ResearchGate Drilling and Well Completion Cost Analysis of Geothermal Wells in Turkey 2 9a Semeot he authors hs publication reals worsng on these rates projets: ‘antn ooung eps ws anced by Soros Sl on 1 ebay 2018,PROCEEDINGS, Ad Weksop oe Geter! Reser gineering Sen Une, Std Co ebay 2018 Drilling and Well Completion Cost Analysis of Geothermal Wells in Turkey Sercan Gul’, Volkan Astanogla’ "hide East Technical University, PetcoloumdeNalurl Gas Engincering Department, Ankara, Turkey serean gul@gmail com, sslanogluvolkan@met.edutr Keywords: geothermal energy, diling, well completion, cst estimation ABSTRACT ‘More than one thousand wells have been dried in Turkey for geothermal energy development which ranked the country upto fourth in total geotherml energy production worldwide, Despite of the high number ofthe wells, there are very limited resources on the costs of ‘these wells and whether i is more affordable to invest in geothermal energy in Turkey in comparison with other geothermal producing counties, The objective ofthis paper isto provide a numerical method and code to calculate the dilling, completion and testing costs of new wells which can be used as an estimation by operators who are interested in investing inthis market and as a result provide a comparison of these costs withthe well costs in other thermally active countries. Well drilling and completion data from more than twenty wells have been analyzed and merged together to form a sofware to calculate the estimated costs of dling, completion and testing a well with a diesel rg in Turkey, This software uses the rig capacity, rig type, the drilling type (kelly or top drive), easing selling depths foreach easing, existing drilling thind party services (mad, directional drilling, performance drilling etc.) and estimated rate of penetration values from offset wells as the input. The code runs wit already calculated casing running times, tripping speeds and connection times for each different size of casing and drill pipe together with the time estimation formulas and provides the service costs and time graphs with the option of changing each input easily. Asa result ofthe study, it was observed that the associated costs in “Turkey are the cheapest amongst the costs of wells in Australia, France, Germany, Iceland, Kenya, Netherlands and the United States, “The major reasons ofthese low costs are mainly because of the following three main parameters. Fisly, daily operating costs of rigs and third-party services and labor cos's in Turkey’ are more affordable compared to other counties. Secondly, the major equipment of the well which are the easings are chosen from the lowest cost option since wells are not overblanced and there is no need fora high cost or high-grade casing to dil these wells. Thirdly, the drilling experience in Turkey resulted in a competitive market which resulted in more optimized wells wile minimum drilling ines. In literature, thee is no published study for the estimation of ding, well completion and well testing costs of geothermal wells in Turkey. This study and the associated code are very important for a geothermal ‘operator to estimate the project times and related costs associated with ther investment. 1. INTRODUCTION Increasing demand for energy with lower CO; emissions in today’s world has resulted inthe necessity of allemative energy sources. In the last decade, there is more and! mote interest in renewable energy sources du to their low CO; emissions and sustainability. One of ‘the most influenced energy source in Turkey today is geothermal energy. Turkey is ranked number 4 inthe tora capacity of geothermal ceergy in the world with its 1,053-MW installed capacity (Gul, 2017). Figure 2 illustrates the top 10 counties in installed capacity ‘worldwide while Figure 3 illustrates the increase inthe installed geothermal capacity of Turkey in last decade and under-development & planned capacity forthe following years. With the completion ofthe planned capacity addition, Turkey is estimated to be the third largest geothermal operating country inthe world with 1827 MW total capacity. Rig counts in Turkey for geothermal wel drilling as of, January 2017 was 26, being ranked frst with the total amount of 60 geothermal rigs worldwide. In total 32 of 98 dling activities in Europe isin Turkey (Hughes, 2017) ‘Turkey is situated on the Alps-Himalayas belt and, although, the geothermal energy potential of Turkey was historically estimated as 31500 MW, that value has recently been increased to 60000 MW (Mertoglu, Sismek, & Basarir, 2015). According to Geothermal Country Update Report of Turkey, there are five major grabens which are Buyuk Menderes, Gediz, Dikili-Bergama, Kucuk Menderes ‘and Euremit grabens along the Northern Anatolia Fault zone and in the Central and Eastern Anatolia voleanie regions (Mertogha, Sismek, & Basarr, 2015). The geothermal gradient in Turkey ranges between 8.33 °C/100m to 11.10 °C/100m in thermally active regions (Njolnbi, 2015), (On the other hand, the drilling costs are mostly affected by the daily rig rates ftom drilling contractors and with the developed experience in the field by contractors and service companies, the daily drilling rg rates have been decreased dramatically inthe last 3 years (Kaya, 2017). As illustrated in Figure I, in the mentioned period Turkey tis an average of 45% ofthe geothermal drilling rigs ‘throughout the world, Moreover, this ratio is approximataly 30% compare with all the drilling rigs in Europe, Therefore, it can be concluded that Turkey is curently a market leader in geothermal drilling activities in Europe and that isthe main aspect ofthe reduction in daily driling costs,Gal & Aslanoglu ‘Monthly Well Count 2 1 g 20% Ej o* tet) rts costo Tron Ware tte Pos Ti ncisseeenae pe Fer Many al ct an 212 Ober 217 ac 207) Top locus Cas nutes caply fo bea ease 201 oso tom 500 a0 2500 mo a5) i TT 3567 lpn: A 1865 mit 1209 nv 1053 ww 360 hy — 944 ‘io — 526 Koy — 710 cd — 675 he 542 hr — 193 Figure 2.Geothermal power operation capacity by country (Gul, 2017) Installed Geothermal Capacity in MW of Turkey by Year Figure 3.Instaled geothermal capacity of Turkey by year (Richter, 2017)Gal & Astanoglu 2. THE COST OF DRILLING A GEOTHERMAL WELL Geothermal drilling is very similar to oil and gas drilling with minor differences, which are explained in chapter 4 of this paper. The Grilling phase includes all the activities starting from the well spud until the target depth is reached. The cost of drilling a geothermal ‘well i estimated to be approximately 40% ofthe toal investment cost for a new high temperature geothermal plant, This makes the geothermal plant more expensive to build than conventional fuel fired power plants and as a result the cost of the well becomes a key consideration when determining the economic viability of a geothermal field. Obtaining accurate costs for the geothermal well is therefore very important as it quantifies & substantial percentage of the cost of the geothermal projeet (Carolyn, 2013). Drilling & ‘geothermal well is a complex process that uses expensive dil rigs, a wide range of drilling expers and 2 lot of financial muscle. I is also @ labor-intensive operation with most ofthe jobs being performed 24 hours a day, seven days a week, in all weather conditions Only extreme weather, mechanical failure or lack of supplies will warrant the shutting down of these operations (Carolyn, 2013), ‘Several factors affect the cost of geothermal wells. These factors include well design, the total depth of the well, the type of drill rig and ‘the methods used. Other parameters may include the efficiency of the drilling operation and the optimization ofthe diling variables, ‘The (otal well time constitutes both the drilling and the non-drilling time (Carolyn, 2013).The general design of a vertical geothermal ‘well in Turkey is provided asin Figure 4. As can be seen in Figure 4, 26” hole are dilled to 200m and 20” casings are run at that depts te prevent the chemical mixing in ground water zones, The next section follows as 17 4" section drilling and 13 3/8" easing running at fan average depth of 700m and 12 1" section dilling with 9 5/8" casing running at around 2000 meters depending oa the formation changing depths. The last section is always drilled with bit diameter of 8%" and 7 slotted casings are used to allow producing through ‘the casings and eliminate the perforation costs Casing Outer Hole Diameter Casing Out Wel Profile Depth (m 26 20" 200 iia" 1338" 700 va oie” 2000 3250-4500 a2" ™ (depends fom field to Feld) Figure 4:General design of a vertical geothermal well in Turkey ‘The estimated total cost of a geothermal well is studied in 11 different parts such as drilling location preparation, tubular equipment, liner hangers, wellhead, drilling contract, mud service, drilling bits.directional drilling or performance drilling services, cementing, logging, company labor and supervision. Out of these 11 steps of the drilling cost, only the costs of 4 of them (dling contract nud service, dilling bits and directions! drilling service) are a function ofthe total drilling time while the other 7 are nt related to the rate of penetrations inthe drilling. Therefore, even though the main ais in deiling isto reduce the total active dling times and obtain lower costs, there will also be a constant amount of cost due to location preparation, tubular equipment, liner hangers, wellhead, cementing, logging and company labor which will not be reducing as the total drilling times are decreased, This situation is illustrted in the sensitivity analysis (appendix B) of the software ‘As an example, for the case with 7” casing setting depth of 3000 meters and effective average rate of penetration in 8.5" section of 5.2 vr (other inputs as provided in Figure 5), the maximum share of the cost (approximately 42%) belongs tothe drilling contrat which includes daily drilling rate, top drive rate, mobilization and demobilization rate, diesel costs and water costs, Tubular equipment is ranked two with approximately 18% of share from the total cost of well which includes the 30" conductor casing, 20” surface casing, 13, 5/8" and 9 5/8" intermediate casings and 7” production casing, Mud service, which ie mud material, chemicals, personnel and mud laboratory equipment, follow as ranked 3 with approximately 12% and drilling location preparation, whichis ste survey, location and road construction and location rehabilitation follows up with 11.5%, All other astocialed cost, suchs as liner hangers, wellheads, rlling bits, directional services, cementing, logging and company labor have a sum of 17% share ithe total costs,Gal & Astanoglu “The costs associated with drilling a geothermal well can be outlined as follows: 4. Drilling location preparation a. Site survey b, Location and road construction ©. Location rehabilitation 2. Tubular equipment 2.30" conductor casing b. 20" casing ©. 13/8" casing a 95/8" casing Teasing 3. Liner hangers a, T" liner hanger 4. Wellhead 2. 21 1/4" x 2measing head housing >, 135/8" x 3m casing head housing 1" master valve 5. Diilfing contract Daily dil “Top drive rate Mobilization rate Demobil Diesel cost Water cost 6. Mud service 8. Mud material and chemicals 1b. Personnel ©. Mud laboratory equipment 7. Dailing bits a. 26" tricone bit b. 17 U2" tricone bit & 1214" tricone bit 4.812" tricone bit Nozzles 8. Directional services 8, Personnel b, Equipment rental ©. Surveys 9. Cementing 2.20" casing cementing operation b, 13 3/8” casing cementing operation ©. 95/8" casing cementing operation 10, Logging a Plog b. Pislog © Compressor service 11. Company labor and supervision 2. Drilling manager b. Drilling engineer © Geologist ‘As mentioned before, the costs associated with @ geothermal wel drilling and completion has been studied in 11 main items witha total (of 38 subitems,Gal & Astanoglu 3. SOFTWARE MODEL AND ESTIMATIONS. ‘An excel spreadsheet has been developed to estimate the total required time and costs associated with each item in the eutline provided above. As the inputs, rig capacity (tons), sig type (single, double o triple stand), the rotary system (kelly or top drive), casing setting depths for each section and the existence of directional drilling services should be provided. Inthe geothermal fields of Turkey, the average rate of penetration (ROP) values are estimated as 4 mr. in 26” section, 8 mh. for 17.5” section, mh. for 12%" section and 4 mur, for 8.5" section, These values are ioput as default and can also be changed in the input poge. Similarly, casing running times, ‘wipping speeds for dil pipes and dil collars and connection times for drill pipe, drill collar and directional surveys are also default but can also be altered depending on the performance of rig erews, The visual of the "Input and constants page is provided in figure 5. ‘The exeel spreadsheet with open source code is accessible by contacting the researchers ofthis paper Rig Capacity ons) 200 Rig Type Double Kelly or Top Drive? Kelly 20" Casing Setting Depth (m) 200 13 3/8" Casing Setting Depth (m) 700 9/538" Casing Setting Depth (=) 2000 7" Casing Setting Depth (m) 3000 Hanged Directional Drilling Services (Yes/No) Yes Estimated Effective ROP for 26.0" Section Drilling (mr) 4 [Estimated Effective ROP for 17.5° Section Drilling (ma) 8 Estimated Effective ROP for 12.25" Section Drilling (nv) 5 [Estimated Average ROP for § 5" Section Drilling (m/e) 52 20" BTC Casing Running Time 3.00 ‘minimeter 13 38" BTC Casing Running Time 1.00 sminmeter 9 538" BTC Casing Running Time 0.60 rinimetee 7? BIC Casing Running Time 0.60 ‘minimeter ‘Tripping Speed -Drillpipe 3.00 ministand ‘Tripping Speed - Drillellar 6.50 ‘ministand Connection Time - Drillpipe (or Dilling) 10.00 sin/single Connection Time -Drileollar (fr Drilling) 15.00 minisingle Connection Time Addition for Directional Surveys 10.00 rinisingle Figure 2:Input and constants page of the spreadsheet ng running times, tripping speeds and connection times for drill pipes, drill collars as well as the additional time for directional surveys (the additional time for diretional survey includes an ifelse condition in the code in which ifthe directional drilling service is selected as no inthe input page, there will be no additional time reflected inthe conection times) have been calculated from average ‘worker performances, These numbers are below the average compared to wells in Europe and the US but in the overall scenario for the costs, these times do not reflect oo much on the overall costs ofthe wells. Therefore, in the example simulated well, 20°, 13 378” and 9 5/8" BTC casing running times are approximated as 3, | and 0.6 min/meter respectively. Tripping speed for drllpips and drillellars are accepted as 3 and 6.5 min/stand and connection times for drillpipes and drill collars are accepted as 10 and 15 minutesisingle respectively, The use of top drive increases connection and tripping times, but in the same time inereases the daily rig costs as well as nnon-productive times due to maintenance problems, therefore not all operators prefer rigs with top drives for geothermal drilling in ‘Turkey. The effect of directional drilling services mostly increases the rate of penetration since the reason of having a directional Grilling service is rather drilling a vertical well and staying in the limits ofthe lease and making sure that the well is not deviating ‘Therefore, the use of mud motor increases the rate of penetration gradually especially in relly high strength formations which in the «end compensates the additional cost due to service and decreases the total well costs, ‘The second page of the code calculates the estimated times for cach operation depending on the provided inputs and provides “Operation Time vs Depth” graph for the estimated well conditions as visualized in Table 1. The total time in hours or in days is calculated by summing up all the time values and multiplying them by 1.1 to compensate for non-productive or unestimated times due to well o field conditionsGal & Aslanoglu In the siemslated well and drilling conditions as provided in Table I, drilling times were observed to be the lead participant inthe total ‘well operations times with 57%, On the other hand, it was observed that a lot of tims is spent in connection times (9%) inthe simulated ‘example well since this wel is drilled with kelly and therefore connection times taking longer than the top-drive case. Moreover, casing running is observed to be 7% and trips as 6%, while all other operations such as casing cementing, wait on cement, wellhead operations and well testing operations stand for the remaining 21% of the time spent in operations. This also matched with the general ‘understanding of well costs s the time spent on drilling the well is dhe most important pat of deep geothermal deiling process since the rate of penetration values ae lower compared to oil and gas wells. More research should be performed on ineressing the drilling speeds ‘on geothermal wells with either different types of muds or new technology drilling bits ‘Table jime estimation table with estimated input parameters in Figure S ‘Cumulative time with Item Time hous) Time (€ays) STB aasacegagsy eB Star of Operations 00 00 90 ° 26" Seton Dring 500 2 23 200 26" Comection Time 50 oz 25 200 26" Drilsing Trips iH 00 26 200 20" Casing Running 109 oa 30 200 20" Casing Cementing 40 02 32 200 Wait on Cement Ro os 38 200 21/4" Weltheed 240 lo 49 200 Run in Hole to Boro i 00 49 200 17 V2" Section Dring es 26 18 700 17 12" Connection Time 83 03 82 70 1712" Drilsings Tips 10 03 a5 700 15 8" Casing Runing ua os 90 700 13 38" Casing Cementing 60 03 93 700 Wait on Cement Ro as 98 700 13 SI8" Wellhead 240 10 0s 700 Run ia Hoe to Borom 23 at 110 700 12 14" Section iiling 2600 108 20 2000 12 14" Connection Time 83 Ls 249 200 12 14" Dailssing Trips 150 06 256 2000 9 5/8" Casing Running 200 08 266 2000 95/8 Casing Cementing 80 03 269 2000 ‘Wait on Cement no os ns 2000 9 518" Wellhead no as 280 2000 Run ia Hole to Botom 56 02 283 2000 8 12" Section Drilling 1923 80 su 3000 8 1.2" Comection Tine 333 14 386 3000 812" Delisting Trips 2s 09 396 3000 7 Casing Running 300 1B 410 3000 Well Testing 480 20 282 3000 tes #80 20 454 3000 TOTAL 1090.16 45.42Gal & Astanoglu Operation Time vs Depth ‘Operation Time (days) ° 5 wo HH tw 500 1000 1500 Depth (m) 2000 2500 3000 3500 Figure 3: Operation time vs. depth graph for the simulated example well ‘The last patt ofthe spreadsheet is provides the elated costs with all the 11 items as outlined in the previous parts of this paper. The screenshot ofthe “cost” section is as in below figures, has been estimated in the code and calculations that no main equipment such as cementing units, driling rigs or directional drilling ‘equipment are owned by the operator and these are all obtained as third-party services, Bottom hole assembly (BHA) length in the calculations and time estimations are estimated as 200 meters foreach section. ‘The effect of directional drilling (extra time due to survey simes) is reflected only on 12.25 and 8.5" drilling sections, After each ‘ementing operation, due fo high temperatures, the common procedure is fo wait on cement for 12 hours in Turkey, ‘Therefore, the same value is eonsidered after each cementing jo in each diameter of casings. Moreover, since all drilling operations are conducted with mobile or semi-mobile rigs, the space below the structure is generally very limited and almost no contractor uses ‘wellhead installation mechanisms with their rigs. For the same reason, the wellhead operation time is considered as 24 hours for 21 1/4 “and 13 5/8" wollheads and 12 hours for 9 5/8” wellheads since the work conducted for 9 5/8” wellhead is mostly only the make-up of ‘the master valve and some adapters to get ready for production from the well For cach tricone bit, the life of the biti estimated as 100 hours, which is the general assumption of the operators and service companies. For the company labor and supervision, total costs are included in a way to include the travel costs of the personnel. In the time estimations, 10% allowance is added to total times to ‘compensate forthe unexpected time losses and non-productive times inthe operations, The associated costs ofall spare equipment such as casings, ding bis, wellhead, et, are illustrated in provided figures. As the daily rig rats, it has been estimated to be $9000 for igs with capacity lower than 200 tons (small rigs) and $11000 for rigs with eapacty higher than 200 tons (big rigs). Similarly, mobilization and demobilization costs are $50000 and $75000 for small and big igs respectively. The model is not compensating for ‘he increases in ROP due to performance drilling, therefore this value should be changed inthe software if here isan expected increase in ROP. Lastly, the easing ranning times are calculated to include the casing running equipment preparations in the field, There isa 1.3 safety factor for casing lengths (to compensate for the damaged casing threads during casing running) and a 15 safety factor for drilling bits (suggested tobe stored in the field incase ofexra bit needs). It should also be noted that the costs associated with every item in Figure 4 are mostly estimations and are subject to change by different ‘operatorsicontrators andor suppliers of equipment and therefore should not be taken as final costs of each operation or equipment but as an estimation on pricing of the whole projectGal & Astanoglu Drilling Location Preparation Unit Cost (8) Unit Quanity Toul Cost) | Site Survey 10000 Ea 1 10,000.00 Location and Road Construction 0000 Ea 1 50,000.00 Location Rehabilitation 7200000 Ea 1 200,000.00 “Tubular Equipment Unit Cost ($) Quantity Total Cost ($) 30" Conductor Casing 250 20 5,000.00 20° Casing 130 260 39,000.00, 15.38" Casing 100 910 91,000.00 9 518° Casing 8 2600 195,000.00 7 Casing 60 1300 78,000.00 Liner Hangers Unit Cost 8) Quanity Total Cost (8) 7 Liner Hanger 720000 1 20,000.00 Wellhead Unit Cost ($) Quant Total Cost 8) 21 1/4" x 2M Casing Head Housing 10000 1 10,000.00 13 S/8" x 3M Casing Head Housing ‘6000 1 6,000.00 11" Master Valve 20000 1 20,000.00 Drilling Contrast Unit Cost (8) Quantity Total Cost (8) Daily Dring Rate 11000 5.42 499,658.25 “Top Drive Rate o 45.42 6.00 Mobilization Rate 50000 1 50,000.00 Demobiization Rate 0000 1 50,000.00 Diesel Cost 5000 rsiday 45.42 340,676.08 Water Cost 2000 litersida 45.42 18,169.39 ‘Mud Service Unit Cost (S) Unit ‘Quantity, Total Cost ($) ‘Mud Material and Chemicals 200,000.00 Personnel 1000 aa 482 45,423.48 “Mud Laboratory Equipment 200 aay 45.42 9,084.70 Drilling Bits Unit Cost ($) Unit Quantity Total Cost ($)__ 26" Tricone Bit 20000 Ea. 1 20,000.00 1712" Teivone Bit 12500 Fa, 1 12,500.00 12.14" Tricone Bit 000 Ea. 45 40,500.00 812" Tricone Bit 5000 Ea, 3 15,000.00 Nozzles 100, Set 9s 950.00 Directional Services Unit Cost (8) Unit ‘Quant ‘otal Cost) Personsel DD + IMWD) 1500 aa 45.42 68,135.22 Equipment Rental 3000 aay 45.42 13627043 ‘Cementing Unit Cost ($) Unit juantty Total Cost $) 20" Casing Cementing Operation 15000 Operation 1 15,000.00 13 38" Casing Cementing Operation 30000 Operation 1 30,000.00 9 518" Casing Cementing Operation 20000 Operation 1 20,000.00 Logging Unit Cost 8) Unit Quantity Total Cost ($) PT Loe 7500 Operation 1 7,500.00 PTS Log 7500 Operation 1 7,500,00 Compressor Service 500 Operation 1 7,500.00 ‘Company Labor and Supervision Unit Cost 8) Unit Quantity Total Cost (8) Dailing Manager 10000 Ea 1 10,000.00 Dailing Engineer 4000 Fa, 3 20,000.00 Geolosist 4000 Eo. 3 12,000.00 Grand Total 2,359,867.55 ‘Figure 4: Cost estimations page ofthe spreadsheet for the simulated example wellGal & Astanoglu 4. COMPARISON OF GEOTHERMAL AND OIL & GAS WELLS In geothermal drilling, some specific problems are encountered more compared to oil and as drilling [6]. These problems can be listed as below: 1. High-temperature instrumentation and seals. Geothermal wells expose dilling Nuid and downhole equipment to higher temperatures than in common oil and gas drilling, High- temperature problems are most frequeatly associated withthe insteuments used to measure and contol drilling direction and logging eguipment, Most of the tools have limitations of 150°C active bottom hole temperature during drilling. 2 Logging Geothermal logging units require wireline that can withstand much higher temperatures than those encountered in everyday oil and gas applications 3, Thermal expansion of easing “Thermal expansion can cause buckling of easing and casing collapse, which can be costly, Cement operations take more precedence for geothermal drilling rather than oil & gas. For the seme reason, there is no hanger slips used in the wellhead in geothermal drilling to let the casings expand and prevent possible collapses due to thermal expansion effect 4, Drilling fluids and mad coolers ‘Mud coolers are mostly used when flow line temperature excecds 75°C, High mad tempertture causes danger for rig personnel and results in longer trip times as well as damages the mud pump components. Other than this, the increase in mud temperatures decreases the mud viscosity and yield point, which results in more usage of viscosifier to obtain the required theological properties. 5, Drill bits Formations bearing geothermal reservoirs tend to be harder and more fractured exystalline compared to sedimeatary formations in oil and gas operations. Most of the resources are in formations that are igneous, influenced by voleanie activity or altered by Bigh temperatures, These formations are generally more difficult odeil due to geophysical activities and confined stresses, 6, Lost eireulation ‘Geothermal reservoirs are quite often under-pressured and prone to lost circulation due to faults associated inthe zones, which results in very dificult casing and cementing operations. In total loss cirulation, lower cuttings carrying capacity of the mud results in higher ‘torque and drag, which may result in stuck pipe problems. Similarly, in easing operations, an empty well means higher pipe weights and in some situations, it is not posible to cement these casings even while mixing them with lost circulation materials. 5, DISCUSSIONS AND CONCLUSIONS Geothermal drilling costs follow the general oil and gas industry trend, which exemplifies a total dependence to erude oil prices. This situation is likely to persist as Tong as the geothermal deiling sector docs not build-up a strong market share ofits own (Dumas, Antics, & Ungemach, 2013). As shown in figure 8, a graph with the current tend of oil prices vs yearly average daily drilling rates has been prepared. As can be seen in the figure, the tend of daly ig rates in Turkey re also following the trend of crude oil prices. That can best be explained by the decreasing interest in demand which results ia a more competitive market. On the other hand, another graph comparing the total drilling costs ftom Australia, France, Germany, Iceland, Kenya, Nevada (US), Netherlands and US Oil & Gas with ‘he simulation results from the developed code is shown as in figure 9. In this caleulstion, the same inputs shown in figure 5 have been used only with changes in production casing setting depth and ROP (decreasing average ROP 20% percent in each S00 meters increment). The estimated average ROP for 8.5 section vs depth has been provided in table 2, ‘Table 2: Depth vs ROP values or the comparison study 85 section ROP Total Estimated Depth (om) (mt) Cost (8) 2100 7.50 2,028,640 2500 620 2,158,660 3000) 520 2,359,867 3500 430 2619311 4000 3.60 2,935,344 4500 3.00 3,339,145Gal & Aslanoglu 25000 Sitay 160 Sibbl 20000 Siday 120 sib1 1g Rate 13000 Siday 80 Sibbt © 10000 say a 5 40sibo1 5000 Siday 0 Siday 0 Sib 2006 2008 2010 2012 2014 2016 2018 -O= 750-900 HP, [00-120 ton (1000-1500 m) —O= 1350-2000 HP, 200-320 ton (1500-3500 m) —=Crude Oil Price igure 5: Crude oll prices vs daily rig rates in Turkey [As can be seen ftom figure 8, total well eosts (drilling, well completion and wel testing) have been compared with other geothermal producing counties, with blue dots showing the results from the model provided. As ilustrated here, well costs in Turkey are gradually ‘cheaper compared to other couniries, The reasons of cheaper well construction can be explained in three manners. Firstly, daily ‘operating costs of rigs, thind-party services and labor costs in Turkey are more affordable compared to other countries, Secondly, the major equipment of the well, which are the casings, are chosen from the lowest cost option since wells are not overbalanced and there is so need for a high cost or high-grade casing o drill iese wells. Thirdly, the drilling experience in Turkey resulted in a competitive ket which resulted in more optimized wells with the minimum drilling times. There is also the need to note thatthe costs associated with value added taxes are not included in model estimation calculations. Cost (Milion 8) o 3,000,000, 6,000,000 9,000,000 12,000,000 1,500 - 2,000 - oO a + * 2,500 + - +o 3,000 ° + ° g 3000 + 3,500 + 4,000 + - ° 4500 + 5,000 - ‘Australia France Germany leeland Kenya +#Nevada (U.S) Netherlands Us Oil Wells + Simulation results in Turkey Figure 6: Comparison of published well costs of different countries vs model results in different depths in Turkey 10Gal & Astanoglu REFERENCES ‘Augustine, C, Tester, J. W., Anderson, B., & Petty, S. (2006). A Comparison Of Geothermal With Oil And Gas Well Drilling Costs. Proceedings, Thrt-First Workshop on Geothermal Reservoir Engineering (pp. 1-15). Sanford: Stanford University. Carolyn, K. (2013). Cost Model for Geothermal Wels. Geothermal Training Programme, 23. Dumas, P., Antes, M,, & Ungemach,P. (2013), Report on Geothermal Drilling. Gvoelec. Gal, S 2017, Dovemiver 01), Medva Ener. Retrieved December 15, 2017, from Medya Eneri: www medyaeneri.com Huddlestone-Holmes, C.R. (2018), Forecast Costs for Geothermal Energy in Australia, Proceedings World Geothermal Congress 2015 (p11). Melbourne: International Geothermal Association, Hughes, B, (2017, December 01). Baker Hughes Rig Count. Retrieved December 15, 2017, fiom Baker Hughes Rig Count -plphe corporate-i:netiphoenix.zhimlo=796878pirol-igcountsoverview Kaldal, G,S., Jonsson, M,, Palsson, HL, & Katlsdottir, S. N. (2015), Structural Analysis of Casings in High Temperature Geothermal ‘Wells in Iceland, Proceedings World Geothermal Congress 2015 (pp. 1-11), Melbourne: Intemational Geothermal Associaton, ‘Kaya, T, 2013). "An Overview on Geothermal Drilling and Projets in Turkey, 2013”. European Geothermal Congress (p. 7). Pisa European Geothermal Energy Council Kaya, T. (2017), An Overwiev on Geothermal Drilling and Projects in Turkey, 2017. Salt Lake City, Utah: Geothermal Resources Council & Geothermal Energy Association, Klein, C. W., Lovekin, J. W., & Sanyal, S. K. (2004), New Geothermal Site Identification and Qualification. California Energy ‘Commission, Public Interest Energy Research Program, Pier Public Interest Energy Research, Lukawski, M.Z., Anderson, B.., Augustine, C, Capuano Jr, L.B., Beckers, F.K., Livesay, B. & Tester, W. (2014), Cost analysis ‘of oilgos, and geothermal well drilling. Journal of Petroleum Science and Engineering, 18, 1-14 Mertogla, 0, Sismek, $., & Basarir, N. (2015). Geothermal County Update Report of Turkey (2010-2015). Proceedings Worl ‘Geothermal Congress 2015 (p.9). Melbourne: Intersational Geothermal Associaton, Niolnbi, D. N. (2015). A New Approach for Estimating the Geothermal Gradient and Deep Subsurface Temperature Distribution in Turkey, Istanbul: Istanbul Technical University. Richter, A. (2018, January 09). ThinkGeoBnergy. Retrieved January 12,2018, from ThinkGeoE gy: www thinkgeoenergy.com Shevenell, L. 2012). The Estimated Costs as a Function of Depth of Geothermal Development Wells Drilled in Nevada. GRC Transactions, 36, 121-128 ‘Sveinbjomsson, M, B., & Thorhallason!, S. (2012), Cost and Effectiveness of Geothermal Drilling, SIMS S3rd conference in Reykjavik (p. 13). Reykjavik: Seandinavian Simulation Society. ‘Tester, J. W., Anderson, B. J, Batchelor, A. S., Blackwell, D. D., DiPippo, R., Drake, EM... Veatch, R. W. (2016). The Future of Geothermal Energy, Idalo National Laboratory, U.S. Department of Energy National Laboratory operated by Battelle Energy Alliance. Maho Falls: U.S, Department of Energy.Gal & Asanoglu APPENDIX A. DATA, ‘Table Al: Geothermal power operation capacity by country (Gul, 2017) 10 Geothermal Countries MW (November 2017) - 13.968 Mw In Total Rank Country Capacity 1 United States ‘3567 2 pines 1868 3 1809 4 ‘Turkey 1os3 5 980 6 ly 44 7 926 5 70 9 676 Sa ote a tora 13968 ‘Table A2: Installed geothermal capacity of Turkey by year (Richter, 2017) ‘Turkey Geothermal Development Installed 1984-2017 Year Capacity 1984 1S 1985 1 2006 2B 2007 B 2008 30 2009 1 2010 34 2olL 14 2012 162, 2013, Sil 201d 405 2015 4 2016 75 2017 1053, Under Construction 107 Ta Development nn Planned 1827 ‘Table A3: Additional Installed Geothermal Plan Capacity During 2017 "ADDITIONAL CAPACITY DURING 2017 Rak County Capacity GHW) 1 Turkey 325 2 Indonesia 165 3 Chile w 4 Tevlend 45 5 Mexico 35, 6 United States 24 7 Japan 5 8 Portugal (Azores) 3 8 Hungary 3 | TOTAL 63Gal & Astanoglu Table Ad: Crude ol prices WTI 2007-2017) from Nasdag, Nymex (Crude Oil WTD) Mon Year (Se ons Year CR on Your SME Month ear CM ower 207 Bat amo owt ae apt aos November 2007 2127 vay ato BS4 November 201287 ay ans 20 pend 200788 me ato pasomber 201218? eats SP mony 2008082 aay att TBS funy ats SP ay ams remy 2008 375m ato TSE etmay 20131228 nga aots SE Mach 2008 TLE enter 201076112018 12281 gener 2005 $623 vost 2008 MESS outer 2000 apt 018 EEE cer 201s S38 Moy 2008277 over 2000 33 ar 8235 over as tne 2008 BLS? eenter 20102287 me 0 acme 2005 SSE iy ato E255 nuay20nr S286 gay aos 2852 amay none 82 vgot 2008 EAST papmay 201322 angus 886 Getmay aoe Sepambr 20087222 tach aunt TORS Sepembr 2013 SRE tach aot SE oxen 20087287 agen att S32 ower 201s SAS apt ans 8S November ato SAO tay nor RE November 2013 12S tay none December 2008 Se 201119585 ecomier 2018 SMe ans 2 oy 2009 BE a8 vay aoe 2S yaw Feimary 20008 st 201119885 tay 2014 TO tans SAE wash 2009 $835 sayemier 20111008 ach anid 104 sptemter zone SSE grt 200228 oat aot 32th ans Moy 2009 SRI November 201118835 wy aot | 10577 November 2016 ‘S28 a cn a or vy amo 8S aay ao 8889 aay aoe S22 aay aor 8S opt 2007748 ebay 20227 august 01205 luay nr? 8 sepenter 2009 $8 Manama YZ sopamber 203582 Maen aon SSL ober 2007 M9 apt ao HRS owner ania I apt aor) ovenker 2009 72S vay ania SE Novemier zoe 7888 yao December 2007 48S ume 2012 SBE ecember 20d S058 tune 2017 touy 2000 ay aoe 38 amy ants 28am SAB retary 2010 72 | avgan | nor. | 8828 | remay amis) S82) augun | z0r7 | SLAGal & Astanoglu ‘Table AS: Yearly daily drilling rates in Turkey Daily Rig Cost (Yearly Average) Rig Type ome 20002010 «20120018 aoe ams a0l6 2017 703001, 100120 po 10-2 S10000 S100 $1100. si2s00 $1400, $14000 st3.00 $13000, siL.000 s10000 BSOAMEETE.20320.68 S14 $15250 $15500 SI6si0 SI9S00 $19500 SIRsWD SIRO $150W si20~ (Ka, “An Over on Geena Diling and Prec ia a Turkey, 2013”, 2013) ‘Yearly Aw Rig Rat ‘able A: Annual US Taton (198-217) fom Warldbank ‘Year Inflation (%) ‘Year Inflation (%) ‘Year Inflation (%) ‘Year Inflation (%) wars 356 1 295 Door 2 200 “036 1386 16 ive 2st 2002 1s 2oiv et 1987 34 1995 281 2003, 227 2011 316 | vos 401 196 293 2004 2 aon 201 v8 an ww bat 200s a9 208 a6 1990 540 1998 155 2006 323 2014 1a | von 433 199 219 2oor 285 20is on vo 308 2000 a8 2008 aa 2uie 126 “Table 7: Geothermal ding fentores in EU omy P| CaSO) Ui Cou USD) Wel Destin Faas 20m sano T790 David penal nt heing Ue Germny 2000440000 2a Disp devised wl Tay 3.000 -9.000000 3.000 ay 200-000 m ee gh ety det ea wl Netherlands 4.000 —+19.200.000 | 4.800 T ‘Wells drilled on a lump sum base ‘Table A.8: Drilling cost of a geothermal well in Australia based on the SAM model (Huddlestone-Holmes, 2015) Country | Depth (m) Total Cost (USD) | Unit Cost (USDim) ‘Well Description Diameter Gn) | ‘Australis 2500 ——7.200000 2.880 ‘Compietly within siimentary basin . Ausra 4000 11,200,000 2.800 Completely within sedimentary basin 8 ‘Ausalia 3,000 ‘11.20.000 3733 Sedimentary basin with crystallin basement 8 ‘Australia 4000 +19.200.000 4800 Sedimentary busin wth crystalline basement & ‘Awsilia 5000 ——~28.800.000 5.160 Sedimentary basin wth erytalin basement ‘ ‘vss 4000 | 16800.000 4200 Sedimentary basin wth entalin basement 6 ‘Table A9: Average well cost for fferent regions of Nevada by using Klsin Regression (Shevenel, 2012) Toil Cost . cowry PSY tds UMC agg REHEMGPEA Yeue | Cont (USD) 2016 (USD) Newda (US) 2502 6715.12 2684 Beowawe 07 oss 2.907.000 Neada(Us) 504 2.030.158 4026 Bradys 16s 9 1.152.000 Nevada's) 1677 565.945 337 Desert Peak sso 98s 245,000 Nevada (US) 2899 8.964434 3.082 Dini Valley 9509 oss 4.417.000 Nevada(US) 516987901 1913 San Emidio 1694 1987 468,000 Newade(US) 335 8STRABS 25580 Sode Lake 1100 1987 4.064.000 Newida US) 922 2.018.666 2.190 Steamboat 3023 1986 905,000 Nevada(US) 909 | 2.721.600 «2.994 ~—=«|~—=‘Stilwater.—==S=S«2982=S—*989 1.341.000‘Table A.10: Summary for an average well in Kenya (Carolyn, 2013) Gal & Astanoglu Unie Tosa Prespad cons Drills preparton Fed 70000 Rig mobilisation and anspor Onoff $20,000 Sum $890,000 Daily operating ests | Rig rental with crew Dayrate $1893.00 Rig rental wit rew-sandby Dayrate $35000 ‘Air compressors, balanced ding Daysate 395500 | Cenentng equipment Dayrate 38.000 | Maintenance Engineering From tbe 524,000 | Dil stem inspection Fed 530000 Directional ding equipment eials Day rte 31250 | Lodging, aterng(campS&fod) Daye 382.030 Sum 52.67. 780 Driling consumables Rock bis From able 182.000 Dring detergent, From ale $46,000 Diesel&ubricationg oil From table 5736424 Cement From able savers Cement aves From ae si967 Diiling mud From table $170,510 Sum s1iTs.o7s Casing and wellhead | Casing From table ssso7ie Casing acessories & consumables From table 293350 | Wellhead equipment From table 379.550 Sum 5665.518 Services Dring supervision From table $30,000 Civ engnesing From table $000 Site geologit From table $12,000 Geological services From table 39.000 Reservoir engineering From table 000 Planning & opines From table $12,000 Lope services Fixed $30,000 Sum $105,000 TOTAL 5.107073 TOTAL 115% CONTINGENCY 7655061 PROTECT TOTAL ssa73.134Gal & Aslanoglu Table A.11: U.S onshore oil well depth vs, cost (Lukawshi, etal, 2014) Country Depth em) Total Cost USD) | _Unit Cost (USDim) US Onshore Oil 355 348.107 388 US Osshore Oi as m.036 si7 | USOnboe ol 13399 LIT.00 16 US Osshow ol 1.940 2.168 836 Lar US Onshore oil 2.643 4.642.309 17 US Onshore oil ——-3.361 648.081 2038 | USOmbow Ol 4S 2B 3.120 US Osho ol 4911 16.999.206, 3461 Table A.12: EGS well drlling-cost estimates from Welleost Lite model (Tester, etal, 2016) Countey Depth (a) Toial Cost (USD) us 1.500 2.300.000 vs 2.500 3.400.000 us 3.000 4.000.000 us 4.000 5,200,000 us 5.000 7.650.000 ‘Table A13: Turkey Market Comparison (2012-2017) 2012-2017 Europe Continent Rig Count Ot Lowest. | Highest | Average | StDeviation Turkey 2B 18 a8 30,89 6a Europe or 2 153 1845 20,85 Share 252% -19,10% | 35.68% ——_26,20% 3,66% 2012-2017 Worldwide Geothermal Rig Count Oct? Tower | Highes’ | Average | StDevinion Turkey B 1 26 1337 702 Worldwide 4 32 66 4597 8.02 Share 31.11% 220% 4792% 29.25% | 13.92%Gal & Astanoglu ble A: Drilling activites in Europe (June 2012-October 2017) (Hughes, 2017) Uk Sein Pee Dae Prope Tukey Norway Satan Romania gl/K poland taly ySSRi*® Germany Naterands Paege lm Ba 30 SS 5 = mam Feiss tat § 9 m0 Mii) 3300S 6 fase i a 7 stam ew 5 1% bee 5 9 a31% CC 6 sam WS 5 9 me poe sw 4 9 as10% Fe 4 1 a1aI% Br 6 5 mare D6 Wks ‘ ssn Re SSS 4 6 zest es 7 1am a 5 10 2703% i @ SS 4 tomar uy ae 3 To a8a9ee a a 4 iL 2Rs% a 4 1 arasse 3 3 saa Wess 2 s205% Wea ie 4 10 28.73% Ce 5 10 2953% ues 3 10 2923% peo 3 6 2891% moo es 4 6am i 4 Sane ng ee 3 4 a521% lis 30 es 3 52586 is 0 2 6 3655% Ws ks i Sasa fee 1 Tae yo RRS 1 5.6% i a 3 7 a885% a 3 337% laws ‘ + as le eS 7 4s es 7 2 ano% % 5 4am oT 4 3 jam sw 4a 3 2 Msi 5 re re) 3 2 shame we 2 2 a0ase wt 3 3 ave ae we 1 2 asm wo oM 9 2 + sam yop is GS 4 3 a350% 9 ea 4 2 339% oe 3 3 nase a 4 2 anio% a 4 oda ood 2 zaaw so Sa 3 1 242i 5 3 2 tae Qe bs 2 2 am owe ss 4 397% Ee 4 dase Co) eB we a Ta 3 [2 2 [25.27%Gul & Astanoglu ‘Table A.S: Geothermal driling worldwide (June 2012-October 2017) (Hughes, 2017) Date Woldwide Tukey Indonesia Kenya France ly Ageia Philippines | Germany Teeland Netherants Penge je 1 > 7 2 7 1 270% Mer’ 2 ° 20 1 1 1 26.19% Aor lS ° 2 1 1 1 2439% May-l4 3510 ° tod ° ° 1 287% Jurld—37 1 ° ro ° 2 7103% his 3810 0 2 2 2 2632% Auld 210 10 2 3 2 23.81% Sep-14 40 10 10 2 3 1 25.00% ould 36 2 1 4 1 21.78% Nowle 35 10 2 1 4 1 285% Dols M10 0 241 4 1 29.41% Janis 3210 10 1 3 1 325% eis 65S 2 3 1 o 1.70% Is 0 2 2 1 38.9% “on 10 20 3 42.50% on 10 241 3 42.50% 2 0 0 21 4 1 408% 2 3. 0 1 3 ° 42.86% “8 4 2B 2 3 1 1 370% “8 5 RB 1 1 ° 1 a091% 4 6 2 40 0 2 1 ° 43.18% a m1 2 1 3 1 1 42.5% 2m 2 21 4 1 1 38.6% Ce ee ee) 2 1 3 1 ° 1 40.82% oe 1 2 3 2 1 o 418% «2 4 2 1 3 1 ° 4585% “e 3 So 2 1 2 1 479% 4M Bs 1 2 1 2 2 1 42.59% som sO 21 2 1 ° 540% re a 2 2 1 1 40.35% re 2 2 2 1 43.86% so 20 2 ° 2 1 a107% sa 6 2 1 1 2 1 45.45% so 21 1 2 1 45.10% su ometSSCtSCi 1 1 2 708% o % 2 wo 2 1 1 2 435% 2 B10 2 1 2 1 4525% “a9 20 1 1 ° 43.18% a 7 2 1 1 1 3953% o ws 8 21 1 1 1 45.00% ee ee 20 1 2 1 000% 3ST 1 2 ° 3429% you >. 7 1 20 1 2 1 29.73% “4G 7 7 41 2 4 1 2 1 ° 36.11% Loa a eT aa 1 oro a 1 | 3L71%Gal & Astanoglu APPENDIX B. SENSITIVITY ANALYSIS Total Operation Time and Operation Cost vs 7” Casing Setting Depths q 45 & 100000 40 3 . som © ‘Total Operation Cost (8) ‘Total Operation Time (days) Total Operation Time and Operation Cost vs 8.5" Estimated Average ROP 2000000 0 % 1800000 s g 6 1600000 i 5s E s00000 g so 200000 1000000 ° 2 4 6 8 10 2 Estimated Average ROP for 8" Section Total Operation Cost (8) Total Operation Time (ays)