PAPER

SOCIETY OF PETROLEUM ENGINEERS OF AIME

Fidelity Union Building
NUMBER 1554-G
Dallias, Te:xas.

TillS IS A PREPRINT --- SUBJECT TO CORRECTION

II EVOLUTION OF A SYSTEM APPROACH TO THE DESIGN

AND ORGANIZATION OF OILFIELD PRODUCING FACILITIES"
By

K. H. Kretzschmar and M. A. Smith

Mobil Oil of Canada, Ltd.
Calgary, Alberta

Publication Rights Reserved

This paper is to be presented at the 1960 Fall Meeting of the Society of

Petroleum Engineers of the American Institute of Mining, Metallurgical and Petroleum
Engineers in Denver, Colorado, October 2-5, 1960, and is considered the property of
the Society of Petroleum Engineers. Permission to publish is hereby restricted to
an abstract of not more than 300 words, with no illustrations, unless the paper is
specifically released to the press by the Editor of the Journal of Petroleum
Technology or the Executive Secretary of SPE. Such abstract should contain appro-
priate, conspicuous acknowledgment of where and by whom the paper is presented.
Publication elsewhere after publication in Journal of Petroleum Technolo~ is
granted on request, providing proper credit is given that publication and the
original presentation of the paper.

Discussion of this paper is invited. Three copies of any discussion should be

sent to the Society of Petroleum Engineers office. Such discussions may be presented
at the above meeting and considered for publication in Journal of Petroleum Technology
with the paper.

ABSTRACT

The usual approach to the design and organization of produc-

ing facilities results in inefficient utilization of equipment
and manpower. A more effective approach is suggested, in which
all facilities related to the producing, gathering, processing
and transportation of reservoir fluids are regarded as consti ..
tuting a single, integrated system. System design concepts are
outlined, and three case histories are presented to show how
these conceptsh3:vebeen successfully applied to large scale
operations.

It is concluded that a further extension of the system

approach to its ultimate objective must inevitably lead to a
functional reorganization of the various corporate identities
engaged in finding, producing and exploiting sources of oil
and gas, with benefits to all concerned.
 ttEVOL1YrION OF A SYSTEM APPROACH TO THE DESIGN AND
2 ORGANIZATION OF OILFIELD PRODUCING FACILITIES"
INTRODUCTION
The development of oilfield produc-
ing facilities in a given field nor-
mally parallels very closely the course
of development drilling in that field.
The location of production centers or
batteries) at which testing, treating,
storage and custody transfer take place,
is usually determined on the basis of
geographical apposition with a conven-
iently sized group of wells and the
pipe line gathering facilities. As de-
velopment drilling proceeds, duplicate
production centers are added in the same
manner.
This approach encourages redlmdan-
cies in facilities and equipment. These
redundancies result in overall develop-
ment costs which are excessive in rela-
tion to production volumes. Utiliza-
tion of labour is inefficient and
operating costs are higher than necess-
ary in relation to the functions per-
formed. Flexibility to meet changing
conditions is poor, and a significant
improyement in operating efficiency can
only be achieved through a comprehensive
reorganization of the existing facili-
ties.
It is the purpose of this paper to
demonstrate how an integrated system
approach to the design of producing
facilities can forestall involvement in
these problems, or help to solve them
effectively where they already exist.
SYSTEM DESIGN CONCEPTS
In the broadest sense an integra-
ted approach to system design comprises
two essential phases:-
1. Statement of the problem.
a. Definition of the system
mission.
b. Choice of the measure of sys-
tem effectiveness.
2. SugGested solution.
The problem involved in designing
an oilfield producing system may best
be stated by defining the mission of
such a system. The mission of any pro-
ducing system is to get the hydrocar-
bons out of the reservoir and into the
hands of the ultimate, large scale user
l554-G
as expeditiously and as profitably as
possible. This implies that both the
producing facility and the gathering
or pipe line facility must be regarded
dS one total, integrated system.
Neither the producing facility
nor the pipe line facility should be
treated as a discrete entity. Neither
must present the other with a fait
accompli which might circumscribe a
desirable course of action.
The best measure of effectiveness
of such a total system is its profit-
ability. Profitability is, in this
case, a function of capital invest-
ment, manpower utilization and flex-
ibility of operation.
Suggested solutions to the design
of an oil field producing system
should) with few exceptions) be based
on the premise that such a system is a
characteristic example of single-
thread design (ie.) it is possible to
state exactly what will happen to
every possible input at every stage of
its passage through the system, or to
describe every response which it will
evoke in the system 1). The system
must, of course, be able to process
its inputs so as to provide the
necessary outputs.
The desired outputs are two in
number, 1) product and by-product, and
2) information. The character of these
outputs is specified in advance. This
specification largely controls the se-
lection of components, as well as the
general form the system must assume.
.In order to optimize the design with
respect to th~measure of effectiveness
the system must be automated to a degree
consistent I/i th i ts complexity. That is
to say, man must be augmented by machine
in his control and information functions
wherever these are sufficiently demand-
ing to affect the profitability of the
system. Therefore, in simple terms, the
successful application of single-thread
design to a producing system essentially
entails the organization of that system
so as to constitute a continuous-flow,
self-regulated process which will pro-
vide the desired outputs at minimum
1554-G K. H. KREl'ZSCBMAR AND M.A. SMITH
cost.
As implied in the introduction, two
basic areas exist for the implementation
of these concepts, 1) the development
of new systems concurrent wfth develop-
ment drilling, and, 2) the reorganiza-
tion of existing systems to improve
operating efficiencies. Of these two,
the latter is the more commonly en-
countered and represents the most
challenging problem. In the following
discussion three case histories are
presented to show how system design con-
cepts have been successfully employed in
these two basic problem areas.
CASE HISTORIES
I. SYSTEM DEVELOPMENT CONCURRENT WITH
DEVELOPMENT DRILLING
The first attempt in Canada to em-
ploy an integrated approach to the design
of a large scale producing system had its
origin in 1957, when Mobil Oil of Canada
began development drilling in the Wey-
burn Field, approximately 80 miles south-
east of Regina, Saskatchewan. The objec-
tives established at the outset caLled
for a system which would allmr wells to
be placed on production as soon as poss-
ible after completion, without the need
for temporary facilities. This system
had also to be capable of expansion
without unnecessary dL~lication of
facilities as development drilling pro-
ceeded. An overriding consideration
was the stipulation that "build-up of a
permanent production staff must be held
to a minimum.
A visual inspection of MobilIs
acreage pattern in this field gives
some idea of the magnitude of the prob-
lem (see Figure 1). A further complica-
tion was the presence of formation water
which would require suitable oil treat-
ing equipment to be used. Obviously, the
type of development described in the in-
troduction would have failed completely
to satisfy the specified objectives.
However, the checkerboard acreage
configuration and the need for both
testing and treating facilities also
suggested the outlines of a practical
solution to the problem. The solution
3
envisaged the establishment of satellite
header stations at the intersection of
adjacent Mobil quarter-sections, where
conventional batteries would normally
be required. Production from a number
of wells would be grouped fo~ testing
and for transfer through a common flow-
line to central treating and custody
transfer stations at strategic locations.
A schematic diagram of the basic system
elements is illustrated in Figure 2.
Further examination of this proposed
solution in the light of probable drill-
ing trends indicated that it would not
only meet the desired objectives but
would also provide other important advan-
tages. Among these were the following:-
1. It would be feasible to apply auto-
mation in order to achieve a con-
tinuous-flow, self-regulated
process.
2. The extent and cost of pipe line
gathering facilities could be re-
duced appreciably.
3. Better control over the entire
producing operation would result.
4. The system would lend itself well
to the eventual installation of
centralized data acquisition and
processing facilities.
In view of these considerations the
suggested solution was adopted and en-
gineering of the system "\-las begun.
Rigorous requirements for well testing,
both as to frequency and accuracy, indi-
cated that the control and information
functions of the system were sufficient-
ly demanding to justify full automation
of the satellite header units, apart
from the desire to automate for the
purpose of making the system a contin-
uous-flow,- self-regulated process.
A large part of the engineering
effort was devoted to the design of the
satellite units. A typical satellite
unit consists essentially of a pre-
fabricated, skid-mounted and housed
header, equipped with motor valves for
diverting incoming production from the
wells to either a test or a group mani-
fold. A simple programmer automatically
routes a different well to test each day
according to a pre-selected schedule.
The test circuit includes a test separa-
 "EVOLUTION OF A SYSTEM APPROACH TO THE DESIGN AND
4 ORGANIZATION 'oF OILFIELD PRODUCING FACILITIES"
tor and associated metering and analyz-
ing devices which measure produced oil,
water and gas, and transmit these data
as electrical pulses to a recorder.
The group manifold merely commingles
production from all wells with the test
production, and directs it into a common
flow line for transmission to a central
treating station. There is no jntermed-
iate storage or physical handling of
produced fluids at the satellites. The
units are compact and require consid-
erably less space than the conventional
battery (see Figure 3).
The central treating station func-
tion is to provide clean oil for ship-
ment to the pipe line. The produced
fluids flow through vertical separators,
a line heater, an overhead separator,
and into an electrical dehydrator where
the water and basic sediment are ex-
tracted. Transfer is effected through
a skid-mounted ACT meter unit. A with a payout time of 6.2 years and a
typical central treating station is
sho~~ in Figure 4.
Locations for the central treating
and custody transfer stations were
based on a number of factors:-
1. Drilling programme.
2. Optimum grouping of wells and
satellite units.
3. Optimum pipe line gathering con-
figuration.
The latter factor, in particular,
demonstrates the importance of the sys-
tem approach. By considering the pipe
line as an integral part of the total
producing system, it was possible to
effect substantial savings in gathering
costs. These have been reflected in a
number of important ways, including
subsequent tariff reductions.
As presently constituted the
Weyburn development consists of 9
satellites and 4 central treating
stations j handling the produced fluids
from.7b wells (see Figure 5). This sys-
tem is a successful example of single-
thread design, organized as a self-
regulated, continuous-flow process from
reservoir to pipe line. Automation has
been applied where necessary to achieve
optimum system effectiveness.
l554-G
The system has proved to be both
practical and reliable during the past
three years. Its flexibility to meet
the demands of a market which has varied
from 1800 bpd to 6500 bpd over this
period has been remarkable. Further,
its capacity for ready expansion is de-
monstrated by the fact that 20 addition-
al wells now being incorporated into the
system require only the installation of
one more satellite header and a nominal
amount of group flow line. No increase
in the producing staff will be necessa~
Based on the experience of other
producers in this area, and on Mobil's
operations elsewhere, the manpower re-
quired for the Weyburn system is about
one-half that which would be reqUired
for a conventional system of the same
size. An economic analysis presented
in May, 1959 shows a rate of return on
the system investment of 19% after taxes,
net profit per dollar invested of $1.45.
These figures will be further improved
as a result of the 20-well expansion
mentioned above. More detailed informa-
tion on the design, operation and eco-
nomics of the system is given in refer-
ence (2).
II. REORGANIZATION OF EXISTING
FACILITIES
A. Typical Large Non- Uni t Operation
Early in 1958 Mobil Oil of Canada
began large scale water flooding of its
holdings in the Pembina Field, approx-
imately 55 miles southwest of Edmonton,
Alberta. These holdings consist, in the
main, of three large contiguous areas,
totalling 14,480 acres. These areas are
known locally as Blocks 1,8, and 10.
There are 93 producing wells and 88
water injection wells. A majority of
the producing wells are on pump, and
prior to flooding, no water was produce~
After flooding commenced, provision
had to be made for the dehydration of
wet production. A conventional approach
to this problem would have resulted in
the installation of emulsion treating
and water disposal facilities at each of
the 12 existing batteries.
 K.H. KRETZSCHMAR AND M.A. SMITH
A preliminary investigation of the
economics of this approach indicated
that the cost of ancillary facilities
for water collection, treatment and
disposal; ACT; housing and heating of
exposed equipment, etc., would have been
almost double the cost of emulsion
treating facilities, an appreciable sum
in itself. This suggested that the op-
timum solution should be based on elim-
ination of as many treating points as
possible. A consideration of the oil
and gas gathering facilities as an
j.ntegral part of the system produced
the SCkJ'1le conclusion.
For other than engiEeerinr~ reaso:Cls,
:t was not possible at that time to
apply system design concepts on as broad
a basis as would have been dec>irable.
Accordingly, a more limited approach
was adopted. Thi~ consisted in treating
each of the three contiguous producing
areas as three separate and wholly con-
tained systems. To illustrate this
case histor;y only the f,;ystem for Bleck
1 is discussed, since the other two
were developed in the same manner.
Block 1 is a roughly square con-
figuration of 6400 acres, containing 40
producing wells and 40 water injection
. wells. Four batteries were originally
located in this area, served by separate
oil and gas gathering facilities.
. P:,:oceeding on the premise that only
one treatirygand custody transfer point
would be established for the area, the
system design resolved itself into a
satellite testing and central treating
layout, similar to that developed for
Weyburn. The existing battery confi-
guration and well grouping appeared
to lend themselves favourably to the
location of satellite well testing
headers at each of the battery sites
(see Figure 6).
Terrain features, elevations,
and existing oil and g as gathering
lines pointed to the battery site in the
southwest quarter of the area as a de-
sirable location for the central treat-
ing station. This location would make
it possible to utilize portions of the
oil and gas gathering lines as group
flow lines to bring commingled produc-
5
tion from the satellite testing headers
into the central treating station. It
was ascertained that the lines so
utilized could be leased from their re-
spective owners for a nominal Suill, in
consideration of the fact that transfer
points would be reduced from four to
one.
Cost estimates for a manually
operated system organized along these
lines showed that it would be apprecia-
bly less expensive than the convention-
ally developed system first investiga-
ted. However) from the sbj,ndpoint of
relative profitability to t11e producing
company, there were no significant
advantages apart from thiS, inasmuch as
the mcwy,ower required to operate either
system would have been about the S8Jlle.
It -ViaS apparent that in order to
optimize the design with respect to
profitability, the system would have
to be automated to the maximuJTI extent
feasible. fL"'l economic analysis of the
effect of automation on system profit-
ability showed that while capital in-
vestment requirements wOlud thereby
be increased, manpower requirements
could be reduced sufficiently to pro-
vide a good payout and rate of return
on the additional investment for auto-
mation. A summary of this analysis is
presented in Figure 7. Accordingly,
the decision was made to proceed with
the design of a fully automated, con-
tinuous-flow system, based on the
satellite testing--central treating
prinCiple.
From the experience gained at
Weyburn a more sophisticated design ·was
evolved for the satellite well testing
1mits. This design is based on the use
of more elaborate instrumentation, to-
gether with electro-hydraulic motor
valves for the control and routing of
produced fluids. A schematic diagram
of the satellite design is shown in
Figure 8. The prinCiple of operation
is as follows:-
Three-way, three-position, elec-
tro-hydraulic header valves, controlled
by a simple programmer, route a diff-
erent well to test each day. Produc-
tion from the other wells not on test
 tfEVOLUTION OF A SYSTEM APPROACH TO THE DESIGN AND
6 ORGANIZATION OF OILFIELD PRODWING FACILITIES"
is commingled at the header and flows
through a common line to the central
treating station, which serves four
such satellites in Block 1.
Fluid production from the well on
test is metered after passing through
the test. separator by a posi ti ve dis-
placement type meter which generates an
electric pulse for each 1/10 bbl of
fluid. Water cut is sensed by a capi-
tance type product analyzer. A ball and
disc integratol' in the analyzer inte-
grates the capacitance measurement with
respect to the rate of fluid. flow, as
measured by the PD meter) to give a
pulse output for each 1/10 bbl of net
clean oil.
Gas from the test. separator is
mf-:::tered by a force ba.lance t.ype flow
computer whlch gives a pulse output for
each 100 scf of gas. An automatic ori-
fice changer, controlled by the test
progr8Jnmer, provides the required
ra.ngeability.
The three pulse outputs, for total
f;!-uid, net clean oil, and gas, are
stored in a data printer. Test totals .•
plus well identification, time and date,
are automatically printed out at the end
of each test. After all measurements
have been accomplished, the test produc-
tion is commingled with non-test pro-
duction in the group flow line.
Malfunction alarms and fail-safe
features combine to make these Lmits
completely self-regulating in operation.
No hmnan attention is required, other
than for routir.e maintenance. A
photograph of the interior of a typical
satellite well testing unit is shown
in Figure 9. An engineering analysis
of satellite performance to date is
given in reference (3).
At the central treating station
emulsion treating is accomplished by
electrical dehydration. Produced
water is filtered and disposed of into
the water injection supply system for
Block 1. Treated oil is shipped by
means of ACT. A photograph of the in-
stallation is shOl,n in Figm'e 10, and a
schematic diagram of the central treat-
ing station is shown in Figure 11.
1554-G
Design details of the ACT facili-
ties are given in reference (4). In
this and subsequent installations the
producer has assumed the capital in-
vestment and maintenance responsibili-
ties for all equipment upstream from,
and including, the shipping tank out-
let valve. The pipe line operator has
assumed capital investment and main-
tenance responsibilities for all equip-
ment downstream from the shipping tar"k
outlet valve. This includes meter
proving. A typical pipe line metering
installation for ACT is sb.own in
Figure 12.
A review of system profitability
made in March, 1960, showed that
actual performance was exceeding pre-
dicted performance by a comfortable
margin. The current rate of return on
system investments is 26% after taxes.
This does not include a sum of $68,000
realized from the sale of equipment
made surplus by the reorganization of
facilities.
B. Large, Newly-Formed Unit
The North Pembina Cardium Unit
No. 1 ~was formed in September, 1959.
The ul1it is located in the :pembina
Field irmnediately to the north of
Mobil's "Block" holdings; it covers
an area of 45,040 acres and has 563
wells served by 69 batteries (see
Figure 13).
Formation of the unit was under-
taken to permit the optimum exploitation
of the reservoir by secondary recovery
means. The secondary recovery scheme
consists of a central miscible flood,
based on five 41-spot patterns, with a
peripheral 9~spot water flood.
Prior to unitization all produc-
tion had been dry, but with the advent
of water injection, it could be anti-
cipated that water production would
rapidly follow. Furthermore, high
GORs could be expected in the miscible
flood area. A considerable capital
investment would therefore be required
to provide adequate production, treat-
ing and disposal eqUipment.
The irregular disposition of hold-
1554-G K.H. KRETZSCHMAR AND M.A. SMITH
ings and existing production facilities
were additional factors to consider.
Large blocks of land) having up to 80
wells) were interspersed by small
corridors having no more than two
wells. The overall result on a emit
basis was an expensive) inefficient
utilization of eqUipment and manpower.
A study was therefore initiated to
analyze existing operations and to
develop the optimum producing system.
Two possible methods of develop-
ment, over and above the conventional
idea of independent self-contained
batteries, were considered. The first
system envisaged a consolidation of
test facilities from 69 to 3)+ locations
wi th a division of th.e LUli t into small
producing areas) each with a treating
station serving three or four batteries.
This vrould have constituted a system
similar to tl::lO second case history.
The secO!ld method of development
conceived was a considerable advance-
ment beyond the firBt) and employeJ.
for H,e f lrst UYJe a true total cl;pproach
to the llroblen:. at hfuld. The number of
battery 10caU_ol1s would still be re-
duced but, rather than small inde-
pendent producing areaB, each with a
treating station, the unit would be
conBidered as a single integrated pro..
ducing area.
A minimum of well test f::ccilities
would be used; large centralized treat-
ing and custody transfer stations would
be establiBhed; and the existing pipe
line gathering facilities would be
exploited to the maximum extent poss-
ible. The sYBtem layout is shown in
Figure 14.
The basic componentB employed in
this approach are) with minor modifi-
cationB) similar to those in the two
BYBtems previously discussed. The
satellite well test units each have a
group oil-gas separator. This separa-
tor is additional to that required for
test purposes. It allows the existing
gas gathering facility to be used, and)
by elimination of gas from the fluid
stream, lowers the pressure drop in
the gathering lines, thereby reducing
flow line sizes and attendant invest-
7
ment costs.
Design of the gathering lines be-
tween the satellite units and the cen-
tral treating station is based on the
maximum fluid flow expected, which
ultimately will be mostly water.
Since a pipe line gathering facility
was already in place, it was reasoned
that centralization of treating equip-
ment would be very attractive if this
facility could be utilized. This
has been found to 'be feasible, and of a
total gathering system length of 52
miles) sO)1le 23 miles will be acqui:!:'ed
from the pipe line company for this
purpose.
Two contral treating stations
serve the entire unit area, one on
either side of the North Saskatchevan
river. The stations consist of oil and
water treating equ~.:pment similar to that
in Block 1. Throughptrt vohunes will he
considerably higher for the ves·';:; side
station, or on the order of 30,000 bpd
of oil and, ultimately, '(5,000 bpcl of
1-rater.
A supervisory monitoring a.nd data
acquisition centre wi1l be located at
the main central treating stat jon.
Alarms, well status, and well test data
are to be telemetered to this centre.
A data logger will produce simultan-
eously a print-out for local use, and a
perforated tape for re-transmission by
teletype to the data processing centre
in Calgary. A data flow chart is shown
in Figure 15.
The advantages of developing the
uni t as a single, integrated proclucing
system are manifold. These advantages
have been discussed at considerable
length in other papers (references 2
and 3). Ultimately, however, the cri-
terion must be the economic analysis
of the development concerned.
On a basis of net investment,
total centralization offers the optimum
solution. On a basis of gross invest-
ment the analysis is still outstanding,
yielding a rate of return of 35%, a
payout time of 4.4 years, and a profit
per dollar invested of $2.57, after
taxes. A breakdown of the investment
 ttEVOLlJrION OF A SYSTEM APPROACH TO THE DESIGN AND
8 ORGANIZATION OF OILFIELD PRODUCING FACILITIES"
and primary operating costs for the
alternatives available is shown in
Figure 16. These figures are based on
field operating cost reductions only,
and do not reflect the savings which
will result from machine processing
of production data in Calgary.
CONCLUSION
The evolution of a system approach
to the design and organization of oil
field producing facilities has been
traced through the discussion of re-
presentative case histories. These
deal with successive projects in which
system concepts have been applied on an
increasingly broader base and larger
scale.
Fundamental to this approach is
the treatment of all facilities (produc-
ing, gathering, processing, transpor-
tation, data acquisition, and reduction)
as one total, integrated system. An
objective analysis of this approach will
show that two basic functions are
involved:-
1. Finding, developing and producing
the reservoir.
2. Gathering, processing and ex-
ploiting the reservoir products.
These functions are mutually inter-
dependent but organizationally separa~
ble.The iact tltat they are organiza-
tionally separable suggests the course
of action which must be followed to
carry the system approach to its ulti-
mate conclusion.
Two final steps are necessary:
The producing organization must divest,
itself of financial and operational in-
volvement in function 2, and a separate
corporate identity must assume respon-
sibility for function 2 in its entir~y,
starting at the wellhead.
The adw.utages of this are obvious.
None of the producer's capital and man-
power are squandered on the installa-
tion, operation and maintenance of faci-
lities which cannot, in the final
analYSiS, give him any return on his
investment. His return is derived
solely from the sale of reservoir pro-
ducts, not from the operation of sur-
l554-G
face facilities. With a separate cor-
porate identity responsible for function
2, this phase of the system can be
developed on a much larger and more
efficient scale; since its facilities
would serve not one, but all produc-
ers in a given field.
It is logical to assume that such a
corporate identity would, or could, be
public ally financed and subject to re-
gulatory control of its rate of return.
Because of the lower element of risk
involved, the permissible return would
be fixed at a relatively low level.
In turn, this would provide oppor-
tunities for investing in measures to
increase system efficiency which might
be denied to the producer, because o£
the necessarily higher rate of return
on capital investment his higher risk
operation requires. Among other ad-
vantages, this should result in a much
more extensive use of automation.
Although these developments seem
to be inevitable in view of the bene-
fits to all parties concerned, they
will not be realized without a great
deal of missionary work. A prominent
industry executive has summarized the
problem qu~te succinctly in the
following words: ttThere are large
groups in this industry that are dead
set against forward movement, whatever
they say to the contrary. The abstract
thing--progress--they favour. It is
the concrete thing--change--that they
look upon with suspicion and fight
off whenever it comes too close to
them. II 5
1554-G K.H. KREI'ZSCHMAR AND M.A. SMITH 9

REFERENCES

1. Harry H. Goode and Robert E.

Machol, SYSTEM ENGINEERING J
McGraw-Hill, 1957.
2. M.A. Smith, "Automation in the
Weyburn Field, Saskatchewan,1t
THE CANADIAN MINING AND METAL-
LURGICAL BULLETIN, December, 1959.
H.L. <Brusset and C.A.Y. Shephard,
"An Evaluation of a Satellite
System in the Pembina Fie1d,l1
1J'RE CANADIAN MINING AND METAL-
LURGICAL BUIJ~TINJ August, 1960.
4. K.H. Kretzschmar and M.A. Smith,
"Suggested Criteria for the Design
of Automatic Custody Transfer In-
stallations," THE CANADIAN MINING
AND METALLURGICAL BULLE:TIN J
August, 1960.
5. Robert C. Gunness, in "Views that
Make News, II PETROLEUM WEEK,
March 11, 1960.
 "EVOLUTION OF A SYSTE!W APPROACH TO THE DESIGN AND
10 ORGANIZATION OF OILFIEIJ) PRODUCING FACILITIES" 1554-G

TP
6

TP.
5
MOBIL ACREAGE
IN WEYBURN FIELD
o ! Mile
Sc a Ie: -=:::::::I

.----B-A-S-I-C-E-L-E-M-E-N-r-s-OF-W-~-,~~-EU-~-N-P-R-O-o-u-c-r-'O-N-s-Y-s-r-E-Ml

I CENTRAL
I I TREATING SURGE
WELLS I S/\TELLITES I STATION TANK PIPELINE

FLUID PRODUCTION I GATHERING SEPARATING AND POSITIVE SUCT10N METERING AND

AND TESTING I TREATING TOTAL HEAD FOR SH I PPING
I PRODUCED FLUIDS I PL PUMP CLEAN OIL
1554- G K . B . =Cl!MP.R AND M.A . SMITH 11
FIGURE 3

WELL TEST FACILITIES

-
.\:., X .
CONVENTIONAL BATTERY

-
SATELLITE UNIT

FIGURE 4

TYPICAL CENTRAL TREATING STATION

WEYBURN FIELD
 "EVOLUTION OF A SYSTEM APPROACH TO THE DESIGN AND
12 . ORGANIZATION OF OILFIElD PRODUCING FACILITIES" 1554-G

Irj.
R.14 R.13

I I I I I I I "'----I I
.... re ~

--- ~
r-
b
0
- .- ~
"
......
~ .A. TP.

~ '-J /
6

... / ~
• f~ I~~
. '-. . .-..
'"
1..-" I~- ~
:... \

I~ ":~..~:. I

.., ,_.L' '"'

I~ --.. ~~.
FIGURE 5 -':.-....-.
SYSTEM LAYOUT WEYBURN FIELD

••• SATELLITE
LEGEND
CENTRAL TREATING STATION AND SATELLITE . -..
•
~,:~ •
~~-:.:_.;-o
: 1;\
6 \,
\
OIL WELL • TP.
-¢- DRY HOLE 5
-
- - ABANDONED WELL
GROUP FLOWLINE
WELL FLOWLINE
.
NEW DEVELOPMENT
SATELLITE
"
----- GROUP FLOWLINE
~------ WELL FLOWLINE

FIGURE 6

SELF- REGULATING PRODUCTION FACILITIES

_ CENTRAL TREATING STATION

AND WELL TESTING SATELLITE
19

.. 20
.. 21 - - - , . - - - - 22

D SELF-REGULATING WELL
L-_ TESTING SATELLITE

15
• PRODUCING WELL

....... WATER INJECTION WELL

- - FLOW LINE

- GROUP FLOW LINES

7 10

---OIL GATHERING LINE ...

- GAS GATHERING LINE

5-----1.---4---'-----3
Rge 8
l554-G K.H. KRETZSCHMAR AND M.A. SMITH l3

Fig. 7

ECONOMIC ANALYSIS OF PRODUCTION SYSTEM FOR BLOCK 1, PEMBINA FIELD

CAPITAL INVESTMENTS

1. Conventional Approach. $188,300

2. Satellite Testing - Oentral Treating (Mallual Operation) 145, 700

3. Satellite Testing - Central Treating (Automated) 229,400

ADDITIONAL COST OF AUTOMATION

Item 3 - Item 2 $ 83,700

RATE OF RETURN ON ADDITIONAL INVESTMENT FOR AUTOMATION

PERIOD 1960 THROUGH 1979

Additional Operating Cost Net Savings 17"/0 Discounted

Investment Savings for Net Tax Tax In Operating Value of
for Automated Depreciation Write-Off Benefit Costs Net Savings
Automation System

$ 83,700 545,300 83,700 461,600 (249,264) 296,036 84,697

Rate of Return 17% Plus

Payout Time 6.4 Years

Net Profit per $1.00 Invested $2.54

FIGURE 8

SCHEMATIC DIAGRAM OF SATELLITE WELL TEST UNIT

TO CENTRAL
TREATING STATION
 " EVOLl1rI ON OF A "SYSTEM APPROACH TO TIlE DESIGN AND
14 ORGANIZATION OF OI LFI ELD PROD~ ING FACILITIES " 1554- G

FIGURE 9

TYPICAL SATELLITE UNIT INTERIOR

FIGURE 10

CENTRAL TREATING STATION, BLOCK I SYSTEM

 I--'
Vl
\11
+=:-
I
,:}

FIGURE II

SCHEMATIC DIAGRAM OF CENTRAL TREATING STATION

GAS TO
GATHERING SYSTEM ~

MOTOR
B.S. 8 W. .
~

VALVES
MONITOR
g
~
N
m
0

PRODUCTION FROM
SATELLITES ~
;t>
S
:s:
!r>
.
gsm
TO GAS
GATHERING SYSTEM ~
VAPOUR RECOVERY' TO WATER
UNIT INJECTION

OIL TO
PIPELINE

I--'
\J1
 "EVOLUTION OF A SYSTEM APPROACH TO THE DESIGN AND
16 ORGANIZATION OF OILFIELD PROD1.K:!ING FACILITIES" 1554-G
FIGURE 12

SKID MOUNTED ACT METER UNIT

Flour. 13

EXISTING BATTERY SITES

AND
GATHERING FACILITIES
NORTH PEMBINA CARDIUM UNIT .NO. I
PEMBINA FIELD
2 Mil ..
Scal, : I
 I-'
V1
Roe.9 Roe.S Roe.7 W. 5 M. Roe.S V1
+-
I
Q

r.·_1--I+-:j
,.
" u I. . "

':~-t.. r
• I
I
I

r-:-=--·~. +--------'-----4-
n;_
+---9L--:::--~... . . ..
.,0

· '1°'-:-I
',.
t·
,_' -
I

I I I

l~. -----~--- Twp.

49 .::IIx

~ .~.
I "E·"····f··'
. .
o-:__ ~.... . . . . . . . '.
I .',
.

9
. .

10
.
+-~~----~------~--.
.,. -
-P-I
• i
jl.
'I
1-
"
~8
N
m
0

~
• •I • "',' . • . •
'1 !
· ~~I.~·~.<.jli~_:-.f· !> I .. "
• If I
I
I.
~
.
• • I • • "
I I'"
I ...
:s:
, I
;t>
i I

. • . II t. ~
H
I
_-'--_fL_
• I
I
til
I I
,
I
--1.. -----_
I
i

/. " "
rl
I
. . .
______ _
Figur. 14
~ ...l_~ __
. I
,.
I ;1'..- Twp.

./~,rr
·,1 . ,/ 23· 2'1
. I
FINAL PRODUCTION SYSTEM LAYOUT 4·8

NORTH PEMBINA CARDIUM UNIT NO, I

PEMBINA FIELD
1---------
~. ?\
i'
.,
I-'

•
o
CENTRAL TREATING 5TH
wITH SATELLITE
SATELLITE
- - - - - GROUP FLOWLINE (NEW)

- - GROUP FLOWLINE
01
j
-'--J

Scolo: o,---====--==",
i •
----- j
 "EVOLDTION OF A SYSTEM APPROACH TO THE DESIGN AND
18 ORGANIZATION OF OILFIELD PRODmING FACILITIES" 15~4-G

Fig. 15

PRODUCTION INFORMATION GATHERING AND PROCESSING FLOW DIAGRAM

PEMBINA FIELD CALGARY

________ D~ ~~ING SYSTEM __ ----L ___ ~M DATA I

~~~ _ _ _ _ _ _ _ ~O..:'~C~N AC~OUNTI:::
Production data from DAILY REPORTS II I
Satellites and Treating Stations
via Telernetering I
I I
I Tape
I
to
Card I
Dowr, time
Well char.ge
I
Reports
-.--- I
I
I
r-----
I
I
Summary
Estimated Oil I
I
I
I
I
I
I

------------+-
I MONTHLY REPORTS
Produce

I Monthly Report

I
I
I Produce
Monthly Report

I
I
I
I
I
 I--'
\J1
\J1
+:-
I
FIGURE 16 Q

ECONOMIC ANALYSIS OF PRODUCTION SYSTEM

)

NORTH PEMBINA CARDIUM UNIT NO.1

Conventional Limited Total

Consolidation Centralization

Gross Investment $4,955,000 $3,565,000 $3,862,000

Oil Inventory and Salvable Material 575,000 983,000

Net Investment 4,955,000 2,990,000 2,879,000

Difference in Gros s Inve stment $ 297,000

Difference in Operating Costs (16 years) $2,589,000

Relating the Difference in Operating Costs (after tax)

to the Difference in Gross Investment, over a 16 year
period yields:-

Rate of Return 35%

Pay-out Time 4.4 years
Profit per $1 Inve sted $2.57