown
9 Engine overspeed
monitoring and auto-
shutdown
X Anti-static fans, blades
and belts
9 Anti-static fans blades
and belts
X Explosion proof inlet
manifold
9 Explosion proof inlet
manifold
X Inlet flame arrester 9 Inlet flame arrester
9 Inlet shutdown valve 9 Inlet shutdown valve
Table 1. Area classification
US IEC/EN
Division 1 Zone 0 high probability of an explosive atmosphere
Zone 1
Division 2 Zone 2 lower probability of an explosive atmosphere
Figure 1. Reduced ignition sources on a typical European installation.
73
rd
EAGE Conference & Exhibition incorporating SPE EUROPEC 2011
|
23-26 May 2011
|
Reed Messe Wien
Unconventional Resources
and the Role of Technology
www.eage.org
The World’s Largest
Geoscience Event
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OILFIELD TECHNOLOGY
April 2011
explosion risk management strategy falls considerably behind
Europe and many other oil producing countries around the world.
Diesel engines located in a non-hazardous area are thought
to be the likely ignition source for the explosion(s) onboard the
Deepwater Horizon platform. An uncontrolled engine overspeed
was reported just before the explosion in the generator room.
Internal combustion engine protection for hazardous area
applications in the US does not afford the same level of protection
as other best available technology standards applied throughout
Europe, and many other locations throughout the world. Current
EU regulations (EN 1834-1) require automatic engine overspeed
shutdown protection for maximum safety in all offshore areas and
other defined hazardous zones.
For the US offshore regulations, several standards were
written around 1988 and are still in current use, to cover
modification of diesel engine air intakes under the following MMS
(now BOEMRE) sections of 30 CFR Ch II;
x 250.405: for engines on drilling rigs (2/20/03).
x 250.510: for engines on well completion platforms (9/14/09).
x 250.610: for engines on well-work over structures (5/29/98).
A study of current US offshore regulations
250.405 regulation states that: “you must equip each diesel
engine with an air intake device to shut down the diesel
engine in the event of runaway; (a) for a diesel engine that is
not continuously manned, you must equip the engine with an
automatic shutdown device.”
However, some gaps exist in this regulation: almost all
engines on a platform or rig are ‘not continuously manned’, so for
improved safety, all engines on an offshore platform should be
classified this way.
Paragraph (b) states: “for a diesel engine that is continuously
manned, you may equip the engine with either an automatic or
remote manual air intake shutdown device.”
The limitations of this part of the regulation include:
x The decision as to what equipment is ‘continuously manned’
is open to various interpretations, resulting in machines such
as diesel welders being fitted with manual valves, where the
welder operator could be working on a different deck or at
considerable distance from the stop control.
x Any manual method of stopping an engine that is accelerating
towards destruction is inherently unreliable, as it completely
relies on a nearby operator to decide that when they hear the
‘racing’ of the engine, they should approach it and push or
pull a control. Esso Research rejected that option in 1970 due
to the unpredictable result.
x US Federal offshore regulators fail to recognise that a
runaway diesel engine, depending on the richness of the
environment, can explode within 30 seconds and so manual
shutdown is not a safe solution.
x Human nature for machinery operators would be to run away
from the runaway engine to reduce their risk of death or
personal injury due to imminent engine explosion.
x Unlike ATEX, the US does not have an agency to test
and approve products for the offshore industry. As such,
contractors and rental companies usually select the least
expensive solution for the diesel engine overspeed shutdown
system and spark arrestors, and this further compromises
safety. It is disturbing to see plastic slide type valves (as
used for fish tanks or RV toilet pipes) have been installed
and apparently, up until now, accepted by the US offshore
inspectors (Figure 2).
Recommendation
All of these high risk situations that come from permitting manual
devices would be quickly eliminated if the existing US offshore
regulations were amended to require the benefit of automatic
shutdown.
The US offshore regulators should immediately issue a safety
alert that states:
x “All diesel engines operating on the offshore platforms must
have an approved air intake device to automatically shut
down the diesel engine in the event of runaway. Manual
devices are no longer permitted and must be removed and
replaced with automatic shutdown system.”
x “A remote control must be fitted to allow demonstration of
the device in a running condition without over-speeding the
engine. Operators are required to check the safe function of
the shutdown system once a month.”
The lessons of the Deepwater Horizon accident investigation
show that a runaway diesel engine is not only an ignition
source, but a potential detonation source and can occur at low
concentrations of gas. Existing US offshore standards for diesel
engines are now outdated and are subject to misinterpretation. It
would be a relatively simple and low cost process for companies
supplying equipment to the US offshore oil and gas industry to
Figure 2. Engine with manual plastic slide valve (push to close)
currently permitted in the US.
Figure 3. US-made spark arrestor test.
OILFIELD TECHNOLOGY
April 2011
77
upgrade their equipment to meet the
proposed revisions.
The resultant step change in engine
safety would be seen as the first
step towards effectively eliminating
the potential source of ignition that
currently exists.
Diesel engine exhaust
spark arrestors
All diesel engines emit dangerous
sparks produced by the combustion
process or the ignition of carbon
buildup within the exhaust system.
The technology of spark
arrestors was originally developed for
agriculture and forestry, adopted by
the military and more recently by the
petrochemical sectors, with various
different designs such as screens,
collection traps and cyclones available.
However, the requirements and test
procedures for the different products
and the different requirements of
different industries mean that not all
products are suitable for the more
severe applications. For example,
the oil and gas industry recognised
that when there was a gas concentration exceeding the lower
explosive limit (LEL) a single low energy spark could detonate a
gas cloud, whereas the forestry industry is concerned with larger
higher energy sparks.
Over time, various organisations such as the
US Forestry Service, OCMA, British Standards and later the
European ATEX Directives, were developed with test procedures
to determine the acceptable methods that would quench all
sparks and cool them to be ejected at a safe size and energy
state.
While some equipment currently working in US offshore
waters has been fitted with spark arresters, these have usually
been of the agricultural variety. Recent tests of one of the most
popular types currently used (Figure 3) have revealed that not
all sparks are cooled adequately before totally safe emission in
an offshore environment where hydrocarbons are easily ignited.
To achieve elimination of exhaust sparks, the current rules
for engines must be amended to state that diesel engine
exhaust systems must be fitted with a spark arrestor designed
and tested to emit no sparks during engine operation. Products
certified as approved for international hazardous zones,
including zone 2, should be allowed. The spark arrestor must be
inspected monthly and replaced if any perforation of the body is
detected.
Equipment with spark arrestors that do not meet this
requirement should be removed or replaced as they are a safety
hazard and can cause fire or explosion.
Exhaust sparks can be eliminated though the addition of an
effective spark arrestor that will not perforate due to corrosion.
It is relatively simple for engines working offshore to have this
addition to remove this dangerous condition. Stainless steel
cyclone type spark arrestors (Figure 4) are effective in preventing
both sparks and corrosion.
Figure 4. Cyclone spark arrestor with certifications.
International variations
Classified areas determine what level
of ignition-protected equipment is
required within these areas. Throughout
the world, the types of equipment
requiring protection can vary from
country to country. Historically within
the US, only electrical equipment
and some specific products currently
require protection under existing
standards.
This approach within the US
promotes misunderstanding and
confusion with respect to what type
and standard of equipment requires
protection, or even whether equipment
requires protection at all. Diesel
engines offshore fall into this category
and protection requirements are further
confused due to the requirement being
defined by location on the platform
not by the probability of the engine
coming into contact with an explosive
atmosphere.
By contrast, within Europe and
many other parts of world, particular
emphasis is placed on the ignition risk
assessment of the equipment covering
both electrical and non-electrical ignition sources. This approach
is supported by product specific standards for high ignition hazard
equipment. Diesel engines are covered by EN 1834-1, which is
applied offshore throughout Europe and many locations throughout
the world. No such approach or standard is applied to diesel
engines offshore in the US.
Major hazard events, such as the hydrocarbon releases that
occurred on the Deepwater Horizon, are considered throughout
Europe by integrated fire and explosion risk management
strategies. This may determine equipment such as diesel engines
located outside of a classified area requiring ignition hazard
protection to reduce the risk of a major release being ignited,
therefore reducing the potential consequences of an incident.
This approach has been mandated through European offshore
legislation.
While US regulators have moved towards an approach
with safety and environmental management systems (SEMS),
which addresses lessons learned from previous events, there
still appears to be a significant void with respect to the rigor
afforded to European installations. These variations in international
standards and approach cause confusion, particularly in the US,
to the extent that platform safety is compromised; the standard
of ignition protection related to diesel engines is a clear example
of this. Best available technology for these products is known
and well understood and applied throughout Europe and many
locations throughout the world, yet they are rarely applied to US
offshore installations.
This situation provides a need and opportunity for
collaboration between US regulators and the oil and gas industry
to create a globally accepted standard for these products. Then,
through strong regulation and enforcement ensure the requirement
is implemented to reduce the ongoing risks of such events as the
Deepwater Horizon catastrophe ever occurring again.
O T

78
OILFIELD TECHNOLOGY
April 2011
news
// Kudu Pumps // Making progression possible
O T
company news
K
udu, like many other service companies, has felt the
brute force of the oil industry’s ups and downs. After
all, how many companies get a national award and
then face insolvency in the same month? Kudu found itself
in this position in early 1998 after the crash in oil price.
It is one of those Alberta entrepreneurial success
stories that everybody loves. Two decades ago, a father
and son team of gear-heads, Robert and Ray Mills, took
Progressing Cavity Pumps for the oil patch from a residential
garage in Calgary, Alberta, Canada, to the world’s second
largest PCP manufacturer and distributor.
Robert started investigating PCP in the late 1970s
and patented a novel PCP drive system in 1982. He was
a pioneer in using PCP technology in sand laden heavy oil
wells and high water cut (95% +) oil wells. His first install was
in the first horizontal oil well in Wabasca, Alberta, Canada
during a blizzard in 1988 for CS Resources. “They were
going through a conventional pump jack per week due to
PCP systems are engineered to handle light to heavy
oil, coalbed methane and de-watering applications.
high sand cut,” Robert says, whose PCP install ended up lasting
over 12 years.
The Mills’ next hurdle was distribution. Initially an oil
company could only purchase a PCP through a supply store.
These supply stores refused to sell Kudu products so Robert
and Ray ended up selling directly to the customer, which was
unheard of at the time. “We were told it would never work,”
says Ray. The Mills’ started peddling their wares and ended up
redefining how PCPs were distributed in Canada.
Selling direct to the customer had another advantage; Robert
and Ray learned first hand the challenges their customers
were facing pumping oil. This led to Kudu heavily investing in
developing new technology to solve customer problems. Kudu
has maintained the technological lead ever since.
“My father and I have always been intrigued by finding a
better solution to a problem, whether it’s using our existing
equipment or sitting down with our customers and coming up
with a new approach,” says Ray.
®
Volume11Number 04- April 2011
VOLUME 04 ISSUE 03-APRIL 2011
A supplement to Hydrocarbon Engineering
Spring 2011
Volume 16 Number 4 - April 2011
www.energyglobal.com
Energy Global
company news
A direct supply chain made the old distribution scheme less
viable and prompted competitors to follow Kudu’s lead and stop
selling to supply stores. Ray was doing the majority of installs at
the time and Kudu was quickly gaining a reputation for being the
knowledgeable PCP company and the ‘go to’ guys for difficult
well applications.
“Kudu has always gone up against much larger and
entrenched competitors,” says Ray. This holds true today.
Kudu’s largest Canadian competitors have now been bought
out by even larger multi-national oil service companies. “But
we have always put a lot of effort into being an authentic
service company. Meaning a collaborative relationship with our
customers is key to our success.”
Soon, Robert and Ray moved from the garage to a small
plant and then to a bigger plant shortly after. Business was
good.
In 1998 the oil price plummeted and Kudu was shouldering
high inventories and bumping up against its credit line. The
business at that time was 95% in Canada and suddenly 60% of
the business went out the door.
At the end of this dark tunnel, Robert saw
Lean Manufacturing which encompasses low debt and low
inventory levels, geographic sales diversity, wider awareness
of economic and industry cycles and a culture of employee
engagement. “Give employees the tools and empowerment to
succeed. They have valuable ideas on how to improve their area
of expertise” Ray says.
These changes vastly improved Kudu’s prospects by
increasing annual sales, enabling three acquisitions, reducing
stock outs by 98% and eliminating bank debt all in the space
of four years. They have grown to have 13 service centres in
Alberta and Saskatchewan along with offices located in Russia,
Romania, Kazakhstan, Oman, the USA and Australia. Perhaps
most importantly, the company now conducts more R&D work in
its field than any other, holding over 20 patents dealing with PCP
technology in the artificial lift field.
O T

To obtain further information on any of the above companies,
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April 2011 Volume 04 Issue 03

ISSN 1757-2134

contents
| 03 | EDITORIAL COMMENT | 49 | THE CASE IN QUESTION
Scott Beattie, Weatherford International Ltd, USA, looks at the benefits of a subsea drilling-with-casing system.

| 05 |

WORLD NEWS | 53 | FIGHTING FATIGUE
Kenneth Bhalla, Stress Engineering Services, USA, explains the importance of riser and subsea fatigue damage monitoring.

| 10 |

BACK ON TRACK
Gordon Cope, Oilfield Technology Correspondent, explains how technological innovations have opened up new plays in North America and expanded old ones; but environmental concerns and other factors complicate the future of this sector.

| 57 |

GREAT INTEGRATIONS
Vincent Vieugue, Emerson Process Management, Norway, explains the growing need for greater integration and intelligence in subsea operations.

| 18 |

DEEP WATER AHEAD?
John Wishart, GL Noble Denton, USA, examines the future of the oil and gas industry and the challenges that lie ahead.

| 61 |

PIPE DREAMS BECOME REALITY
Cobie Loper and Mark Kalman, DeepFlex Inc., USA, introduce a new generation of lightweight, corrosion resistant flexible pipes.

| 24 |

SEAS OF OPPORTUNITY
Luke Davis, Infield Systems Ltd, UK, considers the prospects of the offshore wind sector and its implications for the offshore oil and gas industry.

| 64 |

CHECKLIST FOR PRECOMMISSIONING
Richard Shirley and Dan Vela, Mustang Engineering, USA, run through the process of precommissioning offshore facilities.

| 29 |

AN ILLUMINATING EXPLORATION...
Duane Dopkin, Paradigm, US, points out how full azimuth decomposition, imaging and illumination enhances deepwater exploration.

| 69 |

SWITCHING TO ELECTRIC
Jon Robertson, Saab Seaeye, UK, looks at the benefits of electric ROVs in comparison with hydraulic vehicles.

| 33 |

IMPROVED IMAGING
Gary Rodriguez, Sherry Yang and Laurie Geiger, TGS, USA, present a project to improve imaging in a low velocity trench area in the Gulf of Mexico.

| 73 |

ELIMINATING THE GAPS IN US OFFSHORE REGULATIONS
Jogen Bhalla (USA) and Stephen Gale (UK), AMOT, and Ian Harrison, Pyroban, UK, highlight the importance of ignition source elimination and the differences in approach across the world.

| 38 |

THE ROAD TO RECOVERY
Brian Skeels, FMC Technologies, and Lars Farestvedt, MPM, US, consider solutions for maximising reservoir recovery in this issue’s cover story.

| 78 |

COMPANY NEWS

| 80 |

AD INDEX

| 44 |

LIFTING EXPECTATIONS
Ian Anderson, Camcon Oil, UK, explains how artificial gas lift can assist in developing a long term strategy for subsea extraction.

Oilfield Technology is audited by the Audit Bureau of Circulations (ABC). An audit certificate is available on request from our sales department.

On this month’s cover >>

FMC Technologies’ subsea well intervention system (RLWI) onboard the Island Wellserver in the North Sea. Workers connect a control umbilical to a well control package while the wireline lubricator is suspended in the foreground. This system enables subsea workovers at half the cost and in half the time of the traditional method performed from a rig.

Copyright Palladian Publications Ltd 2011. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the copyright owner. All views expressed in this journal are those of the respective contributors and are not necessarily the opinions of the publisher, neither do the publishers endorse any of the claims made in the articles or the advertisements. Printed in the UK.
©

Blue is the New Green
A NATURAL FIT FOR THE ENVIRONMENT KUDU has one of the most environmentally friendly artificial lift products in the industry. KUDU’s Progressing Cavity Pump solutions typically use less energy than other artificial lift methods and take up less space. Leak proof Driveheads, sound attenuated Power Units and energy saving optimization systems, ensure you get the most from your well in the best possible way. With over 20 patents using Progressing Cavity Pumps in the artificial lift field, KUDU continually strives to reinvent the status quo. With locations around the world, we’re just around the corner, offering the best service standard in the industry. Learn more about Progressing Cavity Pumps by emailing articles@kudupump.com to receive the free e-article Top Ten Must-Knows About Progressing Cavity Pumps. www.kudupump.com

Alberta Export Award Winner for Oil and Gas Manufacturer.

Calgary Manufacturing Industry’s Best Employer for Medium Sized Manufacturers.

Bringing Solutions to Surface

Syria and Jordan.comment James Little Managing Editor J ust in case anyone was in any doubt. plus there is the danger of less investment in future production capacity.co Reprints / Ad wshaw@oilfieldtechnology victoria. It is also struggling to match the high quality light crude that Libya was producing causing more pain for refiners who are forced to compete for scarcer resources. its overall spare capacity is fast being eroded.grinham Peter Grinh Production: ology. events of the past year have been akin to a ‘perfect storm’ for the energy industry. and if crude oil is the world’s most important traded commodity. GU9 7QU. but without doubt it will lead to higher oil prices as Saudi seeks to finance this huge public expenditure. Avenel.com am ge Ben Macleod Palladian Publications Ltd. Let’s not forget. Brent crude stood at US$ 122 at the time of writing. However. ENGLAND. up from just below US$ 95 at the close of 2010. APPLICABLE ONLY TO USA & CANADA: Eight issues of Oilfield Technology Magazine (ISSN 1757-2134) are published in 2011: February.scord ll@oilfieldtec laura. the Middle East and north African region will contribute 90% of crude oil production growth over the course of the next 10 years. An end to the turmoil in the Middle East is vital to a stable oil price. Why? Because according to the IEA. Opec’s largest producer and source of the majority of crude reserves. 15 South Street. with significant increases being seen in natural gas rates as Japan. and finally the devastating earthquake. Surrey. Let’s just hope that the fledgling global economic recovery can withstand the pressure of an extended period of higher oil prices.energyglobal. will amass US$ 1000 billion this year in export revenues if the price of crude remains above US$ 100 a barrel. 365 Blair Road. this crisis remains critical and has potentially set the nuclear industry back years. December.com os@energy anna. UK Tel: +44 (0) 1252 718 999 Fax: +44 (0) 1252 718 992 Website: www. the energy industry has been thrown into an acute state of uncertainty and governments are being forced to re-evaluate their energy policies. Price rises have not been limited solely to crude oil. The increasingly fine balance between supply and demand. an escalation in the price of crude oil has exerted considerable pressure on the fragile global economic recovery. and far from resolved. POSTMASTER: Send address corrections to Oilfield Technology c/o Mercury International Ltd.com hn Advertisem d@oilfieldtec ben. mean that any event that risks an outage. With much of the world still struggling to regain its feet after the recent global recession. April. 15 South Street. With radiation still leaking from the plant. Periodical postage paid at Rahway. then Opec’s available reserves will quickly dwindle. September.com d Hardy mes Little : Ro ent Director gy.lethb ch hn @oilfieldtec peter. Whether this works remains to be seen. to the ongoing. My guess is that it will achieve this milestone and more. by Palladian Publications Ltd.com velopment techn Business De ridge@oilfield ris. August. Saudi Arabia.hardy@o : ent Manager ology. NJ.com Advertisem ilfieldtechnolo rod. ordos itor: Anna Sc Website Ed global. March.com Contact Information >> OILFIELD TECHNOLOGY SUBSCRIPTION RATES: Annual subscription £80 UK including postage/£95/e130 overseas (postage airmail)/US$ 130 USA/Canada (postage airmail). Two year discounted rate £128 UK including postage/£152/e208 overseas (postage airmail)/US$ 208 USA/Canada (postage airmail). the US and even China have each put their nuclear programmes on hold which can only put more pressure on future oil and gas prices. Yemen. has boosted imports following the damage to its Fukushima nuclear facility. coupled with a deep seated fear of supply disruption amongst energy traders. Whilst Opec has been able to compensate for the 1.com shaw ll : Victoria Craw m ministration . looks vulnerable at present with developing disturbances among many of its near neighbours including Bahrain. crude prices rose rapidly over a very short timeframe on the back of increasing Asian demand in 2008 to a high of US$ 147. Farnham. Farnham.cowe s: Laura Cowe Subscription hnology.macleo ris Lethbrid Manager: Ch ology. This pattern is of course not unfamiliar. and the ensuing moratorium on drilling in the Gulf of Mexico. recent events have once again provided a poignant illustration of the significance of crude oil and its indisputable position as the world’s most important traded commodity. An action that will cost Saudi Arabia a total of US$ 129 billion or the equivalent of half of the country’s 2010 oil revenues. Germany. Surrey GU9 7QU. Opec. again leading to higher prices. O T ilfieldtec james. the world’s largest buyer of LNG. October. If problems within the region persist and spread to other nations across the Middle East and North Africa. US agent: Mercury International Ltd.little@o itor: Ja Managing Ed hnology. 365 Blair Road. June. inevitably leads to a marked upswing in the price of crude. NJ 07001. tsunami and nuclear catastrophe in Japan. Avenel. Jordan. then this region holds the key to crude production. So far. SUBSCRIPTION CLAIMS: Claims for non receipt of issues must be made within 3 months of publication of the issue or they will not be honoured without charge. For the first time. Saudi’s solution to internal strife has been the populist measure of providing hand outs to its citizens and boosting public spending. chaos in the Middle East. From the Deepwater Horizon drilling rig explosion on 20 April 2010.6 million bpd of lost crude production from Libya. largely comprised of members from the region. Subscription rates in the US: US$ 130. most notably China and India. NJ 07001. 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including ultra high-resolution wide-azimuth technologies. said: “With over 35 years of experience in Oman. CGGVeritas will step up its participation in the development of highly qualified Omani professionals. CGGVeritas. Petrofac is providing engineering. a key national programme. and has not required a permit for its current fracking operations. has been awarded a multi-million dollar contract by Daewoo Shipbuilding & Marine Engineering Co. Imaging and Reservoir. developing and delivering training initiatives with the Sultan Qaboos University. CGGVeritas has considerable knowledge of the region’s E&P challenges. The two treatment units. (DSME) for the design. near the seaside resort of Blackpool in North West England. for developments in the Majnoon Field. a specialty amine blend designed specifically for treating natural gas from the Haynesville shale. OILFIELD TECHNOLOGY April 2011 05 . procurement. supply and delivery of an Ultrafiltration system and a Sulphate Removal Package (SRP) system. Processing. Tailored to address the geologic challenges of the region. a subsidiary of Veolia Water Solutions & Technologies (VWS). at a ceremony attended by clients and a delegation from the Omani Ministry of Oil and Gas. has said that fracking will take place in bursts throughout April. fabrication and construction management services for the development of a new early production system comprising two trains each with capacity for 50 000 bpd of oil. Our new open centre will provide training and services of the highest standard. France has imposed a moratorium on shale gas drilling. the Omani Ministry of Oil & Gas and international training organisations. the international oil and gas facilities service provider. services are focused on the CGGVeritas unique 3D land seismic portfolio.V. will be installed in the Cravo-Lirio-OrquideaVioleta (CLOV) Fields. can confirm it has been awarded a contract. IRAQ Petrofac. while the German state of North Rhine Westphalia has asked ExxonMobil to cease fracking work until later this year while an expert opinion is prepared on possible impacts. has introduced UCARSOL™ Shale H-100. This is the first in a series of new specialty amine blends Dow Oil & Gas is developing for the treatment of shale gas in North America. an independent UK energy company undertaking the project. Work on the project began in mid-2010 and is expected to complete during the fourth quarter of next year. In this way. Under the competitively tendered contract. along with upgrading of existing brownfield facilities. The project completion is expected in January 2012. Campaigners have raised concerns that the extraction process can contaminate local ground water. Cuadrilla Resources. located Offshore Angola. a business unit of The Dow Chemical Company.world news inbrief USA // CGGVeritas // Opens new centre in Oman CGGVeritas has inaugurated a new open processing and imaging centre in Muscat. Colin Murdoch. designed for DSME’s Floating Production Storage and Offloading vessel (FPSO). customised to help our clients maximise the return on investment they are currently making in very high-channel-count exploration and reservoir optimisation programmes. Cuadrilla has asked to carry out operations at five sites. because there is not deemed to be any possible risk to water supplies. after which time the company will look to study how much gas subsequently flows from the test well. The new centre complements the company’s activity in the country and offers clients access to the latest processing and imaging technology and services. in excess of US$ 240 million by Shell Iraq Petroleum Development B. Oman. The centre also operates as a CGGVeritas University training centre. // Cuadrilla Resources // UK shale fracking The first UK shale gas fracking operation is now under way at the Preese Hall shale gas well. Southern Iraq. Executive Vice President.” Dow Oil & Gas. but an inquiry into possible risks at the site found that no unacceptable risks were being taken. ANGOLA VWS Westgarth.

org www.uk/palladian 25 . has been quoted as saying: “This opens a new oil province that can provide additional resource growth. USA E: registration@spe. Austria E: eage@eage. The company is currently considering the possibility of drilling more wells in the area this year. The drilling will be part of an agreement signed between ExxonMobil and PetroVietnam in 2007.26 May EAGE Conference and Exhibition Vienna.co. Statoil plans to drill a delineation well in the area in 2012. The overall production of oil and gas in Norway is expected to decline from 2015 onwards.com 06 OILFIELD TECHNOLOGY April 2011 .1 September 3P Arctic 2011 Halifax. Robert Gate. PetroVietnam has previously formed partnerships with Russia and several other countries to exploit the reserves in these offshore oilfields. Canada E: 3p@oesallworld.iadc.5 May OTC Houston. Taiwan and the Philippines all hold claims in the region. Other close by nations. It is hoped that this new find will help meet targets to maintain Norway’s output and make the development of a second gas hub in the Norwegian Sea more likely. such as Malaysia. 6 .org www. US Defense Secretary.kersten@iadc.eage.8 December 20th World Petroleum Congress Doha.org 15 .com www. Brunei.16 June World Drilling Conference and Exhibition Copenhagen. half of the oil and gas has been produced. TX. With as much as 250 million bbls of recoverable reserves. Nova Scotia. The company has worked with the authorities of Danang city on safety issues surrounding the drilling and will begin work at Block 119 off Danang city. Denmark E: peggy. having laid claim to the South China Sea and the area in which ExxonMobil intends to explore. has voiced his objection to any ‘intimidation’ of US energy companies operating in the region.org 30 August . while Snøhvit currently operates to exploit the resources in the Barents Sea. Statoil and Eni SpA have potentially made Norway’s biggest oil and gas discovery in 10 years at the Skrugard prospect in the Barents Sea.offshore-europe.28 September MEOS 2011 Bahrain E: jwebster@oesallworld. However.com www.com www. Scotland E: oeteam@reedexpo.” adding that the find was the “most important” exploration event in Norway in 10 years.meos2011.otcnet. Worryingly. The Norwegian Petroleum Directorate estimates that only 40% of the oil and gas on the Norwegian shelf has been produced. Executive Vice President for exploration at Statoil. and that in 20 years time 40% of the production on the Norwegian continental shelf will come from resources that are as yet undiscovered. as well as another exploration well in the same license.com // Statoil // Oil and gas discovery in Norway After a few recent dry well exploration failures in Norway.uk www. according to a recent statement from state-run oil firm PetroVietnam.org // ExxonMobil // Vietnam oil exploration ExxonMobil is likely to start oil exploration off the central coast of Vietnam towards the end of this month.8 September SPE Offshore Europe Aberdeen. in the Norwegian Sea less than a quarter.co.20wpc. 23 .world news diarydates 2 .3parctic.com 4 .com www. Tim Dodson. In the North Sea. this discovery may prove bigger than the current holder of ‘Norway’s largest find’ title – Goliat. and has already fallen by 30% since 2000. Qatar E: info@20wpc. it has been claimed that Chinese patrol boats often harass and intimidate explorers in the area.

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// Suncor // Investment in oil sands Canadian energy company. He said the deepwater wells were to be drilled between 2011 and 2013. The field is located 70 km northeast of the Bacton gas terminal in 25 m of water. detailed pipeline design. After a long established position of energy dependency. expressing confidence that its effort in exploration will be rewarded with major new hydrocarbon discoveries. The contract covers full project management. Studies estimate Cuba has probable reserves of between 5 and 9 billion bbls of oil in its economic zone in the Gulf of Mexico. will also play a part in executing the contract through the provision of detailed pipeline design. The company aims to more than double its oil sands production in the next decade. Vessels from the Technip fleet will be used for the offshore installation campaign. and has acquired a 36. International energy markets should understand that the current price of oil does not reflect the realities of supply and demand. // Cupet // Expanding Cuban exploration in the Gulf of Mexico Cuba currently depends on Venezuela for approximately 100 000 bpd of oil imports. “We’re all really hopeful that we will be able to discover large reserves of oil and gas. and would be in waters ranging in depth between 400 m and 1500 m. UK Energy and Climate Change Secretary Chris Huhne met with Saudi Oil Minister Ali Ibrahim Al-Naimi.world news // Technip // Awarded North Sea contract Technip has been awarded a full EPIC contract by RWE Dea. ConocoPhillips. and has made assurances that any offshore well development will be handled with safety at the forefront. Petrovietnam and Petronas (Malaysia). installation and tie-in of a 15. cut the number of new gas wells it plans to drill and will shift investment into increasing its oil sands output. Suncor. which supplies around half of its energy needs every year. In his first visit to the Middle East since taking office. Genesis.25%.75 billion from the transaction.” said Manuel Marrero. ConocoPhillips will also move towards a focus in oil sands production in Canada. whose response to events in recent months has been crucial for keeping the market supplied to meet global demand. Building greater understanding between consumer and producer countries is more important than ever in these present circumstances. In response to a long period of relatively low natural gas prices. which is scheduled to be completed in the fourth quarter of 2011. for the Clipper South gas field development in the North Sea. and yet the price has remained high. and produces in the region of 21 million bbls a year of domestic oil. “We’re about to move to the drilling phase. Technip’s operating centre in Aberdeen (Scotland) will execute this contract. a Technip Group company providing upstream oil and gas consultancy services. methanol piggyback line from the new Clipper South platform to the existing LOGGS (Lincolnshire Offshore Gas Gathering system) platform. Petrobras (Brazil) recently pulled out and Sonangol (Angola) recently signed on. Mr Huhne said: “There could be no more important time to be in Saudi Arabia. and is divided into 59 blocks. Cuba’s economic zone in the Gulf is geographically very close to the US state of Florida.” said Marrero. Hydro (Norway). PDVSA (Venezuela). 20 blocks are ventures with Repsol (Spain).75% working interest in the Total-operated Joslyn joint venture with Total now holding 38.” 08 OILFIELD TECHNOLOGY April 2011 . OVL (India). There is no shortage of supply. // UK and Saudi Arabia // Discuss supply/demand UK and Saudi energy ministers have met recently to call on international energy markets to recognise that the high price of oil does not reflect the realities of supply and demand in the market. has received all requested approvals needed to finalise its strategic alliance with Total E&P Canada Ltd. production line and 3 in. who added that the ventures would be undertaken with the help of unspecified foreign companies. The contract builds on past experience with RWE: in 2008 Technip provided pipelay and umbilical installation for the Topaz field development. Cuba has announced plans to drill five deepwater oil wells in the Gulf of Mexico beginning this summer. Suncor will receive approximately US$ 1. located in the Southern gas basin. the third largest natural gas producer in Canada.5 km 12 in. State oil firm Cupet has said that the country is currently awaiting a platform constructed in China for one of its offshore projects. an official with the government authority tasked with overseeing Cuba’s oil sector.

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Gordon Cope. CaKk Atr c B on 10 . Oilfield Technology Correspondent. but environmental concerns and other factors complicate the future of this sector. explains how technological innovations have opened up new plays in North America and expanded old ones.

Thanks to advances in horizontal 11 . full year oil production for 2010 averaged 5. In the US. horizontal drilling and hydraulic fracturing. raised its 2011 capital budget more than 20%. the oil and gas sector is riding high on the benefits of two major advances in technology. Alberta’s lease sales netted C$ 2. In addition to a recovered economy. up from C$ 1.7 billion in 2009. the Conference Board of Canada noted that oil company profits jumped to C$ 8.5 billion in 2010. up from 11 350 in 2010. operators are expected to drill 44 714 wells. up from an estimated 43 038 wells in 2010. In 2011. to C$ 4. and will continue a healthy growth into the C$ 20 billion range by 2014.49 million bpd. Husky. based in Calgary.T he oil and gas sector is sending a clear message: North America is back on track. In Canada.36 million bpd in 2009. Service company Baker Hughes predicts that active US rotary rigs will average 1620 rigs per week this year.86 billion. exceeding the record set in 2005.38 billion in 2010. The Petroleum Services Association of Canada expects a total of 12 250 wells to be drilled in 2011. and more than tripling the level from 2009. compared with 5. up from 1515 in 2010 and 1087 in 2009.

Canada is just beginning to produce from shale gas. a 25 t. Secretary of the Interior Ken Salazar reorganised the Department of the Interior’s Minerals Management Service (MMS). such as deepwater drilling. the success of the technology has more than doubled the 1300 trillion ft3 of existing reservoirs in North America. including Louisiana’s Haynesville shale. well intervention and containment. including inspection of rigs to ensure safe and environmentally responsible operations. the legal repercussions to the industry are expected to reverberate through the courts for several years. By 2035. 2010. including horizontal drilling and hydraulic fracturing. After several failures (including attempts to activate the BOP. ExxonMobil Corp. Thousands of employees were temporarily laid off. massive containment caps.7 billion in a deal that includes a major land position in the Marcellus shale play. of the country’s expected 64 billion ft3/d production. for US$ 4. The Barnett shale play has plateaued at around 5 billion ft3/d.3 billion ft3/d by 2020.2 billion.65 billion bbls of recoverable crude oil in the Bakken. the MMS had been responsible for promoting offshore oil and gas development. The Macondo tragedy has resulted in a new focus on personnel safety. operators can target thin. more budgetary authority. Transocean’s Deepwater Horizon semi-submersible rig. Suddenly. Lease sales were also cancelled. The average thickness of the shale is about 475 ft. US government agencies estimate that approximately 4.but that the impermeable nature of shale made it very difficult to produce economically. for instance. five story device designed to prevent runaway wells. situated approximately 40 miles off the Louisiana coast. paid US$ 41 billion in an all-stock acquisition of XTO Energy Inc. revenue collection was assigned to the Office of Natural Resources Revenue (ONRR). the well was finally sealed on July 15. well technology. The new structure will allow the agency’s permitting engineers and inspectors greater independence. and clearer senior leadership focus. enforcing safety regulations. Petroleum companies are building infrastructure to handle up to 1. 12 OILFIELD TECHNOLOGY April 2011 OT_10-17_April2011.8 billion ft3/d from the Horn River Ordovician Muskwa formation and the Montney shale. and over a dozen injured. and maximising revenues from oil and gas to the Treasury. crashing to the ocean floor 5000 ft below.1 million bbls of oil escaped. Hydraulic fracturing then releases the oil to the wellbore. or 16 billion ft3/d. BP also tried to staunch the well. adding 1200 trillion ft3 of shale gas in the US and 500 trillion ft3 in Canada. Regulation and Enforcement (BOEMRE). and Pennsylvania’s Marcellus shale. including drilling and workplace safety. from 1200 m to 1600 m. the cousin of shale gas.The Macondo tragedy On 20 April. the average length of wells in Canada has grown 33% in the last three years. The USGS estimates there are 3. Chevron acquired Atlas Energy and its extensive Marcellus gas play holdings for US$ 4. In the wake of the tragedy. the world’s largest man made oil spill occurred in the Gulf of Mexico. and the injection of debris and mud). dramatically increasing the ultimate expected recovery per well. beaches and protected habitats. and oil spill response. It will also allow several new and enhanced compliance strategies. With the current pace of drilling. the Fayetteville shale of Arkansas. Less than a decade ago. Saskatchewan and Manitoba. The Canadian Society for Unconventional Gas (CSUG) estimates that the entire country’s shale gas production could reach 5. Not only does this mean more hydrocarbons at less unit cost. located in northwest Alberta and northeast British Columbia.indd 12 08/04/2011 09:27 . According to the US Geological Survey. state and federal authorities launched a massive clean-up campaign. Shell agreed to acquire the business of privately owned East Resources Inc. gas condensate and oil. Regulatory enforcement was assigned to the Bureau of Safety and Environmental Enforcement (BSEE). but it is the latter liquids that have made the Eagle Ford one of the hottest plays in North America. Around 50 000 bpd of thick crude began to spill out onto the seafloor and make its way to surface. 11 crew members were killed. BP. high-grade veins that run for thousands of metres laterally. realtime monitoring of the highest risk operations. and lawsuits were brought against BP. resulting in an immense explosion and fire. Thanks to rotary steerable systems (RSS). the EIA estimates shale gas could make up as much as 25%. a large volume of gas and oil raced uncontrollably up the riser. and better inspections and enforcement tools to increase inspection coverage and efficiency. environmental and regulatory compliance in the offshore sector. The stricken rig eventually sank. exploration companies in Texas managed to combine a number of technologies. Shale oil Shale oil. Fort Worth. into the Bureau of Ocean Energy Management. but several other new plays are gaining traction. in order to economically release the gas from the Barnett shale underneath Dallas. and service company Halliburton. Formerly. The blowout preventer (BOP). rig operator Transocean. it also opens up uneconomic plays that were once thought marginal due to economics. After the reorganisation. however. failed to close. is also growing into a major unconventional source of hydrocarbons. The Bakken shale rests in the Williston basin that straddles North Dakota. the US Department of Energy predicts that North Dakota will soon overtake Alaska as the leading producer in the US. The Eagle Ford shale formation in South Texas runs north from the US/Mexico border for several hundred miles. A separate Energy Safety Advisory Committee (Safety Committee) will advise BOEMRE on a variety of issues related to offshore energy safety. Offshore oil and gas development duties were assigned to the Bureau of Ocean Energy Management (BOEM). Shale gas Nowhere is this more evident than in shale gas. black rocks found throughout most basins in the world contain copious amounts of gas often more than 100 billion ft3 per square mile . The formation produces gas. had just finished drilling an 18 000 ft well into BP Exploration’s Macondo prospect in the Mississippi Canyon block. Geoscientists have long known that the dense. 87 days after it first began to spew. And the number of fractures in some plays has advanced from one or two per well to over a dozen. While the oil clean-up proved mercifully short. pumping up to 700 000 bpd by 2017. President Obama imposed a drilling moratorium on all federal leases at depths exceeding 500 ft. threatening wildlife.

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Over the last 150 years. Most nations around the world signed the Kyoto protocol. With over 170 billion bbls of recoverable bitumen. During the process. including instituting a cap and trade system to reduce emission by as much as 80% by 2050. Texas. for instance. the price outlook for the next several years is bleak. however. Currently. ExxonMobil and Chesapeake are all investing heavily in the region. Over the last several years. and officials are worried that they may contaminate adjacent aquifers and drinking supplies. the amount of greenhouse gases (GHGs) in the atmosphere has risen from 280 ppm to 384 ppm. thermal processes have come to the fore. an international consortium of environmental scientists. Oil sands The oil sands are another major unconventional play benefiting from advances in technology. the EPA requested chemical lists from nine major service companies. and transport it to the Permian basin. agreeing to an emissions reduction to 6% below 1990 levels by 2012. such as power plants. In Pennsylvania. the majority of production has been through open-pit mining. claiming that it is ‘dirty oil’ due to the energy needed to clean and upgrade the bitumen. In August. the world’s largest man made oil spill occurred in the Gulf of Mexico when the Transocean Deepwater Horizon semi-submersible rig suffered an immense explosion and fire (see sidebar).724 million through in-situ). Some of the chemicals have been associated with cancer. protestors are organising to seek curtailment of shale gas activity in their state. has established a C$ 2 billion fund to help develop major CCS facilities that will capture and sequester up to 5 million tpy by 2015. Around 80% of recoverable bitumen requires in-situ methods of recovery. which will capture up to 2. For the last several decades. In the US. Environmental concerns also remain front and centre. Advanced horizontal drilling using RSS allows extremely precise placing of the wells. regulatory strength against emissions has been growing. and inject it 2300 m underground as part of an enhanced oil recovery (EOR) programme. Recently. the Environmental Protection Agency (EPA) is requiring new power plants and refineries to consider GHG-reducing technologies. In 2010. The oil sands are also under heavy pressure. maximising steam patterns and optimising recovery. creates large tailing ponds. Environmental groups have dogged provincial politicians and invaded facilities. Aboriginal groups situated downstream from the development have also long complained of higher incidences of rare diseases. The growth of shale gas faces public concerns over hydraulic fracturing. It taxes the hydrological system in the region. however. Shell’s Quest project will see the Scotford oil sands upgrader in central Alberta capture 1. the North American oil and gas sector faces a spectrum of challenges. One such technique is carbon capture and sequestration (CCS) in which large carbon emissions from stationary facilities. several million litres of water are forced at high pressure down the wellbore and into the shale to create a network of tiny fractures that allow the gas to escape. Traditionally. and India’s Reliance spent US$ 1. By 2021. In order to address concerns regarding hydraulic fracturing. the oil sands of Alberta form one of the largest deposits of crude in the world. Steam assisted gravity drainage (SAGD) involves two horizontal wells being drilled. Syncrude was fined C$ 3 million after 1600 ducks died in a tailing pond. International companies are eager to invest.7 for many exploration regions.7 million tpy of carbon from a proposed electric power plant near Midland-Odessa. Although the prospects of comprehensive environmental legislation have abated since the Republicans gained control of Congress. are fitted with equipment that gathers CO2 so that it can be shipped to underground storage facilities for permanent isolation. and have since agreed to pursue more ambitious plans.Apache. and the torrid pace is expected to continue through 2011. then upgraded to high quality synthetic crude. Mining is only good where the bitumen rests within 75 m of the surface. Over the last decade. (1. Mining projects require large amounts of water in order to flush bitumen from a matrix of sand and mud. clay and tarry bitumen is dug up. The future Energy suppliers are looking for ways to reduce GHG emissions. where the mix of sand. Petrohawk. where it will also be used in EOR. mining production stands at 856 000 bpd and thermal in-situ at 794 000 bpd. There have also been calls to regulate hydraulic fracturing under the federal Safe Drinking Water Act.65 million bpd. Empowered by a Supreme Court ruling that GHGs fall under the jurisdiction of the Clean Air Act.3 billion to buy acreage and form a joint venture with Pioneer Natural Resources Co.2 million tpy of CO2. starting this year. gas has consistently lingered around US$ 4/ million BTU. Steam is injected into the top well to melt the bitumen. including Halliburton and Schlumberger. EOG. oil companies have spent tens of billions to boost production to current levels of 1. CAPP expects oil sands to produce 3 million bpd. The US.1 billion for a 33% stake in Chesapeake’s Eagle Ford acreage. Various lawsuits are lodged against proposed pipelines designed to carry oil sands production south to the US and west to Asia. separated with warm water. has followed its own path. well below the replacement level of US$ 6 . as well as major modifications to existing ones. Unless production decreases or demand increases. the Pennsylvania Independent Oil & Gas Association (PIOGA) and the American Petroleum Institute (API) have formed a Marcellus shale public education alliance to provide facts about 14 OILFIELD TECHNOLOGY April 2011 . The government of Alberta. has concluded that this is causing global warming. For the last several years. Drilling permits in the Eagle Ford jumped from 94 in 2009 to over 1000 in 2010. China’s CNOOC paid US$ 1. The UN’s Intergovernmental Panel on Climate Change (IPCC). But one of the major concerns is the persistent low price for natural gas. the Department of Energy will provide US$ 350 million to support the Texas Clean Energy Project. it is treated with proprietary chemicals that decrease its viscosity. acting under a directive from Congress. which then drains into the lower well and is pumped to surface. primarily due to the burning of fossil fuels. one above the other. and threatens residents with trace toxins.277 million though mining and 1. In order for the water to penetrate further. refineries and oil sands upgraders. transport it 10 km. Problems In spite of recent successes. numerous bills in the Congress and Senate have come up with various targets.

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gas can compete with coal on a price basis for baseload demand. much like those already used in sewage treatment plants. to specialized training and modeling. but the recent global recession has left many petroleum companies too weak financially to turn off the cash flow. including carbon reduction. the cost of GTP electricity is generally about twice that of coal. Texas 77060 (USA) | 1 (713) 849-2769 www. and is primarily used to supply peak load demand. however. coupled with a proven track record of success confronting blowouts and problem wells onshore. O T CONTROL WITH CONFIDENCE Engineered Prevention. Syncrude has installed three large centrifuge machines. The API is also working with industry groups and states to create a state-based voluntary chemical registry of hydraulic fracturing chemicals that would ensure effective regulation while protecting trade secrets. has received approval for large scale production of in-situ bitumen using toe-to-heel air injection (THAI). and the utility company takes the loss. each with a capacity of 700 million ft3/d. The process involves igniting air that has been injected into the toe of a long horizontal well. Firming up the price of natural gas will be one of the greatest challenges. There are several opportunities to increase demand. Calgary. we provide the necessary oversight to help you meet NTL-05 and NTL-06 requirements. Thanks to a confluence of new technologies. or GTP. Cheniere envisions first shipments in 2015. Some oil sands producers are moving toward water-free extraction processes. however. As a Qualified Third Party. Louisiana. Cheniere Partners recently announced it is negotiating a long term contract with a Chinese firm to add liquefaction facilities to its terminal in Sabine Pass. and take several years to build. The plan is to build up to four liquefaction trains. producing an earth-like clay-cake. Response & Results Cudd Well Control has a worldwide reputation of experience and efficiency. The clear water is then recycled back into the plant. The US consumes about 19 billion ft3/d to generate electricity. reducing freshwater takeaway from the nearby Athabasca River. Oil sands operators are striving to reduce environmental impact. which owns the distribution rights to 45 million potential customers. coal produces approximately twice as much CO2 per unit of electricity than gas. Our team of engineering experts will assist you with a wide range of services. offshore and underground.5 million tpy. North America’s oil and gas sector faces a promising future.the tight shale gas resource’s energy and economic potential. Gas could be exported as LNG. But the challenges that remain. regulatory restrictions and legislative oversight. Some shale gas production is profitable within this range. A viable option for increasing demand is gas-to-power. Liquefaction plants are expensive. Well Control Services: · Oil Well Firefighters and Blowout Specialists · Well Control & Kick Resolution · Underground Blowouts · Dry Ice/Cryogenic Freeze Services · Hot Tap and Valve Drilling Services · Engineering Services To learn more. Switching to gas also reduces a utilities carbon footprint. Industry groups estimate that at least 150 rigs would have to be retired from the current 950 US rigs dedicated to gas drilling in order to bring long term gas production into line with demand. Unwanted portions of bitumen partially ignite. regulators may not pass the cost on to consumers. Producers could simply shut in uneconomic wells. Booth #1725 Cudd Well Control | 16770 Imperial Valley Drive | Suite 100 Houston. but the rush to acquire land for the shale gas play has left many companies with commitments to drill or lose exploration rights.com . Companies with oil plays are focusing their budgets on high-priced crude. from rig inspections and blowout contingency planning. At around US$ 3/ million BTU. Shell introduced a technique called ‘atmospheric fines drying’ that reduces the drying time for tailings pond material from decades to weeks. visit us at OTC. The main roadblocks to GTP growth are the state commissions that have the power to set electricity pricing. If a long term contract is more expensive than spot market prices. guarantee that the next few years will be replete with many a twist and turn in oilpatch fortunes. The LNG would be shipped to Chinese gasification facilities run by ENN Energy. or 3. environmental protection. Petrobank Energy & Resources. due to the relative ease of start-up and shut-down. which is then collected at the heel of the well and pumped to surface. which causes the silt to separate much faster. Canadian Natural Resources’ Horizon oil sands plant is injecting CO2 into its tailings pond water. Although there is a surplus of gas-fired plant capacity throughout the country. The centrifuges separate clean water from the tailings ponds. The second option is to drill for less new gas. massive unconventional resources and a renewed economy. warming higher grade bitumen. and operators would have the option of locking in large volumes of production for extended periods.cuddwellcontrol.

18 . Healthy investment: the GL Noble Denton sponsored report predicts healthy investment in new exploration and marketing opportunities over 2011.Figure 1.

the 194 board-level executives and policymakers from some of the industry’s leading international companies that were surveyed for the report are optimistic that 2011 will be a key turning point for the industry.F ollowing a year of slow economic recovery. 76% of respondents to the Economist Intelligence Unit’s research 19 . unstable price fluctuations and damaging incidents in the Gulf of Mexico and China. Despite concerns over tougher industry regulation and increased operating costs. Indeed. as operators prepare to drill deeper in new geographies. according to a new report on the future of the sector published by the Economist Intelligence Unit and sponsored by GL Noble Denton. the oil and gas industry is predicting healthy investment in new exploration and market opportunities over the next 12 months.

but respondents to the Economist Intelligence Unit’s survey seem unclear when new legislation will appear and what effect it will have. while a substantial majority (68%) expects cost increases in general. This renewed confidence in industry growth is largely thanks to a period of relative price stability. with strong growth also predicted for India and the Middle East this year. 20 OILFIELD TECHNOLOGY April 2011 . As we face the first anniversary of the Deepwater Horizon incident. with the report suggesting that their safety record will become a more important factor in gaining access to global reserves. With 20% of major oil firm portfolios now coming from deepwater positions. but it seems that debate continues over whether it would work in the US. the emergence of large reserves of ‘unconventional’ gas in North America has proved highly attractive to oil and gas companies looking to replace declining production and. Reserves in these areas are becoming an increasingly prominent feature in global oil and gas production. Challenge: rising demand for energy resources means companies are increasingly having to develop resources in more challenging environments. The global demand for LNG has grown as countries in Asia and Europe have sought to increase their supply options. The largest proportion of industry executives surveyed (32%) saw South East Asia as offering the greatest opportunities for their business in 2011. According to the Economist Intelligence Unit’s report. and proposals to raise the US$ 75 million cap on liabilities related to offshore oil spills will most likely hit them hardest as insurance becomes impossible or too costly to obtain. Following the Piper Alpha disaster in the North Sea in 1988. A senior representative from an international oil company suggested that potential new regulation put into place after Macondo might have a pendulum effect. A very large proportion (72%) of respondents to the research said that they expect regulation to become more stringent in North America in particular. Nearly two thirds of production in the Gulf of Mexico is accounted for by such companies. Participants in the recent round-table discussion felt that a non-prescriptive approach to legislation would be preferable to a rigid regulatory response to Macondo from the US government. such as the deepwater offshore. compared with only 8% describing themselves as ‘highly’ or ‘somewhat’ pessimistic. Uncertainty over regulation It is positive to see that the industry still values the potential of North American production and. the US Gulf of Mexico remains an attractive province. European industry leaders voiced concern over how the increased cost of post-Macondo regulatory compliance may price smaller operators out of the market. this will clearly have an additional impact on spending. such as the deepwater offshore. where operating costs will start off high before settling to a more manageable level. helping operators to reduce risk through more effective mitigation processes. The longer term impact of Macondo however.Figure 2. while nearly a third (30%) of respondents to the Economist Intelligence Unit’s research saw North America as the most significant region. Rising demand for energy resources means that companies are also increasingly required to develop resources in more challenging environments. Additionally. according to the Economist Intelligence Unit’s report. particularly in North America and the fast-growth economies in Asia. and the results of the Economist Intelligence Unit survey reinforce the industry’s feeling of uncertainty towards the effect of future legislation. emerging regions such as China and Brazil are underpinning oil demand as a result of their robust markets. for larger oil companies in particular. the UK government’s response was to separate the regulator from the Department of Energy and ask operators to identify and reduce risks to ‘as low as reasonably practicable. the oil and gas industry recognises that increased regulation will follow the Macondo incident. This regulatory model was subsequently adopted in Australia and West Africa. During a round-table discussion on the findings of the Economist Intelligence Unit’s report. looks set to be on companies’ operational strategy. described themselves as either ‘highly’ or ‘somewhat’ confident about their company’s business outlook. Natural gas: a global ‘game changer’? Natural gas has gained a reputation as a relatively low-carbon ‘transition fuel’ in recent years. According to the report. The report also acknowledges that rising costs are likely to be more problematic for smaller E&P firms. the potential impact of the regulation following the biggest oil disaster in US history continues to feature heavily in industry debate. organised by GL Noble Denton in London recently.’ in addition to justifying their actions to the UK Health and Safety Executive (HSE).

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compared with oil and gas industry is extremely focused on its future challenges. The success of key players in the There are a number of reasons why the oil and gas industry industry in finding more innovative solutions to mitigate risk while is likely to experience a skills deficit within the next 15 years. sustainably and efficiently. focus on recruitment now. Economist Intelligence Unit’s report. the majority of the industry executives polled by the place for the right price. knowledge to its very limits. when investment into the oil and gas industry was last at its peak. who came together to introduce and develop emerging talent in a co-ordinated manner. by the individual states. alongside scepticism over the oil and gas industry’s efforts to support more environmentally friendly approaches to energy production and distribution among younger generations. companies need to to access it are still not fully understood. Alongside the economic downturn came sweeping budget cuts and this good work Figure 3. Participants in the round-table discussions agreed that the But some of the industry’s key players have disagreed with industry needs to work more closely together to address the the report’s findings.pre-credit crunch . Currently regulated in North America recognised as becoming increasingly important to the industry. But it is and gas professionals. Nearly one half (48%) debates that its findings have sparked since its publication that the expect an increase of at least 10% in gas prices. operating more safely. Emerging layer of regulation could slow operations in addition to resulting nations such as India and China may also be depended upon in subsequent price rises. The report also notes that there is an more heavily to provide resource where more mature regions expectation for closer scrutiny of the environmental impact of have difficulties in generating new industry talent. Natural gas: fast emerging as an attractive option for oil and gas companies has likely been halted. and was raised among sector also clear that the industry still has hurdles to overcome if it is to leaders at the recent round-table discussions on the realise the full potential of that market growth. despite fears of tougher industry is another topic close to the hearts of many oil regulation and a more costly operating environment. rather than trying to pursue each others’ technical changer’. The negative impact of the Macondo disaster on the industry has also played a role. ensuring that the right talent is in Overall. It just 7% who think prices will fall by 10% or more. and the increase steadily over the next decade. Most of the rest understands very well the need to find more innovative solutions to (35%) expect prices to fluctuate around the current price range. Before the recent economic crisis. Economist Intelligence Unit expect a modest shift upwards in Cautious optimism natural gas prices. pushing the boundaries of the industry’s technical failure to attract.but is natural gas a global ‘game changer’? investment comes to pass. especially as global demand is forecast to It is clear from the Economist Intelligence Unit’s report. but if a period of looking to replace declining production . due to the fact that the techniques required With activity set to rise in the sector. as forecast by the Economist Intelligence Unit report. programmes. which dub natural gas as an industry ‘game skills problem. Developing the next generation It’s encouraging to see that industry executives expect to see The increasing shortage of technical skills across the an upturn in investment into the sector. O T 22 OILFIELD TECHNOLOGY April 2011 .talented graduates through the promise of high salaries and quick career progression have been detrimental to the oil and gas industry’s recruitment of ‘fresh blood’. recruit and retain highly talented people. production period of investment and expansion. the report highlighted the concerns in that they are able to provide the industry with consistent of those worried that the potential addition of a further federal knowledge and advice during periods of talent deficit. unconventional gas. unlock vast tight gas resources.to recruit position and reputation in the market this year. there is an overall feeling and distribution of oil and gas to tougher extremes of geography that the sector will come against challenges as a result of its and climate. the instead of an anticipated decline in the region. with concerns being raised to drive the sector forward. extraction has industry could soon find itself returning to a situation in which increased dramatically as new technologies have helped to demand for technical resource outweighs supply. initiatives were implemented by players from across the industry. the industry needs to do more to educate students The regulation of energy sources such as shale gas may also at an even younger age about the innovations being developed add cost to the process of extraction. One industry association leader felt that the sector had of extracting unconventional gas from reserves such as those in lost its appeal to university graduates over the last 20 years. the US will result in a weaker return on investment than originally and while a number of oil and gas companies operate graduate expected. Now we are faced with a The demand for energy is taking the exploration. They suggest that companies may find that the cost staff. by some around the best practice for the controversial process Technical consultancies such as GL Noble Denton were also of hydraulic fracturing. the remaining resourceful and sustaining activity will define their success of the finance industry .

K. ecto he offs dustry s t for gas in 24 . U s e Luk tems spect pro Sys d eld rs the re win ons fi In ho ide ati ons he offs implic and c of t nd its re oil ra ho .is. Dav Ltd.

the region’s vast 25 .E ver since oil and gas exploration and production activities kicked off in the harsh waters of the North Sea during the late 1960s. Offshore wind Market potential and hurdles Thanks to a number of meteorological and oceanographic characteristics. driven in no small part by the rising oil price. over the last 40 years of operation. This article discusses the prospects for the offshore wind sector and the competition and opportunities that exist between this nascent industry and its older. when examined on the global level. Indeed. Indeed. contractors have established themselves as leaders in their respective fields and. the offshore wind industry is beginning to make the headlines. oil and gas production in the North Sea is in decline and though E&P activities are set to continue apace. the offshore oil and gas industry. with the demanding needs of North Sea operators as the primary driver. Today. the region has been a major part of the global offshore energy supply chain. more mature cousin. generated a wealth of knowledge and skills within the region. the North Sea and the adjoining Baltic and Irish Seas are among the best suited and extensive offshore wind development regions in the world.

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areas of shallow waters with high. Today. current developer aspirations and announced project plans are indicative of surging growth within the industry. The capital required to deliver offshore wind on such a scale is staggering. many contractors realise a far greater proportion of their revenue from the oil and gas. Infield estimates an industry capex of around US$ 20 billion in Northern Europe alone. In Europe. Figure 2. Infield Systems’ cumulative installed capacity forecast highlights the rapid expansion of offshore wind going forward to 2015. As a result of this stiff competition. offshore wind offers enormous opportunities. combined with a lack of confidence in the long term performance of the offshore wind industry. consisting of over 6500 potential turbines and supporting infrastructure spread across 36 developments. Indeed. for installation services. the European offshore wind industry is poised for rapid and sustained growth. such as those operated by Seaway Heavy Lift and Heerema. such constraints are not 26 OILFIELD TECHNOLOGY April 2011 . To date. equating to over 25 000 turbines. However. these bottlenecks may also be attributed to the relatively low exposure to offshore wind of those players servicing the market. power cable manufacturing and offshore construction assets such as cable laying. the industry is now gathering a strong head wind. such as DONG Energy acquiring A2Sea in 2009. Bound by ambitious renewable energy targets. however. A developer’s access to guaranteed construction capacity will make projects more attractive to third party investors and increase the developer’s chance of securing preconstruction finance for the project. Concurrently however. Indeed. the two industries will go head to head in a battle to attract Figure 1. Given the youth of the offshore wind industry and the lack of confidence in the long term performance of the market. the wind sector may benefit from the decades of accumulated knowledge that the oil and gas industry has produced. Offshore construction and installation services should be regarded as one of the key bottlenecks in the offshore wind industry. the offshore wind industry sits at the same stage of development as North Sea oil and gas did during the late 1960s and early 1970s. oil and gas In many respects. many of the contractors servicing the oil and gas and wind industries are exposed to both markets. competition for suitable vessels has been tough. Scottish and Southern Energy bought a 15% stake in BiFab. This is of particular significance for substructure fabrication. However. or through the construction of assets such as RWE building its own installation vessels. Initially slow to take off. developers have sought to vertically integrate in order to secure capacity within the supply chain. Moreover. Northern European offshore wind cumulative growth forecast (Infield Systems). creating further competition for heavy lift vessels between the two industries. sustained wind speeds make the area quite remarkable. decommissioning demand is expected to coincide with increased demand for wind farm installation services. Quantitatively speaking. Indeed. Offshore wind versus oil and gas: Northern European infrastructure capex forecasts (Infield Systems). by 2015.surprising. in the UK alone there is currently a pipeline of projects nearing 50 GW. The forecasted growth in demand for offshore oil and gas services given in Figure 2 excludes the requirement for decommissioning work. The substantial capital required to increase capacity for offshore vessels. Competition Offshore wind vs. with oil prices breaking the US$ 100/bbl mark and E&P activity starting a new up-cycle. Given the vast network of ageing oil and gas infrastructure in Northern Europe. This has been achieved through the acquisition of contractors. The capex forecast illustrated in Figure 2 highlights the growth in both industries up until 2015. civil marine and telecommunications industries compared to offshore wind. heavy lift and transport vessels. the UK based fabricator of offshore structures. the industry remains constrained by supply chain limitations and a lack of preconstruction finance. Aside from competition for assets within the supply chain. Indeed. with little growth between 2000 and 2007. despite this robust outlook. backed by government subsidies and incentive mechanisms. Further down the supply chain. EU member states have placed considerable emphasis on the rollout of offshore wind to derive 20% of its energy from renewable sources by 2020. this has meant that wind farm developers have often used oil and gas assets. this figure rises to over 150 GW. However. nevertheless the success of contractors such as Seajacks and MPI Offshore is noteworthy. demand for these services in the Northern European oil and gas markets is expected to increase. offshore wind may also find itself in direct competition with the industry that holds the key to unlock the barriers to growth the sector is facing. has made investors cautious in financing newbuild vessels targeted to offshore wind.

Indeed. The presence of a skills gap in the oil and gas industry is certainly nothing new. whilst substructure engineering. Indeed. develop a vertical-axis floating wind turbine. Technological pushes from the oil and gas industry do not stop at the operator level.and retain a skilled and experienced workforce. The oil and gas influence is first observed at the operator level. the petroleum industry will undoubtedly play a pivotal role in the development of offshore renewables.energyglobal.. Coverteam and EDF. fabrication and installation was undertaken by the subsea engineering contractor. Known as Vertiwind. This is of particular importance as contractors in the wind industry may struggle to compete with the deeper pockets found in the oil and gas sector.ON. nacelle. the project was conceived and developed by an international oil company. while Talisman and Scottish and Southern Energy completed the far-from-shore deepwater Beatrice wind farm. the READ about the latest developments in the shale gas sector on Energy Global OILFIELD TECHNOLOGY APRIL ISSUE OUT NOW! SUBSCRIBE TODAY! www. full-scale deepwater floating wind turbine. Moving further down the supply chain. Technip has recently launched a programme to develop a vertical-axis wind turbine. Inaugurated on 8 September 2009. Vattenfall and Centrica have all invested significantly in both offshore wind and upstream E&P. Statoil. while the latter underscores ‘big oil’s’ ability to push the operational boundaries of offshore wind energy. the technology employed for Hywind is a traditional floating platform design transferred from the oil and gas industry. This innovative project has the potential to reduce the cost of floating wind energy due to the simplistic design that negates the requirement for a large tower. The project epitomises the synergies between oil and gas and offshore wind on a number of levels. these synergies continue with a host of contractors including engineering firms. Delivering Value! API Register Today: ACCREDITATION SYSTEM TCPC TPCP-0001 TPCP-0017 TPCP-0027 . The former showcases the opportunities to marry the world of renewable energy and offshore E&P in the economic recovery of marginal hydrocarbons. Oil companies are not only developing wind farms. fabrication yards and offshore construction companies having the knowledge and expertise to drive the industry forward. The wind sector is acutely aware of this potential shortfall and programmes such as the Beluga Offshore Training Academy are being developed to address the issue. An excellent example of oil and gas’ influence within the offshore renewables market can be found in Statoil’s development of the Hywind project. RWE. To begin with. Statoil is not the only oil company spearheading the development of offshore renewables. The so called ‘Spar’ hull was fabricated at Technip’s Pori Yard in Finland. Hywind is the world’s first. the project will see Technip. the same yard that has developed large oil and gas platforms including the Tahiti. yaw system.. it is a key constraint that will be exacerbated by the development of the offshore wind industry. companies such as DONG Energy. alongside Nenuphar. Indeed. Technip. the wealth of operational expertise that has been nurtured in the oil and gas sector during decades of offshore E&P activity provides a solid platform on which offshore renewables can be developed. Shell has made a valuable contribution having developed the wind and solar powered Cutter platform. pitch system and gearbox. they are also one of the major driving forces behind innovation in the industry. Moreover. Synergies and opportunities Oil and wind in harmony Despite the competition for services. Indeed. E.com/sectors System 21 e-Learning Well Control Training Courses Instructor-Led Training Courses Committed to Quality. Mad Dog and Holstein spars that have been installed in the US Gulf of Mexico. Moreover.

Uses: New Application. fabrication and offshore construction services may be the consequence unless the market sees increased investment in wind specific assets such as turbine and foundation installation vessels.ca EUROPE • RUSSIA WEST AFRICA Colin Duff Scotland. and hence the economic incentive. the traditional monopile foundations will be replaced by jackets. As such. Conclusion The rollout of offshore wind at the pace desired by EU nations will create stiff competition for supply chain capacity and skilled workers within the oil and gas industry. the oil and gas and offshore wind industries will complement one another. Conversely. Power generated from both assets would be exported to shore via the wind farm’s transmission system. Contractors such as the UK’s BiFab and the Netherlands’ Heerema have already taken advantage of these opportunities. such structures have the potential to become integral components of the offshore wind infrastructure. Opportunities also exist to reuse existing offshore oil and gas structures within the renewables industry. however. In such a scheme the wind farm would provide the infrastructure. One example is the cogeneration of offshore wind and gas assets. Indeed. Contractors that position themselves correctly will stand to benefit from the huge investment that is required if renewable energy targets are to be met.co. but one that fell by the wayside was Eclipse Energy’s Ormonde project. the development of offshore wind will create a substantial and sustained demand for engineering and construction services. The yard has also secured an agreement with Scottish and Southern Energy to rollout at least 50 jacket substructures for wind turbines on an annual basis from 2014 onwards. Ormonde cogeneration plant was to be developed in the East Irish Sea but the project was re-evaluated. operation and maintenance platforms or substations for a North Sea grid. NL. Existing oil and gas platforms could be used as supply bases. thus reducing offshore construction time. the product of which would fire an offshore gas turbine. Hall One Moscow. There is also significant opportunity for existing technologies to be transferred from the oil and gas industry to the offshore wind sector. BiFab was initially involved in the development of the Beatrice project and has since won a £12 million contract to design and manufacture two substation foundation “Because Your Drill Pipe Deserves the Best” Global Technical Support Centers NORTH & SOUTH AMERICA JAPAN • CHINA • INDIA MIDDLE EAST Duraband®NC Tuffband®NC Hardbanding Alloys Headquarters Postle Industries Cleveland.hardbandingsolutions. OH 44142 USA Telephone: 216-265-9000 Email: sparky@postle. NZ Tel: +64 06 755 3303 Email: sales@duroweld.design would allow the entire turbine and substructure to be assembled in the yard.eu structures for RWE’s Gwynt y Mor wind farm offshore Wales. they are highly capable of developing solutions to new problems in addition to transferring established technologies and practices from one industry to the other. 1205 St. alongside offshore wind. John’s. offshore wind could stimulate the development of the oil and gas industry. and Re-Application to Tool Joints Tuffband®NC Hardbanding.moore@global-ace.co. With the Hywind project successfully completed.uk AUSTRALIA NEW ZEALAND Richard Mascull New Plymouth. to develop a marginal gas field. 301 Wichita Falls. albeit in a marine environment. TX April 26-27 IADC Onshore Conference & Exhibition Omni Hotel Westside Houston.nz SOUTHEAST ASIA David Moore Republic of Singapore Tel: +65 9830 1828 Email: david. tripods and trusses. TX May 19 MIOGE 2011 Pavilion 2. The reuse of these structures would have obvious benefits to both parties. UK Tel: +44 1563 820 505 Email: colin@mathiesonweld. Such a project would involve the development of traditional thermal generating capacity. An example of such a scheme. Head to head battles for engineering. Moreover. Denmark June 15-16 Atlantic Canada Petroleum Show Booth No. Russia June 21-24 Caspian Oil & Gas Exhibition Baku Expo Center Baku. Cogeneration of this nature would tackle one of the key problems with wind energy. Demand for these structures will create opportunities for oil and gas contractors from initial design through to fabrication and installation. and subsequently reverted to a traditional wind farm following Vattenfall’s acquisition of Eclipse Energy in 2008.com . O T •100% Rebuildable •Non-Cracking •Casing Friendly Fearnley Procter NS-1™ Certified Duraband®NC Hardbanding. Uses: New Application to Tool Joints Visit Us: Alliance Expo 2011 Booth No. E&P companies and their contractors are highly experienced in the offshore environment. resource intermittency. Canada June 22-23 www. Indeed. Azerbaijan June 7-10 IADC World Drilling 2011 Conference & Exhibition Booth No.com CANADA Leroy Billesberger Canada Tel: (604) 701-6533 Email: leroy@weldco. At the same time. Technip is positioning itself as a major player in the floating wind energy market and significantly contributing to the sector’s development. as wind farm developers move into deeper waters. 25 Copenhagen.

In the past decade. imaging and illumination enhances deepwater exploration. Subsurface structures (e.g. Paradigm. Benefits from these rich acquisitions have been acknowledged and documented. points out how full azimuth decomposition... substantial investments are being made to acquire wide and rich azimuth seismic data. energy companies are focusing exploration efforts in areas of challenging operational and technical complexity. salt. F aced with replacing critical oil and gas reserves.An illuminating exploration. multiples) and complex wave phenomena which distort the seismic image to the point where many iterations of velocity model building and seismic migration are required before selecting defensible prospects and drilling targets. These acquisitions are needed as geoscientists seek better reservoir definitions in deepwater regimes impacted by the geologic conditions described above. are combined with the latest seismic imaging technologies (e. and 29 . Reverse Time Migration) to improve prospecting and return on investment for these costly seismic programmes.g. in turn. These salt bodies may be overlain or truncated by shale sequences that give rise to additional imaging problems as they often introduce a ‘directional’ velocity dependency referred to as anisotropy. These rich azimuth acquisitions. converted waves. Proper lateral and depth positioning of reflected seismic events below these anisotropic generators require advanced velocity procedures to measure and model these parameters. this imaging problem is compounded by salt geometries that are highly irregular in shape in three dimensions. basalt) can be the genesis of multiple wave types (e. Duane Dopkin. Geophysicists ask a lot from their seismic data. the industry has made huge investments in planning and acquiring seismic acquisitions that are both rich and wide in azimuth. To conduct successful seismic programmes in these areas.g. US. In the deepwater regions such as the Gulf of Mexico.

integrity and are limited in their capacity to extract subsurface attributes with azimuthal dependency. to predict lithology. decomposition of the total scattered energy wavefield into dip/ In the deep waters of the Gulf of Mexico. referred to as the Local Angle Domain (LAD). The combination of the two angle gathers. imaging and specular weighting. The first set of gathers (reflection) contains a continuous Figure 2. Comparison of conventional seismic depth image (left) and seismic depth image generated with full azimuth decomposition. However. The second set of gathers (directional) contains a continuous azimuthal sampling of the total scattered energy as a function of the dip and azimuth of local reflecting surface. The complete set of information from both angle gather types expands our knowledge about Figure 3. we are able to easily differentiate and create images that emphasise these two components (Figure 1). Although there are many ways to decompose recorded seismic data. velocity channels and fractures. Specular energy is associated with reflectors from continuous attenuation. Since the total scattered energy contains both continuous (specular) and discontinuous (diffracted) energy. high-certainty. together with the ability to handle the full azimuth information in a continuous manner. we can decompose seismic data into two independent but complementary sets of full azimuth gathers. such as faults and small-scale fractures. enables the generation and extraction of high resolution information about subsurface angle dependent reflectivity in real 3D space. for example. (360˚) sampling of reflectivity (amplitude) information as a function of reflection (opening) angle. azimuth angle bins at all subsurface points.g. converted waves). we can use the OILFIELD TECHNOLOGY April 2011 31 . because of wave interference (e. It is carried out in a special reference system. we need a rich ray tracing engine that can be initiated from any or every image point in the subsurface. to detect stress directions. See text for both continuous structural surfaces and expanded explanation. Point-diffraction ray tracing from a subsalt reflection image point. leading to accurate. The ability to decompose the specular model determination and reservoir characterisation. This rich ray tracing ‘shoots’ rays in all angles and all directions so that we can ‘capture and preserve’ seismic data in an azimuthally continuous manner. directivity originating from local heterogeneities such as high-resolution. unlike traditional ray tracing procedures that are carried out from the acquisition surface. ray-tracing procedures provide a vehicle to simulate the subsurface ‘camera’. These gathers the interpretation of subsalt reflectors is often challenging contain information about both specular and diffraction energy. and to update velocity models. These gathers provide the data structure to detect and measure velocity anisotropy. By carrying out the ray tracing in this domain. ambiguities in velocity model definition. and diffraction energy from the total scattered field allows for Enhancing deep reflectors the creation of enhanced feature images from the fully recorded Full azimuth directional angle gathers represent a seismic wavefield. Diffraction energy is associated with non-specular complex wave phenomena. and interfaces. multiples. To compensate. discontinuous objects.

orientations and angles in a continuous manner. Ray tracing reference (left). noise suppression decomposition and imaging of seismic data to continuous and illumination of target areas. A new seismic perspective we will introduce new seismic data representations that allow All seismic imaging methods decompose seismic data into us to better understand subsurface illumination. medium properties. given to the subsurface. with the rich azimuthal sampling of data recorded at the surface. sectors formed over a range of surface azimuths lack the What is needed is a solution that allows us to better qualify resolution and accuracy to properly use the entire recorded and even quantify the expenditures that we make in seismic wavefield to uncover the information and data listed in the acquisition and imaging. but processed independently and subsequently must be analysed also help us assess where we can make changes that will have and interpreted. sectored datasets are simplifications in dealing with wide and rich azimuthal data. organised data domains (pre-stack gathers) can take many Limitations of azimuthal sectoring different forms with vertical sampling in time or depth. There are revolving and pivoting camera. and measure velocity anisotropy. However. and to understand the dependency of seismic acquisition on image quality (illumination). while the resulting subsurface azimuthal datasets. other than Azimuthal sampling of seismic data allows us to better detect forming gathers with the sectoring approach described above. convenience to accommodate project deadlines and application most of the solutions are limited in their ability to properly deal limitations of dealing with multi azimuthal data. to better qualify organised domains of subsurface data that provide the pathway seismic images. characterisation and interpretation technologies.different wave types. decisions are often taken out of While advances in seismic imaging continue at a rapid pace. to identify and separate all of these pre-stack gathers carry no directional (azimuth) 30 OILFIELD TECHNOLOGY April 2011 . Sector decisions (size and technology can fall short in exploiting the full potential of these number) are often taken independently without consideration acquisitions. analysis of these independent datasets is not straightforward. to predict lithology from more meaningful seismic signatures. This is particularly true when long offsets only in understanding the implications of our assumptions and are involved. and Much like the benefits of capturing images from a continuously spatial sampling in surface offset or subsurface angle. and other seismic characterisation solutions. Computational and operational barriers often limit the solution to surface acquisition interpolation schemes followed by course Figure 1. and to better describe the critical parameters of the AVO(A). method. capturing seismic data at every subsurface point in all angles and directions (azimuths) is much more problematic. Extracting a holistic interpretation from the the most impact on our seismic programmes. These velocity model. Recognising the full potential from sectored source to receiver offsets and azimuth with of rich and wide azimuth seismic data acquired in deepwater data structures and images constructed from in-situ angle and exploration areas requires a significant ‘upgrade’ to our seismic azimuth data at any or all subsurface image points. If successful. The solution should assist us not previous paragraph. Instead. More importantly. seismic images inherit many of the benefits of rich and wide Although intuitively attractive. and reservoir characteristics. Decomposition and imaging in the local angle domain. we need to give proper attention to To resolve these issues. structural domains that recover and preserve subsurface illumination in all attributes. unlike the camera analogy. and directions. to detect stress orientations and intensity. the benefits of sampling the other representations of pre-stack gathers depending on the subsurface with continuous azimuth are well understood. this upgrade would provide a comprehensive The solution is designed to deliver a complete set of data decomposition of the recorded seismic data into physical containing accurate subsurface velocity models. However. However. Finally. Much information from all angles and azimuths ensures more reliable like a camera equipped for continuous recording at all angles analysis and significantly reduces reflector position uncertainty. surface azimuths (sectoring) rather than the desired include improved multiple suppression. To achieve this objective. the surface sectoring azimuth acquisitions. full azimuth acquisition sampling of reflection angle gather (centre) and full azimuth directional angle gather (right). while easy to create. to reduce the non-uniqueness of the seismic for other data analysis procedures including velocity analysis. The rich imaging. seismic imaging technology being used. we introduce a new seismic the issue of mapping rich azimuthal data recorded at the surface decomposition procedure that replaces images constructed to image points in the subsurface. the application of current seismic imaging approach has severe drawbacks.

and validate References 1. Bartana. The analysis of anisotropic solution is realised in its ability to decompose the recorded behaviour can be visualised in three dimensions so that the seismic wavefield into the physically meaningful domains of sources of anisotropy can be better understood and the strength reflection angle and reflection dips over a full and continuous of anisotropy better appreciated. Illumination analysis is routinely carried out with ray tracing procedures. The solution is a well needed complement information and data contained in the full azimuth directional to a portfolio of existing deepwater seismic imaging angle gathers. especially below complex structures such as salt bodies. 76. 2221-2225. No. energy values computed from the full azimuth directional angle where only a subset of the rays arrive to the surface within the gathers as weighting factors in the creation of the final image.. Expanded Abstracts.g. See text for expanded explanation. When coupled with the range of azimuths. given aperture (green rays). Figure 4 (top) shows the ray-pair illumination Additionally. The high ‘energy’ values associated with the specular directions The full benefit of this type of illumination can be sharpens the image of the deeper reflectors (Figure 2) at the appreciated by the generation and evaluation of illumination expense of the scattered or non-specular energy in the data. on the other hand shows the same ray-pair means to more precisely unite the fields of seismic imaging and illumination intensity. as a function interpretation in areas of complex wave phenomena. 32 OILFIELD TECHNOLOGY April 2011 . Zvi Koren and Igor Ravve. it can deliver information about imaging reliability. Figure 4 of the recorded wavefield into directional gathers provides the (bottom). of opening angle and azimuth. A. geometric spreading. the focusing of the specular energy we observe in intensity from three subsurface image points arriving at the the directional gathers serves as an indicator of velocity model surface from different distances and azimuths. When used properly. Note the poor correlation of orientation at crossline 325. Here. Kosloff. ‘Full Azimuth Angle Domain Imaging: 78th Annual International Meeting. ‘Full-azimuth subsurface angle domain wavefield decomposition and imaging. reliability factors) that are essential for quality control of imaging results. improve the non-uniqueness of the seismic experiment. help define optimum imaging parameters. this time at the subsurface. imaging. P.prospects selected on the basis of amplitude or amplitude continuity. the rich ‘bottom-up’ ray tracing procedure described earlier is used to secure a uniform illumination of the subsurface and establish a mapping of subsurface angle parameters to surface geometry parameters. Part 1: Directional and reflection image gathers’. geoscientists are better able to differentiate technologies that collectively remove imaging uncertainty and between different types (e. Rose diagrams. VTI and TTI) of anisotropy. from a subsalt reflection point.g. and D. The full power of the continuously over all azimuths. E. This Modelling anisotropic velocity behaviour in deepwater provides a strong visual argument against using surface exploration basins is critical for a more accurate lateral and azimuthal sectoring as a procedure to deal with wide azimuthal depth positioning of reflected events beneath the anisotropic data. Koren. Geophysics. Full azimuth reflection angle Full azimuth decomposition. enhance acquisition geometry. 1 January-February 2011. O T Resolving illumination ambiguities Subsurface illumination analysis is a widely used technique in deepwater exploration areas to better understand the dependency of the seismic image on the seismic acquisition and velocity model description. 2008. This full azimuth subsurface decomposition azimuth acquisition geometry is clearly noted. generating formations as well as for the creation of more Conclusions interpretable seismic images. Z. reflecting a large translation in Resolving anisotropic ambiguities azimuth as rays pass from the surface through the salt. The narrow error and accuracy. Vol. I. SEG’. Ravve. Ragoza. Rose diagrams of ray-pair illumination intensity captured at acquisition surface (top) and point-diffraction rays traced subsurface image points (bottom). S1–S13. The result of this ray tracing procedure is a rich set of illumination factors (angle dependent) and physical ray parameters (e. Figure 3 shows an example of Figure 4. 2. and illumination provide gathers allow geoscientists to visualise the influence of deepwater exploration professionals an additional and powerful anisotropy on the moveout of reflection amplitudes sampled tool to evaluate subsurface complexities.

IMPROVED IMAGING Gary Rodriguez. Ewing Bank. Sherry Yang and Laurie Geiger. Grand Isle South Addition and Ship Shoal South Addition areas (Figure 1). TGS. To this end the trench area. the previous processing used long period refraction static corrections and short period surface consistent static corrections applied in the time domain prior to migration. APSDM was employed to better tie the seismic events with well information. shallow tomography and anisotropic model building to solve complex imaging challenges for a large depth migration project in the Gulf of Mexico. The project consisted of approximately 553 OCS blocks of data in the Mississippi Canyon. However. which was addressed in previous processing efforts with refraction statics. and produce a more accurate velocity model that would enhance event placement. H igh quality seismic imaging is a key to successful hydrocarbon hunting. The refraction solution solves the travel time delay induced by the layer and applies a static shift to the traces so as to minimise the resultant time 33 . USA. was modelled using highresolution tomographic velocity inversion to produce a more accurate shallow velocity field. Additionally. Figure 2 shows the bathymetry of the data area. Traditional refraction statics solutions use static shifts to address the time delays caused by shallow velocity anomalies. Compared to previous processing in the area this enhanced work flow resulted in higher quality images and more accurate placement of events. South Timbalier. A solution to the problems posed by the low velocity South Timbelier trench was critical to the success of the project. The goals of this project were to improve the imaging of steep dips. with the trench area highlighted by the white box. Grand Isle. salt boundaries and subsalt events. present a project to improve imaging in a low velocity trench area in the Gulf of Mexico. To overcome these challenges. This article presents a case study of an anisotropic prestack depth migration (APSDM) project that used high resolution. Background The survey is located in an area of the Gulf of Mexico with many complex surface structures and geologic challenges. The creation of such images can be especially challenging in geologically complex areas. the refraction solution causes sags in the resultant seismic image due to the longer travel times through the slow velocity layer.

In particular. An isotropic Kirchhoff migration was run using the Vz model. Project area. These epsilon and delta values were then smoothed. the time static applied is not kinematically correct for depth migration. these fields were used to remigrate the data. A semblance cube was generated for each of the key well locations. this could lead to velocity distortions when solving for the depth velocity field. The semblance cubes were automatically scanned to estimate the optimal epsilon and delta trends. The maximum semblance on each of the depth slices occurs at the epsilon and delta values that best flatten the gather at that depth. epsilon and delta (two of Thomsen’s weak anisotropic parameters)1.sag. Figure 1. Another iteration of parameter estimation was run to refine the epsilon and delta fields. these early iterations were limited in depth to 4 km. The use of a calibrated velocity field should ensure better well ties with the seismic data. Figure 3. epsilon and delta fields were then used as a starting point for tomographic velocity updating. While these static shifts generally produce much improved time images deeper in the section. Through the use of abundant check shot velocity information and anisotropic parameter estimation. The resultant image gathers were used in a two-parameter semblance scan. The semblance cube that was generated had three axes: depth. Figure 2. for these iterations a depth step of 5 m was used. a finer offset and depth sampling were deemed necessary. the tomography inversion cell size was decreased compared to that of a typical work flow. Therefore. These edited check shot velocities were gridded. it was decided that a high resolution tomographic inversion would be attempted to more correctly model the velocities in the South Timbalier trench area. this part of the static solution. 34 OILFIELD TECHNOLOGY April 2011 . Consequently. after which the initial anisotropic sediment model was complete. event focusing and well ties were checked. Map view of residual curvatures over low velocity trench. Water bottom showing trench area within the white box. was retained. These distortions could affect the entire velocity model. well-calibrated velocities were used for migration. To verify the integrity of the epsilon and delta fields. High resolution trench tomography The resultant Vz. If correctly modelled. interpolated and gridded to populate the 3D model. In order to correctly derive residual curvature estimates for the shallow data. A full volume high resolution anisotropic prestack depth migration was run over the trench area. Initial anisotropic model building A total of 539 check shots were analysed for use as a starting point for building the initial velocity model. Gather flatness. this time using anisotropic Kirchhoff prestack depth migration. interpolated and smoothed to generate the initial vertical velocity model (Vz). which derives from surface consistent residual statics. Additionally. The other key enhancement to the previous processing flow was the use of APSDM. when planning the velocity modelling approach for this project. a more stable velocity field and a more accurate depth image should be expected. Typical model building runs output 10 m depth steps with 300 m between output offsets (input offset increment of 150 m). Furthermore. The check shot velocity functions were analysed and spurious trends edited. Since tomography cannot resolve the high frequency component of the shallow velocity variation. and the output offset increment was 150 m.

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In evaluating the residual curvature picks it was noted that there was a strong correlation between areas of positive residual curvature and the previously derived refraction statics solution. Velocity model updating Figure 4. Figure 5. The red arrow in Figure 7 shows the same area after tomographic velocity updates. Accounting for the shallow trench area allowed for better imaging and placement of events around this region. the epsilon and delta fields were then adjusted in order to preserve both flatness of the resultant gathers and the ties to the check shots. Figures 3 and 4 show the auto-picked residual curvature estimates that were put into the tomography velocity inversion. The curvature values along with derived dip fields were input into the first tomographic inversion. This image is shown in Figure 8. was filled in with slow velocity mud. Velocity update output from tomography. and residual curvature analysis was performed on the resulting image gathers. The original migration using refraction statics appears to have false structures induced by distortions in the velocity model. Over time. including trench. This is contrasted with the image obtained by migrating with the data that had refraction statics applied before migration and velocity updates. Faults are better imaged and reflectors appear more geologically realistic. 3D anisotropic prestack Kirchhoff depth migration was run. the deep trench. For each of the tomography iterations. A shallow slow velocity region is exactly what one would expect in the unconsolidated Timbalier trench area. The sub-trench events do not have this velocity sag. 36 OILFIELD TECHNOLOGY April 2011 . The red arrow seen in Figure 6 highlights an event sag that is induced by the slow velocity anomaly. The red residual curvature values in Figure 3 relate to positive move-out (increase in reflection depth with offset). Prestack depth migration with initial model. The white circle indicates the trench area. The green region of this display is an area of negative velocity updates (velocity slowdown). Figure 6 shows the seismic data migrated with the initial velocity model. Below the trench area much better event continuity is evident. sub-trench structures. A positive residual curvature requires a slowdown in velocity in order to flatten gathers. Prestack depth migration after shallow. tomography. Inline view of residual curvatures through low velocity The anisotropic sediment model was further updated with two passes of grid based tomography. high resolution Figure 6. Any rays travelling through salt were not used in the tomography matrix solution. Automatic dip estimation was performed on the stack volume for use in the tomography ray tracing steps. and well ties was rechecked and recalibrated. A new dip field was created for each of the iterations that were run. Figure 5 shows the velocity perturbation that was output from the tomographic update. This correlates well with the regions of negative velocity updates that are shown in Figure 5. Figure 7 shows the result of migrating with the updated velocity model. These iterations went to a total depth of 12 km and were output with a 10 m depth step and a 300 m offset increment. as shown in Figure 2. Figure 7. After recalibration of the velocity field. implying that a velocity decrease is needed in this area. Because the imaging was more accurate.The APSDM gathers were scanned for residual curvature. Vz was updated from the inversion results.

The second base salt was then interpreted. S. Connie Gough.. Previous isotropic WEM with refractions statics. ‘Understanding Seismic Anisotropy in Exploration and Exploitation. In order to correctly define salt overhangs. This methodology resulted in a high quality image with more accurate event placement and geologic structures. Quincy Zhang and Steve Hightower who worked on this project. OK.. Q.. D.’ 1218 . the salt geometry was defined using four passes of APSDM. Turning rays were also used in the migration to better image steep dip salt flanks. P. and the final salt model was constructed using these four surfaces. Michael Ball. which flooded below the second top salt.1999.. salt boundaries interpreted from the seismic images were checked against top salt events picked from well data. All of these improvements led to a more accurate migration in the shallow region. Initially. 2010. USA. which were subsequently added back to the previous sediment model. Expanded Abstracts. and HIGHTOWER. ZHANG. S. YANG.. SEG. The data was then migrated with the interpreted salt geometry. ‘Anisotropic Depth Migration and High Resolution Tomography in Gulf of Mexico: A Case History. and second (deeper or overhung) salt tops were interpreted. Addressing the slow velocity zone using tomography rather than using a refraction statics solution resulted in better focused shallow faults and more realistic structures in the Timbalier trench area and beyond.. D.. both under salt and away from salt. modelling of salt bodies with overhangs. including Simon Baldock. Bibliography RODRIGUEZ G... Subsalt velocity model updates A final tomography pass was performed for the subsalt areas. Salt boundaries and steep or overturned events were imaged much better than in previous processing. Salt model building The salt geometry was quite complex. and CHARLES. Vz. FARMER.. 2009. RODRIGUEZ G.’ 2002 Distinguished Instructor Short Course. YANG. while simultaneously preserving the image gather flatness. Next. anisotropic prestack Kirchhoff depth migration. top of salt was picked on the image produced by migration with the final supra-salt sediment velocity field. Number 5.’ 79th Annual International Meeting. were more correctly shaped and positioned. D. Expanded Abstracts. were updated. Thanks also to TGS for allowing this work to be published.. This in turn allowed for a more accurate dip field. Deep structures and subsalt events were more geologically sensible and had increased continuity. . The final imaging step was run with the anisotropic prestack Kirchhoff depth migration using an increased aperture. ZHANG Q. S..’ 72nd EAGE Conference and Exhibition. References 1. O T Acknowledgments The authors would like to acknowledge Diane Yang. Tulsa. epsilon and delta were then adjusted accordingly in order for salt tops to image at the proper depths. SEG. In this iteration. WOODWARD. resulted in better tomographic velocity updates and improved imaging below the trench and throughout the project. Salt was inserted back into the final sediment model to produce the final salt velocity model. APSDM was run. M. YANG. including two shallow. The authors would like to thank those who helped review this paper. The first base of salt was interpreted on seismic images produced after APDSM using the recalibrated salt flooded velocity model. Conclusion The enhanced workflow for this project included using a well-tied anisotropic sediment model.salt. . S. ‘Improved Imaging through Anisotropic Depth Migration and High Resolution Shallow Tomography In Lieu of Refraction Statics in South Timbalier Trench Area of Gulf of Mexico: A Case History. A migration was then run with the first top and base of salt inserted into the model. sedimentary regions of the model. Bin Wang and Zhiming Li.. in turn.1221. At this stage. which. NICHOLS. and HIGHTOWER. S. YANG. THOMSEN L. and iterations of both supra-salt and subsalt tomography. ‘Automated 3D tomographic velocity analysis of residual moveout in prestack depth migrated common image point gathers: 69th SEG Expanded Abstracts. Figure 8. high resolution iterations. Tomography inverted for the velocity updates..

well intervention and drilling sidetracks are methods to increase the oil production from existing wells. Operators can significantly improve offshore hydrocarbon recovery from both greenfield and brownfield reservoirs by installing subsea processing systems. Subsea gas/liquid separation and liquid boosting can increase the production rate in low energy reservoirs. Subsea separation and local re-injection of produced water and/or gas to the reservoir or to a dedicated disposal zone will allow flowlines and topside processing equipment to be used more efficiently. Subsea separation and boosting allows marginal reservoirs to be developed economically. This is important as 38 . and in some cases. can eliminate the need for surface host facilities. Treating the production flow at the seabed provides many opportunities to achieve more effective exploitation of oil reservoirs around the world.[COVER STORY] The road to recovery F or offshore oil and gas fields. Subsea processing presents significant potential for cost savings by moving some of the traditional topsides fluid processing to the seabed.

The focus is now on addressing the challenge of how to cost-effectively produce oil and gas from offshore fields located in deeper waters and more remote areas.Brian Skeels. FMC Technologies. This is primarily because of the limitations in the pumping technology itself. harsher environments. the use of surface structures is becoming prohibitive due to complexity and cost. However. Subsea multiphase pumping is an effective means to improve the economics by reducing back pressure on the reservoir. As offshore production moves to deeper. This has led to subsea processing. which has created a new emerging market for processing equipment. and Lars Farestvedt. MPM. consider solutions for maximising reservoir recovery in this issue’s cover story. which increases well flow rates and total recoverable reserves. it has been limited to applications in shallower water with shorter tieback distances. the industry must turn to reservoirs that are not easily accessible in order to maintain energy supply. US. The traditional way of improving asset value using subsea processing has been through installing a multiphase pump close to the well. 39 .

electric. Once the TTRD rig is mobilised. It uses a compact. In subsea wells. To improve 40 OILFIELD TECHNOLOGY April 2011 . damage to horizontal subsea trees has been a persistent problem. MPM 3D Broadband technology detects accurately and rapidly to determine how the liquid and gas is distributed throughout the pipe. Such service has been in operation in the Norwegian sector for the past six years and is currently experiencing exponential growth with the addition of several more intervention systems spurred by continued long term commitments. compared to traditional methods that require the installation of two individual systems. Mark II has experienced success in water umbilical management. The approach was to remove on-deck based surface power generation equipment while replacing the maze of hydraulic hoses and fittings associated with the cumbersome IWOCS umbilical with the ROV-style cable. These accomplishments are all due to the recommendations and lessons learned from first generation RLWI systems. non-abrasive hard banding. surface BOP. Principles from the first generation were largely maintained for well barriers and overall system philosophy. The TTRD system features fit-for-purpose protection sleeves for the seal areas in the completion. The TTRD configuration consists of a tree adaptor. A sidetrack well can be drilled from deep within the current well through the installation of a whipstock at the selected depth and the milling of a window in the liner. the control system architecture was updated.Figure 1. FMC Technologies’ Through Tubing Rotary Drilling (TTRD) system makes it possible to enter a well and drill a sidetrack from the parent well without having to pull the tubing. subsea monitored chemical injection and fluid exchange/flushing capabilities have reduced fluid wastage and contingency tankage requirements. Merlin riser. efficiency from remote in-situ fluid delivery and hydrate control. lower riser package. the demand for efficient subsea light well intervention service continues to grow. The TTRD system configuration allows drilling. comprehensive planning and training and the right technology. marine riser slip joint and surface flow tree. as well as electric powered control system architecture by using the ROV-style cable. safer deck handling. The subsea IWOCS controls powered by the cable feature the same distributed control architecture found on newer work class ROVs. innovative technology to help operators produce more hydrocarbons out of existing reservoirs remains one of the industry’s top priorities. and upgrading the control systems. Reconfiguration between wells and/or tasks is much easier and more efficient than it used to be. emergency disconnect package. The new stack configuration opens the door for improvements in other operational sequences and may also adapt to new drilling techniques in the future. both TTRD and well interventions can be performed. neither the tubing nor the Christmas tree needs to be removed. optimising the size of pressure control and closure devices. Through tubing rotary drilling As the number of fields drilled with subsea developments increases and the need to increase production remains ever present. mitigating the possibilities of time lost due to handling of the large diameter IWOCS electro-hydraulic umbilical. Since sidetracks are drilled below the production packer with the drill pipe conducted through the tubing. which enhances the value of the operators’ assets in subsea fields. Autonomous grease injection capability. well testing and completion to be performed through one system. Improved well control ‘barrier’ equipment now accommodates a third longer length wireline tools. bottom-hole assembly Figure 2. Both the whipstock installation and the window milling can be achieved in one run. Through Tubing Rotary Drilling (TTRD) system makes it possible to enter a well and drill a sidetrack from the parent well without having to pull the tubing. taking advantage of IP routing and control. With strong HSE focus. the RLWI operations have proven to be a cost-efficient increased oil recovery tool. FMC Technologies’ second generation Riserless Light Well Intervention (Mark II) makes interventions feasible in deeper water by reducing weight. Riserless light well intervention With the rising number of ageing subsea wells in the North Sea. operational efficiencies. ROV-style optic-electrical umbilical cable that can be disconnected quickly and safely without ROV assistance and stands up to rigorous heave compensation winches. Field operators have concluded that the intervention cost for individual production wells is paid back in less than 20 days of increased production.

.. .L ? ly e on Turn to page 47.

Riserless Light Well Intervention makes interventions feasible in deeper water. longer revenue stream. while at the same time determines precise flow rates of oil. eliminating the Christmas tree and a crown plug with elastomer. Typical costs for a new subsea well can range from The MPM meter allows the operators to improve reservoir US$ 40 – 50 million. Measuring miniscule for one FMC customer using TTRD are estimated to cost amounts of water in gas wells extremely accurately (down to US$ 10 million. Not having to bring a sampling Multiphase meters bomb to the surface from a 10 000 ft deep high pressure The MPM multiphase meters employ tomographic technology subsea well not only significantly reduces cost. The MPM meter has also been designed for 11 500 ft water depth. The new drainage points created monitoring and increase recovery.002%). gas and water. MPM meter. Additional benefits of TTRD include With its significantly lower sensitivity to fluid property changes reduced fatigue exposure to the wellhead and more efficient and the in-situ self calibration functionalities found in the operations with less handling of heavy equipment. The MPM meter works equally well for multiphase and wetgas applications. the MPM meter will automatically switch up to five times per second between the multiphase and wetgas modes. This new feature is achieved through implementing salinity measurement functionality in combination with the in-situ fluid property verification. O T 42 OILFIELD TECHNOLOGY April 2011 . need for costly subsea sampling to calibrate the meter. the operator can optimise and significantly reduce the economical and existing wells will have a longer life and a amounts of chemicals injected to mitigate hydrate formation. gas and water on the seabed. Smaller reserve pockets are suddenly more 0. bridging a gap previously not covered by multiphase meters. close to 100% in late life. one meter can be used for the full field life even if the wells change from predominantly oil to predominantly gas. but also to significantly improve measurement accuracy and removes a potential safety hazard. for gas void fractions of 0 – 100% and water cut of 0 – 100%. and the compensates for changes in the water salinity.measurement range for multiphase meters for topside and subsea applications. The self calibrating feature implemented in the MPM meter is a step change from conventional multiphase meters. The meter’s unique self calibration functionality furthermore automatically measures and designs that are not aggressive to the completion. For slugging flow regimes. MPM Subsea Multi Phase Meters utilise patented (seven patents) technology achieving significantly improved real-life measurement of oil. the operator can reduce and often eliminate the need for subsea sampling. and as the water cut increases from close to zero to Figure 3. Through using the DualMode® automatic switching between multiphase and wetgas measurements. The 3D Broadband® technology is employed to accurately and rapidly determining how the liquid and gas is distributed throughout the pipe. The MPM subsea multiphase meter has been qualified through the stringent DNV RP-203 qualification process to an impressive 15 000 psi working pressure and 480 ˚F working temperature.

HP/HT. we have the technology – rigorously proven in the world’s toughest situations – to raise your recovery factor and production to unprecedented heights.The low-hanging fruit is long gone. Every day it’s more of a challenge to increase oil and gas recovery and production from aging. long distance. industry-leading stability and position control accuracy. We put you first. tight sands. Whatever the need. Now. shale and thermal oil sands. Not some day. . deepwater complex pre-salt or lower tertiary formations. under-producing fields and complex new ones: arctic and ultradeep subsea fields. And keep you ahead. Schilling Robotics’ HDTM ROV sets new remote intervention standards with 1-hour maintenance.

for example. subsea oil and gas production strategies have been guided by short-term decision making – predominantly by fluctuating oil and gas prices. UK. however. It is. despite this. The same is the case on the UK Continental Shelf (UKCS) where the latest 26th licensing round led to the largest number of bids since the first round in 1964. the last few years have seen renewed interest. Camcon Oil.explains n. Ian Anderso oping lift can assist in devel how artificial gas tion. And this is not helped by their ‘economic limit’ being a ifting L ations expect moving target – fluctuating due to the influences of worldwide supply and demand. of course.namely when the production rate no longer covers the expenses incurred extracting the hydrocarbons. There is no sense. are often quick to leave existing fields when they have reached recovery rates of around 30% (the recovery factor being the ratio of producible oil reserves to total oil in place for a given field). with the NPD estimating that more than 50% of oil remains in Norway’s fields. in operating a field for many years that has reached its economic limit . The North Sea is an example of operators not doing enough to maximise their assets. Operators. vital to ensure that production in fields adheres to strict economic criteria. Yet. albeit often from smaller players. How often has it been said over the past few years that North Sea oil is running on empty? And that we are dealing with the very dregs of the reservoir. sacrificing these fields in the relentless search for ‘new oil’. there were 16 new discoveries on the Norwegian Continental Shelf (NCS) in 2010. 44 . According to the Norwegian Petroleum Directorate (NPD). tegy for subsea extrac a long term stra T here is little doubt that too often over the past two decades.

Oil and Gas UK, the trade association for the UK offshore oil and gas sector, believes that up to 25 billion bbls remain to be won from the UKCS. It is these kinds of figures that leads one to the conclusion that many of the larger operators were premature when deciding to take leave of the North Sea in search of richer potential assets elsewhere – mainly due to a short term production strategy. It is also possible that incidents, such as the Macondo spill, may turn out to be an example of fast-tracking the search programme and pushing out the boundaries of oil and gas exploration too quickly.

The focus on EOR
The last few years have seen more operators looking to next generation enhanced recovery techniques as a means of trying to meet and then alter the economic

limit of their fields. With new frontier regions increasingly remote, geologically complex and expensive, there is also an element of ‘needs must’. In the North Sea, Norwegian operator, Statoil is a good example of how recovery rates can be significantly improved. The company has a target recovery factor of 65% for platform operated fields and 55% for subsea-operated fields and is starting to make good on these goals. Similarly in the Middle East, ambitious targets are being set. Saudi Aramco’s President and CEO, Khalid A. Al Falih, has released a target recovery rate of 70% from its major existing fields and in Oman, oil production has actually increased by 17% over the last two years with much of this due to EOR techniques.1 Yet there is clearly more to do and few are satisfied with the current, albeit improving, levels of recovery.

45

Linked to this is the lack of information from which many operators suffer, with regard to their subsea wells and key variables, such as temperature, gas flow or the amount of water or sand in the production flow. This information gap often translates into a production gap. The twin themes of well instability and the importance of generating vital, real-time information will be constant themes throughout the rest of this article.

Improving oil recovery strategies
There are a wide variety of technologies on the market today trying to address oil recovery challenges – technologies normally coming into effect once primary and secondary recovery methods have been exhausted. These include chemical injection, where chemicals such as alkaline or caustic solutions, are utilised; thermal injection where techniques are used to heat crude oil to reduce its viscosity; and newer technologies such as microbial injection. Probably the most common form, however, is gas injection, where gases, such as CO2, natural gas or nitrogen, are injected into the reservoir in order to either push gases through the reservoir or decrease viscosity within the oil. Probably the most common form of gas injection is artificial gas lift.

Figure 1. Key internal elements of Camcon’s digital artificial lift

solution.

The importance of artificial gas lift
Artificial gas lift consists of injecting gas into the production tubing to reduce the impact of the hydrostatic pressure where the reservoir pressures are not sufficient to force the hydrocarbons to the surface. By reducing the density of the columns, reservoir liquids can enter the wellbore at higher flow rates. Artificial gas lift normally sits beside other forms of artificial lift, such as beam pumping, electric submersible pumps, and hydraulic pumps. Whereas in the past, it might have been considered a secondary or tertiary technique, today, artificial gas lift can be, and often is, employed at any time during the productive life of the fields – sometimes even from the outset. 10% of wells in the US, for example, use some form of artificial gas lift2 and in Bahrain, 60% of oil wells use some form of artificial lift to generate 50% of the Kingdom’s total oil production.3 Spears & Associates estimated that the total global artificial lift market was worth US$ 6.9 billion in 2008. While there are clear benefits to what has become an established technology, there are also limitations to artificial gas lift, many of which come back to the lack of information. Operators usually have very little information on pressure and temperatures at the point of gas injection, as well as no control or flexibility to alter injection rates as production variables change. The primary method of gas injection is still to be found in the ‘side pocket mandrel’ configured completions, where wireline interventions are used to change the operating valve when injection rate changes are necessary. Such interventions can be a long and cumbersome process, leading to damage to existing infrastructure (if the wire snaps, for example) and the halting of production as a new side mandrel unit is installed. These side mandrel tools also have no instrumentation onboard. This lack of information and flexibility means that rather than providing more control of the stability of wells, artificial gas lift can actually cause greater instability. This is due to the potential for artificial gas to increase the probability of dramatic flow fluctuations, unpredictable surges in liquid and gas production rates, and increased concerns over the integrity of the casing and tubing, leading to burst or collapsed

Figure 2. The Camcon digital artificial lift solution – APOLLO.

Even in Norway, which boasts some of the highest recovery rates in the world, there is a concern over the inability to maximise oil and gas reserves. Bente Nyland, Director General of the Norwegian Petroleum Directorate, said in a recent press release: “We are still not satisfied. If we manage to recover just 1% more, this would mean revenues in the hundreds of billions for Norway.” And these potential windfalls of enhanced recovery are clear worldwide. According to Oil & Gas Journal, an increase of 1% in recovery rates would replace three years of global oil consumption.

Closing the subsea information gap and countering well instability
So how can effective oil recovery strategies be employed, while still increasing these rates? In answering this question, it is also important to tackle another issue – the widening recovery gaps between topside and subsea wells, with the latter generating average recovery rates of up to 15% less than their topside counterparts. The high costs and risk profiles of subsea intervention are major contributors to this gap as are two ongoing threats - well instability and the lack of information on subsea wells. Well instability can be due to a number of reasons, including water breakthrough; slugging – the accumulation of water, oil or condensates in the pipeline; or increased pressures in the well. While well instability rarely results in catastrophic scenarios, it can still be a major impediment to reservoir performance and recovery rates.

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is easy

Energy Global

Bringing you the power of information

Figure 3. Digital lift can be deployed in a wide variety of challenging geologies.

Figure 4. A comparison of the optimum performance of the dial solution compared to a side pocket mandrel system. casing strings and, in the worst case scenario, oil or gas migrating vertically towards the surface along the outside of the casing. While these issues could be dealt with if the artificial gas lift process was closely monitored at the point of gas injection onwards, the fact that the operator is ‘flying blind’ increases the risk. Whereas in the past, incremental changes might have been suggested to meet these limitations, it seems clear that there is a genuine industry need for greater operator control over artificial gas lift operations. Operators need to have access to variable operating valve combinations, where decisions and modifications can be made in real time without intervention and without threats to well stability. So if there are clear limitations here, why are companies not surfacing with new technologies? One slightly conspiratorial answer is that this is exactly how the large integrated oil service companies like it – reduced risks and expenditure and a focus on developing their current business lines rather than embracing innovation. The results are products that simply squeeze better performance from an existing concept for short term gain and increased market share without tackling the fundamental long term challenges. It is reasonable to conclude, however, that the opportunity to use ‘old’ technology solutions in different, new ways has now been exhausted.

of developing a digital artificial lift solution that addresses many of the issues described above. Figure 1 provides an overview of the system, while Figure 2 outlines the product. The solution is based around binary actuation technology (BAT), a technology that has been developed over the last few years and which also has applications for the automotive, manufacturing and life sciences industries. Central to the technology is a low energy pulse control that signals to switch an actuator between two stable positions to digitally operate a valve. Particular benefits include high switching speed and low power consumption. This technology has now been customised for artificial gas lift and, as Figure 3 illustrates, can be deployed in a wide variety of challenging geologies and a wide variety of completion string geometries – far more than for a conventional gas lift. The actuator is coupled to a gas flow control valve to enable that valve to be opened or closed remotely. This eliminates the need for side mandrel units and wireline intervention and is particularly important in bringing digital technology to artificial gas lift. Trials of the new solutions are currently taking place with a major oil operator who is providing support and access to its rig and multiphase test facilities. The series of digitally operated valves enable the real time setting of injection rates and the extremely low power consumption ensures that all control signals are at low voltage. The technology can also be fitted straight into the tubing so it can be deployed far more flexibly – in fish-hook wells or where there are highly deviated sections. In this way, it can go where side mandrels cannot, as well as being superior in operation. What the solution therefore achieves is to allow operators to vary injection rates in real time without wireline or slickline intervention, meaning no lost uptime, continuous production and reduced risk for operators. Figure 4 shows this comparison with the traditional side pocket mandrel. As opposed to conventional gas lift, where operators have no knowledge of operating conditions at the point of injection, the live information allows operators to optimise extraction conditions, minimise gas usage across the reservoir, enhance oil recovery, and protect the wells from instability. Taking into account the reduced cost of well interventions, the loss of production, wireline and slickline intervention incidents, and optimal usage of gas and associated compressor equipment, it should be possible to deliver an ROI of at least 20, and potentially increase recovery from individual wells by up to 30%. The ability to alter conditions remotely and without intervention should have the capability to address the performance gap between topside and subsea wells. A digital artificial lift installation in a subsea well can have the downhole conditions remotely monitored, and injection conditions altered without the need to touch the wellhead. The result is a huge increase in operating flexibility. This article has described just one element of a sustainable enhanced oil recovery strategy for the future. It is by embracing these new technologies that information gaps can be closed and recovery rates increased. Operators can also have more control of their subsea wells, and fields can become more economically viable. It is advances such as these that may lead to the future operators focusing on the long term development of resources. O T

Digitising artificial gas lift
It is against this global context and against some of the industry limitations already described, that Camcon Oil is in the process

References
1. 2. 3. ‘EOR Enhanced Oil Recovery Worldwide’, SBI Reports, April 2010. www.rigzone.com. Inauguration of 2009 Middle East Artificial Lift Forum.

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In doing so. the commercial introduction of Weatherford’s SeaLance™ DwC system is generating interest across global deepwater basins. Because the system has the ability to drill through trouble zones. loo f a subsea dril ks at ling-with-casi ng system. etermining operational and economic success in deepwater wells is dependent upon shallow hazard mitigation. it offers significant value in costly deepwater applications. The SeaLance system extends the wellbore construction advantages of the DwC system to the physical and economic extremes of subsea operations. Operators drilling in subsea environments can now effectively manage typical top-hole issues such as caverns. USA. fluid losses. collapsed holes. Weatherford International the benefits o Ltd. 49 .The case i n question Scott Beattie. the system extends the wellbore construction advantages of the DwC system to the physical and economic extremes of subsea operations. cemented and released in a single run. The system enables a 20 in. The industry’s first subsea drilling with casing (DwC™) system provides a unique solution to shallow hazards in deepwater drilling by expanding an already proven technology. casing string and its high pressure wellhead housing to be drilled to depth. ledges and rubble zones. With testing complete and subsea operations at hand. D Figure 2.

With surface DwC systems. The project began as an endeavor to explore the idea of applying DwC in subsea application. drilling hazards and associated potential risks must be understood. Early development prospects for the system were supported by more than 1000 jobs and 10 years of DwC deployments in land. Continued collaboration and a significant investment in research and development greatly matured the design and brought it to the point of creating a prototype. At times. Having the casing constantly on bottom while drilling creates an environment where there is a mechanical smearing of cuttings against the wellbore by the large surface of the casing. The RSJ enables the wellhead housing to be soft landed without rotation. improved efficiency and lowered costs. The world’s first subsea DwC system mitigates shallow hazards in deepwater environments. It combines proven DwC drill bit technology with an innovative running tool that enables deployment of the system below the rotary table for the first time and a retractable shoe joint (RSJ) adapted from the company’s cementing products. the string is pulled back and a joint or two of pipe is laid down. the tool locks into a dedicated setting sleeve below the wellhead. This bit enables cement operations to begin almost immediately after bottomhole casing-setting depth is reached. The subsequent subsea solution the company produced is a promising multifaceted enabler for drilling deepwater prospects. the same process does not work. Once on bottom. This resulted in the first DwC system that can be deployed below the rotary table. where the SeaLance system is aimed at mitigating multiple hazards in the upper portion of the well. however. To be successful. Building a drive mechanism for the subsea system involved creation of a running tool. In subsea operations. DwC technology has been implemented to mitigate these problems that are expected with conventional methods. newer technologies must be deployed to minimise non-productive time (NPT) and make these reserves economically viable. This process enables the entire string to be rotated to make the hole. the approach must be altered. mentioned hazards. a new way of doing things.In this environment. System components The system’s design draws on a diverse scope of resources. Much like a liner hanger system. This process is important because the hole must be drilled before the wellhead housing can be set. thus reducing the previously The process began with internal brainstorm sessions and consultations with ENI to pull the concept together. It has been proven. if new drilling practices are used. An estimated 10 – 40% of expenditures are still spent drilling trouble zones. Then a joint with the wellhead is picked up. In areas where hole instability. loss zones or sloughing shales are a concern. It is a new mindset. and sometimes avoided. The drillable casing bit is a proven technology frequently applied in land and shelf-type wells where a surface blowout Figure 1. with most ‘easy’ prospects having already been drilled. that trouble zones can be drilled. Mitigating drilling hazards As the industry takes on increasingly challenging reserves. the hole is drilled to total depth (TD) with the casing and wellhead separate. Such a technology would mean major improvements in the cost and capabilities for subsea drilling. made up to the string. The string would have to be pulled back to surface 1000 m 50 OILFIELD TECHNOLOGY April 2011 . preventer (BOP) is used. But subsea operations offered significantly different demands on the technology. platform and other surface applications where performance has shown a 20 – 50% reduction in drilling time. run and cemented. helps maintain casing tension and creates a torque path from the drillpipe through the casing to the bit. the rewards include significantly reduced risk. Concept development The company entered a technology agreement with ENI in 2007 to collaborate on the development of a new deepwater technology with the unique capacity to mitigate shallow hazards.

the system provides some strong new capabilities for achieving significant savings. the system is already attracting attention with some unique incentives and opportunities in the form of well integrity enhancements and cost savings. zwick-valves. By drilling. The result is a new way of looking at deepwater operations and economics. Plans are now being made for trials in deep water. NPT is reduced and the general integrity of the well is improved. and pulling casing out of the wellbore defeats a major reason for drilling with casing in the first place. ledges and rubble zones. If fill or some other restriction is encountered a few feet from bottom.D-58256 Ennepetal . The scope is broad because every deepwater basin has potential applications.or more. The new SeaLance system is designed for mitigation of shallow drilling hazards that significantly reduce the risk and NPT to help control costs and enhance well integrity. personnel safety is enhanced.Egerstr. Brazil and Australia.a very limiting approach.zwick@zwick-gmbh. fluid losses. Combined with the advantages of shallow hazard mitigation. Shallow hazard mitigation capabilities cover several problems that have long vexed subsea drillers. 1 . cementing and landing the high pressure wellhead housing in a single trip. and offshore Africa. The system also promotes safer operations.de . the system’s trials were successfully completed in a test well at the Weatherford Technology & Training Centre in Houston. The outcome of these combined components extends beyond putting together a few widgets . Prospects range from the Gulf of Mexico to the South China Sea. In deepwater drilling.Email: m.com Zwick Armaturen GmbH . Applying the RSJ provided a starting point for approaching this obstacle. Since its design allows the surface casing and high pressure wellhead housing to rotate during subsea deployment. enhancing the foundation of the well. the tendency is to apply the same methodology used in a conventional well . Moving the DwC system into the subsea environment provides advantages in exploration and development applications. the RSJ can collapse a land without having to ream or disturb the sediment. These top-hole issues include caverns. the subsea DwC system required a means of drilling to TD and then somehow collapsing the string below the housing. O T Triple eccentric Butterfly Valves Check Valves Double Block and Bleed ESD Valves www. By eliminating dangerous operational steps such as tripping pipe. To gain room at the bottom of the hole for landing the high pressure wellhead housing. this approach is ideal for reducing the overall costs of subsea development programmes.it introduces a new way of drilling subsea wells that reduces risk and improves efficiency. USA. The system ensures the ability to land a long 20 in. While batch drilling may not be an instinctive technique in deepwater development. gas and water flows. Subsea advantages While changing the drilling methodology for subsea wells presents challenges. string and have a better cement job as a result of being able to rotate it.Germany Tel.: +49-(0)-2333/9856-5 . the system provides an inherently safer cement barrier. Texas. collapsed holes. Global deepwater solutions In 2010.

aeminfo.com.bh .Under the patronage of His Royal Highness Prince Khalifa bin Salman Al Khalifa Prime Minister of the Kingdom of Bahrain 10th Middle East Geosciences Conference and Exhibition Bahrain International Exhibition Centre 4 – 7 March 2012 The Middle East's Premier Geoscience Event www.

FIGHTING Kenneth Bhalla. or flow induced vibration (FIV). completion risers. the equipment used in these facilities is exposed to harsher environments. Given these concerns.2 API RP 1111. Stress Engineering Services (SES) recently developed a data acquisition instrument . When performing drilling from mobile operating drilling units. and subsea equipment. mitigation usually involves pulling more tension on the drilling riser or even utilising fairings. Stress Engineering Services. it is of the utmost importance that the integrity of each system used to drill and produce any field be maintained. Moreover. s offshore drilling and production facilities are pushed to operate in deeper waters. jumpers. 53 . USA.1 which limits the significant dynamic stress range. explains the importance of riser and subsea fatigue damage monitoring. a wave fatigue assessment is performed by using requirements in API RP 16Q. and hence fatigue monitoring of drilling risers. specifically to monitor dynamic structural response and fatigue in deepwater applications. flowlines.the subsea vibration data logger (SVDL). VIV analysis or assessment may be performed to determine the damage rates on the drilling riser system from high currents. A Providing assurance Vibration. Vibration can be in the form of wave-induced motions.4 Similarly. other API codes are utilised for the completion risers. accurate assessment of the present operating state and future life of equipment in these environments is essential for site safety and operation. manifolds and wellheads are critical and can provide assurance that ongoing and future operations can be performed safely. production risers. Fatigue design and assessment for production risers are based on requirements in API RP 2RD.3 and API RP 2A. vessel induced motions. vortex induced vibration (VIV). wellhead. as reservoirs with high pressure and temperatures are being developed. no actual wave fatigue analysis is performed. such as semi-submersibles and drill ships. In this case.

The SVDL is a new tool in the SES suites of solutions. fatigue design includes conservatism. In addition. especially during inclement/extreme conditions. Modal deflection of a jumper system. Subsea jumper. Figure 1. Additionally. current). leading to increased operational costs and lost revenue. High quality data SES has developed a number of accelerometer and strain gauge based tools to measure and assess fatigue damage. and large memory storage are well matched to maximise the deployed logging duration. After deployment. if a location experiences an active storm. low power consumption. In addition to signal filtering. wave. hurricane or loop current season. it is prudent to perform an analysis that predicts the expected mode shapes and fundamental frequencies of the system prior to deployment of the instrumentation. statistical analysis is performed to determine annual and extreme events. The long battery life. then any previous fatigue assessment or design must be re-evaluated. The data logger and clamping devices feature a low mass and high mechanical impedance structure. proper data interpretation is a key component in understanding the quality of the collected data. then it would be prudent to reassess the metocean data. Signals are passed through an aggressive low-pass analogue filter prior to being digitised by a high resolution analog-to-digital converter. However. Figure 4. Thorough data processing techniques and data quality checks have been developed by SES. Subsea manifold. Excessive conservatism can result in reduced operational windows and shorter service life. It is not sufficient just to take data using instrumentation. The instrumentation must be fit for purpose and packaged so that it will measure the expected/appropriate response without excess noise or offsets. oversampling techniques are employed to maintain the highest digitised signal quality. Vibration measurement ensures safe operation by allowing monitoring of fatigue critical components. 54 OILFIELD TECHNOLOGY April 2011 . Safe operation Additional inspection costs can be mitigated by vibration monitoring and fatigue damage estimation from vibration measurements. it was developed to service the emerging need to collect high quality vibration data for extended periods under increasingly stringent subsea environments.A fatigue assessment is based on metocean data (wind. If the metocean data is modified. Housed inside the unit is a high quality tri-axial accelerometer. Instrumented riser joint. Figure 3. This ensures that the vibration signals collected by the logger are not distorted Figure 2. The accelerometer is constructed using a state-of-the-art MEMS process to achieve unprecedented sensitivity and resolution. and allows rig crews to make prudent decisions based on actual fatigue damage estimates of a component.

1st edition. Figure 6. this system will be operational in autumn this year. API RP 2RD. Operation and maintenance of Offshore Hydrocarbon Pipelines’. 1st edition. Exterior dimensions: 3. ‘Recommended Practice for Planning. the SVDL may be mounted by an ROV to any structure of interest. ‘Design. 3. Sensor is hard mounted to housing end cap to maximise coupling stiffness to measured structure. References 1. 4.1 in dia. long (24 in. July 1993. Avoid completion NPT and future interventions. 3rd edition. O T The DEEPCLEAN* pill combines solvents and surfactants to create the world’s first double emulsion cleanup pill. www. Introducing the world’s fastest water-wet wellbore cleanup. while protecting near wellbore reservoir permeability. Construction. ‘Recommended Practice for Design. The data logger specifications include: Sensors and electronics fully enclosed in a one-atmosphere aluminium subsea housing with redundant o-ring seals at each closure. Designing and Constructing Fixed Offshore Platforms – Load and Resistance Factor Design’.miswaco. ‘Design of Risers for Floating Production Systems (FPSs) and Tension-Leg Platforms (TLP)’. Through a suitably designed clamping device. includes pressure relief valve.com/deepclean *Mark of M-I L. with lower chemical concentrations than conventional displacements. Subsea vibration data logger.Figure 5. API RP 16Q.25 in. and can deliver water-wet tubulars just six minutes after contact. x 18. Weight in seawater: less than 6 lbf.slb.C . Selection. Mass: less than 10 lbm. Figure 6 shows an example of a low moment-of-inertia clamp developed for jumper pipe monitoring applications. 1st edition.L. API RP 1111. July 1999. November 1993. All exposed aluminium surfaces hard-anodised. SES is in the process of developing a real-time fatigue monitoring system that will provide immediate assurance of operations. SVDL data logger clamp. The unique application of water-in-oil-in-water technology improves film removal and droplet dispersion. June 1998. even at high measurement frequencies of 50 Hz or greater. Ported for nitrogen back-fill. Depth rating: 10 000 ft seawater. long including ROV handle). 2. API RP 2A. Operation and Maintenance of Marine Drilling Riser Systems’. by the mechanical characteristics of the logger system itself.

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high temperatures and sub-salt. Finally. Emerson Process Management. 57 . T here is little doubt that operators have a great deal to think about it when it comes to subsea operations today. Norway. explains the growing need for greater integration and intelligence in subsea operations. with Africa accounting for 40%. Other examples of challenging conditions include the deepwater fields of offshore Africa and Brazil with production and geological challenges. there are the age-old threats to production and well control of water breakthrough. which are often tied into existing infrastructure with long distance tiebacks. hydrates. Industry analysts Douglas Westwood forecast back in 2007 that US$ 25 billion will be spent annually in deepwater capital expenditure by 2012. if anything. The growth in popularity of smaller and older fields in the North Sea. are increasing. such as high pressure. There is the remoteness and challenging conditions of the fields themselves – conditions that are often underlined by highly complex subsea production systems. are one example of this increased complexity. sand erosion and corrosion – challenges that. and the rise in increasingly complex ownership structures with commingled streams and royalty allocations that must be measured by subsea systems.Great integrations Vincent Vieugue. the sour gas fields of the Middle East. North America 25% and South America 20%. Information and integration The level of investment in subsea operations over the last few years has been steadily increasing.

Emerson has been working to subsea production? How can we better manage the information with Statoil to increase the field’s sand monitoring capabilities that is created. operators activities. detect the early onset of formation-water There are also other areas of the subsea production in the gas flow. there are other important concentrations. Get the dosage wrong and there areas of the reservoir where the operators are is even a danger of increasing the likelihood of quite literally ‘flying without instrumentation. the very technologies that downhole measurements instruments. flow lines or pipelines. which is not accessible greater subsea control. They can cause Douglas Westwood predicted that more than 1000 additional blockages in tubing. once production is underway. when the field is vulnerable . are a significant obstacle to production control. There is also a need for greater integration Undetected high pressure behind the of corrosion monitoring. or which. or flow measurement. hydrate inhibition strategies. for example. According to deposits in the Gulf of Mexico.” monitoring of wells. whereas And yet.2 billion by 2014. in a worst case scenario. pressure drops multiphase and wet gas meters. due to the in oil or gas migrating vertically towards the corrosion of key infrastructure. surface and increasing the risk of a shallow Today. casing. there is often a lack of integration probes and intrusive sand/erosion probes and also has a few across subsea production systems.when there is a water production According to IBM Global Services. multiphase meters – many of them subsea – will be deployed The rise in deepwater wet gas fields. injection valve. mainly due to their lack of information and non-intrusive solutions (which are directly on pressures and inability to verify the barrier installed on the pipe walls) are also integrated integrity. injection and observation wells. The module will allow how can we ensure a more intelligent and integrated approach to Statoil to respond faster to changes in sand production conditions subsea production? and establish maximum sand free production rates for production While these may appear lofty ambitions. which can and temperature distributions. the management of information. while some levels of the reservoir are producing thermodynamic inhibitors tend to require higher injection rates and gigabytes of data. Whether it is the downhole are being made to find new methods to increase oil recovery. yet ensure that there are no blind spots? And through a new sand management module. Emerson is paving the way for stream is often based on approximations and a greater integration between Roxar subsea guesswork around flow rates. Hydrates – the crystals that are formed in high pressure and low Emerson’s Roxar downhole monitoring systems are now temperature gas flows where water and natural gas are present – deployed in production. downhole monitoring.” The good news is that there are tools to combat hydrates. With So how can we restore the balance and bring greater control a recent increase in sand production. as well as 58 OILFIELD TECHNOLOGY April 2011 . “continuous efforts where they fit in with other activities. with sand monitoring. Roxar subsea chemical Too often. there is cause optimisation. for optimism in areas such as hydrate control and corrosion An intelligent downhole network monitoring. corrosion or sand The field makes extensive use of both intrusive corrosion erosion. To compensate for this. “a more mature and advanced technology. For example. increase in predictive intelligence and integration across reservoir Hydrate control and corrosion monitoring production monitoring. Norwegian continental shelf. Corrosion can lead to casing can lead to poor or deteriorating production losses. metal loss (which reduce the cement sealing and a loss of casing integrity life of production and storage equipment). production system that are ‘no go’ areas to responsible for the flow and chemical dosage operators. pig detection and other Figure 1. and with no strategy as to to the Norwegian Petroleum Directorate (NPD). where. the detection of sand in the well To this end. a single oil or gas field can in the wet gas well. work at very low injection rates. for example – and also provides an effective generate up to one terabyte of data per day1 . such as methane-based hydrate operations is likely to reach US$ 3. that annual expenditure on ROV temperatures and deposits. the sheer amount of data derived glycol (MEG) and low dose hydrate inhibitors (LDHIs). These hydrate and corrosion monitoring solutions are part of an and intelligent metering. can result safety and environmental setbacks. One rates of hydrate inhibitors. in another report.’ hydrate formation. Figure 1 shows a photo following the sealing and cementing of the of the latest chemical injection valve.In terms of more specific subsea operations. The result is an such example is the B annulus within the integrated subsea production system and casing of an oil well. While such levels of investment and recent technology principally thermodynamic inhibitors such as methanol and ethylene advances should be encouraged. from subsea instrumentation has meant that some operators are These inhibitors require a subsea system that tells the operator reeling from the amounts of reservoir data that are produced. Emerson’s corrosion monitoring blowout.data that must be distribution system for their accurate injection. such as the company’s intrusive have spent millions of dollars shutting down (probes and coupons installed with flow lines) wells. are supposed to bring control to subsea One example is Statoil’s Heidrun field on the production are viewed as commodities. also means that hydrates are on the one of the authors of the report. The latter is essential collated. according procured in an ad hoc manner. and injection valves. this is mainly down to ROV being rise. interpreted and used as input into further decision making. locations with combined corrosion and sand/erosion probes. – LDHIs. with high pressures and by 2015 and.

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and which could be integrated into a field monitoring system in the future. Figure 3 shows an example of a real-time multiphase and subsea measurement system. in conjunction with the instrumentation of highly complex multi-zone intelligent wells. corrosion. Real-time sensor data is then fed and converted into visualisation tools for viewing and analysis. the multiphase meter has the References 1. with the network acting as a hub for downhole choke position indicators.potential to become a critical component in measuring flow and production rates. can then be based on all the necessary information. they still need a system that not only brings all the information together. and ensure that no area of a subsea production system is a ‘no go’ area. Through the field monitoring system. In this way. A real-time multiphase measurement and subsea sensor system. through the self-diagnostics application within the field monitoring system. ‘Meeting the Challenges of Today’s Oil & Gas Exploration and Production Industry’. For example. sand and erosion. The field monitoring system is also proving an important means of bringing greater intelligence to instrumentation. but also gas fraction. production control. the operator can gain access to everything from individual data series from an instrument to complex expert guidance for choke settings. data conditioning. Roxar third generation multiphase meter. Figure 3. downhole reservoir monitoring can provide crucial information not only on temperature. real-time production information on the reservoir. is a wireless instrument that tracks pressure in the B annulus inside the well casing in subsea production wells. with accurate and continuous online monitoring and valuable. 60 OILFIELD TECHNOLOGY April 2011 . Such meters are not only an effective alternative to well testing. pressure and water cut. At the heart of the new system is a server that consists of algorithms and models for data validation. Another recent solution that has reached the testing stage. confront potential threats to well integrity. O T Figure 2. allows operators to install 32 instruments on a single cable. Emerson recently installed its Roxar subsea multiphase meter on the Cascade and Chinook fields in the Gulf of Mexico. Multiphase meters are another example (Figure 2). The software provides an interface to all the instrumentation and the scalable architecture also allows remote connectivity. and manage calibration from a single application. Emerson’s intelligent downhole network. providing critical real-time information on a well’s capabilities during production. IBM Business Consulting Services. operators can track pressure. operators can configure flow meters. putting the operator where they should be – in even greater control of their production operations. which comes with a series of modules that cover many facets of operators’ subsea production systems. overriding message – that there is a growing need for greater integration and intelligence in production operations. It is encouraging that. When integrated with gauges. Decisions such as choke setting and artificial lifts. progress is indeed being made towards these goals. sand rate. Emerson has developed a Windows-based field monitoring system. there is one clear. Improved information management No matter how well an operator integrates their instrumentation. With this goal in mind. while the subsea challenges continue to remain challenging. Petrobras. but they can also have a significant impact on reservoir management across production operations. and contributing to real-time decision making. for example. and for the transmission of power and data. While this article has covered a number of different elements of the reservoir management and production process. smart alarm handling and virtual instruments. and flow velocity. monitor status and alerts. including flow assurance. but also provides the necessary analysis tools to rigorously interpret that data. In this way. simulation. troubleshoot from the control room. perform diagnostics. for example. sensors and other intelligent devices. the MPFM 2600. enabling multiple users to draw upon the same data and instruments. and virtual flow metering. These meters will work alongside combined sand erosion and pressure and temperature sensor systems to provide the operator. additional third party sensors.

Either glass or carbon fibre composite reinforcements are used for this layer. as well as the structural capacity to resist tension and bending in deep water. with the selection based on the application and temperature. Tensile reinforcement: provides tensile capacity. Either glass or carbon fibre composite reinforcements are used for this layer. Jacket (outer sheath): protects the FFRP™ structure against abrasion and mechanical damage. PA 12 or PVDF thermoplastic materials are employed for the liner. DeepFlex has developed a unique composite reinforced flexible pipe technology that overcomes these issues and supports subsea developments as they move to more demanding environments. Anti-extrusion layer: prevents liner from deforming into gaps in the overlying non-interlocked hoop strength layer. The innermost anti-wear layer may also provide a conduit for the flow of permeated gases to a vent at the end fitting. Testing and qualification of an expanding operating envelope. two layers wound in opposite helical directions assure torque balance.U nbonded flexible pipes with steel pressure and tensile reinforcement have been in operation for over 30 years but are facing serious challenges in deep and ultra-deepwater as well as corrosive environments due to top tension limitations and corrosion fatigue. HDPE. composite reinforced solution that offers reduced risk. Hoop strength layer: provides internal pressure hoop resistance. Anti-wear layer: prevents wear of composite reinforcement due to contact/relative movement between adjacent layers. Membrane (intermediate sheath): prevents seawater intrusion into underlying layers. The pipe’s lightweight and high tensile strength combine to allow installation in water depths up to and beyond 3000 m. HDPE for static service and PA 11 or PA 12 for dynamic service. capital and operational costs. in addition to proven field performance. PA 11. Flexible Fiber Reinforced Pipe (FFRP™) is a lightweight. Value proposition The FFRP value proposition in the development of deep and ultra-deepwater harsh environments includes: An enabling technology allowing more cost-effective development of deep and ultra-deep water oil and gas reserves. In offshore project developments. PA 11 or PA 12 are employed for this layer. A typical FFRP pipe structure includes the following pipe layers: Liner: smooth bore conduit for conveying internal fluids. depending on the application and temperature. external hydrostatic collapse resistance and resists radial compression installation loads. The composite flexible pipe products offer the necessary resistance to both internal and external pressures. will address the future challenges of the industry. allowing the hoop strength layer to bear the external hydrostatic pressure. also selected based on the application and temperature. The reduced weight offers significant project 61 . HDPE.

DeepFlex used the following approach: For each FFRP composite layer.1 and the layer geometry. loads. The FFRP™ provides a significant weight advantage over steel reinforced products. If the outer sheath of a steel reinforced flexible pipe is damaged in the splash zone. Composite material development and testing. Technology development is reviewed by an independent verification agency. Figure 2. Based on the previous point. define the potential failure modes and mechanisms that might be experienced as a result of those loads and environments. In order to develop the test plan to qualify these materials.topside jumper loads Dynamic test .FPSO catenary riser loads 1 1 1 5 5 1 1 1 2 1 1 Lowers installation costs and reduced project schedule risk. the FFRP composite reinforcement is resistant to seawater and the annulus environment resulting from permeated gases condensing in the annulus. where cathodic protection is ineffective. Pipe structure qualification testing. construction and materials employed. Resistance to corrosion fatigue that reduces full life-cycle costs. disconnectable turret optimisation and low payload on existing deep water hubs allowing for more production within tension capacity limits. This weight advantage reduces the size and capacity of the equipment on the deck of the installation vessel. The Urugua project. Figure 1. A comprehensive material testing programme is being executed to expand the operating envelope of materials for high pressure and high temperature. operating condition and layer stresses are determined. requiring rapid replacement of the pipe. 62 OILFIELD TECHNOLOGY April 2011 .1 define the tests needed to evaluate the material performance against the failure mechanisms. Fiberglass and carbon fibre composites are being tested to verify the characteristic resistance values. Larger top tension equipment requires larger installation vessels. and the guidelines in section 6 of DNV OS C501. which are fewer in number and have substantially higher operating costs. For each load case. and can lower full life-cycle costs relative to competing steel-based pipe. which supports the weight of the pipe and controls its movement as it is lowered into the water. Planned test programme Quantity of tests Burst .bent to minimum OBR Axial tension with internal pressure Collapse Crush strength Combined bending with tension Bending stiffness Torsional stiffness Axial compression Dynamic test . With proper material selection. FFRP has been successfully deployed in applications where DeepFlex’s fiberglass reinforcement is qualified including low/ moderate pressure and temperature applications.straight Burst . verified by comprehensive testing. and address the potential failure modes and mechanisms based on the loads and environments that the material may be subject to over the FFRP service life. relocating shallow water FPSOs to deep water. and the guidelines in section 4 of DNV OS C501. The lighter weight solutions allow for a greater number of potential installation vessels and a wider range of opportunities to secure a more cost-effective vessel at the required time. the environment (fluid). verify the partial safety factors used in the pipe design calculations. The Afren Okoro Setu project. temperature. Based on the previous point. Table 1. Model development and calibration.savings for floating production systems including reduced cost of new build FPSOs. Steel reinforced flexible pipe is susceptible to corrosion fatigue due to seawater ingress into the steel reinforcement layers especially when combined with the presence of H2S and CO2 that permeate through the inner thermoplastic layers. load cases are identified. The greater number of vessels allows project flexibility and reduces schedule risk in the event of project delays. the tensile armour reinforcement will corrode very rapidly. Technology development Technology development is focused on the following three key areas to support the development and qualification of the FFRP for deep and ultra-deepwater offshore production environments: Composite material development and testing. particularly the equipment known as ‘top tensioners’.

Laboratory tests are performed on unidirectional composite strips and laminates.4 million bbls. These models are developed in-house and are calibrated by small scale. mid scale and full scale testing. Production at Okoro Setu has averaged 17 841 bpd and total gross cumulative production from the field (since start-up) at 30 June 2010 is 11. The product has been proven in demanding field conditions and a comprehensive material and full scale test programme is ongoing to expand the operating envelope. Conclusion The FFRP solution offers substantial value for deep and ultra-deepwater environments. The 3 in. collapse. Composite Components. reflecting the excellent operational efficiency of the flowlines and risers. 2.) 4 3 2 2 4 6 8 8 4 4 4 3 2 Design pressure (psi) 5000 5000 5000 5000 5000 5000 5000 2500 5000 5000 1250 2900 4000 Water depth (m) N/A N/A N/A 800 14 14 14 80 146 150 120 1500 N/A Deployment year 2006 2006 2007 2007 2008 2008 2008 2008 2008 2008 2008 2009 2010 Pipe structure qualification testing The FFRP has been successfully deployed in shallow water operating environments and deepwater temporary applications. tensile and bend tests. The analysis results are used to verify resistance of the composite reinforcement to potential failure modes. DNV OS C501. small-scale tests and mid-scale tests. The general approach is to: Perform a variety of tests on unexposed samples. O T Field deployments The FFRP has been successfully deployed in all major offshore operating basins around the world. and fatigue data to be used in the service life analysis methodology. Potential failure modes based on expected in-service loads and environments are addressed in the design methodology. Some of the key applications are summarised in Table 2. the Norman Cutter. internal diameter dynamic risers connected to the FPSO are operating in a double wave riser configuration in a water depth of 19 m. Table 2. Expose to fluids that are representative of fluids for offshore production for durations at design temperatures. The 4. a process uptime of 99. DeepFlex projects Project name Petronius Bourbon Opale Genesis Mardi Gras Okoro Okoro Okoro Arthit Lyell Aries Swan Workover Vessel J Ray McDermott Urugua Genesis Customer Chevron Maritima de Ecologia SA Chevron BP Afren Afren Afren EMAS CNR Crossmar Petro SA Saipem Chevron Deployment region Gulf of Mexico Bay of Campeche Gulf of Mexico Gulf of Mexico Nigeria Nigeria Nigeria Thailand North Sea Mexico South Africa Brazil Gulf of Mexico Pipe size (in. The field architecture for Okoro Setu References 1. During this period. which simulate the combined loading experienced in the critical anti-extrusion layer and hoop strength layer. Qualification testing for these applications includes burst. Recommended Practice for Flexible Pipe. The programme will qualify the FFRP for 7 in. The product offers a new tool to the design kit of subsea engineers to meet the challenges of deep and ultra-deep water offshore field development. API RP 17B. Some key elements of the projects follow: Afren Okoro Setu FFRP risers have been successfully operating for over two and a half years in extreme dynamic service on the Afren Okoro Setu project offshore Nigeria. Urugua export pipeline 160 km off Brazil in the Santos basin. includes a well head platform connected to an FPSO with DeepFlex product. internal diameter downline was deployed in 1500 m of water by one of Saipem’s installation vessels. Design methodology verification goals include: The pipe performance and associated failure mode are predicted by the design methodology. 6 and 8 in. Urugua The Urugua project included the successful deployment by Saipem of a downline solution for the commissioning of an export pipeline offshore Brazil. OILFIELD TECHNOLOGY April 2011 63 . Two of the most demanding project deployments are the Afren Okoro Setu and Saipem Urugua projects.6% has been maintained. 5000 psi flowlines and riser in water depths of 2000 m and temperatures up to 90 ˚C. are being conducted. In addition. The FFRP downline offered a unique lightweight solution for this challenging deepwater commissioning project by lowering deployment costs and reducing operational risk. and on anti-extrusion tapes. The FFRP delivered to Saipem was used in the commissioning of the 174 km. Test the exposed samples and analyse the results. 18 in. a detailed qualification programme to API RP 17B2 is being executed to qualify deep and ultra-deepwater flowlines and risers for high temperature and high pressure applications. Model development and calibration Part of the overall qualification process for flexible pipes is the ability to accurately predict the mechanical and physical properties of the structure. The downline was connected to a subsea commissioning structure for over 40 days and operated successfully in very challenging weather conditions including seas of 5 – 7 m. The testing programme is highlighted in Table 1. and update and validate the characteristic resistance and partial safety factors used in the design methodology. To expand DeepFlex’s operating envelope. The light weight and corrosion resistance of DeepFlex pipe offers project and operational cost savings. Saipem.

64 .PRECOMMISSIONING CHECKLIST FOR Figure 2. The precommissioning team is vital to maintaining project schedule.

Mustang Engineering. the functionality of the system as well as calibration of the instrumentation to the facilities’ controls and control systems. and the final commissioning and startup of the facility. E ffective precommissioning (PC) planning and initiation of PC activities provide a necessary bridge between earlier project execution phases. Systems driven Whereas mechanical completion includes the non-functional testing of equipment to confirm the integrity of its fabrication and installation to the intended design. 65 . the supervisor of the MC phase creates a formal document transferring the complete dossier of all activity of the system for handover to the PC team. USA. The planning required for an efficient PC of an offshore facility is typically started during the early stages of detail design and commences immediately after mechanical completion (MC) has been achieved.Richard Shirley and Dan Vela. PC verifies the mechanical completion. along with a register or punchlist that indicates any remaining MC work that still needs to be completed or closed out. regardless of their location on the facility. PC can be an essential mark between the transition from a discipline-based approach. including mechanical completion. to one that verifies the functionality of systems. Prior to initiating the PC actual work stage. which itself follows the engineering design and construction phases. run through the process of precommissioning offshore facilities.

a plan must be established as a starting point. manufacturers and operating personnel for support and their expertise. an organisation chart needs to be established. instruments will undergo initial and final calibration. motors verified for proper rotation and can be run and tested (burned in). pumps can be operated where possible. getting to the matrix level of PC and MC interface. tracking progress critical for adhering to schedule and determining the status of the various activities. electrical. the PC phase will be turned over to specialists who can address confirmation by system. and rotating equipment can receive initial (cold) alignments. the onshore MC work will take priority and the facility where the work is being performed would be the driver. but also the responsibility and simultaneous operations (SIMOPs) that may occur. During the PC effort. After the project has determined the scope of work. Whereas offshore the MC work may still be the priority. For the purpose of this discussion. ensuring that it is complete and ready for final commissioning and startup. There will need to be separate designators in organisational charts created indicating location for the onshore and offshore PC work due to potential differences in contractual arrangements. In the initial planning of the PC stage. This point in the project is when potential flaws of construction. therefore. uncompleted tasks and system inadequacies can come to light and be addressed early enough to minimise schedule delays. a critical path should be evaluated to establish the procedures that will be optimal to success. a roles and responsibilities matrix required for the upcoming activities should be established. Additionally. Organisation and planning are key The selection of a PC team is one of the most important milestones that will need to be addressed. P&IDs. mechanical. defining the overall hierarchy of how the PC team fits within the overall project management team. can be verified. vendors. due to contractual limitations as well as schedule drivers. PFDs. instrumentation and controls fabrication to systems checks where scheduled work is maximised. Where practical. electrical motor Figure 1. While MC is completed by area or discipline. The level of the matrices vary from broad to detailed.potentially time-consuming and expensive modifications can go undone onshore. The PC phase is vital to schedule adherence of the project and a necessity in helping to minimise cost overruns. but is not limited to. personnel housing. as well as its complexities. The matrix. therefore. tasks. Only after the scope of work and organisational plan is in place can the initial schedule be prepared. Deck space and personnel management are critical parts of offshore PC activities. The leadership. PC activities should be planned as part of the construction and earlier project execution strategy so there can be a smooth transition from structural. The PC contractor is responsible for maintaining the database. only to be addressed in a much more difficult offshore environment. As discussed previously. transportation. identifying the location of the PC work plays an important role in the responsibility of certain activities and interfaces. should. but the responsibility of the work. establishing the critical milestones for handing off systems to the commissioning and operations teams. the overall project schedule and startup drivers. Without a thorough PC effort. Reference data provided by engineering and the other delivery teams will need to be organised by the PC contractor according to the identified systems and should reside in a location accessible to all who will be utilising it. This phase can best commence efficiently after all of the components are in place so that systems. Figure 3. along with the other SIMOPs is wise early enough to best identify any potential holes during the different phases of work. Although the best laid plans always have their obstacles. whereas the details of the work are identified within the PC procedures and tracking database. instrument and electrical loops will be verified. there can be many activities completed during the onshore phase and then moved offshore for completion of the system checkout. The PC contractor also engages the design engineering firm. be experienced with the planning. mechanical. Precommissioning addresses readiness by system rather than by individual pieces of equipment. communication systems tested to the fullest extent possible. schedule and project drivers regarding startup. piping should be power flushed and dried. as well as team members. 66 OILFIELD TECHNOLOGY April 2011 . These milestones are often how the PC team and their progress will be measured. The team will be responsible for planning and supplying the critical support and leadership during this project phase. Data includes. Ideally. parts availability and numerous other issues. For example. the driver would be the operator. can identify not only the task. The responsibility matrix is important to complement the organisation definitions. A detailed list of required activities would be created by the PC team and coupled with the data developed earlier in the project by engineering and managed through an electronic project information management system. but its main use is to identify not only the scope of work and supply. rather than individual pieces.

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defined responsibilities and procedures. between all groups must be established. as well as (HUC). to understand each other’s schedules and manpower requirements. This allows life and work plan for utilising a floatel. heat be carefully planned for and put in place in order for approval recovery unit. For (COI). fire detection and suppression equipment. The systems are separated according to Certificate of Inspection (TCOI). e. potable water and sewage treatment construction. These would and ISA data sheets. without having to initiate work on for housing personnel might be required at a significant extra the entire system.g.by the team and adjusted accordingly. A job commissioning operations. temporary power generation. a meeting schedule should be established so that structure. can assure overall planning and progress can be regularly discussed and that the precommissioning segment is efficient and can keep understood by all parties. The critical nature of the work being performed offshore to start on a system scenario. Each of the participants should have costs and schedule in-line with expectations. fire likely been supplied by different vendors and reside on separate fighting. Task sheets record the subsystems and systems. This systems breakdown is the logical process to verify evacuation equipment. An experienced team. Temporary manageable systems. precisely scheduling manpower is critical. include topsides hookup and commissioning wiring plans and elevations for skids and modules. the PC team will have to work closely with all of the different work scopes onboard Figure 4. O T a schedule that can be owned by them. communications. The key and the hull type. A variety of systems must example. will include in the overall schedule identifying work onshore. and prepare the provisions. Similarly. The PC work normally is broken down into discreet. The work plan within the project so as not to impact the planned startup date. POB management An important consideration in precommissioning is planning for the required number of personnel needed to undertake the offshore PC activities. While working during the onshore phase space is somewhat unlimited with the exception of interfaces with construction. a good and as-built record. If sufficient facilities The organisation also allows for the commissioning of are not available on the platform. communications personnel and from outside of the topsides delivery team. so that progress coincides among all team members. or activity card system is an output of the existing database Conclusion system. export operations. ‘floatels’ or other means sub-systems within a system. This also means weather support for the offshore personnel in addition to minimising the limitations and transfer of personnel risks must be evaluated. controls and electrical. along with interconnect of these various milestones. and the export pipeline installation and testing contractors. The critical path should be reviewed at least weekly and recovery plans generated or updated as necessary. Planning for and system for handover to operations as the phase goes forward. Offshore. This avoids having to work around a finish cost. database. a heat media system might include a fired unit. a habitability inspection will be conducted by will be to provide a conscious effort to close these gaps early the US Coast Guard or similar regulatory body. subsea flowline installation and testing contractors. detailed precommissioning/commissioning plan should be which have been completely precommissioned and ready for developed as early in the project as possible and good interface handover to be integrated into the facilities operating systems. working space and delivery areas must be closely It is essential that good record keeping and a detailed planned to accommodate the simultaneous operations (SIMOPS) preventative maintenance plan be initiated and carried out being conducted during the precommissioning and subsequent through handover to operations during the PC phase. instrumentation. depending upon timing pipeline. the transportation requirements for the crews and their supplies. work to achieve quarters habitation. hull fabricators equipment. work offshore. thus pushing the overall startup compared with the other activities along with the schedule must schedule past the desired outcome. For TCOI these may include piping. In the overall PC work plan and prior to initiating the PC equipped with the necessary tools. rather than by a package vendor. need for additional components to PC the process systems later. as A potential shortcoming is in not obtaining the interface data well as third party vendors. and Handover to Operations. emergency skids. all of which have sufficient living quarters. reviewed intermittently 68 OILFIELD TECHNOLOGY April 2011 . Final Certificate of Inspection the logical process flow. storage unit and pumps. organisational work. During the offshore phase. the manufacturer’s final data manuals for purchased equipment. subsea. resulting as an archive to the work performed as an In order for the PC segment to be successful. Successful PC work relies on detailed planning and defined responsibilities. instrument and electrical loop drawings. The PC of utility systems is be evaluated in depth to determine the cost/schedule benefit typically the first to be addressed and completed. and the allocated personnel onboard (POB) space to accommodate them. and communications equipment. offshore work presents a whole different set of challenges. confirm the integrity of the design.

For such a cable-laying dredging task. They bring significant savings to the oil and gas industry because they cost less. results can be more accurate when compared to using an acoustically noisy hydraulic work vehicle. tasks carried out by electric work ROVs may include: hot stab connection and disconnection. S marter and more powerful electric ROVs are increasingly taking on the work of hydraulic vehicles. and changing out AX wellhead gaskets. Power myth All this contests the myth that only 100 HP and above hydraulic vehicles have the power for work class operations. UK.power has been boosted. and for survey work. This means more power intensive tasks can be tackled because power is cleverly divided between thrusters and tooling. are easier to use. while still operating its thrusters at full force. but not both. and so useful power is overstated on a hydraulic vehicle when compared with an electric vehicle. without loss of power to either. cleaning wellhead and bulls eyes. Saab Seaeye. looks at the benefits of electric ROVs in comparison with hydraulic vehicles. and the higher drag on its meatier tether. then back to rotary power before turning the propellers – a process that loses over 30% of shaft power. The use of high efficiency brushless DC motor technology also means there is no significant loss in the transfer of electrical power to thrust. through a three phase electric motor to hydraulic power. for instance. Driving this development are significant breakthroughs in electric ROV technology . dual point docking and free flying stab-plate connection. A doubling of thruster power on top of the range electric vehicles means that the newest generation of vehicles are serious competitors to the hydraulic ROV systems and they can also operate to depths greater than 6000 m. and quicker to deploy. pre and post drilling site survey. Hydraulic propulsion is also very inefficient as the electrical power delivered to the hydraulic ROV needs converting 69 . Power in electric ROVs is not shared and is therefore available in full to thrusters and tooling at all times. Routinely. depth and orientation of wellhead and BOP stack.Switching to electric Jon Robertson. More power means that a new generation of electric ROVs has. whereas the truth is that the power rating relates only to the shaft power of the prime mover. an electric work ROV can do all the tasks of 100 or 125 HP hydraulic. Performance With a lift capacity of 240 kg. and control and redundancy have been enhanced. This is an advantage over hydraulic vehicles that can typically only use one or other at full power. fewer crew. although it can still play a valuable support role during such work. keeping the vehicle steady while driving it along. guidance and orientation for BOP and riser connection. The hydraulic vehicle also needs more power to counteract its high mass. except heavy construction. require less deck space. an operator would typically need a 150 HP hydraulic ROV that would take up twice the deck space. not the power available to both thrusters and tooling. enough tooling power to run a Merlin excavator on maximum load. It is ideal for IRM as access is easier.

mapping. it is backed up by a second complete system. ICON allows each device within an ROV to think for itself and talk remotely to operators and engineers through a gateway into the heart of the vehicle. or untangle a snagged umbilical. Gives the pilot feedback on navigation. cleaning.Resident power and intelligent control means that the electric ROV can be fitted out with a host of tools and systems. OILFIELD TECHNOLOGY April 2011 The vital role that electric ROVs now play in the industry means that growing operational demands will continue to extend their capability through innovation and increasingly intelligent power resources. auto-pilots. along with custom tooling as required. Additionally. It can guide a recovery strop. As a bonus. equipment does not get tangled up. linear actuator override tool. branded Intelligent Control of Nodes (ICON) by engineers at Saab Seaeye. This could bring considerable savings in time and cost by avoiding the need to outsource an expensive ROV/vessel for recovery of the hydraulic vehicle or completion of the task. Typically. In particular. primary sub-systems and any critical errors or faults. ready to help recover the work ROV should it get into trouble. Buddying Electric and hydraulic ROVs are not mutually exclusive. Smart and powerful electric work ROVs like the Saab Seaeye Jaguar are taking on the work of hydraulic vehicles. flying lead orientation tool. A significant benefit is that multiple ROV systems can be launched from a single vessel without the fear of entanglement. configuration. profiling and monitoring. when the ROV is due to return to the TMS. inspection. anvil cutter. operators across the world can manage diagnostics. the operator gets a small yet powerful and intelligent resource that can also be used for a variety of other tasks including observation. and recovered safely afterwards. These include a seven function position feedback manipulator and heavy duty five function grabber. Also. Launch and recovery Safe launch and recovery of the ROV in various sea-states is vital during operations. hydraulic hot stab. rotary or 4 in. Self-diagnostics clearly display to the pilot any fault and the necessary remedial action to be taken. low-cost resource. adding to the safe and efficient completion of the task in hand. O T 70 . quad actuator tool. An operator can use the nippier electric ROV to swim about to give a clear view of the back and sides of the working area. This is especially true when the ROV is operating from a tether management system (TMS) and other ROVs are sharing the same patch of seawater. single or dual point TDU. AX/VX ring change out tool. a fluid injection skid. The current can cause problems: it can drift the TMS about until. software upgrades and system inventory directly onboard the ROV wherever it is located. Figure 1. meaning the ROV can be kept working. Each has a role to play and they often work together. it can act as a standby. Vital role Figure 3. This problem has been solved by fitting the TMS with its own thrusters. it is essential that under the waves. Primary flight screen. Thruster touchscreen page. This concept has been added to the latest fully distributed control system for electric vehicles. and help the ROV operator resolve configuration issues in live time. This means the whole system is duplicated and should one complete system fail. Statistical and diagnostic information is accessible remotely. 6 in. manipulation. Figure 2. Engineers can also remotely interrogate devices onboard. the top end electric ROVs also have dual redundancy systems. statistics and diagnostics of a thruster. zip jet suction tool. reliability is a key issue: there is less to go wrong with electric. Thinking for itself It is possible to configure intelligent electronic devices such that they can be interrogated remotely over the internet. along with a management system that controls the position of the TMS and also ensures it remains orientated to the ROV as it flies about its task. everything is the wrong way round. and possibly complete or contain an interrupted task while the stricken ROV is repaired. It means that through an enabled remote web interface. An interface for control. torque tool. a growing trend is to buddy a smaller electric ROV with a heavyweight work ROV. HP water jet or cleaning brush tools. Reliability When comparing electric and hydraulic ROVs.

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AMOT. The physics of how an explosion or fire is initiated cannot be disputed: simply put. and Ian Harrison. the oil and gas industry. Every organisation involved in the upstream oil and gas industry is responsible for ensuring its knowledge of and adherence to the most current applicable regulations and standards. Following the events of the Deepwater Horizon catastrophe. which would also include gas detection. The objective of this article is to highlight the importance of ignition source elimination and the differences in approach mandated by law in different jurisdictions around the world. Current proven technologies can greatly reduce this risk. investments and the environment from fire and explosions because without the energy to ignite flammable gases. The science needed to prove conclusively if combinations near explosive limits will be safe is not yet available. making exact predictions of what is safe and unsafe. The potential combinations of fuelhydrocarbons. UK. These technologies have been employed by leading oil and major companies outside the US both onshore and offshore for decades. The elimination of the energy (ignition source) can avoid a serious hydrocarbon release becoming a fire and explosion. difficult and often impractical. Pyroban. only represents a starting point for improved safety regarding fires and explosions. but no effort has been initiated within the US. The elimination of ignition sources is a well-known strategy to protect people. however. particularly within the 73 . Regulatory compliance. a hydrocarbon release (HCR) incident is far less likely to develop into a catastrophic failure situation. oxygen-air. highlight the importance of ignition source elimination and the differences in approach across the world. The real requirement is for a constructive means of ensuring that practical improvements and preventative measures are adopted. ELIMINATING THE GAPS IN US OFFSHORE REGULATIONS H igh levels of uncertainty require larger margins of safety. and energy-ignition are highly complex. This is not to say that ignition source elimination strategies should act alone. fuel + oxygen + sufficient energy will lead to a fire. Indeed. wherever it conducts operations. elimination of ignition sources must form part of an overall safety strategy. emergency shutdown protocols and evacuation strategies.Jogen Bhalla (USA) and Stephen Gale (UK).

Table 2. However. processes. unforeseeable or unpredictable release. the types of equipment requiring ignition protection within hazardous areas can vary from country to country. as does the definition of what equipment is deemed necessary to provide protection. as it is considered a catastrophic. country. Differences in the standards can be further clarified by focusing on the standard of ignition hazard protected diesel engines in the US. compared to the standard provided in many other locations throughout the world. in Europe and other parts of the world: Both electrical and non-electrical equipment must be considered. investments and the environment from fire and explosions offshore. the fundamental principles of classification remain very similar. The elimination of ignition sources is a well known approach used in an overall safety strategy to protect people. the reality within the oil and gas industry is that significant releases still occur. Area classification US Division 1 IEC/EN Zone 0 high probability of an explosive atmosphere Zone 1 Division 2 Zone 2 lower probability of an explosive atmosphere where the approach should be applied on an oil platform and what type of equipment requires protection varies significantly dependent on geographical location. policies and practices and determine how they can be improved. Ignition hazard protected diesel engine requirements Typical US X X X X X Exhaust flame traps Exhaust spark arrester Exhaust temperature monitoring Exhaust gas cooler Water-cooled turbo charger Coolant temperature monitoring Water-cooled exhaust manifold Explosion protected electrical components Engine overspeed monitoring and shutdown X X X Anti-static fans. Typical European installation Figure 1. a particular concern in these circumstances is the continued operation of internal combustion engines. while classifications in the US and rest of the world differ in terminology (Table 1). In these circumstances. Explosion protection regulations and standards in the US are very similar to European equivalents for electrical installations but largely ignore risks associated with non-electrical ignition sources. Current practices for the determination of hazardous areas offshore Strategies to reduce hydrocarbon releases have been applied admirably throughout the world for the last 15 . Reduced ignition sources on a typical European installation. Areas outside of these zones are defined as ‘non-hazardous’. providing ‘safer ‘solutions for industry. blades and belts Explosion proof inlet manifold Inlet flame arrester Inlet shutdown valve Typical European (EN 1834-1) Exhaust flame traps Exhaust spark arrester Exhaust temperature monitoring Exhaust gas cooler Water-cooled turbo charger Coolant temperature monitoring Water-cooled exhaust manifold Explosion protected electrical components Engine overspeed monitoring and autoshutdown Anti-static fans blades and belts Explosion proof inlet manifold Inlet flame arrester Inlet shutdown valve X X X Differences in standards of equipment Throughout the world. must evaluate its current principles. Deepwater Horizon accident investigation hearings clearly indicated that a catastrophic loss of containment leading to a large hydrocarbon release was likely to have been ignited by the primary diesel generators located on the platform. explosion protected equipment standards and particularly major incident fire and 74 OILFIELD TECHNOLOGY April 2011 . Thus. This determines the required level of active and/or passive protection to ensure equipment does not present an ignition hazard. particularly Europe. however. However. The principle of ignition risk assessment of equipment within a legislative framework rather than compliance with standards allows best available technology and processes to be applied to equipment. The main limitation of area classification is the general exclusion of the type of event that occurred on the Deepwater Horizon.20 years with some effective results. many jurisdictions. determining hazardous area zones (IEC) and divisions (US)) and consequently where explosion proof equipment requires installing. hence the potential for ignition is high. the US federal regulations and associated enforcement agencies have not demonstrated the commitment to cover offshore platform safety in these situations. Currently within the US Federal Regulations.e. These kind of low probabilities and high consequence events in many cases have the potential to propagate the migration of flammable gases and vapours beyond classified areas where ignition sources are not controlled. Area classification is applied to offshore platforms to determine the probability of an explosive atmosphere developing from hydrocarbon releases (i. Table 1.US. the oil company or even the oil platform. employ legislation to implement platform fire and explosion risk management strategy.

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Esso Research rejected that option in 1970 due to the unpredictable result.” However. It would be a relatively simple and low cost process for companies supplying equipment to the US offshore oil and gas industry to A study of current US offshore regulations 250. up until now. (a) for a diesel engine that is not continuously manned. Figure 3. Paragraph (b) states: “for a diesel engine that is continuously manned.405: for engines on drilling rigs (2/20/03). Operators are required to check the safe function of the shutdown system once a month. can explode within 30 seconds and so manual shutdown is not a safe solution. as it completely relies on a nearby operator to decide that when they hear the ‘racing’ of the engine. Existing US offshore standards for diesel engines are now outdated and are subject to misinterpretation. The US offshore regulators should immediately issue a safety alert that states: “All diesel engines operating on the offshore platforms must have an approved air intake device to automatically shut down the diesel engine in the event of runaway. depending on the richness of the environment. to cover modification of diesel engine air intakes under the following MMS (now BOEMRE) sections of 30 CFR Ch II. several standards were written around 1988 and are still in current use.405 regulation states that: “you must equip each diesel engine with an air intake device to shut down the diesel 76 OILFIELD TECHNOLOGY April 2011 . the US does not have an agency to test and approve products for the offshore industry. 250. contractors and rental companies usually select the least expensive solution for the diesel engine overspeed shutdown system and spark arrestors. resulting in machines such as diesel welders being fitted with manual valves. Manual devices are no longer permitted and must be removed and replaced with automatic shutdown system. US-made spark arrestor test. all engines on an offshore platform should be classified this way. 250. It is disturbing to see plastic slide type valves (as used for fish tanks or RV toilet pipes) have been installed and apparently. As such. where the welder operator could be working on a different deck or at considerable distance from the stop control. An uncontrolled engine overspeed was reported just before the explosion in the generator room. Recommendation All of these high risk situations that come from permitting manual devices would be quickly eliminated if the existing US offshore regulations were amended to require the benefit of automatic shutdown. Current EU regulations (EN 1834-1) require automatic engine overspeed shutdown protection for maximum safety in all offshore areas and other defined hazardous zones.engine in the event of runaway.” “A remote control must be fitted to allow demonstration of the device in a running condition without over-speeding the engine. Internal combustion engine protection for hazardous area applications in the US does not afford the same level of protection as other best available technology standards applied throughout Europe. Any manual method of stopping an engine that is accelerating towards destruction is inherently unreliable. and this further compromises safety. US Federal offshore regulators fail to recognise that a runaway diesel engine. Engine with manual plastic slide valve (push to close) currently permitted in the US. you must equip the engine with an automatic shutdown device. so for improved safety. accepted by the US offshore inspectors (Figure 2). Figure 2. some gaps exist in this regulation: almost all engines on a platform or rig are ‘not continuously manned’. 250. and many other locations throughout the world.” The limitations of this part of the regulation include: The decision as to what equipment is ‘continuously manned’ is open to various interpretations. Human nature for machinery operators would be to run away from the runaway engine to reduce their risk of death or personal injury due to imminent engine explosion. but a potential detonation source and can occur at low concentrations of gas. Diesel engines located in a non-hazardous area are thought to be the likely ignition source for the explosion(s) onboard the Deepwater Horizon platform.” The lessons of the Deepwater Horizon accident investigation show that a runaway diesel engine is not only an ignition source. Unlike ATEX. For the US offshore regulations. explosion risk management strategy falls considerably behind Europe and many other oil producing countries around the world.510: for engines on well completion platforms (9/14/09).610: for engines on well-work over structures (5/29/98). you may equip the engine with either an automatic or remote manual air intake shutdown device. they should approach it and push or pull a control.

British Standards and later the engines offshore in the US. of this.upgrade their equipment to meet the proposed revisions. These variations in international certified as approved for international hazardous zones. with various and protection requirements are further different designs such as screens. including zone 2. Recent tests of one of the most therefore reducing the potential consequences of an incident. popular types currently used (Figure 3) have revealed that not This approach has been mandated through European offshore all sparks are cooled adequately before totally safe emission in legislation. particular severe applications. This may determine equipment such as diesel engines While some equipment currently working in US offshore located outside of a classified area requiring ignition hazard waters has been fitted with spark arresters. The spark arrestor must be to the extent that platform safety is compromised. Deepwater Horizon catastrophe ever occurring again. are considered throughout sparks and cool them to be ejected at a safe size and energy Europe by integrated fire and explosion risk management state. for engines must be amended to state that diesel engine which addresses lessons learned from previous events. O T OILFIELD TECHNOLOGY April 2011 77 . yet they are rarely applied to US hazard and can cause fire or explosion. there exhaust systems must be fitted with a spark arrestor designed still appears to be a significant void with respect to the rigor and tested to emit no sparks during engine operation. confused due to the requirement being collection traps and cyclones available. While US regulators have moved towards an approach To achieve elimination of exhaust sparks. these have usually protection to reduce the risk of a major release being ignited. OCMA. such as the hydrocarbon releases that to determine the acceptable methods that would quench all occurred on the Deepwater Horizon. which is higher energy sparks. the standard inspected monthly and replaced if any perforation of the body is of ignition protection related to diesel engines is a clear example detected. the requirements and test not by the probability of the engine procedures for the different products coming into contact with an explosive and the different requirements of atmosphere. the types of equipment requiring protection can vary from country to country. products are suitable for the more many other parts of world. were developed with test procedures Major hazard events. or even whether equipment agriculture and forestry. various organisations such as the the world. whereas the forestry industry is concerned with larger equipment. defined by location on the platform However. different industries mean that not all By contrast. addition to remove this dangerous condition. adopted by requires protection at all. Products afforded to European installations. Historically within the US. Then. This approach explosive limit (LEL) a single low energy spark could detonate a is supported by product specific standards for high ignition hazard gas cloud. should be allowed. Stainless steel through strong regulation and enforcement ensure the requirement cyclone type spark arrestors (Figure 4) are effective in preventing is implemented to reduce the ongoing risks of such events as the both sparks and corrosion. the current rules with safety and environmental management systems (SEMS). No such approach or standard is applied to diesel US Forestry Service. within Europe and Figure 4. particularly in the US. European ATEX Directives. Throughout the world. Diesel the military and more recently by the engines offshore fall into this category petrochemical sectors. Best available technology for these products is known Equipment with spark arrestors that do not meet this and well understood and applied throughout Europe and many requirement should be removed or replaced as they are a safety locations throughout the world. collaboration between US regulators and the oil and gas industry It is relatively simple for engines working offshore to have this to create a globally accepted standard for these products. strategies. only electrical equipment Diesel engine exhaust and some specific products currently spark arrestors require protection under existing All diesel engines emit dangerous standards. sparks produced by the combustion This approach within the US process or the ignition of carbon promotes misunderstanding and buildup within the exhaust system. Cyclone spark arrestor with certifications. an offshore environment where hydrocarbons are easily ignited. emphasis is placed on the ignition risk the oil and gas industry recognised assessment of the equipment covering that when there was a gas concentration exceeding the lower both electrical and non-electrical ignition sources. Diesel engines are covered by EN 1834-1. For example. Exhaust sparks can be eliminated though the addition of an This situation provides a need and opportunity for effective spark arrestor that will not perforate due to corrosion. International variations Classified areas determine what level of ignition-protected equipment is required within these areas. confusion with respect to what type The technology of spark and standard of equipment requires arrestors was originally developed for protection. The resultant step change in engine safety would be seen as the first step towards effectively eliminating the potential source of ignition that currently exists. applied offshore throughout Europe and many locations throughout Over time. standards and approach cause confusion. been of the agricultural variety. offshore installations.

“We were told it would never work. Selling direct to the customer had another advantage.company news news // Kudu Pumps // Making progression possible O T PCP systems are engineered to handle light to heavy oil. “My father and I have always been intrigued by finding a better solution to a problem. “They were going through a conventional pump jack per week due to high sand cut.” says Ray. The Mills’ next hurdle was distribution. This led to Kudu heavily investing in developing new technology to solve customer problems. has felt the brute force of the oil industry’s ups and downs. His first install was in the first horizontal oil well in Wabasca. Alberta. The Mills’ started peddling their wares and ended up redefining how PCPs were distributed in Canada. coalbed methane and de-watering applications. Alberta. like many other service companies. Robert and Ray learned first hand the challenges their customers were facing pumping oil. took Progressing Cavity Pumps for the oil patch from a residential garage in Calgary. K udu. Robert and Ray Mills. Kudu has maintained the technological lead ever since. Canada. to the world’s second largest PCP manufacturer and distributor.” says Ray. which was unheard of at the time. how many companies get a national award and then face insolvency in the same month? Kudu found itself in this position in early 1998 after the crash in oil price. These supply stores refused to sell Kudu products so Robert and Ray ended up selling directly to the customer.” Robert says. Canada during a blizzard in 1988 for CS Resources. Robert started investigating PCP in the late 1970s and patented a novel PCP drive system in 1982. After all. It is one of those Alberta entrepreneurial success stories that everybody loves. Initially an oil company could only purchase a PCP through a supply store. Two decades ago. whether it’s using our existing equipment or sitting down with our customers and coming up with a new approach. whose PCP install ended up lasting over 12 years. a father and son team of gear-heads. 78 OILFIELD TECHNOLOGY April 2011 . He was a pioneer in using PCP technology in sand laden heavy oil wells and high water cut (95% +) oil wells.

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com Oilfield Technology is audited by the Audit Bureau of Circulations (ABC). Meaning a collaborative relationship with our customers is key to our success. . 48 OFC. At the end of this dark tunnel. Robert saw Lean Manufacturing which encompasses low debt and low inventory levels. O T Advertisers Index ATLAS RESIN PROPPANTS BWA ADDITIVES CAMCON OIL CAMERON CUDD ENERGY SERVICES DYNA TORQUE EAGE ENERGY GLOBAL ENERGY GLOBAL IPHONE APP FMC TECHNOLOGIES GEO 2012 GEODYNAMICS GLOBAL INDUSTRIES KUDU PUMPS 71 IFC 37 23. They have valuable ideas on how to improve their area of expertise” Ray says. They have grown to have 13 service centres in Alberta and Saskatchewan along with offices located in Russia. “But we have always put a lot of effort into being an authentic service company. 55 79 59 28 07 OBC 71 09 35 21 71 13 51 75 SEABIRD EXPLORATION 16. Romania. “Kudu has always gone up against much larger and entrenched competitors. 72 41. Perhaps most importantly.” Soon. enabling three acquisitions. Ray was doing the majority of installs at the time and Kudu was quickly gaining a reputation for being the knowledgeable PCP company and the ‘go to’ guys for difficult well applications. This holds true today. 67 17. These changes vastly improved Kudu’s prospects by increasing annual sales. Business was good. geographic sales diversity. An audit certificate is available on request from our sales department. Robert and Ray moved from the garage to a small plant and then to a bigger plant shortly after. The business at that time was 95% in Canada and suddenly 60% of the business went out the door. In 1998 the oil price plummeted and Kudu was shouldering high inventories and bumping up against its credit line. wider awareness of economic and industry cycles and a culture of employee engagement. holding over 20 patents dealing with PCP technology in the artificial lift field. 43 52 IBC 15 02 SERCEL SERIMAX SIEMENS AG SPIR STAR TD WILLIAMSON ZWICK ARMATUREN To obtain further information on any of the above companies. 27 56 M-I SWACO OTC P2 ENERGY SOLUTIONS POSTLE INDUSTRIES ROSEN SCHLUMBERGER 04. the company now conducts more R&D work in its field than any other. “Give employees the tools and empowerment to succeed. reducing stock outs by 98% and eliminating bank debt all in the space of four years. please visit the Advertisers Index page on our website: www.” says Ray. Kudu’s largest Canadian competitors have now been bought out by even larger multi-national oil service companies. Oman. Kazakhstan.company news A direct supply chain made the old distribution scheme less viable and prompted competitors to follow Kudu’s lead and stop selling to supply stores.energyglobal. the USA and Australia.

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