EPMAG.

COM

JANUARY 2013

Safety Systems
and Solutions
Processing and
Interpretation
HP/HT Drilling
Offshore Systems
and Solutions
Ultra-deepwater
Advances

REGIONAL
REPORT:
West Africa

R&D
SPOTLIGHT
Technologies and equipment advances
that will change the industry

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WORLDWIDE COVERAGE

JA N UA R Y 2 0 1 3

A H A R T E N E R GY P U B L I CAT I O N

SAFETY SYSTEMS AND SOLUTIONS

48

Emerging technology for oil leak detection

52

Improving efficiency through marine

personnel transfer

54

Operators seek sustainable solutions to water

management

VO L U M E 8 6

ISSUE 1

w w w. E P m a g . c o m

COVER STORY: R&D SPOTLIGHT

34

PROCESSING AND INTERPRETATION

56

Broadband marine data require new

processing techniques

58

Journal highlights interpretation process

HP/HT DRILLING

62

New rheology fluid simplifies engineering,

enhances performance

66

HP/HT tools allow completion of

challenging wells

68

MWD reaches new temperature extremes

in Thailand wells

OFFSHORE SYSTEMS AND SOLUTIONS

72
76

Reaching new highs and lows

Change can be good

ULTRA-DEEPWATER ADVANCES

82

Diving deeper in the race for new reserves

98

REGIONAL REPORT:
WEST AFRICA

R&D in the
trenches
It seems that for every problem solved, two
more challenges emerge. The oil and gas
industry spends billions of dollars developing
new technologies to overcome these hurdles.
Here is what they are working on now.

IndustryPULSE:

Gas firming up
as fuel of the future

With technological advances

enabling the shale revolution in North America,
gas is increasingly likely to end up being the global
energy resource that eventually replaces oil but
not necessarily with shale as the driving force.

10

WorldVIEW:

Getting the band

back together

Thomas Petrie, Jon Hughes, and colleagues

are back with a new boutique investment bank
focused on mergers, acquisitions, and divestitures.

Unconventional:

78

Oklahoma reverses 25-year

decline in oil production

Operators have shifted to oil- and liquidsrich shale plays, tight sandstones, and the Mississippian
limestone in jump-starting Oklahomas oil production
once again.

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EXPLORATION TECHNOLOGY
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DRILLING AND COMPLETION

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COMING NEXT MONTH The February issue of E&P focuses on hydraulic fracturing,
one of the most important and controversial technologies in the upstream industry. Other
features examine EOR, reservoir characterization, drillbit technology, wellhead pad design,
and subsea processing advances, and special reports will highlight activity in South
America and in the unconventional plays in Indonesia. As always, while youre waiting for
the next copy of E&P, remember to visit EPMag.com for news, industry updates, and unique
industry analysis.
ABOUT THE COVER

The oil and gas industry is constantly investing

in new technology to meet the worlds insatiable need for energy. Left,
fishermen arent the only ones finding bounty offshore West Africa.
(Cover design by Laura J. Williams)

E&P (ISSN 1527-4063) (PM40036185) is published monthly by Hart Energy Publishing, LP, 1616 S. Voss Road, Suite 1000, Houston,
Texas 77057. Periodicals postage paid at Houston, TX, and additional mailing offices. Subscription rates: 1 year (12 issues), US $149;
2 years (24 issues), US $279. Single copies are US $18 (prepayment required). Advertising rates furnished upon request. POSTMASTER:
Send address changes to E&P, PO Box 5020, Brentwood, TN 37024. Address all non-subscriber correspondence to E&P, 1616 S. Voss
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Hart Energy Publishing, LP, 2013. Hart Energy Publishing, LP reserves all rights to editorial matter in this magazine. No article may be
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Index and Engineering Index Inc. Federal copyright law prohibits unauthorized reproduction by any means and imposes fines of up to
$25,000 for violations.

Printed on
recycled paper

NeoScope

ONLINE CONTENT JANUARY 2013

SOURCELESS FORMATION
EVALUATION WHILE DRILLING
Subscribe @ EPmag.com/explorationhighlights

PREMIUM CONTENT

Beach Energy makes Cooper basin oil discovery

Beach Energy Ltd. made an oil discovery at the Pennington-1 exploration
well located 9 km (5 miles) east of the Bauer oil field, the company
announced.

Norways licensing round draws applications

from 36 companies

Ir
I?

When the application deadline for the 22nd licensing round on the
Norwegian Continental Shelf expired Dec. 4, 2012, a total of 36 companies had submitted applications, the Norwegian Petroleum
Directorate announced.

?
I

{,t e r ?

Gazprom takes worlds top oil, gas producer title

OAO Gazprom has been named the biggest overall producer of oil
and gas, concludes the latest report from GlobalData.
t

AVAILABLE ONLY ONLINE

East Africas energy sector has potential,

challenges

ANEW

By Velda Addison, Associate Online Editor

A report by the Control Risks consultancy showed

challenges such as politics, infrastructure, and
security await operators with interests in Ethiopia, Kenya, Mozambique,
Tanzania, and Uganda.

ATC 2012: Pivotal years are ahead

for Arctic drilling

Sourceless LWD

By Velda Addison, Associate Online Editor

Challenges await companies willing to take on

Arctic exploration, but the payoffs can be big, with
billions of barrels of oil and trillions of cubic feet of gas believed to be
below Arctic waters.

Carbon capture, storage technology gains attention

By Velda Addison, Associate Online Editor

CO2 storage is being developed to reduce greenhouse gas emissions

while continued CO2 EOR techniques could transform the greenhouse
gas into a valuable commodity.

Service Saves
Apache 7 Rig Days
NeoScope service , the industry 's only
sourceless LWD technology, saved Apache
Corporation 7 days by avoiding chemical
source mobilization in western Egypt.
NeoScope service also provided the

necessary real-time measurements for

a full petrophysical anal ysis.

Australia could overtake Qatar

as leading LNG producer
By Velda Addison, Associate Online Editor

Qatar could fall to Australia as the latter

ramps up LNG-related projects; however, East
African countries also hold hope for becoming major LNG players.

READ
TH
LATES E
T

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INDUS
TRY
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M&ioETING.
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Executive Editor

EPmag.com

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Group Managing Editor

SCOTT WEEDEN

Senior Editor, Drilling

MARK THOMAS

Senior Editor, Offshore

Senior Editor, Production

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Editorial Advisory Board

CHRIS BARTON
Sr. VP Business Development, Oil & Gas, KBR
KEVIN BRADY
President, Multi Products Company
MIKE FORREST
Exploration Consultant, formerly with Shell
JOHN M. GILMORE JR.
Director of Global Industry Solutions Upstream
Oil & Gas, Invensys Operations Management
CHRIS JOHNSTON
VP & Managing Director, North America, Ensco
ULISSES T. MELLO
Manager, Petroleum & Energy Analytics, IBM
DONALD PAUL
Executive Director, University of
Southern California Energy Institute
EVE SPRUNT
Business Development Manager,
Chevron Energy Technology Co.
MANUEL TERRANOVA
Sr. VP Regional Operations & Global Sales,
Drilling & Production, GE Oil & Gas
RONNIE WITHERSPOON
President,
Superior Well Services, a Nabors company
DENNIS A. YANCHAK
Sr. Geosciences Advisor, Apache Corp.

Editorial Director
PEGGY WILLIAMS
Senior Vice President, Consulting Group
E. KRISTINE KLAVERS
President & Chief Operating Officer
KEVIN F. HIGGINS
Chief Executive Officer
RICHARD A. EICHLER

Energy outlook
in the year 2040
I

n this issue of E&P you will find a number of columns and articles that forecast
oil and gas activity for the foreseeable future. That near-term forecast is looking
pretty rosy.
ExxonMobil tends to take a longer term view. It recently presented the results of its
2013 Outlook for Energy, but dont let the title fool you the company is forecasting global energy supply and demand through 2040.
William Colton, vice president of Corporate Strategic Spending for ExxonMobil,
noted that the forecast is generated from internal and public databases to give the
company a roadmap for its business planning. The report reveals key findings about
how the world will use energy, how much energy it will need, and what types of fuel
will be used.
An interesting graph revealed the companys bullish outlook on societys ability to
reduce its carbon footprint over time. While energy demand will continue to rise,
energy supply requirements will not follow suit if, as the company suspects, the global
population becomes more energy-efficient and moves to cleaner fuels. Colton said
that this would be the result of improvements in energy intensity. It also will result
from economies changing over time. For instance, China is in a manufacturingintense mode right now, but as it moves into more of a service-based economy, it
will require less energy. With these types of energy efficiency improvements across
all sectors, demand will drop by 500 quadrillion Btus annually compared to a
scenario where more efficient use of energy does not occur.
Electricity generation will be the single largest consumer of energy through 2040,
and of the fuel types available coal, gas, nuclear, wind, and solar natural gas comes
out the clear victor. Coal is widely available but has an unattractive environmental footprint; nuclear energy faces an uphill battle with public perception; and wind and solar
are intermittent power sources, requiring backup systems to maintain steady supply.
Natural gas is the obvious choice, Colton said, noting it has 60% lower CO2 emissions than coal.
On the supply side, Colton said that conventional crude oil production will remain
flat, while sources such as deepwater fields, tight oil, oil sands, and NGL will see significant growth due to advances in technology. Deepwater production was barely on
the radar screen in 2000, but its now expected to double by 2040, he said.
Natural gas, meanwhile, is completely reinventing North America. The report predicts that North American oil demand will fall due to improved efficiency, and the
continent should be a net exporter of both oil and gas by 2030.
I find this information to be somewhat refreshing after
countless presentations showing expected demand
growth followed by the question, Where is this
energy going to come from? It sounds like
human innovation and common sense might
be two of the biggest solutions.
7

industry
PULSE

Gas firming up as fuel of the future

With technological advances enabling the shale revolution in North America, gas is
increasingly likely to end up being the global energy resource that eventually replaces
oil but not necessarily with shale as the driving force.
Mark Thomas, Senior Editor, Offshore

dvances in upstream technology and the pioneering

actions of smaller independent companies have
been directly responsible for the shale boom in the US
and Canada, according to former BP CEO Tony Hayward.
Speaking at the recent PETEX 2012 event in London
in his latest role as CEO of fast-growing UK independent
Genel Energy, he said the resultant dramatic effect of
the shale phenomenon on the international energy supply and demand scene had highlighted the key role that
gas is likely to play in the future.
With oil demand growing in the Eastern Hemisphere,
while remaining relatively slow in the West, Hayward
said, We are in a growth industry, but it is not growing
very quickly in terms of oil demand. Gas is growing
quicker.
However, he admitted to being bearish on gas, saying
that he did not expect major exports to emerge from
the booming US onshore sector. Rather, Hayward said
that it would be the fracturing technologies and expertise that would travel abroad. But this will not happen
rapidly.
He described technology as riding to the rescue in
terms of the US shale boom. Thats why the peak oil
argument will always be wrong. The Stone Age didnt
end because they ran out of stone. It is likely to be gas
that would eventually replace oil in the long term.
In the US, Hayward gave credit for the success of the
shale gas and oil phenomenon to the smaller independent companies. It was the mama and papa companies
that made shale gas happen, not Big Oil, he said. The
drivers were mostly relatively light regulation and good
access to funding, Hayward added. These companies
have helped take shale gas from virtually zero in the US
to currently around 30% of US supply within a matter of
years, with 50% forecasted by the end of the decade.
Looking at its impact on the global energy scene, Hayward said that the rise of shale caused coal demand in
the US to fall by an estimated 20%. This, in turn, has led
to a rise in coal exports to Europe causing prices to
crash there. This also has had a knock-on effect with
8

Shell is bullish on gas and says it will drill more wells in the
next decade than in the past 100 years. Pictured is a rig worker
on Shells Groundbirch tight gas project in British Columbia,
Canada, where the company has so far drilled more than 300
wells. (Images courtesy of Shell)

regard to emissions, with CO2 levels having actually risen

in Europe while falling in the US as power stations in
Europe go back to burning coal instead of gas.

Global gas development

Natural gas was also flagged as potentially being the
backbone for future energy supplies around the world
by Shells Glen Cayley, vice president, Technical. Also
speaking at PETEX on the companys perspective of
global gas developments now and in the future, he highlighted the three As that give gas a number of advantages as an energy source: Its abundant, its acceptable,
and its affordable, he said.
Its worth pointing out that Shell will drill more wells
in the next decade than in the past 100 years, Cayley
said. There is over 100 years of supply for sure in the
United States. The global estimate is around 250 years of
supply, and thats probably conservative. Half of that is
conventional, half is unconventional.
Cayley described Shell as being bullish on gas and outlined the companys ongoing plans and developments
for LNG projects such as its multibillion dollar Prelude
Floating LNG project in the Browse basin offshore western Australia. The FLNG project will be a world first, as
Januar y 2013 | EPmag.com

www.halliburton.com/HSE

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2013 Halliburton. All rights reserved.

101

II

industry
PULSE

the vessel will also be the largest floating offshore facility

ever built.
He went on to outline Shells gas-to-liquids (GTL)
activity, which he described as being a long story. The
company has recently made major progress in this area,
with its 140,000 b/d Pearl GTL facility in Qatar coming
onstream just last year.
In the area of tight oil and gas, he described the US
and Canada as an energy revelation and highlighted
the companys work in projects such as Groundbirch in
Canada. That project is currently producing more than
200 MMcf/d of gas with more than 300 wells drilled
using six rigs. He also flagged the Eagle Ford play in
Texas as ramping up rapidly.
However, in Europe there has not been much movement, Cayley continued, although it was starting in
earnest in countries such as China. It would be important
for Europe to move quickly along the learning curve in
terms of getting the costs of drilling wells down.

Growing demand
Another speaker, Carl Trowell, president, Schlumberger
Production Management, underlined the fact that the
number of people on the planet had recently passed the
7 billion mark and that energy demand would naturally
continue to rise. This demand is driving the oil and gas

industry onwards, with Trowell describing the rise of

shale oil and gas as a true paradigm shift. Shale
resources will provide a new source of reserves, but
the industry must still search for conventionals.
Trowell highlighted water management as a key issue
for the upstream sector. There is an increasing need for
water management as shale E&P is so water-intensive with
its fracing and production requirements. With aging conventional fields also increasingly moving toward water
injection, the issue is becoming even more important.
The E&P industry must view water as a strategic component of the value chain, he said. Water will be a
touchstone issue.
Trowell described the way shale oil and gas is being
developed in the US as being unsustainable outside of
that country because of the cost of service delivery in
areas such as Europe. Each well there, for example,
would need to produce up to three times as much as in
the US to meet the likely costs. The value delivery of
drilling wells is going to have to take another quantum
leap, he said.
Trowell also highlighted future technology trends
as needing to result in more efficient methods for
fracturing and stimulation, better reservoir evaluation
and completion, and a step change in subsurface
imaging.

Global gas demand is expected to double from 2010 to 2050, according to Shell. Reassuringly, the company also currently estimates
there are 250 years of global supplies left.

EPmag.com | Januar y 2013

world
VIEW

Getting the band back together

Thomas Petrie, Jon Hughes, and colleagues are back with a new boutique investment bank
focused on mergers, acquisitions, and divestitures.

Leslie Haines, Oil and Gas Investor

he Eagles said during their first reunion concert a few

years ago, after being off the road for 20 some years,
We never broke up; we just took a vacation. Thomas A.
Petrie and Jon C. Hughes might say the same.
Partners in energy investment banking for 26 years,
they and some colleagues have banded together in a
new iteration as Petrie Partners LP in Denver. This follows their recent five-year stint at Bank of America Merrill Lynch, where Petrie was vice chairman and Hughes
was a managing director in the banks energy group. In
2006, Hughes was the principal negotiator when Merrill
Lynch acquired Petrie Parkman & Co., the boutique
they had co-founded in 1989.
If anyone can name drop in the mergers, acquisitions,
and divestitures (M, A&D) world, it is this pair. Petrie

Thomas Petrie serves as chairman of Petrie Partners. (Photos

courtesy of Lowell Georgia)

10

has been an active advisor on more than US $200

billion of energy transactions over a career that spans
four decades. One of the former Petrie Parkmans most
noteworthy deals was advising the US Department of
Energy (DOE) on its sale of the Elk Hills Naval Petroleum Reserve in California to Occidental Petroleum
Corp. in 1998 for $3.7 billion the largest US privatization ever and one of the largest divestitures ever in the
oil industry at that time.
This time around, Petrie Partners will be more streamlined, with a focus on strategic advisory work, M, A&D,
and private placements versus public offerings, equity
research, or sales and trading.
Wanting to know about their M&A outlook, we met
with Petrie and Hughes at their temporary offices in
Denver, a unique castle-like building that used to be a
gentlemans gambling club the humor of which is not
lost on these two solid investment bankers.
Why not rest on your laurels; why jump back into the fray?
Thomas Petrie: Its a delight to have it back together
and be with people you know and trust whove been
through the cycles. The genesis of the idea was really
not mine; it was Jons and my other partners. I was
flattered, but it is not so much about me as it is about
the fact that key elements of the team wanted to come
back together. I will be chairman and Jon the CEO.
He will really run this.
Jon Hughes: I personally am more comfortable in a
client-focused boutique situation. When I left Bank of
America in March 2011, I started thinking about this.
We had carved out a nice niche at Petrie Parkman, and
we had an individualized approach to serving our clients.
We had built a reputation of trust.
I think we did 200-plus transactions some $85 billion
in M, A&D alone during our time at Petrie Parkman.
When we sold it to Merrill Lynch in 2006, there was a
strong strategic basis for the deal, but it turned out that
Merrill had some issues. We met a lot of good people at
Bank of America Merrill Lynch, but in the end we feel we
are more boutique-oriented. It was an attractive thing for
Tom to come back as he has an irreplaceable wealth of
knowledge and cycle-tested experience.
Januar y 2013 | EPmag.com

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VIEW

What are some of your concerns and observations?

Petrie: There are big energy challenges ahead. The oil
and gas business is so strategic to the future of the US.
Energy is a big, big part of our economy. We cant get
from here to there without fossil fuels. We want to help
private capital sources and public companies navigate
those waters. I have a lot of faith the industry will come
out the other side in strong shape.

Jon Hughes serves as CEO of Petrie Partners.

What kind of advice do these companies need?

Petrie: We help managements with their strategic thinking whether they are private or public. We are able to
maintain the highest degree of confidentiality. At Petrie
Parkman our clients included the DOE and Saudi Arabia, so we understand the sensitivities of those kinds
of players. We can see the need for objective inputs
on strategic advisory matters. There can be inherent
challenges in strategic thinking if managements have
too many other irons in the fire running their day-today businesses.
Hughes: Were not going to be revenue-driven quarter
to quarter. Were doing this because we love the business
and working with clients we enjoy and respect. We
intend to keep a reasonably small footprint.
Do you expect to see more M&A in the next few years?
Petrie: There are several drivers now identifiable. For
one, there is abundant liquidity with likely aquirers.
Majors and large-cap independents have more than
$100 billion of available cash on their balance sheets,
have generally been late to build shale acreage holdings,
and can always use new ways to grow organically. In addition, large private equity firms are focused on investing
in petroleum ventures, and international players are
becoming more comfortable with US operations.
12

What kind of issues are your clients mentioning to you?

Hughes: They are talking about the marriage of horizontal drilling and fracturing and the implications and
costs of the technology. A lot of companies we work
with have ample opportunities, and theyre interested
in how to most efficiently develop them. Should they
sell some assets, should they bring in a partner, or do
an offering? How do they position themselves to go up
the food chain?
Petrie: Companies have to figure out how to drill
enough to validate their acreage but not over-exploit
it. As you move from validation to exploitation, thats
a different skill set, an exciting new dimension.
For the last 30 years, we worked with a 10-year reserve
life for natural gas. Today we can argue whether its 50
years, 75 years, or 100. We now have forward planning,
and were talking about what kind of role we will play in
international markets.
What role should government play in all this?
Petrie: The role of government is still open for debate,
but if you think of the priorities of the country, probably 80% of people say itd be education, health care,
and energy. If we dont get energy right, were not
going to be able to afford the rest, so that makes
energy the number one priority. Weve got the
options to work with now, and we couldnt say that
a decade ago.
Hughes: And as an industry weve got the right technology currently available; its not 10 years out. We
have the technology, we have the will, and we have
the capital. But we live in an era of empowered regulators, so as an industry we will probably suboptimize
relative to our potential.
Petrie: We also have an energized anti-fossil-fuel
industry that is fairly clever in using litigation and misleading media channels to create fear and raise doubts
about the energy industry. Unfortunately, a lot of people can be persuaded with misinformation. The industry is doing better getting the facts out, but we cannot
assume the battle is over.
Januar y 2013 | EPmag.com

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management
REPORT

Shale vs. big exploration

What sorts of risks are you taking?

Preston Cody, Wood Mackenzie Consulting

he rapid growth of unconventional resources in

North America, especially shale gas and liquids, has
generated both enormous enthusiasm and deep skepticism. Some have proclaimed that shale represents
extremely low-risk manufacturing-style opportunities,
while others question whether it has or ever will truly
yield the anticipated returns. The collapse in regional
gas prices has driven home the marginal nature of these
assets with their substantial exposure to commodity
price risk. This in turn is forcing the debate around how
to best allocate sparse capital between conventional
exploration programs and unconventional resource
projects, causing the industry to rethink how it characterizes unconventionals.
With more than a century of
experience, our industry has
widely adopted frameworks and
tools for understanding and quantifying risk and rewards for conventional exploration opportunities.
There are well defined stages, each
with its own associated risks and
activities. However, the industry
has yet to clearly characterize
unconventionals, and it lacks commonplace techniques for evaluating unconventional investment
opportunities against conventional
options within the overall
upstream portfolio concept.

sanctioned the project for development, the industry

typically no longer applies subsurface risk to the entire
project. Uncertainties and risks remain and are worth
modeling as sensitivities, but these are risks to an assets
valuation, not its technical and commercial viability.
There are two major differences in applying a similar
life cycle approach to unconventionals. First, the transition between stages for unconventionals is far less discrete
than with conventional prospects. Second, derisking is a
slower and more gradual process. For unconventionals,
Wood Mackenzie has defined concept, pilot, ramp-up,
and exploitation life cycle stages. During concept, the
operator tries to identify prospective unconventional
resource targets that do not have any production history.
To fully derisk the concept, the operator must run a pilot
drilling program to work out the engineering and costbenefit tradeoffs that establish repeatable, economically

Comparisons using
life cycle frameworks
Conventional exploration
prospects progress through distinct life cycle stages: exploration,
appraisal, development, and production, with clear transitions for
each stage (exploration well discovery, final investment decision
[FID], first production, and
abandonment). Following the
appraisal process and having
14

Investment profiles compare hypothetical conventional and unconventional programs.

(Images courtesy of Wood Mackenzie Consulting)

Januar y 2013 | EPmag.com

management
REPORT

profitable results. During these early two stages, it is

unclear whether a commercial-scale development program will be viable. Thus, just as a conventional fields
development cash flows are risked, the same process
should be undertaken on the potential shale development cash flows.
Operators have not traditionally talked about making
FID on a shale asset; however, there often is a ramp-up
period after the pilot stage in which financing is secured,
rig fleets and completion crews are contracted, leases are
drilled to hold, midstream is built out, etc. The project
then moves into the exploitation phase, when development drilling must continue to maintain production (due
to steep decline curves). During these later stages, the
percent developable acreage and well performance
deviations represent the major remaining subsurface risk
that unconventionals face that conventional fields do not.
Percent developable is a direct determinant of the number of well locations (hence remaining value) of the
undeveloped portion of the acreage. These later-stage
risks can be quite substantial. For example, a leading US
operator of shale plays has applied factors of 30% to 75%
developable to its established positions.
The value and returns from conventional and unconventional assets share the same primary drivers price,
production volumes, capital costs, and fiscal terms and
they are equally impactful across the life cycle. The key
driver of value that evolves across the life cycle of a project or prospect ultimately the variable with the largest
impact on valuation is the overall commercial chance
of success (CoS), quantified by combining technical
and commercial risks.

Shale CoS is less than one

The evidence is mounting that shales are more risky and
less homogenous than originally conceived. Out of more
than 30 shale gas plays in the US, only 10 have emerged
from pilots into full development mode. While the jury
is out on several plays still being tested, another 10 have
arguably been proven noncommercial or face numerous
subsurface and above-ground challenges. Stipulating that
there is a failed play for every proven shale suggests that
the CoS for an entire play could be around 50%.
Even when shale plays undergo serious pilot efforts,
they do not emerge in their entirety as a commercial
play. The Niobrara is a prime example of a play in which
heterogeneity has meant that only a subset of the pilots
conducted in the play are leading to commercial development. The pilot stage also is one of delineation of
core areas and sweet spots, and even in largely homogenous plays, the percentage of acreage that is commerEPmag.com | Januar y 2013

Value sensitivities differ between conventional and unconventional

development projects.

cially viable is far less than 100%. For example, success

in the Eagle Ford is concentrated along the narrow gasliquids transition window that runs down the middle of
the play.

Portfolio allocation
Using the life cycle framework enables operators to
acknowledge and account for the fact that most investment opportunity comparisons are fundamentally not
like-for-like. The very real allocation decision facing many
large E&P companies today is between their conventional
exploration programs and their existing shale asset developments. To consider such a case, Wood Mackenzie conducted a hypothetical exercise for a company deciding
between allocating US $1 billion per year over five years
with the choice of either a high-impact exploration program in the Gulf of Mexico (GoM) or developing an
existing, proven Eagle Ford shale position.
The two options offer very different value propositions: In terms of reserve additions, $5 billion spent on
GoM exploration may discover around 1 Bboe from new
fields (discovery costs in an achievable $5/boe range),
while in the Eagle Ford this buys almost 600 wells, which
if assuming an average estimated ultimate recovery
(EUR) of 900,000 boe, yields only half the reserves at
around 530 MMboe. Using default economic assumptions and analogs for the Eagle Ford and GoM, we modeled the production and value of both programs. The
GoM program results in substantially higher net present
value (NPV) at more than $5 billion (net of the exploration costs), while the Eagle Ford project yields only
about $1.5 billion. Unconventionals such as the Eagle
Ford do offer some advantages, including nearer term
production, in this case reaching a peak production rate
of 130,000 boe/d within five years. Longer development
cycle times for deepwater projects mean the GoM pro15

management
REPORT

in a 30% change in NPV, but a

20% change in well EUR in the
Bakken will swing the NPV plus
or minus 110%.
A change in price has an even
larger impact. This level of volatility in commodities is commonplace, and volumes are highly
uncertain. But while the conventional field economics can suffer
a setback, the Bakken project is
at risk of being uneconomic. For
Conventional and unconventional assets can be complementary to a companys portfolio.
many shale gas producers, this
phenomenon is all too real. In
gram would not reach its peak production of 174,000
this light, unconventionals are riskier than conventional
boe/d for 11 years. Earlier production provides revenue
fields, especially during the development phases.
that can help fund capital requirements, meaning the
The value of unconventional projects also is far more
maximum net cash impairment of the Eagle Ford projsensitive to costs than conventional projects. In the case
ect would only be $2.8 billion, while the deepwater proof opex, the impact on conventional projects is insignifigram would require $8.5 billion.
cant whereas for unconventional projects opex is still releBecause they are so different, the investment profiles
vant. This may represent an underappreciated long-term
of conventional and unconventional assets can be highly
risk for unconventionals as there is limited experience
complementary and can work in tandem at a corporate
with and information on the long-term operating costs
level. Early production from unconventionals can fill the
and maintenance requirements for the tens of thousands
void of long conventional cycle times. This, in turn, proof shale wells being drilled, particularly for those producvides early positive cash flows, helping to offset the othering liquids. On the plus side, technological advantages
wise deep, standalone cash impairment of a conventional
that reduce costs, even incrementally, have the potential
opportunity. Conventional and unconventional assets
to greatly enhance asset values.
also can be complementary within a portfolio in that
Evolution of risk
they offer different risk profiles (types of risk and timWith the benefit of experience, we now understand that
ing), theoretically providing a potential source of diversiunconventional resource plays and shales in particular
fication for the overall risk profile of the portfolio. Given
are just as risky as conventional high-impact exploration.
their typically much larger acreage footprint, unconvenAdditionally, the nature of this risk evolves in a less definitional assets also can provide a great deal of resource
tive manner over the asset life cycle, and the residual risks
upside potential with future technology improvements.
(percent developable) and uncertainties (marginal ecoThe key is managing unconventional assets within the
nomics) are more severe for unconventional assets, even
portfolio with full appreciation of their life cycle stage
during the development stage.
and risk characteristics.
However, there is a role for unconventionals in the corProject sensitivities
porate portfolio as long as companies employ frameworks
It also is critical to recognize how the marginal nature of
and approaches for evaluating risk that enable them to
shale projects will impact a portfolios exposure to comcompare unconventional and conventional opportunities
modity, volume, and cost risks. When comparing later life
on a near like-for-like basis. With so many variables and
cycle stage assets, one must consider the usual key uncerunknowns with unconventional asset modeling, it is critical
tainties: volumes, price, and cost. Here, the valuations of
to identify which ones deserve the most upfront scrutiny.
the unconventional assets are far more sensitive, mostly
This is largely determined by the assets current life cycle
due to their significantly higher break-even prices. For
stage. With unconventionals, there is a temptation to focus
example, a Bakken project may have a break-even price
on the more well understood engineering and operational
in the $50/bbl range vs. a large discovered GoM field
assumptions; however, it appears more and more that
with a break-even price around $15/bbl. In this instance,
strong technical and commercial evaluations of risks and
a 20% change in the volume of the GoM field may result
uncertainties are far more important.
16

Januar y 2013 | EPmag.com

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digital
OIL FIELD

The consumerization of the

oil and gas enterprise
Smart technology provides relief for reporting headaches.

Greg Archbald, GreaseBook

ver the last five years, there has been a major paradigm shift in the source of innovation.
Although the supermajors of the oil and gas industry
still contend for the top spot in industry innovation (as
demonstrated by their success in exploiting ever deeper,
more remote basins), some of the larger E&Ps are resisting the call to mobilize their working environment. These
companies are saying no to connectivity, restricting the use
of smartphones and tablets, and overlooking the applications and convenience their employees have come to
enjoy and even depend on in everyday life.
Why is this so? Old habits die hard. Large companies
look at mobile and pervasive computing from the IT mindset control and compartmentalize ahead of the benefits
the organization will gain by enabling its teams through
the mobile medium. However, with the employee time savings and relative affordability that the mobile medium has
to offer E&P companies, smaller operators are taking note.
Many of the small- to medium-sized independents have
started to look to consumer electronics and cost-effective
apps to work smarter, not necessarily harder. Thanks to
mobile technology, independent operators are able to
scale every last man hour and squeeze every last drop
of oil from their operations.

The GreaseBook app allows operators to use consumer technology to streamline their wellsite reporting. (Image courtesy of
GreaseBook)

autocratic domain knowledge silos might all be part of an

average day at one of the majors, for the smaller players,
the cost and energy required does not justify the means.
While large independents and supermajors have
entrenched themselves in advanced analytics software,
data repositories, and massive IT departments to oversee it
all, smartphones and tablet computers have been piggybacking their way into smaller companies. How? In the
pockets and purses of the employees who work there.

The pen and paper live on

David vs. Goliath
For years, the standard protocol of large production companies has been to monitor and execute all deepwater
drilling activities via sophisticated satellite networks. Most
wells over a certain capex are fitted with real-time optimization tools and sensors. However, for many smaller
industry players, the digital oil field has always been a
mirage that lay just out of reach.
Most operations managers and field engineers feel they
are already spread too thin. Many field data collection systems require a high level of expertise to design, deploy,
and operate. These systems also require general IT, control theory, and petroleum engineering skill sets to properly manage. While continually updating risk assessments,
quantifying uncertainties, and integrating data across
18

It may surprise most people to learn that in a large majority of independent operating companies, the pen and
paper method still remains the dominant form of field
data collection. However, this is quickly changing. In most
operations, field personnel are contracted to oversee and
troubleshoot an operators leases. These field personnel
usually fill out industry-standard paper gauge sheets. All
oil, gas, and water production measurements are handwritten, and (if the operator is lucky) pumpers include
any special commentary before mailing or faxing these
figures to headquarters.
Although technologies like remote operations and
SCADA have sought to address productivity and efficiency
issues, many independent operators are of the mindset
that a marginal well is going to produce what it is going to
Januar y 2013 | EPmag.com

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produce regardless of whether its production is monitored or not. Even in the

case of high-flow wells, most operators require that their pumpers visit these sites
several times a day, trumping some of the potential benefits a wireless monitoring device may tout.
When it comes to smaller operators, telemetry providers promoting real-time
information may have missed the mark. Many operators are not concerned about
immediate information. What they truly desire is a way to streamline the redundancy, reporting, and productivity issues that come with field data collection.
What is more, they want a way to make sense of it all. And, with many pumpers
fast approaching retirement age, operators are now searching for effective ways
to transfer the intimate knowledge they have gained about their production
properties to the next generation of engineers, managers, and field workers.
Some forward-looking E&P companies are addressing this through consumer
electronics. Because of the shared repositories of information on which these
mobile devices subsist, intimate knowledge of a companys oil and gas assets is
not stored away deep in a file cabinet or in some autocratic domain silo but is
easily accessed via the cloud.
Rather than focus on the management and operations of onsite data servers,
a majority (if not all) of the smart device software apps are hosted on the cloud.
For the smaller operator, this means that employees can focus on what they are
best at: overseeing oil and gas production, not managing complicated IT structure. Every piece of historical production information is stored offsite at a cloud
storage provider, from which a relief pumper or a newly hired engineer can easily access needed information for review.
Smaller operators also are becoming more cognizant of the free apps on
the iPad and iPhone that are the perfect complements to their business. Many
of these apps only take a few minutes to set up but have the potential to yield
days in productivity increases from operations managers, field engineers, and
pumpers every year. For example, pumpers generally have a task list of things
they need to do on a weekly, monthly, and yearly basis to keep their leases running in top form. By forming pumper message groups in Apples Reminder app
(which comes standard on every iPad and iPhone), oil and gas operators have an
effective way to deliver daily, weekly, and monthly to-do lists (e.g. drop soap
sticks, pump maintenance, chemical schedules, gas chart calibration, etc.).
Engineers who oversee the operations of small producers are employing free
file sharing services such as Dropbox to store and deploy important documents
like well completion reports and workover information. Once files are uploaded
into Dropbox, employees are no longer tethered to their desktop computers. A
field engineer can view a well history file from his tablet or smartphone in the
field and share this same file with his team of field personnel.
Pumpers also have been quick to realize that by using the camera function on
their smart devices they are able to save an employer thousands of dollars each
year. By taking photos or video of problems in the field and posting them to
messaging applications, veteran foremen and engineers can visually engage
with their production assets. Where once issues could only be resolved through
verbal descriptions over the telephone, companies are now able to visually troubleshoot problems from the office, thus avoiding costly onsite service calls.
A new breed of specialized apps has begun to crop up in the oil and gas industry. GreaseBook, an iPad application for operators and their pumpers, has eliminated the need for the traditional paper gauge sheet workflow. The company
designed the app to work in oil-producing areas with zero mobile connectivity,
EPmag.com | Januar y 2013

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OIL FIELD

and the app touts zero setup time and no contracts. The
company has set out to improve the way pumpers record
and interact with the vital production information they
collect in the field, and the app can potentially eliminate
99% of all in-house, field-related administrative duties.
Operators are happy to outsource many of their core
computing and operations processes to third-party companies because of the convenience and amount of time that
is saved. What is more, company employees actually want
to use these smart devices, which means management does
not have to endure the typical push-back of new initiatives.
The platforms on which these smartphones and tablets
run are nothing to scoff at. Take Apple, which according
to market value surpassed ExxonMobil as the worlds most
valuable company in 2011. The apps that run on these
smart devices are backed by cloud computing heavy hitters
like Microsoft and RackSpace Cloud systems and are connected by mobile communications giants like Verizon and
AT&T. Essentially, operators feel more comfortable leaving the responsibilities of their core computing and opera-

0 R D E R

tions processes to third-party consumer companies, not

only because of the convenience and amount of time they
save but also because these companies dedicate 100% of
their resources to providing and perfecting these services.

Democratization of the oil field

Despite the success operators are having with the implementation of these easy-to-use, cost-effective apps, many
of the larger operating companies are resisting the call
to mobilize their working environment. The cost of not
going mobile comes in many forms. It comes in the form
of not attracting the strongest candidates to replace the
industrys aging work force. And it comes in the form of
not making the best decisions due to limited information.
These petite E&P companies may soon find themselves the
envy of their larger, more sophisticated brethren. Something happens when people start to use smart technology.
Their focus shifts from how things get done to how
things need to get done, and for owners and managers
of E&P companies, this is a welcome transformation.

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digital
OIL FIELD

Selecting the best wellhead

automation solution
Easy-to-use wellsite systems help operators maximize productivity.

Eddie Mechelay, Flow Data Inc.

he concept has many names: digital oil field, smart

field, field of the future, digital energy, intelligent
oil field. These all refer to the idea of using integrated,
sophisticated information and communications technologies to extract maximum value from oil and gas E&P
assets. In our everyday lives we have become accustomed
to using technology to save time and money, improve performance, and access more and better information from
which we make better decisions. Yet on many oil and gas
pads, where profits are at stake, we have yet to fully adopt
the modern conveniences that technology affords. IBM
estimates that a single well generates enough data to fill
200 DVDs daily, but translating that data into meaningful,
decision-driving knowledge remains elusive. Some larger
players or early adopters are working to build these fields
of the future. But there are technologies within reach now
that can deliver significant advantages without extravagant
costs, even for the smallest producers.

What is limiting success?

Around the globe, oil and gas well pads typically operate
with some level of wellhead automation for monitoring
and control. There are still manual operations, but most
E&P operators and service companies deploy remote terminal units (RTUs) or programmable logic controllers
(PLCs) to monitor the pad. Too often, these technologies
fail to provide simplified access to real-time, high-density
data from the increasing number of end devices or packaged equipment operating on the pad. The RTU and
PLC technologies do not easily interface, can be difficult
to access remotely, and can become obsolete before the
wells do. Finding skilled field operators to manage this
equipment can be a challenge.
Even well trained personnel rely on reference documentation and training materials, and accessing this
information in the field is, at best, difficult. Large E&P
organizations often standardize on equipment to reduce
costs, but finding a controller flexible and powerful
enough to effectively serve both oil and gas wells has
been a problem. Importantly, producers want proven,
integrated technology that will help them collect actionable data from which they can make effective decisions.

A look at the pad

Twenty-two wells, 75 wireless instruments, and one pad controller: Wireless automation solutions with advanced automation allow efficient monitoring and control of plunger lift wells.
(Images courtesy of Flow Data Inc.)

24

In the gas world, producers look to automate and optimize

pad operations with a wellsite control management system.
Typical controllers, whether wired or wireless, automate
from one to eight wells and may integrate with gas pipeline
systems for custody transfer data or as a source for well
control. Operating modes for gas well controllers should
include manual, plunger lift, intermitter, and gas lift and
injection gas functions. These should generate high-density, three-minute data for trending and should have data
logging capability to interface with hosting applications
such as ClearSCADA, CygNet, Intellution, Iconics, and
Wonderware. The software should support standard Modbus registers for the application but provide the flexibility
to assign registers for easy host integration. To facilitate
operational needs, the controller needs to provide integrated email alarm and shut-down capabilities.
On the oil pad, operators want pad-wide management
of input and output devices and complete tank manageJanuar y 2013 | EPmag.com

digital
OIL FIELD

ment, including high-level shut-down and production

totals for inflow and outflow. Tank management should
cover local and battery tanks and provide an interface to a
pipelines lease automatic custody transfer (LACT) system.
The controller should offer remote shut-in of pumpjack
units driven by gas engines or electric motors and emergency shut-down valves as well as trending for tank levels,
pressures, flow, etc. These controllers also should interface
with host applications such as ClearSCADA, XSPOC, Iconics, CygNet, Intellution, Wonderware, and more. As with
gas systems, a controller should provide email alarm and
shut-down capabilities.

The Android-based controller display places information at the

field technicians fingertips and offers remote access as well.

Whether gas or oil wells, these pads require management of a growing technology base. A well pad controller
now must monitor, measure, record, and analyze data
and facilitate action. The technology list is extensive: flare
systems, vapor recovery, LACT units, flowback systems,
tank level devices, rod pump controllers, and wired and
wireless connectivity, among other technologies. The controller aggregates data from and through these technologies and makes it available to everyone from field
personnel to the corporate office.

Considerations
Not all wellsite control management systems are created
alike. When evaluating a wellhead automation system,
there are important components and capabilities to look
for. Features should include:
A configurable system that is easily modified without
programming;
A single solution that serves oil and gas, wired and
wireless, and single and multiwell pads;
A modern, easy-to-use, familiar display for maximum
productivity;
Local data storage to access essential information in
the field;
EPmag.com | Januar y 2013

A system that supports multiple communication protocols; and

Enhanced connectivity such as local WiFi and remote
Ethernet capability.

A solution for fields of the future

PADPro is a new wellsite control management system that
serves both oil and gas pads, whether single or multiwell
(30+ wells per pad) and wired or wireless. It features configurable software modules to build out functionality without programming and an Android-based touch-screen
display. The touch-screen display is as familiar as todays
smartphones or tablets and as easy to learn and use.
Unlike standard controller displays, which typically offer
two- or four-line resolution and lots of button tapping for
navigation, the systems display lets users:
Access the controllers operational data locally or
remotely via a smartphone, tablet, netbook, or laptop
operators can see information from their trucks;
Store and access PDFs, video, and other important files;
Generate real-time reports;
Configure applications dynamically without rebooting
the system;
Text or email through the controller network or cell
modem; and
Enter site, well, or pad notes using a local notepad.
The system gets its intelligence from proprietary control
software and configurable modules. These modules tailor
the system to meet user-specific well automation needs.
Configurable architecture requires less expertise than software that must be programmed, saving time and money.
Wellsite control systems that serve both oil and gas pads
offer a single solution for producers with both assets.
Adopting the interface with its Android operating system makes the display familiar and therefore easy to learn
and use. This maximizes productivity and greatly simplifies
the interaction with the controller. The ability to store
important documents on the controller and easily access
them through display or remote devices means field technicians and other users will always have access to essential
data, whether for training or troubleshooting.
The field of the future offers E&P operators the capability to be more productive, make better decisions, and
extract maximum value from their oil and gas assets.
Selecting the best wellsite control management system to
automate and monitor the wellhead is essential to fully
benefiting from the latest technology, especially for the life
of the well. Solutions that provide the horsepower of a PLC
without costly programming and that make interaction
through the display intuitive and productive are the best
choice for todays oil and gas pads and tomorrows.
25

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exploration
TECHNOLOGY

Exploration success will continue in 2013

A new report paints a rosy picture for continued offshore discoveries.

ccording to a Morgan Stanley report, 2013

promises to be a big year for exploration.
In its 2013 Offshore Exploration Outlook: The
Renaissance Continues, the analyst firm indicates
that the renaissance in activity it predicted in 2010
will continue through this year. The report predicts
offshore exploration activity to increase by around 7%
over its 2012 estimate and 26% over 2011.
This continued increase is reflected not only in
newer areas like East Africa but in mature provinces
like the North Sea and the US Gulf of Mexico (GoM).
Morgan Stanley analysts compiled a global database
of offshore exploration wells that are expected to be
drilled, not counting appraisal wells, by year-end.
Planned wells were limited to prospects with gross
resource potential greater than 100 MMboe. The
analysts studied 304 wells drilled in 45 countries by
75 companies.
They also built country-specific asset models for 39
countries applying varying finding and development
costs, product pricing, and fiscal regimes.
Findings suggest that companies will test 91 Bboe of
potential reserves by the end of the year, with about
78% of that focused on oil. A 25% success rate could
result in 23 Bboe of additional resource, which the analysts said will put the industry 30% ahead of the 12-year
average. A 40% success rate would result in the highest
amount of new reserves since the Kashagan discovery
in 2000.
Some of the factors leading to these findings include
the North Sea Johan Sverdrup discovery in 2011; the
easing of offshore fiscal terms in the UK; renewed

New acquisition methodologies and better imaging

are spurring an increase in offshore exploration.
(Image courtesy of CGGVeritas)

EPmag.com | Januar y 2013

RHONDA DUEY
Executive Editor
rduey@hartenergy.com
Read more commentary at

EPmag.com

interest in the GoM, with the number of contracted

floaters surpassing pre-Macondo levels; and increased
prospectivity for both East and West Africa.
Other factors include the 2007 Jubilee discovery,
which opened the West Africa Transform Margin; the
Tupi discovery in 2008, which kicked off Brazils presalt
craze; a return to exploration in the GoMs Lower Tertiary after Macondo; the end of Shells seven-year struggle to clear regulatory hurdles offshore Alaska; and of
course continued high commodity prices.
While Brazil boasted one of the largest discoveries
with its Carcara success in the Santos basin, the analysts
predict a slowing of exploration activity as Petrobras
and OGX focus on developing existing finds. West
Africa is now a major contender in the presalt play
thanks to CIEs Cameia #1 and #2 discoveries offshore
Angola. The report notes that Angola will see a significant activity increase both in 2013 and 2014 following
the 2011 licensing round that freed up 11 blocks.
Mozambique and Tanzania also have seen continued
big discoveries, increasing resource estimates to more
than 100 Tcfe.
There were a few disappointments in 2012, most
notably offshore Namibia and the Falklands. However,
the report noted considerable potential in both areas
and expected activity to continue in 2013.
Before the new year even kicked off there were several notable offshore discoveries, including Cobalts
North Platte discovery in the GoM, with several hundred feet of net pay and the potential for several hundred million barrels; Enis additional gas discoveries
offshore Mozambique, adding 6 Tcf; and Petrobras
ultra-deepwater discovery in the SergipeAlagoas basin, its fourth discovery in
that province in 2012. The renaissance continues apace.

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drilling &
COMPLETION

International rig utilization hits 95%

National Oilwell Varcos 59th annual rig census showed strengthening in
the international land rig market, and construction of new offshore mobile
rigs topped 40 for the fourth year in a row.

or 2012, land rig utilization in the Middle East

was at 100% while the percentage in every other
region except Latin America (88%) was in the mid90s. The worldwide offshore mobile rig fleet grew by
4% in 2012 to 824 rigs with the addition of 44 new
rigs, representing the fourth year in a row for at least
40 additions to the fleet.
Those were two of the many highlights of the 59th
annual rig census presented by National Oilwell
Varco (NOV) at the 2012 annual meeting of the
International Association of Drilling Contractors
(IADC) in Scottsdale, Ariz., Nov. 9.
The enthusiasm for higher specification land rigs
and deepwater mobile rigs was obvious at the IADCs
annual meeting. The emphasis on safety also was at
the forefront of the drilling contractors agenda.
Robin McMillan, senior vice president of Business
Development, NOV, presented the rig census. In
the US, total available rigs dropped by 2% to 3,006
units. US rig utilization rose to 75%, up from 67%
the previous year.
Over 50% of the fleet is now less than seven years
old. We are turning over the fleet faster than we have
done before, McMillan said.

Utilization rates in Africa were at 95% for the 2012 census, as this
rig in North Africa represents. In the Middle East, utilization was
at 100%. (Photo by Jon Gaute Espevold, courtesy of Statoil)

EPmag.com | Januar y 2013

SCOTT WEEDEN
Senior Editor, Drilling
sweeden@hartenergy.com
Read more commentary at

EPmag.com

For the worldwide offshore mobile fleet, the number of active rigs reached 626, the highest level since
2001. With the number of active rigs increasing, utilization rose to 76% for the offshore mobile fleet.
As the census pointed out, contractors remain
optimistic, with 45% of survey respondents planning
to expand current fleets. Another 28% had no plans
for expansion, while 12% were seeking merger
opportunities.
Mike Acuff, senior vice president, Contracts and
Marketing, Diamond Offshore Drilling Inc., said that
in the near term, there will be a shortage of rigs in the
mid-water, deepwater, and ultra-deepwater markets.
Over the long term there will be a significant number
of new rigs coming out in 2014, and the market could
come back in line.
Acuff added that the rigs for ultra-deep water, which
has a depth greater than 2,272 m (7,500 ft), and deep
water, which has a depth from 1,515 m to 2,272 m
(5,000 ft to 7,500 ft), are sold out in effect for 2013.
The first available rigs will be in 2014. Operators are
lining up for rig capacity.
A year ago, day rates were in the US $300,000 range.
In the past 12 months, those rates have gone up to
$500,000 per day, and availability in 2013 is difficult,
he continued.
The number of offshore rigs under construction is
almost at the peak level reached in 2008. Newbuilds
have gone up for two reasons: higher demand and
attractive shipyard pricing in Singapore
and South Korea, he noted.
It was encouraging to see the
optimism from the contractors.

29

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production
OPTIMIZATION

Bringing more fizz to the Permian basin

A clean coal energy project would make more CO2 available for use in
EOR projects in the Permian basin.

ore than 40 years ago, CO2 EOR got its start

in the Permian basin when the process was
employed to help boost oil production in the SACROC
Unit in Scurry County, Texas. The technical success of
the project led to the eventual construction of CO2
pipelines that connect the Permian basin oil fields to
natural underground CO2 sources in Colorado and
New Mexico.
Today there are more than 6,276 km (3,900 miles) of
pipeline in the US that transport approximately 65 million tons of CO2 annually that is purchased by the oil
industry for use in EOR, according to a report from
the National Enhanced Oil Recovery Initiative. Of the
281,000 b/d of US crude oil produced with EOR, more
than 170,000 b/d come from Permian basin oil fields.
Operators there inject more than 1.6 Bcf/d of naturally
sourced CO2, according to a US Department of Energy
(DOE) report.
The availability of CO2 and the significant cost of
delivering it have placed constraints on operators in
the Permian basin and elsewhere. There are concerns
that the constraints could become greater as more projects are brought online across the country.
During the recent CO2 Conference held in Midland,
Texas, Ann Banks, chief commercial officer of Summit
Power Group, updated attendees on the companys
Texas Clean Energy Project (TCEP). The project would

JENNIFER PRESLEY
Senior Editor, Production
jpresley@hartenergy.com
Read more commentary at

EPmag.com

provide an additional 2.5 million tons of anthropogenic CO2 for EOR use in the Permian basin.
TCEP is a DOE-supported clean coal demonstration
project billed as a first-of-its-kind commercial power
plant. The plant will be located on a 600-acre site in the
small town of Penwell, which is located about 24 km
(15 miles) west of Odessa, Texas.
When operational, the plant will use an integrated
gasification combined cycle process to generate 400
MW gross output of power. The plant, according to
Summit, will capture 90% of the CO2, 99% of sulfur,
and more than 95% of the mercury and [will] eliminate more than 90% of the nitrogen oxides produced
by the process.
Captured CO2 will be delivered to the Central Basin
Pipeline owned by Kinder Morgan CO2 Pipeline LP.
The location of this pipeline was a key consideration
during the plant site selection process. Transportation
costs from the plant to the pipeline should be minimal as there is an existing tie-in valve located less
than 1 km (0.6 miles) from the plant.
In 2011 Whiting Petroleum Corp. agreed to
purchase 80 MMcf/d of compressed CO2 during
the first five years of TCEPs operation for use
in its Permian basin EOR operations. Since
then, two other undisclosed companies also
have agreed to purchase CO2. On the power
generation side, CPS Energy of San Antonio
has agreed to purchase 200 MW of power from
the plant for 25 years. Minnesota-based CHS
Inc. will purchase the plants entire output
of urea for use in fertilizer and is expected to
reduce annual US imports
The sun rises on a new era of energy development in the once boomof urea fertilizer by more
ing oil town of Penwell, Texas. (Photo by Jennifer Presley)
than 10%.

EPmag.com | Januar y 2013

31

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offshore
ADVANCES

A series of trends worth tuning in for

Global spending forecasts indicate that the offshore sectors star is very
much in the ascendancy.

uning in for an online webcast can be a time-consuming and not always very rewarding effort. But
there are times when they can be very enlightening
and you dont have to get on a plane, either.
Listening to a presentation by Aker Solutions business leaders at the companys Capital Markets Day in
December, it was very hard not to get excited by the
prospects they outlined for themselves and the wider
industry as a whole.
The main offshore trends going forward are already
pretty clear: increased demand for oil and gas, greater
complexity, deepwater and harsh environments, declining production, increased recovery, and extending the
lifetime of existing fields. According to Aker, the resulting priorities for it as a company are also pretty clear:
offshore and remote frontier exploration, the Arctic
and LNG, deep water, subsea infrastructure, FPSOs,
ultra-deepwater rigs, CO2, EOR and IOR, subsea processing and boosting, late life modifications, subsea
tiebacks, and light well intervention.
The company flagged the latest global E&P capex
spend forecast (onshore and offshore) from Barclays
Capital Equity Research, which noted the strong
rebound for the upstream market in 2011, expected
to continue upward and hit US $604 billion in
2012 and $644 billion in 2013.
The offshore global E&P capex and opex
spend figure is equally encouraging for 2012,
coming close to $350 billion and on a clear

The main offshore trends going

forward are already pretty clear:

increased demand for oil and gas,

greater complexity, deepwater
and harsh environments,
declining production, increased
recovery, and extending the
lifetime of existing fields.

EPmag.com | Januar y 2013

MARK THOMAS
Senior Editor, Offshore
mthomas@hartenergy.com
Read more commentary at

EPmag.com

long-term continuous growth trend with a predicted

compounded annual growth rate of 10%. By 2017 the
figure will be nearing $550 billion, said Aker, quoting
analyst Rystad Energys forecasts. By far the biggest
slice of these figures is taken up with development
and well capex, according to Rystad.
A glance at the top-spending countries over the
next five-year period from 2013 to 2017 also reveals
one or two surprising members. It is of little shock
that Brazil sits at the top with an expected total offshore E&P spend of around $250 billion, while just
behind it with a forecasted figure of $220 billion is
Norway. In third place is the resurgent US with
$190 billion for the same period, with Australia in
joint fourth on $150 billion alongside the perhaps
slightly less expected UK sector. For those
who like figures, Angola was fifth at $100
billion, Malaysia sixth at $75 billion, and
again, perhaps a little surprisingly, India landed
in seventh place with a forecasted $40 billion.
According to Aker, despite the increasing emergence of independents in frontier areas around the
world, it is the majors that occupy the dominant spending seats offshore. Reflecting the above spend figures
for Brazil, Petrobras lies atop the pile with a forecasted
offshore spend for 2013 to 2017 of around $200 billion,
some $60 billion ahead of the next biggest spender,
Statoil. The top 10 list of majors is a familiar one after
that too, with the companies in descending spending
order being Shell, Chevron, ExxonMobil, BP, Total,
Pemex, Eni, and Saudi Aramco.
The title of this column is Offshore Advances
and according to the above figures, that is
precisely what this industry is doing.
Long may it continue.

33

COVER STORY:
R&D SPOTLIGHT

R&D

IN THE TRENCHES
It seems that for every problem solved,
two more challenges emerge.
The oil and gas industry
spends billions of dollars
developing new technologies
to overcome these hurdles.
Here is what they are
working on now.
Staff Report

echnology and innovation are critical factors

in the oil and gas industrys continued success. Without a constant push for new ways of doing
things, areas such as deep water
and unconventional resource
plays would still be out of reach.
Companies, research centers,
and academia work tirelessly
to perfect existing techniques
while pushing the boundaries to
examine additional possibilities.
In this spotlight on R&D, several companies discuss trends
that guide their research dollars.

34

Januar y 2013 | EPmag.com

COVER STORY:
R&D SPOTLIGHT

Taking a macro view

While many major oil companies scaled back their
research efforts in the 1980s and 90s, they still are at
the forefront of pure science R&D, leaving more of the
applied science to their service company partners. For
instance, Statoil has been a long-time believer in investing
substantially in its own R&D activities and now has three
research centers in Norway alone. The companys R&D
cluster, with facilities in Trondheim, Bergen, and Porsgrunn/Krst in addition to a heavy oil technology center
in Canada, exists to establish and execute Statoils R&D
portfolio in line with its corporate technology strategy.
This, it hopes, will position it for future technology leaps.
The operator has decided to triple its 2013 technology
research budget for the Arctic alone to US $43 million
(NOK 250 million) from $14 million (NOK 80 million) in
2012 as it bids to close the technology gaps that exist for
Arctic projects. In particular, it is focusing much of its current Arctic research, in conjunction with Norwegian universities, on ice management.
The operators R&D program also is maturing the concept of an Arctic drilling unit, able to drill year-round in
ice-bound conditions in varying water depths. Based on
Statoils specialized category A and B rigs developed for
the Norwegian Continental Shelf, the Arctic category unit
will be able to operate in varying water depths and will
involve integrated operations in drifting ice.
Functions the company is aiming to deliver include a
management system to reduce ice impact, an optimized
drilling package for faster drilling and increased rig availability, and solutions to ensure that the rig dynamically
maintains its position. At present, according to Technology,
Projects, and Drilling Executive Vice President Margareth
Ovrum, no robust solution for dynamic positioning dedicated for ice operations exists. When we see a technology
need, we try to fill the gap ourselves. We have now directed
our strategic focus towards developing technology for
exploration and production in ice. A new dedicated unit
has been established to solve these challenges, she said.
She added that Statoil was developing more robust solutions for both permanent and floating production solutions for the Arctic as well as other technologies, including
shooting seismic in ice.
BPs R&D efforts currently total around $640 million
annually on both its upstream and downstream sectors,
with around 35% of that global spend figure being invested
in R&D activity through UK-based institutions.
Along with its own research centers, BP also has a policy
of investing in programs with UK universities and government initiatives. For example, the BP Institute (BPI) was
established as an interdisciplinary research institute at CamEPmag.com | Januar y 2013

bridge University more than a decade ago. The BPIs

research has touched on everything from oil recovery to
areas such as geological storage of CO2 and ocean currents.
Oil recovery remains a subject close to BPs heart.
According to Chris Reddick, vice president of EOR for BP,
only 3.5% of global oil production today comes from EOR
projects. A lot of effort is needed to improve that, he said
at the recent PETEX 2012 event in London.
Within BP, the companys own equivalent figure for
EOR-related production on a gross basis is about 100,000
b/d, with its goal being to increase that amount.
Reddick said BPs global hydrocarbon portfolio contains
a significant proportion of oil resources, which are the target of EOR techniques that are currently the subject of
R&D studies. These are focused on improving both pore
scale displacement and sweep efficiency.
Outlining BPs approach in screening, evaluating, testing, and applying these techniques, he highlighted the
following:
Analysis of resources using a reservoir technical limits
process to identify the most leveraging recovery
processes and their targets;
Laboratory scale tests, often using innovative
experimental methods, to assess recovery process
performance;
Centrally funded field trials to prove the effectiveness
of the process at the interwell scale; and
Centrally supported deployment for programmed takeup across the company.
Addressing the eventual deployment of EOR technologies and techniques, Reddick added that BP has had to
adapt its stance on EOR to meet the needs of its portfolio.
EOR methods that complement waterflooding are an area
we are focusing on, he said.
He also mentioned the issue of getting EOR into a
projects life cycle earlier in the process as a key area.
If we can apply it earlier in the life of a field, we can
get more oil out of the field, he added. He also commented that BP and the wider industry still need to
broaden the applicability of EOR solutions as well
as accelerate the development cycle time for new
EOR solutions.
One example of the successful evaluation and early takeup of this kind of technology within BP is its LoSal EOR
waterflooding and sweep enhancing polymer treatments,
both of which are part of its Designer Water suite of EOR
technologies.
Ram Shenoy, CTO of ConocoPhillips, pointed to
advances in high-performance computing coupled with
advances in algorithms for modeling and simulation in
different fields elastic full-waveform inversion in geo35

COVER STORY:
R&D SPOTLIGHT

physics, molecular modeling

methods in chemistry, and the
life sciences transplanted to
chemical recovery processes in oil
and gas. He said that networking
and telemetry advances are allowing the instrumentation of the oil
field to an unprecedented extent.
Advances in IT particularly
mobile applications, networks,
and telemetry are enabling
many applications of computing
in environments where it was not
previously possible in the oil
field, Shenoy said. Real-time
troubleshooting and diagnosis of
production facilities in offshore
and remote environments is one
example. Another is real-time control of the drilling process to optimize the time spent in wellbore
Halliburtons WellLock resin acts like cement to provide better sealing of small leaks. (Image
construction.
courtesy of Halliburton)
He added that the industry is
beginning to examine the implications of nanotechnology research in a variety of
ties. Another is to develop technology to ensure deepwaareas, such as coatings to combat corrosion and new
ter operations are safer and cause minimal disruption to
types of miniaturized sensors that use carbon nanotubes,
the environment.
enabling new types of interfacial science at nanometerRoyal Dutch Shell has an extensive R&D effort for
length scales.
both upstream and downstream challenges, but lately it
Some of the companys priorities revolve around lowhas focused on subsurface challenges. Teaming with a
permeability and shale plays around the globe. Given
variety of service companies and academicians, Shell is
ConocoPhillips current and anticipated position in
devoting a great deal of science and funding toward
unconventional reservoirs, this is a focus area spanning
advancing industry understanding of current and future
all aspects of reservoir characterization, development,
challenges.
and production.
For instance, geophysical surveying has been chalAnother emphasis is to make advances in geophysical
lenged by the need for new ways of thinking, accordimaging, seismic and otherwise, to establish our position
ing to Dirk Smit, chief scientist, Geophysics. We believe
in deepwater and thick subsalt plays globally, Shenoy
the trick is to drive down the cost of these measuresaid. We also are looking at technological advances in
ments by an order of magnitude, at least, Smit said.
deepwater facilities for instance, subsea and downhole
We think we have identified the technologies that will
power management, more effective ways of managing
allow us to do that, and that will drive a profound
drilling processes, and assuring access to hydrocarbons
change in the seismic industry.
in a safe and predictable manner to reduce the cost of
In unconventional plays, reservoir engineers are disexploiting deep water while being safe and environmencovering that standard equations such as Archies equatally responsible.
tion and Darcys law to derive the physical properties of
As is the case with many companies queried, Conocoreservoir rocks, while providing reliable methods to gain
Phillips is very aware of the need for technology to
a better understanding of the rock properties and flow
minimize the environmental footprint across the range
characteristics in conventional reservoirs, are not well
of the companys operations. One example Shenoy cited
suited for this new type of formation.
is managing the use of water in operations, including oil
Darcys equation doesnt apply here, and we know
sands, unconventional reservoirs, and producing facilithat, said John Karanikas, chief scientist, Reservoir
36

Januar y 2013 | EPmag.com

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COVER STORY:
R&D SPOTLIGHT

Engineering. We need to replace it with something.

Would that something be Darcys law with a modification factor? Would it be something with the same
structure of equation but a more complicated
modification of the permeability, called an effective
permeability? How do I measure the scaling factor
of that permeability?
He added that the equations, in their current form,
are too simplistic to describe the organic nature of shale
rocks. Its a question of whether we can expand them in a

producibility. It will be a permeability-like parameter but

one that will depend on entirely different microscopic
features of the rock.
The next question is how to scale it up. How do we
translate that into producibility at the reservoir scale?
That will be part of an engineering approach that we
will look at later. Im pretty sure we can crack that nut.
Sau-Wai Wong, Shells R&D manager for Unconventional Gas Technology, said that for the industry to optimize its completions technology, it needs a better

BPs Andrew platform in the North Sea will handle production tied in from the nearby Kinnoull field and is one of three reservoirs that
are being developed as part of the rejuvenation of the Andrew area. The company has placed a large emphasis on EOR R&D. (Image
courtesy of BP)

convenient way to account for the new phenomena, he

said. My first response would probably be, not immediately, because there is nothing about absorption or desorption in Darcys law. Its not even part of the saturation.
That needs to be modified.
What is needed, he said, is a methodology that would
allow scientists to go from the pore-size scale to the
reservoir-size scale at which the derived laws or coefficients can be applied.
One approach is nanotechnology. The goal, said
Vianney Koelman, chief scientist, Petrophysics, is not
to study nanomaterials to death. Rather, the plan is to
translate the understanding into a methodology for
engineers to use. We want to understand what is happening at the micro scale, what the dominant mechanisms are that make the hydrocarbons mobile, he said.
That should translate into a parameter that describes
38

understanding of the reservoir and how the fracture

fluid interacts with the rock. Key technical considerations for the industry include:
Finding geological sweet spots;
Optimally and safely drilling, completing, and fracture-stimulating the wells;
Understanding how production will flow through
the ultra-tight rock to the fracture network and
wellbore;
Developing and applying surveillance technologies
to monitor the wells, reservoir, and surrounding
environment during injection and production; and
Effectively treating, recycling, and reusing the water.
Fracture stimulation is a critical technology in unlocking unconventional gas and oil, and to be able to optimize our design, we need a better understanding of the
fundamental subsurface processes, Wong said. For
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R&D SPOTLIGHT

example, if the wells do not produce, we need to know

why. Is it because of suboptimal fracture stimulation or
poor geology?
Wong said that this type of research is in its infancy. In
a tight reservoir, the rock must be broken up to create
pathways that the fluid can escape into and eventually
be produced to the surface via the wellbore. Hydraulic
power provides the energy to break the rock.
The question is, are there any other forms of energy
that we can send far into the ground that can create that
energy? Wong said. Different people are taking different approaches. There are mechanical methods and electrical methods. Or maybe a combination of those. Its a
long shot, but I think thats what R&D should do.
EOR presents the challenge of dealing with the interactions between the water, oil, and rock surface. The goal is
to detach the oil from both the water and rock and make
it move on its own. Rather than being in small droplets
that are suspended in the water, the oil droplets need to
be connected into strings that then flow through the
rock, said Bruce Levell, chief scientist, Geology. The
attractive force takes place at the atomic scale on the surface of the rocks that is interacting with the surface of the
fluids. And what weve discovered is that some techniques
for analyzing catalysts in refineries are particularly suitable
for analyzing the surfaces of rocks in very fine detail.

In refinery-based catalysis, the active sites of the catalysis

substances must be repeatedly accessed by the gases or the
liquids that are flowing past them and repeatedly reused
to bring molecules together. Were really interested in
the atomic surface layer, and what were finding is that the
bulk is by no means representative of whats on the surface, Levell said. For example, a surface polarity or
charge can be related to clay minerals or bonds in the
lattice that are free, and those are interacting with polar
compounds in the oils. If you can change the ionic
strength of the water, you can change those electrostatic
attractions and detach the oil from the rock surface and
you can do that simply by exchanging the bivalent ions of
the calcium and the magnesium into water with a monovalent ion, like sodium.
Magnetic nanoparticles are being studied for these
applications. Sergio Kapusta, chief scientist, Materials, said
emulsions are relatively easy to separate using the magnetic field, and oil becomes attached to the nanoparticles.
When using the magnet, it moves the oil along with the
nanoparticles out of the water phase.
This has been known for some time, Kapusta said,
but we didnt know exactly what size of particles we could
use, what strength of magnetic field was required, and
whether it would work when we put it all together. We
now have the theoretical framework.

Collaborative efforts

Upstream R&D includes the pursuit of better imaging techniques.

(Image courtesy of CGGVeritas)

40

The Research Partnership to Secure Energy for America

(RPSEA) was established to facilitate a cooperative effort
to identify and develop new E&P methods for ultra-deepwater and unconventional natural gas and to ensure that
small producers continue to have access to the technical
and knowledge resources necessary to continue their contribution to energy production in the US.
In the onshore area, the biggest and most exciting thing
thats driving R&D activity at RPSEA is the interest in
unconventional gas research, particularly shale gas and
tight unconventional liquids production, according to
Robert Siegfried, RPSEA president. Those are resources
that have the opportunity to dramatically change the
energy picture in the US and the world, but its going to
need some new and improved technology to reach its full
potential, Siegfried said. I think the key technologies
that are going to be required are those aimed at ensuring
that we can develop the resource not only economically
but with an environmental footprint thats acceptable to
the communities that are involved as well as the population at large.
He mentioned water management as a key issue going
forward. Theres a lot of water that needs to be sourced
Januar y 2013 | EPmag.com

COVER STORY:
R&D SPOTLIGHT

Breakthroughs on the horizon

When asked about new technology in the next decade, companies gave their forecasts.
Rustom Mody, Baker Hughes. Next-decade technological
breakthroughs will be driven by the operators needs,
including a new class of metals with step-change chemical
properties for extreme environments, elastomers rated to
40,000 psi and 371C (700F), automated drilling with
greater and faster horizontal reach, smart fluids and chemicals with self-tuned viscosity, smart proppants or fluid
additives for formation fracture mapping and reservoir
condition sensing, logging while fracturing, nanosensors
for fracture and stress mapping, fully autonomous longterm wellbore sensing and control, and interwell tracer
technology.
Thierry Brizard, CGGVeritas. Seabed seismic acquisition using self-propelled nodes is one such foreseeable
breakthrough. We also expect to see affordable 1 million
trace seismic acquisition implementing a new generation
of seismic sensors/sources and processing algorithms.
Ram Shenoy, ConocoPhillips. I expect we will mature
our understanding of unconventional reservoirs to the
same level as conventional reservoirs. This will require fundamental improvements in our understanding of hydrocarbon transport in shales at the nanoscale level, which is
lacking today.
To fully exploit deep water, we will need to develop
equipment to operate in harsher environments than ever
before. To recognize fruitful exploration plays, we will need
to continue advancing geophysical acquisition and imaging. We expect that advances in IT and computing, coupled
with advances in robotics, will begin introducing automation to do more comprehensive monitoring and control of
operations while reducing the number of people placed in
challenging operating environments, particularly offshore.
Frank Van Ginhoven, Fluor Corp. I think we will make
enormous progress in the Arctic and in subsea processing
and will reach new levels of safety in design and implementation. We will reuse most of the water we require in
processing, and our facilities will be increasingly energy-

and also produced water that needs to be treated and

managed after the treatment process, which needs to be
either disposed of or treated and recycled, he said. And
the technologies for both sourcing and managing the
large amount of water thats associated with unconventional resources is going to be an area of a lot of R&D
opportunity.
More efficient fracture treatments are another area of
research. Current treatments do not stimulate the entire
reservoir, he said. I think there are opportunities to
improve that so that we can access a greater reservoir volEPmag.com | Januar y 2013

efficient and green.We also will make substantial progress

on reducing carbon emissions.
Greg Powers, Halliburton. In the next five to 10 years I
think we will see breakthroughs in the areas of telemetry
and automation and control. One is an enabler, and another
is an outcome of that enabler.
The enabler is going to be high-speed telemetry. When
were drilling, measuring, or logging, we want to know
whats happening at the rockface and want that information
topside right away.
Then you have to consider how to process this massive
tidal wave of information that is being generated in high
speed. Its clear that you have to process it at high speed,
and you have to process it faster than humans can think. So
the challenge is to effectively and safely share the command and control of whats happening downhole between
a computer and people.
Tom Tilton, Weatherford. Development of smaller nextgeneration downhole sensor technologies that require less
power or are self-powered downhole could enhance the
ability to evaluate and monitor reservoir performance to
optimize production and provide continuous monitoring of
wellbore integrity, thus improving safety and reducing the
risk profile. Also, todays fuel cells are cost-prohibitive for
most oilfield operations, but the critical mass in the automotive industry could potentially reduce the cost, making
them a viable option.
Robert Siegfried, RPSEA. I expect to see better processing technology for cleaning up water, either for recycling and reuse in the oil and gas development process
or for other beneficial uses. I also think theres a lot of
opportunity for an increased understanding of the basics
of fluid flow that will then be translated into more effective tools for planning stimulation treatments and for
designing reservoir management scenarios that maximize recovery and minimize the need for additional stimulation treatments. n

ume for the same sort of surface infrastructure and surface impact, he said.
Offshore, the Macondo tragedy has focused attention
on safe operations. But Siegfried said there are exciting
new technologies to help the industry do a better job in
deepwater offshore development. One of the technology
trends out there has to do with just getting the raw data we
need to see whats going on in the subsurface and manipulate things in the subsurface, he said. The technology
for autonomous underwater vehicles (AUVs) coupled
with better imaging technologies that will allow informa41

COVER STORY:
R&D SPOTLIGHT

tion on whats going on near the seafloor to be seen by

operators at the surface is exciting. One key area of technology is imaging technologies; systems using infrared
light as well as acoustic sensors are getting better images
that will allow AUVs to go down in challenging environments and be a lot more effective in terms of both monitoring and controlling subsea operations.
Improved data collection techniques are another area of
potential improvement. This will include better seismic
technologies and better application of controlled-source
electromagnetics. That lets us have a better idea of what
were going to be drilling into and to plan operations
more effectively, he said. And the ability to put more
facilities at the subsurface, I think, is something thatll be a
real enabling technology in terms of processing and
power generation.

Nuts and bolts

Service companies are the workhorses of oil and gas R&D,
focusing on both pure science and applied research that

C!

improves existing products. Much of their R&D efforts are

focused on the challenges their clients face in the field.
Rustom Mody, vice president, Technology at Baker
Hughes, noted that challenging operating environments
and more progressive philosophies are leading to exciting technological advancements. Increasingly, operators are willing to invest in technologies that will reduce
their long-term overall risk, he said. This is a big shift
from the previous prevailing philosophy of incurring
risk to spend less at the outset.
As the saying goes, necessity drives invention. The
tagline should be: Investment funds it.
Mody sees the industry as on the cusp of a new
era in upstream R&D. This trend is focused on increasing long-term reliability and reducing risk in extreme
environments, he said. Most exciting among the
trends we see are in materials science and monitoring
and control.
In the area of monitoring, he said, the operative word
is control. The industry has been able to gather data

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Januar y 2013 | EPmag.com

COVER STORY:
R&D SPOTLIGHT

downhole for quite some time but is just now perfecting

its ability to decipher and analyze those data and use
them to control operations.
There is tremendous potential for improving both
short- and long-term reliability and safety as well as
reservoir understanding, he said. We are integrating
downhole surveillance, monitoring, and control capabilities in drilling and completion equipment.
Mody noted that the intelligent well market continues
to expand, and there is broader acceptance of electronics
in downhole equipment and development of remoteactuated annular casing packers. Through integrated
interpretation, we can combine data from all available
resources to improve value and better help operators
make the best decisions through a combination of drilling
data, wireline, seismic, reservoir models, and geomechanics data, he said. We also need materials that can handle
the extremely high temperatures of [steam-assisted gravity
drainage operations] (SAGD), the extreme pressures and
temperatures of subsea environments such as the Lower

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60

Tertiary, and acid gas. Much of our research in materials at

Baker Hughes is focused on nano-scale materials; new polymers; and high-strength, corrosion-resistant metallurgies.
For instance, the company has developed a new nonmagnetic hard facing that is up to eight times more wearresistant than current materials. Slick coatings and smart
materials such as shape-memory polymers, high-strength
dissolvable metals, thermoelectric polymers, and time-control shielding materials are just some of the materials
being researched and developed.
In the area of drilling and evaluation, using real-time
formation data to geosteer the well on a more precise
path is generating effective wellbores for completion and
production, Mody said. The result is an optimized reservoir, both initially and throughout its life, he said. The
integration of interpretative data from multiple sources is
driving a new level of decision-making for increased value.
Likewise, a new generation of hybrid drilling bits, combined with drilling dynamic models, is improving the
drilling time and quality for new wellbores.

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EPmag.com | Januar y 2013

43

COVER STORY:
R&D SPOTLIGHT

Downhole instrumentation, both wireline and LWD,

is benefiting from greater reliability at ever increasing
temperatures. Producing wells can now be better controlled with respect to water and gas management. New
downhole fluid analysis techniques combined with efficient sampling tools are improving the accuracy and the
models for deeper reading and novel sensors such as
mineralogy, [gas-oil ratio], optical, and others.
Mody added that remote actuation also is being
implemented into surface equipment such as top drive
cement heads. The technology is superior from an
HSE perspective, he said, by removing personnel from
close proximity to the head during higher risk well
operations such as high-pressure circulation and ball
or dart dropping.
Instead, a compact, battery-powered console can be
hand-carried as needed on the rig floor to monitor and
control operations, he said. The heads are designed with
their own battery and compressed gas tanks, which allow
rotation and actuation independent of rig power supplies.

ry

These are all exciting developments that were not even

concepts five years ago.
According to Thierry Brizard, executive vice president,
Technology for CGGVeritas, it is an exciting time in
upstream research. At CGGVeritas we are focusing on
key areas to provide affordable answers to the central
challenge of our clients: maximizing recovery of conventional and unconventional oil and gas, he said. Areas of
study include dense seismic acquisition via high channelcount operations to deliver high-resolution imaging,
robotization to ensure efficient seismic acquisition in
the new context of dense geometries, automation of
some key aspects of the seismic workflow to handle the
tsunami of data generated by high channel-count operations, joint seismic/nonseismic inversion for high-fidelity
imaging, advanced modeling to optimize all aspects of
seismic acquisition, and advanced seismic illumination
to address the diversity of subsurface geologies.
CGGVeritas has been actively partnering with other companies to push these innovations. With respect to robotiza-

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44

Januar y 2013 | EPmag.com

COVER STORY:
R&D SPOTLIGHT

tion on seismic acquisition, the company announced in

November 2012 that it had entered into a collaboration
with Saudi Aramco to conduct a major joint R&D project,
known as SpiceRack, to develop, manufacture, and commercialize an innovative robotized solution for seabed seismic acquisition. This solution is based on the deployment
of self-propelled recording nodes, and we expect it to lead
to a step change in the efficient delivery of reservoir-quality
seismic data, Brizard said. Both companies will draw on
their extensive seismic acquisition experience and allocate
resources to the SpiceRack project, and CGGVeritas will
create a unique Center of Excellence for Automation in
Geophysical Acquisition in the Dhahran Technology Valley
within the new technology center we are jointly opening
with [Arabian Geophysical and Surveying Co.], our Saudi
joint venture with TAQA.
For dense seismic acquisition and advanced seismic illumination, the company has launched cross-disciplinary
technology projects mobilizing all CGGVeritas divisions
and value-added technology partners, he said.

Frank Van Ginhoven, senior vice president, Fluor Corp.,

noted a few trends that he and his research cohorts find
particularly exciting. These trends include shale gas
recoveries and associated water treatment solutions, sour
gas processing and safety, oil sands (SAGD and associated
water treatment technologies), subsea processing of oil
and gas, LNG pipelines, the concept of intrinsic safety in
design (as a result of Macondo), deepwater production,
Arctic production, and processing challenges given the
fragility of the environment, he said, adding that Fluors
R&D priorities include safety, water, and environmental
sustainability. The company also is increasing its focus on
sour gas, sulfur processing, CO2 capture technologies,
energy efficiency, and the Arctic.
At Halliburton, the greening up of everything, particularly in the realm of chemistry, is a key focus, according
to Greg Powers, vice president, Technology. From a
chemistry perspective, weve been thinking a lot about
water, he said. Halliburton has introduced CleanWave,
a system that uses electricocoagulation to remove sus-

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R&D SPOTLIGHT

pended solids. This allows use of flowback and produced water as part of the next
fracture and eliminates significant hauling of water on and off the site, effectively
giving multiple-pass uses for fracture water.
The CleanStream system is Halliburtons solution to the bacteria problem in
the oil field. Instead of relying on chemical biocides, which pose environmental
challenges of their own, the system uses high-powered ultraviolet light to control
bacteria while minimizing or eliminating the need for chemical biocides.
Another chemistry trend is zonal isolation, which has been conventionally
provided by cement. Powers said that Halliburtons WellLock resin is not really
cement; it is actually a polymer being used as cement in cases where there are
small leaks in the annulus. Because it exhibits Newtonian behavior, WellLock
resin can be placed more easily into micro-annuli than conventional cement, he
said. Tight casing leaks, the type that bleed off pressure but wont accept a continuous injection rate, usually must be broken down with acid to increase the leak
area so that even a fine-mesh cement slurry system can enter. However, this resin
is able to penetrate the small leak much more readily without prior acidizing.
Modeling is another R&D challenge at Halliburton. Powers said that one of the
issues in unconventionals is how many fractures to perform for the best production. You can do a fracturing treatment and not get any production, which is
expensive and time-consuming, he said. The goal is to only do fractures that
are highly effective and avoid nonproductive zones.
The company recently launched its Knoesis service, a proprietary suite of software applications that provide improved knowledge of the reservoir and its stimulation characteristics. Knoesis 3-D fracture matching software is being used to
understand, optimize, and help reduce the risk of the shale asset by understanding well spacing, stage spacing, and asset development plans, he said.
For Tom Tilton, CTO and vice president, Research and Engineering for Weatherford, a very active and interesting trend is the development of automated systems for control and real-time decision-making during the drilling process. This
technology promises to provide benefits in both well control and overall drilling
efficiency, he said.
During the production phase of wells, there is more use of surveillance to
measure and monitor fluid properties, he said. Advanced monitoring technology and algorithms are being developed to analyze and maximize production.
And predictive methods are being refined to improve the accuracy, shorten the
pilot phase of asset development, and maximize overall reservoir recovery.
In addition, there is considerable research underway to optimize the understanding and efficiency of fracturing in shale reservoirs and to minimize the environmental impact of these operations.
Tilton added that Weatherfords higher priority research efforts include shale
reservoir analysis such as wellsite geochemistry methods and geomechanics
analysis to enhance wellbore placement and fracability potential.
The company also is focusing on improving software tools to manage large
volumes of production data as well as providing enhanced capabilities to analyze the data. Measurement capabilities are in development to provide highly
accurate multiphase flow measurement at the well. Additionally, Weatherford
maintains a strong technology focus on rig-site safety and removing personnel
from harms way through the application of process automation for various
rig operations. The automation provides options to increase productivity and
efficiency in closed-loop drilling operations, cementing, and completion
processes.
EPmag.com | Januar y 2013

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47

SAFETY SYSTEMS
AND SOLUTIONS

Emerging technology
for oil leak detection
Given successes in other applications, fluorescence detection may meet the exacting
requirements for hydrocarbon leaks, especially when combined with other techniques.
Frances Metcalfe, Cambridge Consultants

ncreasingly, inclusion of oil leak detection and mitigation strategies by operators is an essential requirement
for achieving government approval for projects. But can
such systems deliver real commercial benefits too? And
how can these be realized when the currently available
technologies fall short of the requirements? These questions lead us to look at similar systems for other applications, how they can be brought to bear, and, in particular,
how improvements could be made in fluorescence technology for oil leak detection.

Potential commercial benefits

Effective oil leak detection systems have the potential to
reduce operational risk, thereby helping to satisfy the
needs of the regulators and so enabling operators to
drill and produce in environmentally sensitive areas.
Beyond this, though, a reliable in-place distributed oil
leak detection system has the potential to help pinpoint
leaks, minimizing the costs needed to address them and
preventing small problems from becoming major issues.
Furthermore, it can contribute to asset integrity monitoring and, particularly in aging fields, help with optimization of maintenance and as a result minimize costs.
By borrowing technologies successfully deployed in
other applications, development costs and timescales can
become acceptable and system reliability can be assured.

What an oil spill detection system needs to do

First and foremost it needs to be accurate and robust.
Accurate information on the location and size of leaks can
help the correct resources to be sent to the right place at
the right time, reducing the costs of deploying vessels and
ROVs.
The maintenance burden of the system itself has to be
acceptable, its lifetime commensurate with long-term offshore operation and qualified to the applicable standards.
Last, it must be cost-efficient to integrate, deploy, and
operate. This means having industry standard mechanical, power, and communications interfaces; having
48

Fluorescence technology from the Cambridge Consultants

device can detect oil drops in a water column. (Images courtesy
of Cambridge Consultants)

acceptable power consumption and communications

overheads; and, above all, being easy to use.

Limitations of current technologies

A common limitation of many potential technologies, as
identified in the report by Det Norske Veritas (DNV) in
2010, is false alarms. After too many false alarms, the operator loses confidence, and the system is rendered useless.
This seems to be a particular problem for capacitance
detectors. Hydrocarbon sniffers are triggered by natural
releases of methane from the seabed, meaning it is hard
to differentiate a natural leak from a pipeline leak.
Currently, there is no single sensor technology that on
its own can differentiate between true leaks and false
alarms 100% of the time.
Based on the DNV report, Cambridge Consultants concluded that fluorescence detection may meet these exacting requirements, given successes in other applications.
Even so, fluorescence techniques are expected to be more
powerful when combined with other sensing techniques.

How to address the issues

Almost 30 years ago, a novel radar system was developed
to survey through Arctic ice. Since then, Cambridge Consultants has not only developed its radar capability to a
world-class level but has developed sensors based on ultrasonics, fluorescence, and novel optical techniques by
employing a variety of sensor technologies to solve similar
problems across multiple industries.
Januar y 2013 | EPmag.com

SAFETY SYSTEMS
AND SOLUTIONS

Here are some of the key questions that Cambridge

Consultants asked its researchers from the outset that are
important for achieving the needs of such a system.
What needs to be measured and where? The purpose of the
system has to be translated into performance requirements and identification of the confounding factors that
can limit this or trigger false alarms. For example, in considering fluorescence detection as a technique, it is necessary to understand what else in the environment naturally
fluoresces (e.g. plankton), what differentiates this from an
oil leak (detailed characteristics of the fluorescence signals), and what the fundamental limits are to range and
sensitivity that can be achieved for the fluids of interest.
Also, the target environment will define the constraints on
power consumption and communications bandwidth as
well as the required lifetime and level of robustness.
Which sensor technology should be used? Evaluating a technology in the context of what is to be measured and
where is a means for selecting promising technologies.
How the technology is implemented is also key, drawing

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often on our successes in other applications and different

markets. For example, fluorescence detection has been
implemented for a variety of medical-diagnostic applications from high-volume, low-cost, over-the-counter testers
to sophisticated top-end performance diagnostic instrumentation for laboratory use. In doing so, breakthroughs
in performance, cost, and reliability and the means to
understand the various design tradeoffs that impact performance criteria have been achieved.
The technology achieves detection of the natural fluorescence of small amounts of crude oil using components
that are inherently robust.
Is the information there, and where is it? A sensor is
usually a combination of a hardware transducer, signal
conditioning electronics, and data processing algorithms
implemented in software. Optimal design depends on
understanding whether the sensor is fundamentally
capable of seeing what needs to be detected, whether
improvements are possible, if these are to be achieved via
design of the hardware or software, and how the wanted

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50

H A R T E N E RG Y

Januar y 2013 | EPmag.com

SAFETY SYSTEMS
AND SOLUTIONS

signal can be separated from

Next steps
unwanted noise or interference.
DNV has recently announced a proIn the past, probabilistic techposal for a joint industry project to
niques to answer such questions
develop guidelines for the applicawere successfully deployed. Such
tion of leak detection in offshore
techniques also can be used to
fields.
identify the best combination of
Any effective in-place oil leak
An oil sheen on the water surface can be
sensors to use, how best to impledetection system almost certainly
detected with fluorescence techniques,
ment them, and how to turn uncerrequires more than one sensing techwhich are expected to be more powerful
tain data into useful information.
nique. Gathering real data from the
when combined with other
What does the overall system need to look
field where it will be deployed is key to
sensing technologies.
like? The overall system design will depend
selecting the right sensor combination and
on the area it is intended to monitor. For
transforming the data provided into reliable
instance, a known trouble spot within subsea equipment
information. This can be delivered only by adopting a systhat is inaccessible will require detection at a long range.
tems engineering approach from the outset.
Likewise, sensing leakage from a seabed fissure may
Cambridge Consultants fluorescence detection techrequire an array of sensors that communicate acoustically.
nology offers real potential for oil leak detection. To realize it, researchers now need to work with those who stand
The design can be optimized to minimize duty cycle,
to benefit to identify where it can usefully be deployed
power consumption, and communications bandwidth while
within a leak detection system.
considering components that meet lifetime requirements.

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51

SAFETY SYSTEMS
AND SOLUTIONS

Improving efficiency through

marine personnel transfer
Personnel transfer is one of the key challenges in the offshore environment,
particularly in regions affected by extreme weather conditions.

Lindsay Young, Offshore Solutions BV

og, high winds, rough sea states, and other adverse

conditions can cause significant delays in the transportation of personnel to offshore installations, with a
resultant impact upon costs and efficiency.
With more than 10 million crew transfers taking place
annually around the world in the offshore oil and gas sector alone, either by helicopter, vessel, or crane and basket,
this is one of the highest risk and most expensive activities
in the industry. Transfer methods must be proven, reliable, and capable of handling the changeable conditions
that occur in the offshore environment. This means that
suppliers must be able to provide solutions that are both
safe and technically and economically feasible.
Offshore Solutions BV (OSBV)s Offshore Access System (OAS) is a cost-effective, practical personnel transfer
solution that facilitates safe and efficient access from a
vessel to offshore facilities.

Active heave compensation

The OAS is a 21-m (69-ft) hydraulically operated telescopic gangway fitted with an active heave compensation
system. With unique continuous 24-hour connection and
operating capability, it incorporates a motion reference
unit in its active hydraulic system, which when engaged
maintains the walkway tip at a constant height relative to
the horizon. This allows the gangway to be connected
The OAS gangway is fitted with an
active heave compensation system
that can connect to a fixed platform in
sea states of up to 3 m (10 ft). (Photos
courtesy of Offshore Solutions BV)

52

safely to a fixed installation in sea states up to 3 m (10 ft),

significant wave height when installed on a suitable vessel.
Once connected, the heave compensation is disengaged, and the gangway is allowed to float between the
vessel and the installation. The walkway is robustly connected and automatically compensates for the six movement planes of the vessel motion.
During transfer, the OAS operates a semi-automatic
traffic light system allowing personnel to cross from the
vessel to the installation safely. From system checks to the
deployment of the OAS, the process takes around five
minutes, while recovery takes approximately one minute.
With its own independent power source, the OAS can
remain operational even in the event of power failure
on the vessel. Should an emergency disconnection be
required, the OAS has a fail-safe mechanism that allows
automatic release from the platform.
It is the only heave-compensated gangway system that
can maintain a permanent connection and has an outstanding safety record. Since operations began in 2006,
the OAS has achieved more than 157,000 personnel
transfers and 8,800 successful connections without any
lost time incidents while maintaining an average 96%
availability.

Multiple benefits
An OAS-equipped vessel with accommodation in the field
means that personnel can be transferred to the installation or FPSO at the start of their 12-hour shift. Several
installations can be serviced by one vessel, and with available man-hours on each installation increasing by up to
70% using an OAS as opposed to helicopters, this represents significant cost savings for operators.
An OAS vessel also can prove more cost-effective than
a jackup accommodation unit, and with multifunction
capability it can be used as a standby vessel to facilitate
ROV or dive spread, dive support, workshops, materials
storage, and platform supply.
In response to market demand, OSBV recently adapted
the system and designed a free-standing skid-mounted
unit to reduce installation time to less than 24 hours. This
Januar y 2013 | EPmag.com

SAFETY SYSTEMS
AND SOLUTIONS

system, which last year completed the worlds first vesselto-FPSO personnel transfer using a heave-compensated
gangway, retains all the safety and operational features of
the original OAS.
The 80-sq-m (861-sq-ft) Lloyds Register-approved unit
is fully self-contained and, once installed on an appropriate vessel, is ready for immediate operation.

Permanent connection
One of the key challenges in the offshore environment is
extreme, unpredictable weather conditions. In the Middle East region OSBV has seen a rise in activity after first
trialing the prototype in Qatar in 2003.

LEFT: The system onboard the Bourbon Gulf Star

has been used for more than 25,000 personnel
transfers in 2012, with more than 60,000 total
transfers taking place and no safety incidents
recorded. ABOVE: The walkway transfer system
can automatically compensate for the six
movement planes of a vessels motion.

The OAS was first operational in the region in late

2010, and since the success of its first project, OSBV has
been providing 24-hour personnel access in the Middle
East for Qatar Shell GTL Ltd., operator of the worlds
largest gas-to-liquids (GTL) plant, since the completion
of sea trials in December 2010. The OAS is the first heavecompensated access system to work in the region and has
been used to transfer crews to the Pearl 1 and 2 platforms
in the Persian Gulf.
Mounted onboard the Bourbon Gulf Star vessel, the
system provides a permanent connection, enabling
the operator to optimize 12-hour shift patterns and
use the OAS vessel as the primary means of escape.
Despite a challenging environment, the continuous connection capability allowed staff to leave the platform for
the vessel during periods of high temperature and humidity, returning to work during cooler periods of the day a
demonstration of the flexibility and efficiency of the OAS.

60,000 transfers for Qatar Shell

The system mounted on the Bourbon Gulf Star has been
connected for more than 4,500 hours since operations
EPmag.com | Januar y 2013

began, with 100% availability for the past 12 months. More

than 60,000 personnel transfers have taken place without
any safety incidents (25,000 in 2012 alone). The three-year
contract was awarded based on the OAS proven technology, safety record, and potential to increase operational
efficiency. The OAS delivers considerable time reductions
and, as a consequence, operators can manage projects far
more efficiently.
Marcel Goedhart, engineering services manager, Qatar
Shell GTL, said, The concept of transferring people
from vessel to platform via an OAS was a life-changing
decision. Qatar Shell GTL Ltd. will no longer use helicopter transport to transfer people but will have a gangway
between platform and ship to make crossings as easy and
safe as going from one floor of a building to another.
In order to operate the systems, we often require connecting the OAS for 24 hours to utilize the vessel as our
refuge. With this capability, we have a great solution to
moving people around fast, safely, and comfortably.
A demonstration of demand from the region, OSBV
expects to have four units operational in the Persian Gulf
by early next year.
53

SAFETY SYSTEMS
AND SOLUTIONS

Operators seek sustainable solutions

to water management
A new water management system offers operators a sustainable
and environmentally safer solution.

Steve Hardwick, Swire Oilfield Services North America

echnological advances in hydraulic fracturing and horizontal drilling have unlocked a vast reserve of new
domestic energy. While many credit hydraulic fracturing
with job creation, economic growth, and energy independence, the process also has brought water issues to
the forefront and has stirred global debate.

HydroDrive flexible pipe is deployed at a location in the Eagle

Ford shale. (Images courtesy of Swire Oilfield Services)

Hydraulic fracturing can typically devour more than

100,000 bbl of water per well. As many parts of the US
struggle with drought, operators are balancing bottom
lines with limited freshwater supplies, negative public perception, increased regulation, limited disposal capacity,
and increased disposal cost.
Water has become an increasingly crucial commodity,
and operators are now looking at ways to manage water
from initial freshwater transfer to the fully produced well
with a goal of working toward efficient and sustainable
solutions.
To meet this new demand, Swire Oilfield Services created HydroLutions a complete water management system that includes several sustainable systems to transfer,
blend, treat, and recycle all water needed during completion and production.
54

Rethinking water transfers

For decades, aluminum pipe and agricultural pumps
have been used to move water across land. These
aluminum pipes leak and can dump nonpotable
water across fields, potentially polluting the soil and
groundwater.
Leaking pipes cost operators millions of dollars
every year, especially in areas like the Permian basin
where water sources are scarce. Besides the potential
for pollution, leaks mean more water must be trucked
or pumped to the job site, which increases the environmental impact. Landowners and workers, used to
flooded fields and muddy boots, are looking for more
sustainable ways to move water.
With this in mind, a water transfer system called HydroDrive was created. It features high-volume pumps; discharge manifolds; a specially designed retrieval and
deployment system; and a leak-free, flexible pipe.
Instead of aluminum pipe that can only be laid out at
90 angles, this new technology curves over land and does
not leak like traditional aluminum pipes. It is safer and
faster to deploy and requires fewer workers to lay it down
and pick it up.
The hose-like pipe is made of extruded through-theweave, single-wall thermal plastic urethane and has been
used by the military for years to transfer fuel and water. A
reduction of friction within the pipe helps produce a 140bbl/min flow rate, which has been virtually unheard of
until now.
Apache Corp. and other operators are now using this
technology in the Permian basin and have been pleased
with the results.

Innovations in blending
During multistage hydraulic fracturing, the well is treated
from the bottom up, and blending liquids are needed
before the actual hydraulic fracturing occurs as well as
after the final zone has been treated and the plugs need to
be removed from the well.
Chemicals such as polymers to carry the cuttings, coiled
tubing (CT) friction reducers, and lubricants are vital to
Januar y 2013 | EPmag.com

SAFETY SYSTEMS
AND SOLUTIONS

The HydroLutions system was used by Apache Corp. for an operation in the Permian basin.

the process. Lubricants and CT corrosion inhibitors also

can be used during the CT drill out.

Responsibly handling flowback

Operators are working to meet stricter requirements set
forth by landowners and legislators. Making matters more
muddled is that there is not a general specification for
the final treated water. Different operators have different
requirements because fracturing fluids depend on geology, operating environments, fracturing design, and
results required.
Service companies must be able to provide customizable
solutions to meet numerous needs, and operators need to
understand how many different technologies and
processes treat flowback. There is not one that offers a
complete solution; the type of technology used depends
on the chemistry and the treated water requirements.
During a hydraulic fracturing job, 15% to 30% of the
fracture fluid returns to the surface as flowback, which is
typically deposited in disposal wells. However, this fluid
can be recycled and reused for future hydraulic fracturing
jobs.

Coagulation and flocculation process

The most versatile and cost-effective treatment process is
the chemical coagulation and flocculation process where
flowback fluid is chemically pretreated to precipitate the
unwanted constituents and then separated by physical
means. This process typically involves four stages: oil separation, coagulation and flocculation, settling tanks, and
sludge handling.
During the oil separation phase, flowback fluids contain
water that can be recovered. There are numerous types of
technology that can separate oil from water, including
hydrocyclones, which spin the mixture and use acceleration to separate oil from water. The water is then forced
outside of the unit where it is then removed.
EPmag.com | Januar y 2013

The next stage is the coagulation and flocculation

process, which is primarily based on the particles electrical charges. Most particles dissolved in water have a
negative charge and tend to repel each other. In the
coagulation stage, these electrical charges are neutralized so that particles are capable of sticking together.
For chemicals that have no charge, such as boron,
there are coagulants such as a double-layered hydroxide
compound that can be used to selectively precipitate the
boron. Due to Van der Waals force, which is the tendency
of particles to attract to each other weakly if they have no
charge, the particles drift toward each other and join
together into a group.
In water treatment systems, adjustments are often necessary to maximize the coagulation process. These adjustments are a reaction to changes in the raw water entering
the system. Coagulation will be affected by changes in the
waters pH, alkalinity, temperature, time, velocity, and zeta
potential.
Flocculation is the gentle mixing stage where the particle size of the flocculate increases and joins together
before settling out of the water. Once the flocculate has
reached its optimum size and strength, the water is ready
for the sedimentation process.
Following coagulation and flocculation, water containing flocculates normally passes to a settlement and clarification phase where solids are settled by gravity. As the
solids settle downward, the liquid flows upward and over
a weir. Settled solids collect on the floor to form what is
known as a sludge blanket.
The final process is to recover as much water as possible
and to reduce disposal cost of solid wastes. Sludge dewatering includes centrifuges, vacuum filters, belt filters, and
filter presses. The best dewatering solution for a facility is a
function of many variables such as the sludge quantity and
characteristics, the sludge disposal methodology, available
space to house the equipment, and the dewatering time
period.

The future of water management

Restrictions and new legislation will certainly have an
impact on the future of hydraulic fracturing, and these
issues will continue to propel the industry to seek new
ways to conserve and recycle water.
The industry must continue to explore solutions that
treat and manage the entire life cycle of water. As new
technologies that offer sustainable solutions are developed, costs will come down. Lower costs coupled with the
continued greening of the oil fields will make it even easier for the industry to adopt sustainable water management systems.
55

PROCESSING AND
INTERPRETATION

Broadband marine data require

new processing techniques
Variable-depth streamer data require algorithmic modifications
to improve demultiple effectiveness.
Ronan Sablon, Damien Russier, Oscar Zurita,
Danny Hardouin, Bruno Gratacos, Robert Soubaras,
and Dechun Lin, CGGVeritas

rocessing variable-depth streamer acquisition has

recently become possible with a new joint deconvolution algorithm. In this particular acquisition, using variable-depth broadband streamers, the receiver depth
regularly increases with offset, which allows a wide diversity
of receiver ghosts and dramatically increases the possible
frequency bandwidth in both low and high frequencies
from 2.5 Hz to source notch. Compared to conventional
flat streamer data, processing broadband data requires a
major change since the receiver ghosts are rigorously taken
into account.
In conventional processing, both source and receiver
ghosts are included in a wavelet that is assumed to be consistent from offset to offset. With a broadband dataset, the
receiver ghosts change from near offsets to far offsets and
cannot be included in a wavelet. This breaks the implicit
assumption of many processing steps such as surfacerelated multiple elimination (SRME). These receiver
ghosts will then be removed from the final image with a
prestack or post-stack joint deconvolution. Of course, the
receiver ghost preservation is a constraint for some programs developed for conventional processing.
One of the key challenges is how to deal with demultiple techniques and variable-depth streamer data in both
deepwater and shallow-water environments.

Demultiple techniques in shallow water

In shallow-water environments, the SRME method is not
well adapted for short-period multiples reflections; due to
the lack of near offsets, the recorded water-bottom reflections used by SRME are often not good enough or are
missing. Other common demultiple methods such as TauP deconvolution and shallow-water demultiple (SWD) have
been tested on broadband data. The predictive deconvolution in Tau-P domain is frequently used for attenuating
short-period multiples, mainly from a relatively flat and
shallow-water bottom. For broadband data, this method
56

FIGURE 1. An autocorrelation of a BroadSeis shot gather on a

window shows the ghosts varying along the offset. (Images
courtesy of CGGVeritas)

also could be applied in both shot and receiver domain,

but this could affect receiver ghosts with a periodicity close
to that of the water layer. The key point is to keep a gap
long enough to preserve the receiver ghosts (Figure 1).
The SWD method uses the water-layer-related multiples
from the data to reconstruct the missing water-bottom primary reflections. The prediction operators, used to compute a short-period multiples model, are derived from the
nearest offsets where the wavelets are close to those of
conventional zero-phase wavelets. In practice, SWD allows
the processor to efficiently remove the short-period multiples, with results equivalent to those expected on conventional data.
These demultiple methods were tested on a 2-D line in
the central North Sea. Different trials were done by combining different tools, and the best result was achieved
by combining SWD, predictive deconvolution in a Tau-P
domain, and SRME (Figure 2). Using this technique, the
water-layer multiples are handled by SWD and Tau-P predictive deconvolution, and SRME tackles the free-surface
multiples that have longer periods. In this case, the water
bottom has to be muted prior to generating the SRME
model.
Januar y 2013 | EPmag.com

PROCESSING AND
INTERPRETATION

quency multiples provided by

the variable-depth streamer
acquisition cannot be properly addressed. That is why
some algorithmic modifications were introduced to
improve the model prediction
by normalizing the receiver
ghosts. This new SRME technique allows processors to create a multiples model with
correct wavelets on the fulla
b
c
frequency bandwidth. Once
FIGURE 2. Different demultiple results on a central North Sea 2-D dataset (prestack time migrations with
the multiples model matches
post-stack joint deconvolution) demonstrate (a) predictive deconvolution in both shots and receivers,
perfectly with the input data,
(b) a shallow-water demultiple followed by the previous predictive deconvolution in shots and
the multiples model adjustreceivers, and (c) shallow-water demultiple with predictive deconvolution in shots and receivers folment could be even more
lowed by 2-D SRME.
accurate and efficient.
This new technique was successfully applied on 2-D and
Demultiple techniques in deep water
3-D datasets and has consistently produced better results
The demultiple technique commonly used in deepwater
than standard SRME. Figure 3, from a dataset in the west
environments is 2-D or 3-D SRME. By applying SRME on
of Shetlands area, illustrates the results of standard SRME
conventional data, where both source and receiver ghosts
and new SRME after post-stack deghosting.
already have been included in a wavelet, the modeled mulThe receiver ghost normalization method could theorettiples are close to the input data multiples. A key issue
ically be extended to any demultiple technique producing
appears with broadband data because of the receiver
a multiples model that could be adapted and subtracted to
ghosts. Variable receiver depth creates visible differences
the input data. This method is currently being tested with
in wavelets from near to far offsets. By convolving traces
other standard demultiple techniques such as SWD, convowith different wavelets, the standard SRME method prolutive interbed demultiple, and radon demultiple.
duces multiple models with mismatched wavelets that are
actually different from input data, and the differences
Acknowledgements
vary from offset to offset.
The authors would like to thank CGGVeritas for permission to
Even if this particular problem can be partially solved
publish this paper and Salvador Rodriguez and Robert Dowle for
through a wavelet adjustment, this method was developed
coordinating the BroadSeis test campaigns. This paper was origifor conventional data and cannot properly handle the mulnally presented at the 2012 European Association of Geoscientists
tiples wavelet variations. Indeed, the standard SRME
and Engineers annual meeting and has been reprinted with permethod leaves a lot of residual multiples, and the low-fremission from the authors.

FIGURE 3. These results of different processing methodologies (post-stack deghosting) show (a) a deghosted stack without SRME, (b) a
deghosted stack with standard SRME, and (c) a deghosted stack with new SRME.

EPmag.com | Januar y 2013

57

PROCESSING AND
INTERPRETATION

Journal highlights
interpretation process
In its first new journal launch in 30 years, the SEG is targeting an
underserved population of geoscientists.
Rhonda Duey, Executive Editor

search for seismic interpretation on Google yields

2.4 million results, including books on the subject,
several ads for interpretation software, and even a video
on YouTube. But what interpreters have been lacking
is a peer-reviewed journal that follows this ever-evolving
science.
Through its peer-reviewed publication Geophysics, the
Society of Exploration Geophysicists (SEG) attempted to
overcome this shortfall by including a special section on
interpretation several years ago. There was a section for a
time called Practicing Geophysics, said Ted Bakamjian,
SEG director, Publications. The idea was to draw papers
that were focused more on applications rather than novel
research. But it wasnt as clear and focused as needed.
Former SEG Editor Yonghe Sun of Chevron resurrected
the idea in 2011. With the support of SEGs Publications
Policy Committee and approval from the societys executive committee, the new journal Interpretation was launched
in fall 2012. Sun is the editor. The first manuscripts
already have been submitted and are in review, and the
print version of the first issue is expected in summer 2013.

Why another journal?

There are a couple of key differences between interpretation articles and other technical articles that might find
their way into Geophysics. For one thing, interpretation
tends to involve workflows that may or may not include
brand new algorithms or techniques. For another, interpretation tends to be more multidisciplinary than other
technical work in geophysics. It was felt that this segment
of the geoscience was not being properly served through
SEGs existing publications.
Weve long felt that our interpretation community
was underserved in our publications, especially in our
journals, Bakamjian said. Our expanded abstracts and
meeting presentations include a lot of material on interpretation, but those arent as frequently transformed into
articles in our publications as material in other subject
areas. He added that the bulk of the interpretation arti58

cles that do get published go into The Leading Edge, which

is not peer-reviewed.
Sun added that the goal of the new journal is to elevate
the art and practice of interpretation.
Interpreters use geophysical software and tools that are
based on principles and algorithms that have been developed in the work published in Geophysics, he said. They
share their work at the SEGs annual meeting and in summary technical articles published in The Leading Edge.
The new publication will take that exposure further, he
said, offering:
External peer review before the publication of an
interpretation. Project reviews by the authors colleagues within the same place of employment are less
likely to bring forth new perspectives and alternative
practices, Sun said;
Adequate space for comprehensive case histories and
in-depth expositions;
Timely updates on educational content such as tutorials, pitfalls, tools, and techniques;
Invited contributions on special topics to stimulate
publication in selected subject areas and to bridge the
expertise gap among geophysicists, geologists, and
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A dedicated space to archive interpretations and case
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A spring 2012 marketing survey indicated that the idea
is ripe. Bakamjian described very positive feedback.
That was a necessary step, part of a formal process for
evaluating new journals, he said. This is the first journal

Interpreters benefit from software programs that aid in their visualization of the subsurface. (Image courtesy of Paradigm)

Januar y 2013 | EPmag.com

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PROCESSING AND
INTERPRETATION

cality is implied by the editorial acceptability test, Sun said,

which is, Would the interpretation community be better
served if the paper were published? A good technical paper
should not be technically difficult for its intended readers.
To learn more about Interpretation, please visit
seg.org/interpretation.

SEG has launched since The Leading Edge 30 years ago,

and it does represent a bit of a departure for us in that
our publications have been organized more around
form than by subject area. This is the first one thats
really subject-specific.
Sun said that within seven weeks of the journals introduction, 16 submissions had been
received. A key responsibility of Interpretation editors is to identify, invite, and
prod interpreters with publication-worthy
materials to write Interpretation articles,
he said. Our target for 2013 is two quarterly issues, the first in August and the
t
i96;
second in November. Each of these
issues will include a special section. The
August special section will be titled Interpreting stratigraphy from geophysical
data, while November will feature InterSA ,
pretation for unconventional resources.

j
?I
-w

Article specifics
Sun expects that typical articles will present applications of well-established geophysical methods either alone or in
combination to subsurface characterization projects. These applications usually require interpretation of incomplete
geophysical data based on a priori geologic knowledge, he said.
The journals editorial policy allows
for the description of a project completed well before the paper submission.
It might not be justifiable for the contributing authors to maintain continued
access to proprietary project data or to
spend significant additional project
resources for the purpose of addressing
some of the technical deficiencies identified by the reviewers, the policy stated.
An Interpretation paper could include a
section on suggestions for further study
in which new ideas for expanding the
work can be put forward, technical
weaknesses of the work can be enumerated, and remedies of such weaknesses
can be proposed. This might be an
important section for geosciences students who have less frequent exposure
to real data or problems.
How technical might these papers be?
The only limit on the degree of techniEPmag.com | Januar y 2013

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61

HP/HT
DRILLING

New rheology fluid simplifies

engineering, enhances performance
Field trials conducted in extended-reach drilling and deepwater wells confirmed that many
operational benefits can be achieved using a new flat rheology invert drilling fluid.

Steve Young, Jim Friedheim, John Lee, and Ole Iacob

Prebensen, M-I SWACO, a Schlumberger company

roven in deepwater and extended-reach wells, the

next-generation flat rheology invert drilling fluid simplifies system engineering and maintenance without sacrificing performance. The upgrade is especially beneficial
in deep plays where thermal stability and fluid control are
essential to avoid complications that substantially raise
risks for operators.
M-I SWACOs flat rheology invert drilling fluid (FRIDF)
has performed consistently due to the correct combination of emulsifier, wetting agent, rheology modifiers, and
supplementary viscosifiers. But multiple products complicated engineering and management in the field. Two
years ago M-I SWACO set out to revamp the fluid system
for better field handling and better rheology control without compromising performance. Now a new flat rheology
system (NFRS) contains only a single emulsifier for both
emulsification and surface wetting.
A decade ago, the company developed its original FRIDF
system to combat the problem of thinning fluids at deeper

Typical Fluid Composition of NFRS

Base Fluid, bbl

For desired SWR

Organoclay, lb/bbl

1-3

Lime, lb/bbl

2-4
8-12

CaCl2 Brine, bbl

For desired SWR

0.75-1.5

Fluid Loss Control Additive, lb/bbl

Barite, lb/bbl

0.5-2.0
As needed for mud weight

TABLE 1. This typical fluid composition of NFRS resulted in reducing the breaking circulating pressure, standpipe pressure, and
ECD. (Images courtesy of M-I SWACO)

62

depths with higher temperatures. Thinner fluid contributed to poor hole cleaning, barite sagging, and lost
circulation.
But the FRIDF relied on two organoclays, one emulsifier, one wetting agent, and two rheology modifiers to generate flat rheology with consistent readings of 6 rpm,
yield point, and 10-minute gel strength from 4.5C to
65.5C (40F to 150F).
The products 10-minute gel strength was considered
excessive, especially with the fluid system contaminated
with low-gravity solids (LGS). One rheology modifier
tended to become less effective at temperatures above
121C (250F), and another had to be added to maintain
the flat rheology profile.
The NFRS has a simpler fluid formulation, lower gel
strengths, and flatter high-temperature profiles than the
original FRIDF. This is enabled through the use of a new
emulsifier and rheology modifier package. The NFRS delivers lower equivalent circulating density (ECD), standpipe
pressure, and breaking circulation pressure than the original FRIDF while providing similar drilling performance.
Field trials conducted in extended-reach drilling (ERD)
and deepwater wells confirmed that many operational
benefits can be achieved using the NFRS. No major lost
circulation was encountered due to good hole cleaning
and low ECD impact in both field trials. This was especially
critical for the deepwater field trial where low margin windows were encountered. The new system was proven to be
contamination-tolerant, including both drilled solids and
brine contamination.

New flat rheology system

After hundreds of tests, one combination of emulsifier
and rheology modifier demonstrated desirable flat rheology profiles and low gel strengths without sacrificing other
fluid properties.
The new emulsifier includes chemistry that imparts
both emulsification and surface wetting. The result is stable emulsion to improve solids tolerance, enhance the flatness of the rheology profile, and provide less increase in
gel strengths in the presence of LGS.
Januar y 2013 | EPmag.com

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HP/HT
DRILLING

Conventional SBM
20

40

Original Flat Rheology SBM

60

80

70F/0 psi

70F/0 psi

40F/1.5K psi

40F/1.5K psi

Temperature/Pressure

Temperature/Pressure

70F/2.5K psi

100F/5K psi

150F/7.5K psi

200F/10K psi

40

60

80

70F/2.5K psi

100F/5K psi

150F/7.5K psi

200F/10K psi

6-rpm

6-rpm

YP
220F/12.5K psi

20

YP

10-min Gel

220F/12.5K psi

10-min Gel

FIGURE 1. The new rheology modifier with additional low-gravity solids tolerance is more efficient and temperature-stable and provides
enhanced barite suspension while minimizing barite sag tendency. This is a comparison of the rheology profiles of the original FRIDF
and NFRS in the temperature range from 4.5C to 65.5C (40F to 150F).

The emulsifier can be used to formulate invert drilling

fluids with synthetic-to-water (SWR) ratios varying from
60:40 to 90:10.
The new rheology modifier, also based on novel chemistry with additional LGS tolerance, is more efficient and
temperature-stable. It provides enhanced barite suspension while minimizing barite sag tendency. Table 1 shows
the typical fluid composition of the NFRS. Figure 1 shows
the plots of 6-rpm reading, yield point, and 10-minute gel
strengths of the original FRIDF and the NFRS of similar
mud weight and solids content.
The NFRS displayed comparable 6-rpm readings and
higher yield point but lower 10-minute gel strengths. With
similar amounts of LGS, it demonstrated better solids tolerance to allow for faster drilling with good hole cleaning.
It also can minimize problems induced by high ECD.
The new fluid showed reasonably good flat profiles even
after aging at 149C and 177C (300F and 350F). This
is a significant improvement over the original system
in which rheology profiles could deteriorate in higher
temperatures as the rheology modifier underwent
thermal degradation.
The new emulsifier and rheology modifier were used in
separate systems with mineral oil and paraffin oil as base
fluids. The fluids again showed reasonably flat rheology
profiles after heat-aging at temperatures up to 121C
64

(250F). Lab tests of the NFRS and original FRIDF systems

revealed similar barite sag control performance in a simulated flow loop with 60 hole angle and no pipe rotation.
But hydraulic simulations revealed that the NFRS performed better in reducing the breaking circulation pressure, standpipe pressure, and ECD without sacrificing the
hole cleaning index (HCI).

Extended-reach well
Field trials were conducted on one extended-reach well
and one deepwater well. For the ERD, the NFRS, with
mineral oil as the base fluid, was used to drill the 17-in.
and 12-in. sections with a relatively low mud weight.
With comparable low-end rheology designed for hole
cleaning, the NFRS had much lower 10-second and 10minute gel strengths. It showed a flat profile with 6-rpm
and 3-rpm readings, almost identical over a wide temperature range. The fluid also exhibited relatively low but flat
and nonprogressive gel strengths with sufficiently high
low-end rheology and yield point. The drilling fluid was
prepared with a final oil-to-water ratio of 70:30.
Throughout drilling, stable rheological properties were
maintained to deliver good hole cleaning under optimized ROP.
Since this was an ERD well, barite sag tendency was
determined using a specially designed sag flowloop tester
Januar y 2013 | EPmag.com

HP/HT
DRILLING

Rheological Properties of the Deepwater NFRS

Mud Wt, lb/gal

11.4

13.2

16.7

15.0

16.9

SWR

67/33

71/29

79/21

74/26

72/28

160

200

280

315

340

Max. BHT, F
Rheology at (F)

40

120

150

40

120

150

40

120

150

40

120

150

40

120

150

600-rpm Dial Reading

165

80

71

186

82

74

290

116

94

213

93

74

293

125

92

300-rpm Dial Reading

100

52

49

106

51

49

160

68

55

117

56

46

168

70

52

200-rpm Dial Reading

76

42

40

79

41

40

114

50

42

81

42

35

110

51

38

100-rpm Dial Reading

50

30

29

50

30

29

64

31

27

47

26

24

61

31

24

6-rpm Dial Reading

17

15

14

16

14

14

12

10

10

10

10

3-rpm Dial Reading

16

14

13

14

12

12

10

PV, cP

65

28

22

80

31

25

130

48

39

96

37

28

125

55

40
12

YP, lb/100 ft2

35

24

27

26

20

24

30

20

16

21

19

18

43

15

10-sec Gel, lb/100 ft2

21

17

17

20

16

15

14

13

13

11

11

12

16

15

10-min Gel, lb/100 ft2

33

33

33

30

25

24

28

25

24

19

19

18

22

25

25

30-min Gel, lb/100 ft2

39

34

35

33

28

25

30

28

26

23

23

20

ES, volt
ECD, lb/gal

445
0.24

478
0.12

680
0.18

420
0.47

557

1.04

TABLE 2. With the rheological properties of the NFRS used in a deepwater well, the new fluid consistently delivered lower breaking circulation pressure than the original FRIDF for similar ECD and HCI.

to allow mud weight changes to be measured at different

angles with different eccentricities of the drillstring under
various fluid circulation and pipe rotation conditions.
No mud weight changes, thus no barite sag, were
observed even at low annular velocity and zero-rpm pipe
rotation. Subsequent testing of the field mud with a
higher mud weight revealed similar results. The NFRS
experienced flat rheology with very little thinning at high
temperatures versus conventional nonaqueous drilling
fluids (NAF) used in offset wells.
The NFRS fluid reduced back-reaming time through
improved hole cleaning, a lower standpipe pressure, and
increased flow rates. It also reduced plastic viscosity of
the fluid, improved low-gravity solids tolerance, reduced
breaking-circulation pressure, and lowered drilling
fluid cost.

Deepwater exploration well

In the deepwater Gulf of Mexico, the NFRS was used from
top-hole to total depth over a conventional NAF and the
original FRIDF system because of the likelihood of encountering narrow operational windows in several intervals that
can cause severe losses.
The mud weight varied from 10 lb/gal up to 17.2
lb/gal. The synthetic-to-water ratio was run between 68:32
and 79:21 but mostly between 70:30 and 75:25, even with
high mud weights.
During the drilling operations, a severe brine influx
occurred in the top intervals. The NFRS took the brine
EPmag.com | Januar y 2013

kick without suffering severe changes in fluid properties.

In the lower intervals with a high mud weight but slower
ROP, the content of LGS increased sharply. But the fluid
rheology remained stable without significant increases in
gel strengths.
For the last interval, the maximum bottomhole temperature was expected to reach 177C. To ensure the flat rheology profile and low gel strengths, a specially designed
polymer was used as a supplementary rheology modifier.
The additive was used only in the last two intervals, and the
concentration used was relatively low at about 0.5 lb/bbl.
Despite the relatively high mud weight and high LGS
content toward the last two intervals, the NFRS consistently exhibited relatively low and nonprogressive 10minute gels at all temperatures.
This property allowed the well to be drilled to a greater
depth for a higher well pressure evaluation. Table 2 shows
rheological properties for the deepwater NFRS.
With both fluid systems having similar low shear rate
viscosity, simulation results showed that the NFRS consistently delivers lower breaking circulation pressure than
the original FRIDF for a similar ECD and HCI.
The NFRS also shows a potential in reducing tripping
times compared to the original FRIDF.
Acknowledgement
This article was adapted from SPE 154682, which was presented
at the Society of Petroleum Engineers Oil and Gas India Conference and Exhibition in Mumbai, India, March 28-30, 2012.
65

HP/HT
DRILLING

HP/HT tools allow completion

of challenging wells
Canadas liquids-rich Duvernay shale has been the testing ground for innovative solutions in
reservoirs that are defined by a unique set of completion challenges, including high fracture
gradients and breakdown pressures, high differential pressures, and geological heterogeneity.

Katie Alton, Packers Plus

s operators continue to drill and complete deeper

and increasingly challenging wells in emerging plays,
they are relying on advances in completion technology
that can accommodate HP/HT ratings to perform the
desired stimulation. Ongoing exploration and development in unconventional reservoirs has continued to push
the technological boundaries of downhole equipment.
Not all stages are created equal in a horizontal wellbore.
Formation heterogeneity along the lateral can lead to
greater-than-expected differential pressures, where each
isolated zone has a different breakdown pressure to initiate a fracture. Often, treatments that have not been executed as designed are due to treating pressures reaching
the limitations of downhole equipment.
For example, operators working in the Montney in the
Western Canada Sedimentary basin typically encounter
underpressured zones and high fracture gradients. The
play is estimated to contain 80 Tcf to 700 Tcf of natural gas
and is made up of a varying depositional environment.
Due to its rich silt and sand composition, the Montney is
often referred to as a tight gas reservoir; however, the natural gas found within the formation is generated in place,
a characterization more typical of shale gas reservoirs.
An underpressured zone can lead to a greater-thanexpected differential pressure across an isolated interval.
In this situation, a burst scenario could be encountered.
This scenario occurs when a high treating pressure is
required for a lower interval while an upper interval is
exposed to a lower bottomhole pressure (BHP).
Downhole tools with higher pressure capabilities reduce
the risk of burst and collapse scenarios often encountered
in zones where these conditions exist. Additionally, some
areas in the Montney have a high fracture gradient, resulting in higher breakdown pressures and thus the need for
higher treating pressures to perform effective stimulation.
The trend toward increasing pumping rates, lateral
lengths, and stage numbers adds to the need for highpressure tools.
66

In the Montney shale in the

Western Canada Sedimentary basin,
operators typically encounter underpressured zones
and high fracture gradients. (Images courtesy of Packers Plus)

Case study in the Duvernay shale

The Duvernay is the latest emerging liquids-rich shale play
in Alberta covering a surface area of approximately 100,000
sq km (38,610 sq miles). The Duvernay is best known as the
source rock for the Devonian-aged Leduc Reef, Keg River,
and Slave Point formations, and development in the Duvernay is currently in its infancy. It has drawn comparisons to
the Eagle Ford shale in the US due to its high liquids content and similar reservoir characteristics.
The formation is composed of interbedded bituminous
shales, calcareous shales, and dense argillaceous limestones. The thickness of the formation varies, ranging
from 10 m to 70 m (33 ft to 231 ft) depending on the
location. Approximate depths range from 2,500 m to
4,000 m (8,250 ft to 13,200 ft).
Due to the early phase of development, publically
available reservoir data of the Duvernay are very limited;
however, estimates in the Kaybob region have indicated
a porosity range of 3% to 12% and permeability up to
0.01 mD. Sweet spots in the formation are yet to be
Januar y 2013 | EPmag.com

HP/HT
DRILLING

determined but will be exposed as more wells are

drilled in the area. The Duvernay was once thought to
be uneconomical to produce and, consequently, was
largely ignored until horizontal drilling and multistage
fracturing began unlocking resource plays.
An operator targeting the Duvernay shale in the Kaybob region completed a 25-stage well with a combination
StackFrac and QuickFrac Titanium XV HP/HT system.
The system was run into a wellbore with a lateral length
of 1,735 m (5,725 ft), true vertical depth of 3,390 m
(11,187 ft), and measured depth of 5,160 m (17,028 ft).
BHP in the wellbore was 6,816.8 psi, and bottomhole
temperature was 115C (239F).
During the slickwater fracture treatment, the surface
treating pressure and pump rate reached 10,007.6 psi and
16.5 cu m/minute (582.7 cf/minute), respectively. Pump
rates ranged from 8.2 cu m/minute to 16 cu m/minute
(289.6 cf/minute to 565 cf/minute) during stimulation
operations. An average of 98 metric tons of proppant and
1,000 cu m (34,315 cf) of slick water was used per stage to
fracture the well for a total of 2,440 metric tons of proppant and 25,030 cu m (883,926 cf) of slick water.

Designing downhole stimulation systems

The Titanium XV system uses proven technology to enable
the stimulation of challenging HP/HT wells in areas that
could previously not be completed due to the limitations of
downhole equipment. Continued exploration and development in deep shale formations highlight the need for
innovative solutions in reservoirs that are defined by a

These HP/HT tools are capable of withstanding

differential pressures of 15,000 psi and
extreme bottomhole temperatures.

EPmag.com | Januar y 2013

unique set of completion challenges, including high fracture gradients and breakdown pressures, high differential
pressures, and geological heterogeneity. More than 45
StackFrac Titanium XV systems have been run in tight
sandstone reservoirs and shales in Canada, including in
the Montney and Duvernay.
The system addresses the need for completion systems
in wells where differential pressures above 10,000 psi
could be encountered. These HP/HT tools are capable
of withstanding differential pressures of 15,000 psi and
extreme bottomhole temperatures. This was achieved
through the use of an innovative metallurgical composition and premium seal technology. The Titanium XV system was developed with the same function and design as
the Packers Plus StackFrac system, which uses a continuous pumping operation to effectively stimulate isolated
zones along the entire length of the wellbore. Mechanical
isolation is achieved with the Titanium XV RockSeal ll
packer. A Titanium XV FracPort sleeve is run in between
two packers to allow specific zones of the wellbore to be
selectively fractured.
In addition, HP/HT tools also have been developed
for the QuickFrac batch fracturing system to allow limited
entry stimulation in openhole completions and for the
SF Cementor stage collar for cemented-back monobores.
All of these systems are modular, allowing combination
systems to be run. This method maximizes the number
of stages available while maintaining the largest ball-seat
size possible for coiled tubing intervention.
Packers Plus developed the Titanium XV system to
address these limitations with higher pressure-rated tools
capable of withstanding aggressive environments. With
applications in Canadian formations such as the Montney,
Duvernay, Cadomin, Nikkanasin, Alberta Bakken, and
Deep Foothills, the Titanium XV system can be applied
to shale and sandstone formations around the world.

67

HP/HT
DRILLING

MWD reaches new temperature

extremes in Thailand wells
New reservoirs offshore Thailand and in ultra-deep waters in the GoM have
hot operating environments that severely affect MWD electronics.

Douglas McGregor, Weatherford International

ottomhole temperatures in the southern Gulf of

Thailand (GoT) have always been above average.
But current wells are pushing temperatures beyond the
areas 175C (347F) extremes past what have long
been the upper limits of MWD technology.
Efforts to cool the mud and stay within tool temperature limits are time consuming and with higher temperatures, increasingly ineffective. As MWD limits are
reached, drilling accuracy and safety suffer along with
acquisition of logging data. Ultimately, well costs and
the completion are placed in jeopardy.
Recent advances in critical MWD electronics and manufacturing are proving successful in extending technology performance into new temperature extremes. The
first application of 190C (374F) technology took
place earlier this year in the GoT. The success of
the application, with 29 operating hours
above 170C (338F), has led to the
drilling of additional area

wells with similar performance. Six different runs in

excess of 180C (356F) have been made for a total of
more than 650 operating hours and 8,534 m (28,000 ft)
drilled with no trips for an MWD failure. The longest
exposure time above 175C is in excess of 42 hours with
a maximum temperature of 188C (370F). These
results have spurred further R&D to develop 200C
(392F) tools and sensors to drill even hotter well
prospects emerging in the GoT and around the world.

GoT application
For the initial application in the GoT, the 190C temperature MWD technology was used to successfully drill to
total depth (TD) without any interruption to the drilling
operations in hole temperatures that reached the tools
maximum rating of 190C.

Weatherfords new HeatWave MWD technology

used in the GoT wells is rated to 190C (374F).
It was developed as part of the companys pioneering
hostile environmental logging technology that uses pressuremodulated mud-pulse telemetry to transmit surveys and tool faces
for real-time directional drilling. (Images courtesy of Weatherford)

68

Januar y 2013 | EPmag.com

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HP/HT
DRILLING

The well was drilled with oil-based mud in a 618-in.

hole. No mud motor was used in the application, and
the hole angle was controlled with an adjustable gauge
stabilizer.
Nearly 29 operating hours were recorded with wellbore
temperatures above 170C. The run lasted 83 hours and
drilled 1,006 m (3,300 ft) to a measured depth of approximately 4,128 m (13,544 ft). Total drilling time was about
32 hours with about 58 hours circulating.
Eliminating a trip to lay down the MWD/LWD assembly
saved a minimum of 24 hours of rig time and about US
$200,000 in rig costs and provided the data to safely and
accurately drill the well.

These methods can lower circulating temperature

approximately 10C to 20C (18F to 36F). While this
cooling allows the tools to function so that TD can be
reached in a single run, it also presents drawbacks.
Costly nonproductive time (NPT) is accrued while
cooling the well, and MWD technologies are operated
at high temperatures for a longer period of time, reducing service life.
Even more problematic, if the bottomhole static temperature is too high (greater than 200C), temperature mitigation cannot bring the temperature within the operating
range of the standard tools. New technology is needed to
safely and economically drill these wells.

High-temperature demand

Next plateau

While relatively small, the busy GoT has long been a driving market for high-temperature MWD technology. Operators drill more than 200 wells per year in the area that
exceed 150C (302F), and the GoT is by far the largest
area with users of the technology.
Globally, demand for high-temperature MWD is less
concentrated with lower activity than the GoT, although
the potential is relatively significant. For example, ultradeep gas assets in the Gulf of Mexico (GoM) point to the
need for 220C (428F) MWD capabilities in the not too
distant future. New reservoirs on the horizon in the GoT
exhibit similar extremes, and around the world there are
many increasingly high-temperature prospects.
The hot operating environment in these wells severely
affects the technologys electronics. It is estimated that
when electronics are operated above 140C (284F), the
component life is reduced by ~50% for every 10C (18F)
gain. Solutions must consider many aspects of the technologys reliability and accuracy, including vibration and
mechanical fatigue for the MWD electronics for all sensors. Developing the MWD technology for these wells will
increasingly require collaboration with the operators who
anticipate the challenges and recognize the critical role
MWD will play as well as accelerate high-temperature
MWD developments.

Reaching beyond the 175C limit was complicated by

market and legislative circumstances. Over the years, manufacturing standards have naturally favored the lower temperature requirements for consumer electronics. Legislative
changes include environmental regulations implemented
since 2006 as part of the European Unions Restriction of
Hazardous Substances Directive, which had a negative
impact on manufacturing high-temperature electronic components. This environmentally friendly improvement has
inadvertently impacted all wireline and MWD/LWD service
providers ability to work at elevated temperatures.

Temperature mitigation limits

In addition to rising temperatures, the effectiveness of traditional mitigation techniques is reduced. When mitigation
cannot sufficiently cool the hole, MWD technology must
be developed to drill the well safely and economically.
In GoT wells with circulating temperatures in excess of
175C, mitigation procedures to cool the mud include
reducing bottomhole assembly rpm, lifting the assembly
off bottom and circulating the drilling fluid, and reducing
penetration rates.
70

A technician works on the software/sensor component of the

LWD system. Recent advances in critical MWD electronics and
manufacturing are extending technology performance into new
temperature extremes.

Januar y 2013 | EPmag.com

HP/HT
DRILLING

A significant R&D commitment was required to redevelop high-temperature capabilities and expand them to
higher limits. The process involved multiple considerations,
including changes to the overall manufacturing process,
packaging of vulnerable components, and design changes
to allow easy component replacement.
Weatherfords new HeatWave MWD technology used in
the GoT wells is rated to 190C. It was developed as part of
the companys pioneering hostile environment logging technology that uses pressure-modulated, mud-pulse telemetry
to transmit surveys and tool faces for real-time directional
drilling. The tool can be integrated with other LWD sensors
and rotary steerable systems. The modular design of the
product line allows the higher temperature technology to be
applied to the full range of MWD/LWD tools measuring 9
in., 8 in., 6 in., and 4 in., as used in the GoT.
Capabilities currently include direction, inclination, and
tool face; gamma ray (total gamma and 16 bin image); bore
and annular pressures; and vibration. Additional capabilities
of the extreme temperature technology will soon include

resistivity, neutron, density, and sonic measurements and

formation pressure testers. Ongoing development is also
focused on the design of 200C MWD tools with sensors to
survive in excess of 350 hours at temperature.
The new high-temperature MWD technology reduces
well costs in several ways. Less NPT is required for circulating off bottom or reduction in rpm and/or ROP. Drillers
are safer and better informed with borehole positioning,
gamma ray data, bore and annular pressure, and logging
data. These capabilities are reducing the number of rig
days per well and adding additional prospects to the list
of viable candidate wells.

Global reach
Recent advances in high-temperature MWD technology
reach a global market where extremely hot holes compromise the ability to drill and complete wells effectively and
efficiently. Reliable, accurate MWD and LWD services provide the means to develop these assets and lay the groundwork for drilling even hotter wells.

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71

OFFSHORE SYSTEMS
AND SOLUTIONS

Reaching new highs and lows

Breakthrough in wet insulation meets industry need for subsea flow assurance
at high- and low-temperature extremes.

Eric Rexrode and Nathan Wilmot, Dow Oil & Gas

ncreasing oil demand and depletion of existing hydrocarbon reserves are driving investment in harsher subsea
installation and operating environments, including arctic
conditions, deeper waters, higher well temperatures, and
higher water pressures. These conditions stretch or exceed
the thermal and mechanical capabilities of current wet
insulation offerings for subsea flow assurance.
To bridge the performance gap, a multiyear research
project was initiated to develop a wet insulation solution
that would reliably perform at higher service temperatures, lower installation temperatures, and greater water
depths. The result of this multiyear effort is the patentpending Neptune Advanced Subsea Flow Assurance
Insulation System.
The system may be installed or used in temperatures
as low as -40C (-40F) and has been tested at operating
temperatures of up to 160C (320F). Complete end-toend protection is achieved through the use of the three
grades: Neptune C coating for subsea equipment, Neptune P coating for line pipe, and Neptune F coating for
field joints. Comprehensive field testing conducted in
partnership with industry-leading coaters and validated
by a third-party witness demonstrates that the system
offers a new level of installation and operating performance for subsea flow assurance.

FIGURE 1. The test results of a thermal conductivity evaluation of

Neptune C Insulation Coating are compared by date.

subsea equipment, line pipe, and field joints may be subject to interior temperatures that exceed the capabilities
of traditional wet insulation materials. The Neptune system is based on a proprietary hybrid polyether thermoset
technology developed by Dow to boost performance relative to operating temperature. In lab testing, hydrolytic
performance was determined in a worst-case hot and wet
interface scenario in which Neptune C coating dog-bone
samples were aged in simulated seawater at 160C and
4,300 psi for 3,000 hours. Table 1 presents the test results.
Initial and post-aging tensile properties were determined
according to ATSM Standard D412.
To further quantify hydrolytic stability, thermal stability,
Taking the heat
and hydrostatic crush performance, a 28-day simulated
High-temperature stability is a key limiting factor to sucservice test was performed on a composite 4.2-m (13.7-ft)
cessful exploitation of higher temperature wells comsection of 4-in.-diameter Schedule 120 pipe with 2 in. of
monly encountered in deep and ultra-deep water. Future
proprietary coating. The pipe was tested at an internal
pipe temperature of 160C
TABLE 1. The test results of the tensile properties of Neptune C Insulation Coating at 0 hours and
and an external temperature
3,000 hours of wet aging at 160C (320F) demonstrate the hydrolytic and thermal stability of the
of 4C (39F) in simulated seacoating in these conditions. (Images courtesy of Dow Oil & Gas)
water.
A hydrostatic pressure of
Product
Tensile Properties
4,351 psi (300 bar) was applied
Hours wet-aged
Tensile
Elongation
Modulus
to the sample for the duration
at 160C (320F)
strength
at break
of the test.
Neptune C
Initial
1,508 psi
79.6%
3,249 psi
Temperature, pressure, and
for subsea architecture
3,000 hours
1,899 psi
85.7%
6,846 psi
heat flux were measured over
applications
% of initial value
125%
108%
211%
the pipe length throughout

72

Januar y 2013 | EPmag.com

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TABLE 2. The test results of Neptune P and F Insulation Coating

elongation at break are shown at -40C, 0C, and 50C (-40F,
32F, and 122F) temperatures.

Product
Neptune P
for line pipe
applications

Neptune F
for field joint
applications

Temperature, C

Elongation at break

-40
0
50

65%
90%
64%

-40
0
50

72%
87%
67%

TABLE 3. The results of hydrostatic compression of Neptune C

Insulation Coating are shown at 160C (320F) and 5,800 psi.

Hydrostatic compression at 160C (320F), 5,800 psi

FIGURE 2. The results of hydrostatic compression of Neptune C
Insulation Coating are shown at 23C (73F) and 0 psi to 5,800

Volume change

psi (400 bar).

Weight change

2.5%

Hardness change

-2.1%

the duration of the test to calculate thermal conductivity.

Results are presented in Figure 1. Spikes in the graph indicate the planned shut-down periods employed to measure
cool-down time. The uniform pattern of the line graph
demonstrates the stability and consistency of the thermal
conductivity measured throughout the course of the test,
confirming that the coating exhibits very stable thermal
conductivity performance, even at the 160C operating
temperature. At 0.152 Watts per meter Kelvin (W/mK),
the measured K-factor compares very favorably with
reported data of other wet insulation products available
on the market today.

2.0%

160C respectively when subject to pressure up to 5,800

psi (400 bar), representing a water depth of at least 4,000
m (13,123 ft). There is virtually no change in the insulation coating under these conditions.
Additionally, the insulation coating does not incorporate glass beads, driving simplification, eliminating the
potential of glass breakage during processing, and contributing to reduced risk. All of these advantages are
achieved without the loss in thermal insulation performance typically associated with solid elastomers.

End-to-end simplicity
Taking the cold
As reported in 2008 by the US Geological Survey, areas
north of the Arctic Circle are estimated to have 90 Bbbl of
technically recoverable oil, with the vast majority located
offshore. In these environments, extreme cold temperatures are a limiting factor for subsea flow assurance.
The Neptune system was designed to provide flexibility
and durability at very low temperatures. These properties
are important for offshore use in any climate but especially in cold weather. Low-temperature flexibility helps
maintain productivity during cold weather reeling versus
incumbent materials, some of which can show embrittlement in colder climates. When tested according to ASTM
D412 at -40C, 0C, and 50C (-40F, 32F, and 122F),
Neptune Insulation Coating demonstrated flexibility in
temperatures as low as -40C as presented in Table 2.

Taking the pressure

Neptune Insulation Coating is a solid elastomer and is
therefore virtually incompressible. Figure 2 and Table 3
show hydrostatic crush performance at 23C (73F) and
74

The anti-corrosion performance for line pipe and field

joints is achieved by using a fusion-bonded epoxy that is
specially designed for high-temperature applications. The
anti-corrosion coating for subsea equipment is provided
by industry standard liquid epoxy materials. Combined
together in the Neptune Advanced Subsea Flow Assurance
System, the insulation coating and these epoxy anti-corrosion coatings provide a strong bond that eliminates the
need for an adhesive tie layer, further driving simplification and contributing to risk reduction.
Some flow assurance systems can require multiple coating and tie layers to achieve insulation performance and
may also require different insulation materials to provide
end-to-end thermal protection. This introduces a level of
complexity that increases the risks associated with bonding
of dissimilar and potentially incompatible materials. The
Neptune system, by contrast, employs a simple dual-layer
technology with a single homogenous layer of anti-corrosion coating and a layer of proprietary insulation coating
that provides end-to-end thermal and mechanical protection from the wellhead to the delivery point.
Januar y 2013 | EPmag.com

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OFFSHORE SYSTEMS
AND SOLUTIONS

Change can be good

The FPSO Peregrino gets the job done for Statoil.

Jennifer Presley, Senior Editor, Production

n 2011, after many years of exploration and development, Statoil produced first oil from its Peregrino field
located 85 km (53 miles) offshore Brazil. While the field
provided many development challenges, namely 14API
heavy oil and high water production rates, the company
found success in the field through its innovative application of surface, subsea, and subsurface technologies.

The Peregrino project

Development of the field by Statoil, according to the company, was completed to plan and below cost. More than
24 million man-hours were tallied during a development
schedule that involved more than 500 contractors and the
establishment of a 200-person-strong organization in
Rio de Janeiro, Statoil said.
The Peregrino field is the companys largest international field. The reservoir is located about 2,300 m (7,590
ft) beneath the seabed in an estimated water depth of 120
m (394 ft) in licenses BM-C-7 and BM-C-47. Statoil holds
60% ownership and the operatorship of the field, and
Sinochem holds the remaining 40%.
To reach the reservoir, Statoil used the same horizontal
drilling techniques applied in locations such as the Grane

heavy oil field in the North Sea, where several wells were
drilled from a single location.
This project showcases the subsurface and reservoir
management skills, said Statoil spokesman Brd Glad
Pedersen. Applying skills such as produced water injection, horizontal wells, and flow assurance to sustain the
project over a longer term, recoverable resources are
now in the range of 300 [MMbbl] to 600 [MMbbl of oil].
The production system at the Peregrino field has the
capacity to produce 100,000 boe/d.
There are 30 horizontal production wells and seven
water injection wells, which are connected to two drilling
and wellhead platforms located about 10 km (6 miles)
apart. The platforms are connected to an FPSO with
flowlines and power umbilicals.

Helping heavy oil flow

Producing the heavy oil found in the Peregrino reservoir
is perhaps the greatest challenge that Statoil faces. The
oil viscosity is so thick that it must be treated before it will
flow. Each production well is artificially lifted using electric submersible pumps to bring the oil up from the reservoir to the wellhead platforms. For the oil to flow between
the platforms and the FPSO, it is heated in the flowlines.
The fluid that reaches the FPSO from the reservoir
is a mixture of oil, gas, water, and sand and has to be
separated and cleaned. This is performed in the topside
separation unit, where the arrival temperature of the
fluid is boosted from 60C to 66 C (140F to 150.8F)
to 120C to 150C (248F to 302F). Once separated, the
oil is stored in tanks at a temperature of 65C to 70C
(149F to 158F) to prevent it from solidifying until it
is offloaded onto shuttle tankers. The cleaned water is
reinjected into the reservoir.

Peregrino FPSO

The FPSO Peregrino has a storage capacity of 1.6 MMbbl of

oil, the equivalent to 16 days of round-the-clock production.
(Images courtesy of Statoil)

76

The key component in the Peregrino production system

is the FPSO. Career change can come late in life or, as in
the case of the very large crude carrier (VLCC) Maersk
Nova, very early. In 2008, with only one commercial voyage on its log books, the Nova returned to the shipyard
for its conversion from a VLCC to an FPSO vessel. At a
cost of more than US $1 billion, the conversion was the
largest unit investment in the history of the ships owner,
the A.P. Moller-Maersk Group.
Januar y 2013 | EPmag.com

OFFSHORE SYSTEMS
AND SOLUTIONS

In April 2011, after three years in which more than 16

million man-hours were logged in the conversion of the
vessel, the newly named FPSO Maersk Peregrino processed
its first oil from the Peregrino field. The vessel, built as an
oil transporter, had a new job as an oil producer. In July
2012, Statoil and Sinochem acquired the FPSO from
Maersk FPSOs in an undisclosed sale.
With a daily production capacity of 100,000 bbl, 350,000
bbl of liquids, and 7.3 MMcf of gas, the FPSO Peregrino has
a storage capacity of 1.6 MMbbl of oil, equivalent to 16
days of round-the-clock production. The topside consists
of two identical production trains and 15 modules for
crude oil separation, water treatment, chemical injection,
metering, power generation, power distribution, power
and process control, and accommodation for 100 staff.

FPSO. EOW-x offers an ergonomic operator environment

that facilitates operator decision-making and produces
measurable improvements in plant productivity, safety,
information flow, and operator job satisfaction, according
to ABB. Some 14,000 integrated operations on the vessel
and platforms are controlled by AC 800M process controllers and AC 800M high-integrity controllers.

Statoils Peregrino B platform (foreground)

is one of two production platforms
located about 10 km (6 miles) apart.
The platforms are connected to the
FPSO Peregrino (background) by
flowlines and power umbilicals.

Energizing Peregrino
The complex process of recovering the oil from the subsea reservoir and heating it in the separation unit and
storage tanks requires vast amounts of electric power.
To generate this energy, FPSO Peregrino has an onboard
power plant that can produce 72 MW of electricity, or
enough electricity to power 150,000 Brazilian households.
As a part of the conversion process, Maersk FPSOs partnered with ABB in the bidding process for the FPSO contract. The two companies formed a central engineering
team, with ABB performing the FEED studies and calculations for the electrical, instrumentation, automation,
and telecommunications systems. This enabled Maersk
FPSOs to determine the cost of converting the VLCC to
an FPSO and contributed to many of the process and production parameters of the design proposal. When Statoil
awarded the FPSO contract to Maersk FPSOs in 2007,
ABB was retained as the main automation and electrical
contractor for the vessel.
On the electrical side, the ABB solution for the FPSO
and wellhead platforms distributes power for the entire
production process, including the electric submersible
pumps in the production wells below the seabed.
A multisystem automation solution, including field
instrumentation and telecommunications systems, was
supplied by ABB. The solution includes a process control
system, power management system, production information management system, condition monitoring system,
fire and gas system, and emergency shut-down system, all
integrated within the same System 800xA Extended
Automation platform and operating environment.

The solution also includes an 800xA Simulator, which

contains adapted versions of all the site automation systems and connects them to a dynamic process flow
model. The simulator provides realistic and safe process
simulation for operator training. It enables engineering,
testing, startup, optimization studies, and upgrading to
be performed and mastered in the simulator prior to
the execution in the field.

Future plans for Peregrino

Measurable improvements

Between first oil in April 2011 and June 2012, Statoil has
lifted and processed more than 15 MMbbl of oil from the
Peregrino field. Statoil and Sinochem continue to explore
and develop the field. The companies announced in
October that appraisal well 3-STAT-8-RJS on the Peregrino
South discovery had been drilled. The appraisal well
encountered approximately 85 m (279 ft) of high-quality
oil-filled sandstone reservoir in the Carapebus formation,
supporting the current subsurface model.

Each system is operated from a System 800xA Extended

Operator Workplace (EOW-x) control room onboard the

ABB and Statoil contributed to this article.

EPmag.com | Januar y 2013

77

UNCONVENTIONAL:
OKLAHOMA

Oklahoma reverses 25-year decline

in oil production
Operators have shifted to oil- and liquids-rich shale plays, tight sandstones, and the
Mississippian limestone in jump-starting Oklahomas oil production once again.

Scott Weeden, Senior Editor, Drilling

he Sho-Vel-Tum field in southern Oklahoma was discovered in 1905, leading to a rush of oil finds in the
state that culminated in peak production in 1927. Now
a brand new play the South Central Oklahoma Oil
Province (SCOOP) is tapping a shale below the ShoVel-Tum formations that could add to the states booming unconventional plays, leading to a big increase in oil
and condensate production.
The Oklahoma Corporation Commission reported
Oklahomas total liquids production hit a modern low
of 58.05 MMbbl in 2010 before jumping up to 76.8
MMbbl in 2011. In 2009, only 163 wells in Oklahoma
were producing more than 100 b/d, according to the
Energy Information Administration.

The shift in interest to the oil-liquids plays in Oklahoma

can be seen in the rig count. On Nov. 25, 2009, Baker
Hughes rig count in the state was 86. By Nov. 30, 2012,
the number of rigs had more than doubled to 188 units.
Like the Bakken shale boosted North Dakotas output
from less than 100,000 b/d to more than 700,000 b/d
over a relatively short period of time, the Cana Woodford,
Woodford Arkoma, and Woodford Ardmore shales; the
Mississippi Lime; and the Granite Wash, Marmaton,
Cleveland, and Tonkawa tight sands hold the promise
for the same boost in production in Oklahoma.

Newest play: SCOOP

Continental Resources has started promoting a play it

named SCOOP. The company has kept the play in the
Woodford Ardmore shale under the radar while it signs
up leases. It also has been drilling wells in the play, drilling
or participating in 35 wells to date. Continental has 197,340 acres in Stephens, Grady,
McClain, Garvin, and Carter counties.
During 2012 Continental completed
three wells in the oil fairway. The Simms
1-32H flowed 702 boe/d (80% liquids),
the Healey 1-12H came in at 670 boe/d
(86%), and the Mills 1-21H produced 626
boe/d (81%). The condensate fairway
produces higher volumes with generally
between 55% and 60% liquids.
Five wells were completed in the condensate fairway: Poteet 1-17H with 1,771 boe/d
(55%); Vesta Marie 1-29H with 1,530 boe/d
(61%); Carson 1-2H with 1,524 boe/d
(57%); Auld 1-10H with 1,334 boe/d
(58%); and Dawkins 1-20H with 808
boe/d (58%).
In its 3Q 2012 overview, Continental said,
The SCOOP and Northwest Cana plays
were previously combined by us and
referred to as the Anadarko Woodford play.
Cimarex Energy is drilling infill wells in the liquids-rich core of the Cana Woodford
The company reported a 55% increase
in northwest Oklahoma. The company has four to seven operated rigs drilling off
in average daily production over the 3Q
two well pads with nine wells per section. (Photo courtesy of Cimarex Energy)
2011. The increase in 2012 production

78

Januar y 2013 | EPmag.com

UNCONVENTIONAL:
OKLAHOMA

was primarily driven by an increase in production from

our properties in the North Dakota Bakken field and
the Northwest Cana and SCOOP plays in Oklahoma due
to the continued success of our drilling programs in
those areas, the overview stated. Production from our
properties in the emerging SCOOP play in south-central
Oklahoma averaged 5,183 boe/d for the 3Q 2012, a
327% increase over the 3Q 2011.
The company said that the Woodford shale is up to
122 m (400 ft) thick with Upper Woodford and Lower
Woodford sections. The Lower Woodford has six times
the reservoir volume of the Cana field and is oil-prone
and liquids-rich. Continental participated in 12 gross (5
net) wells in SCOOP and Northwest Cana during 3Q
2012. The company is currently operating six drilling
rigs in SCOOP and none in Northwest Cana.

Granite Wash attracts attention

The unconventional plays in Oklahoma have been attractive for small to mid-size companies. The success caught

the attention of the large independents. In January 2012,

Apache Corp. agreed to purchase Cordillera Energy Partners III LLC for US $2.85 billion in cash and stock.
The acquisition more than doubled Apaches holdings
in the Anadarko basin. Cordillera held 254,000 net acres
in the Granite Wash, Tonkawa, Cleveland, and Marmaton
areas. One of the more prolific wells drilled by Cordillera
was the Skyy 2-33HC. The well can recover NGL at a 6:1
conversion ratio. The initial production rate was 4,546
boe/d. Also, the Bradshaw 1-11HB produced 1,254 bbl
of oil and 847,000 cf of gas in a 24-hour period.
Chesapeake Energy owns approximately 190,000 net
acres of leasehold in the Granite Wash play and 30,000
net acres in the Hogshooter play in western Oklahoma
and the Texas Panhandle. About 28% of total Granite
Wash and Hogshooter production during the quarter
was oil, 22% was NGL, and 50% was natural gas. The
company is currently operating 10 rigs in the two plays.
Two notable wells completed by Chesapeake in the
Granite Wash during the quarter were the Clarence B

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79

UNCONVENTIONAL:
OKLAHOMA

Flares for cost-effective VOC control

must meet new standards
Flares that meet new NESHAP and NSPS requirements also can be
engineered to reduce potential wildfire risk in drought regions such
as the Woodford shale area.
By Caleb Hurd, Zeeco Inc.

s any Oklahoma producer knows, the states weather conditions are

simply unpredictable. High wind and extreme drought conditions
are a major concern in the Woodford play. Leading operating companies
are making the move to enclosed flare systems to reduce the potential
wildfire risk as well as to meet new US Environmental Protection Agency
(EPA) oil and gas production regulations.
On April 17, 2012, the EPA, as part of the Clean Air Act requirement,
released the first federal air standards for oil and gas production, transmission, and storage facilities. The National Emissions Standards for
Hazardous Air Pollutants (NESHAP) 40 CFR 63 Subpart HH/HHH has
been revised, affecting existing, new, and modified facilities. In addition, the newly developed New Source Performance Standards (NSPS)
40 CFR 60 Subpart OOOO (Quad O) applies to new and modified
affected facilities, and significant staff increases are anticipated as a
result of these broad-reaching emissions reduction rulings.
As of Oct. 15, 2012, NSPS Quad O requires gases that would otherwise
be vented during periods of flowback to be routed to a completion control device (CCD) instead. The CCD must achieve a minimum of 95%
volatile organic compound (VOC) reduction. A
properly designed and engineered flare will
achieve greater than 98% VOC reduction.
In the Woodford shale and urban locations,
enclosed flares (sometimes incorrectly called
incinerators or combustors) are often preferred as a good neighbor investment.
Enclosed flares can be designed for multiple
streams within the same unit to save on overall
capital costs.
When evaluating an engineered flare, operators should seek a robust design that includes
temperature-resistant construction for heataffected components to ensure long-term life
expectancy of the flare tip and pilot. Use of
Typical of enclosed
investment castings for the critical components
flares being deployed in
in the heat-affected zones minimizes the potenplays such as the Woodtial for field failure. Requiring a continuously
ford shale, the Zeeco
monitored pilot that meets or exceeds AmeriEnclosed Flame Wellcan Petroleum Institute Standard 537 design crihead Flare system is
teria for performance under high wind and rain
used where open flames conditions means less operations and mainteare undesirable. (Photo
nance nuisance issues in the field and ensures
courtesy of Zeeco Inc.)
environmental performance. n

80

21-11-26 1H in Beckham County, Okla.,

with about 750 b/d of oil, 490 b/d of
NGL, and 6.4 MMcf/d of natural gas and
the Ervin 17-11-17 2H in Washita County,
Okla., with 460 b/d of oil, 495 b/d of
NGL, and 5.0 MMcf/d of natural gas.

Cleveland, Tonkawa tight sands

The Cleveland, Tonkawa, Marmaton, and
Granite Wash tight sands extend from
western Oklahoma into the Texas Panhandle. Chesapeake owns approximately
520,000 net acres of leasehold in the
Cleveland play and 285,000 net acres in
the Tonkawa play in western Oklahoma
and the Texas Panhandle.
One notable well completed by Chesapeake in the Cleveland sand during the
3Q 2012 was the Larry Imke 9-19-25 1H
in Ellis County, which achieved a peak
rate of approximately 1,035 boe/d. In
the Tonkawa sand, the best well reported
was the Fariss 2-16-20 1H in Dewey
County, Okla., with a peak rate of
nearly 775 boe/d.

Liquids boost
Mississippi Lime play
The Mississippi Lime play in northern
Oklahoma and southern Kansas continued to attract new players, including
at least one major. Shell Oil bought
into properties on the Kansas side of
the play.
In Oklahoma, Range Resources Corp.
completed 18 horizontal wells in 2012 with
four of these wells showing 24-hour initial
production rates to sales of more than
1,000 boe/d (83% liquids). The company
planned a five-rig drilling program for
2013 in the horizontal Mississippian play
along the Nemaha Ridge in Oklahoma
and Kansas.
Jeff Ventura, Ranges president and
CEO, said in the companys 3Q 2012
report, Range believes its location along
the Nemaha Ridge largely accounts for
our positive results. We believe our 2012
results with four wells having initial rates
over 1,000 boe/d confirm that we have
identified a core area of the play. Given
Januar y 2013 | EPmag.com

UNCONVENTIONAL:
OKLAHOMA

our continued positive developments in the play, we

have accelerated the start date of our five-rig program,
originally slated to begin in the first quarter of 2013.
The company has reaffirmed its estimated 600
MMboe estimated ultimate recovery (EUR) per well for
its 2012 program wells with greater than 1,067-m (3,500
ft) laterals. For its acreage position, Range projects that
the EUR per well will approximate equal parts oil, NGL,
and natural gas.
Based on its current plans, Range expects to run a
five-rig program in 2013, increasing to 10 rigs in 2014
and 15 rigs in 2015. The 2013 program is expected to
drill 68 wells, consisting of 51 producing wells and 17
water disposal wells.
With about 2 million net acres in its leasehold in the
Mississippian play, Chesapeake boosted its production
211% year-on-year for the 3Q 2012. As of Sept. 30, 2012,
Chesapeake had 227 producing wells in the Mississippi
Lime play, which included 73 wells that reached first
production in the 3Q 2012 compared to 49 in the 2Q
2012 and 11 in the 3Q 2011. The company also had
approximately 55 wells drilled but not yet producing in
various stages of completion and/or waiting on pipeline
connection. Chesapeake is currently operating nine rigs
in the Mississippi Lime play. Chesapeake continues to
pursue a joint venture and/or sale of a portion of its
Mississippi Lime acreage.
MineralMarketing.Com is headquartered in Woods
County, Okla., in the core area of the Mississippian play.
The company works primarily with mineral owners to
provide a national market for their mineral leases and
sales. The bulk of the companys client base are farm and
ranch families that have owned the assets for 60 years to
80 years.
Exploration and production companies are targeting
areas with better well performance. It is a narrower target than two years ago, said Shane Terrel, CEO, MineralMarketing.Com. We take listings on assets and
market them to prospective buyers.
Leasing activity becomes more focused as the play
develops. There are areas nobody wants to lease that
would have easily leased a year ago, he continued.
Were seeing something new in southern extensions
in Logan, Payne, and Noble counties. Operators are not
just drilling the Mississippian Line but are shooting at
targets at different depths, he told E&P.
When reputable companies enter the play it tends to
add credibility. Devon Energy is involved in the play and
Devons presence alone adds credibility to the play. It is
the same thing that happened when Shell moved into the
play in Kansas north of the Oklahoma border, he said.
EPmag.com | Januar y 2013

SandRidge Energy is the obvious front-runner in the

Mississippian play, he added.

Liquids-rich Cana Woodford fairway

Cimarex Energy is active in the Cana Woodford shale in
Caddo, Grady, Canadian, Custer, Blaine, Dewey, and
Kingfisher counties. The company has about 120,000
net acres in the play with 75,000 acres in the liquids-rich
area and 45,000 acres in the gas-rich area.
During a Dec. 4, 2012 presentation, Cimarex said
that it currently is drilling infill wells in the liquids-rich
core. The company has four to seven operated rigs. It
is drilling off two well pads with nine wells per section.
Cimarex began hydraulic fracturing on the infill wells
in May 2012 and expects to complete the last frac job in
the 1Q 2013 or the 2Q 2013. An estimated 115 infill wells
were drilled in 2012 (59 operated and 56 nonoperated).
The company is focusing on drilling program efficiencies, including multiwell pads, bi-fuel for rigs, water management, proximity savings, and rig competition.

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81

ULTRA-DEEPWATER
ADVANCES

Diving deeper in the race

for new reserves
When it comes to the future for the ultra-deepwater sector,
the stage is set for growth and then some.
Mark Thomas, Senior Editor, Offshore

he ever-growing number of deepwater fields successfully producing or due onstream in the next few years
around the world is no longer considered noteworthy
news. This is now very much business as usual for the
offshore sector, with some deepwater fields having produced since the 1980s. But for many, the surprise story
has been just how quickly the E&P industry has moved
into the ultra-deep arena of 1,500-m (4,921-ft) water
depths and well beyond far faster than it cautiously tackled its first generation of deepwater projects.
With at least 200 ultra-deepwater subsea field developments lined up to come online over the next four years

Global Deepwater Capex

US $ billion

0
2007

10

20

30

40

50

60

70

2012 has been a turning

point for global deepwater

2008

spending after several

years of slight decline

2009

due to the economic

and more than 11,000 subsea wells forecasted to be in

operation worldwide by 2020, according to Schlumbergers CEO Paal Kibsgaard at a recent energy event,
water depths are proving to be less and less of a barrier
to innovation.
Ultra-deepwater projects are expected to be the fastest
growing part of the subsea market over the next few
years. Infield pipelines in these water depths are forecast
to grow at an annual rate of more than 15% between
2012 and 2017, according to reports from Technip and
Heerema, who have formed a new joint venture (JV)
aimed specifically at this market.
The JV is aimed at addressing some but certainly not
all of the ultra-deep development challenges being
faced by the industry as a whole, including:
The increasing size and complexity of ultra-deepwater projects that require extensive project management skills and an execution track record;
The complexity of deepwater reservoirs that
requires technology investment to optimize field
design and provide solutions for HP/HT or highly
corrosive hydrocarbons; and
Deeper water and heavier pipes that increase pipetensioning and installation requirements of specialized pipelay vessels.

downturn and the

2010

Macondo effect.

Dramatic subsea capex increase

(Graph courtesy of

2011

Douglas Westwood)

Nearly a quarter of all subsea christmas trees installed

annually between 2012 and 2016 will be in ultra-deepwater territory, according to analyst Infield Systems. The
analyst said in its latest subsea market report that the
potential for subsea capex to 2016 has increased dramatically and that global subsea tree manufacturers
utilization rates are expected to increase to an average
of 75% in the next three years, up from 49% in the 2009
to 2011 period.
The growing move into the ultra-deep is being led by
major international oil and gas companies who recognize that they stand to find large discoveries if they are
willing to pour substantial dollars into exploration
efforts.

2012
2013
2014
2015
2016

82

Januar y 2013 | EPmag.com

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ULTRA-DEEPWATER
ADVANCES

Global oil and gas deepwater resource inventory

Bboe

591

831

Ultra-deep water*
Deep water**

484

174

107

122

66
-75
-3

59

52
7

-72
Produced

Developed

Discovered

Yet to find

Current
inventory

With 174 Bboe of deepwater reserves found but not yet developed, there is an estimated further 591 Bboe still to be found.
(Graph courtesy of Sevan Drilling and Rystad Energy)

This emerging trend was featured in a recent report

by Bernstein Research, which said deepwater production had jumped globally from less than 500,000 b/d 15
years ago to around 5.5 MMb/d in 2012 (about 7% of
the world oil supply). If exploration, access, willingness,
economics, and a growing Brazilian presalt outlook
align properly, the company predicted an additional 4
MMb/d from deep water and ultra-deep water by 2020.
The beneficiaries of the trend into deeper water
mainly include international oil companies and the
oil service companies with deepwater offerings, said
Rob West, co-author of the report and senior research
associate, European Oil and Gas, for Bernstein. These
resources are hard to access compared to conventional
hydrocarbons onshore and so resource-holding governments are more dependent on the technical capabilities of the majors and international E&Ps. The services
benefit because of a tight deepwater rig market and the
reliance upon specialized equipment, [subsea umbilicals, risers, and flowlines], and technologies.
About 70% of the discovered resources so far have
been found in water depths of more than 1,000 m
(3,280 ft), and 50% of the discoveries have been found
in frontier areas in the past three years, he said.

600 MMboe giants in ultra-deep water

The report also stated that deepwater acreage, specifically frontier deepwater acreage, resulted in the largest
84

discoveries in the last five years. The average size was

600 MMboe in water depths greater than 1,500 m
(4,921 ft).
This continued increase in ultra-deepwater exploration and development activity also is expected to
spread across product lines, the report said. These likely
include greater demand growth for products including
subsea equipment and infrastructure, infrastructure
installation, marine well testing, wireline, directional
drilling, LWD, and completion equipment.
Challenges still remain such as higher well costs, with
rig rates for ultra-deepwater capable units up to and
more than US $600,000/day. Exploration expenses have
increased more than 14% in the last decade and jumped
30% to about $90 billion in 2011, according to the
report.
So what are the deepwater drivers that are pushing the
industry? The generally accepted figures:
142 Bboe of deepwater resources have been found
and developed globally, but only approximately half
have so far been produced;
174 Bboe have been found but have not yet been
developed;
The deepwater development backlog amounts to
55% of the volume discovered so far;
Another 591 Bboe of resources is expected to be discovered; and
This is 90% higher than that already discovered.
The core areas driving the industrys advance into the
ultra-deep water remain the established regions such as
the US Gulf of Mexico (GoM) with attractive fiscal terms
and Lower Tertiary wells; Brazil with presalt success and
light oil and gas; and West Africa with long lead-time
developments in Nigeria and Angola and increasing
activity in Ghana, Liberia, Namibia, and Cote dIvoire.
But it also is now featuring increasing exploration
activity in emerging areas such as East Africa, Mexico,
the Mediterranean Sea, Malaysia, Brunei, Indonesia,
India, the South China Sea, the Black Sea, Atlantic
Canada and Greenland, Suriname, and Guyana.

Floaters riding the wave

Of course, where exploration drilling takes place, development expenditure usually follows, and in the ultradeep sector it is not only the subsea market that is
benefiting. The floating production systems sector will
see demand from ultra-deep projects dominate over the
course of the next five years.
Infield noted that installations in water depths of 1,500
m (4,921 ft) and greater will make up a 31% share of floating platform capex over the 2012 to 2016 timeframe. This
Januar y 2013 | EPmag.com

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ULTRA-DEEPWATER
ADVANCES

compares to 22% over the historical 2007 to 2011 period.

Of these developments, Latin America will continue to
hold the dominant share at 58% of capex spend, with key
floating production and storage vessel projects including
the Lula and Sapinhoa developments in Santos basin
blocks BM-S-11 and BM-S-9 offshore Brazil.
Since 2000, the trend for floating platform installations
beyond water depths of 500 m (1,640 ft) and greater has
primarily been driven by Brazil. Since then, the country
has consistently held a 35% market share of capex at this
water depth and is expected to maintain this throughout
the forecasted period.

Project 20K

future major ultra-deepwater discoveries such as Kaskida

and Tiber.

Tapping industry expertise

With this in mind, the company is tapping into expertise
from within the industry, recently awarding initial contracts to KBR and FMC Technologies for the technology
initiative. KBR will develop program execution and management plans, including capital cost and schedule estimates, risk assessments, and technical designs. FMC will
participate in a technology development agreement in
which it will work jointly with BP to design and develop
20,000-psi-rated subsea production equipment, including
a subsea production tree and a subsea high-integrity pressure protection system.
The end game for BP is that the eventual application
of this technology across its own global portfolio could
access an additional 10 Bbbl to 20 Bbbl of resources, it
estimates.
For many, the ultra-deep challenge is largely represented by drilling and rig-related issues. Balmoral Offshore Engineering has tackled the issue of drill riser
buoyancy by launching two additions to its portfolio
enabling operations in up to 4,500 m (15,000 ft) of
water.
The companys Durafloat Superlite and Durafloat
Superlite-X materials are rated to operating depths of

88

MMboe

MMboe

Advances in ultra-deepwater technology are being pushed

in many different areas. Bernard Looney, executive vice
president, Developments at BP, said that the companys
Project 20K aimed at increasing its capability to 20,000
psi and temperatures of 175C to 204C (350F to 400F)
was in many ways the next chapter in deepwater. Over
the next decade BP will work with others to develop an
integrated system from the rig to the risers and the subsea
all the way to the well with the ability to intervene.
This could include equipment, he continued, such as:
Subsea valves weighing 20 tons, capable of closing and
isolating hydrocarbons in a matter of seconds;
State-of-the-art sensing and monitoring systems for
real-time subsea
integrity manageDiscoveries of oil and gas deeper than 122 m
Global discoveries by water depth
ment;
,
,
Land (much unconventional from 2000s)
BOPs weighing in
Shelf (to 125 m)
Deepwater
excess of 1 million lb
(125 m to1,500 m)
,
Ultra-deepwater
and standing more
(1,500+ m)
,
than 21 m (70 ft)
,
high; and
,
Equipment capable
of operating at
,
30,000 psi onshore
,
one-and-a-half times
,
its designed working
pressure.
,
Those resources are
inaccessible with current
,
,
equipment, which has a
technical limit of 15,000
,
psi pressure and temperatures of 120C (250F).
BP said that in the
GoM, Project 20K techDeepwater discoveries are expected to remain at a consistent level throughout the next three decades.
nology will play a key
(Graph courtesy of Sevan Drilling and Rystad Energy)
role in developing its
Januar y 2013 | EPmag.com

ULTRA-DEEPWATER
ADVANCES

Global subsea capex spend by region, onstream year

2004 to 2017
20,000

South America
North America
North Sea

15,000

Asia Pacific/Middle East

US $

Africa/Mediterranean

10,000

5,000

0
2004

2005

2006

2007

2008

2009

2010

2011

2012e

2013e

2014e

2015e

2016e

2017e

Global expenditure on subsea projects is set to rise consistently through 2017, largely driven by ultra-deepwater demand. (Graph courtesy of Quest Offshore)

4,500 m typically 900 m to 1,500 m (3,000 ft to 5,000 ft)

deeper than industry-standard drill riser buoyancy it said.
Balmoral sank a six-figure sum into its R&D program for
the syntactic foams, which were developed by its technical
and engineering teams in Aberdeen, Scotland.
Drill riser buoyancy provides uplift by effectively
decreasing the submerged weight of the steel riser joints
that run between the drilling vessel and the BOP on the
seabed.

Drilling rig demands

The highest profile item most often mentioned whenever the subject of ultra-deepwater comes up, however, is
the drilling rig itself. The current rig-building boom has
seen a flood of new units arrive on the market, with
plenty more still to come. According to Tom Kellock of
IHS-Petrodata, speaking at a recent International Association of Drilling Contractors event, ultra-deep water is
the dominant specification. He also said that despite
water depths of 3,048 m (10,000 ft) or more being the
bespoke capacity for most, the average water depth for
rigs working today is 1,067 m (3,500 ft). So we do not
need ultra-deepwater rigs all the time, he said.
However, the long-term picture remains one of an offshore industry going deeper, and this means that more
rigs capable of drilling in these depths must be built
development drilling requirements alone will make up
around half the demand for deepwater rigs going forward. With most deepwater discoveries having not yet
been developed, the future level of rig demand becomes
EPmag.com | Januar y 2013

clearer, with the stage set very much for growth.

The factors fueling demand and heightened technical
requirements for these new ultra-deep floaters include:
Challenges of remote drilling sites;
Drilling deeper, more complex wells with longer
offsets;
Greater drilling efficiency to reduce total well costs;
Advances in well construction techniques such as
intelligent completions;
More demanding downhole environments such as
HP/HT drilling; and
An increasingly demanding regulatory climate.
For the latest drillships, manufacturers have typically
responded by building units with specifications such as:
Water depth capability of 3,048 m to 3,657.6 m
(10,000 ft to 12,000 ft) with enhanced load paths
and mud systems;
Dual-activity derricks with the ability to take critical
path activities offline;
More accommodation space and variable deckload
capacity; and
Advanced dynamic positioning class 3 systems, 6-ram
or 7-ram BOPs, and redundant mud pumps.
This unflinching demand for such units has created
an ultra-deepwater rig market that is tight and shows
no sign of slowing up any time soon. Virtually all of the
competitors involved agree the market is in a strong
cycle that will prevail over the coming years. The same
is true for the global ultra-deepwater E&P sector as a
whole.
89

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industry

IMPACT

Cost-effective cable system

increases reliability downhole
Feed-through packer allows passage of lines without cutting or splicing to
zonally isolate both cased-hole and openhole completions.
Mary Hogan, Associate Managing Editor

or more than 40 years E&P and its predecessors have

awarded cutting-edge technology with one of industrys most coveted awards, the Meritorious Awards for
Engineering Innovation (MEAs). These awards are
bestowed upon best-of-class technology that solves a
major technical challenge or saves operators time and
money. Five years ago 12 technologies were given the
top prize. But where are they now? Industry Impact will
provide a monthly look back at previous MEA winners
and their evolution.
When Halliburtons Swellpacker cable system an
annular isolation cable feed-through packer won the
award for intelligent systems and components in 2008, it
provided a cost-effective solution for both cased-hole and
openhole applications.
Using downhole valves operated by hydraulic pressure
through control lines or by electrical power through
cables, operators could selectively open, close, and choke
production from different sections of a wellbore. These
valves were positioned between packers to form the zonally isolated sections, but until the invention of the Swellpacker cable system, as featured in Hart Energys MEA,
they were only available for cased-hole applications, said
Peter E. Smith, product manager for Swell Technology,
Halliburton. A swellable version of a feed-through packer
became the enabling technology that permitted the
worlds first openhole intelligent completions.
Unlike the mechanical feed-through commonly used
in packers for cased-hole applications, the Swellpacker
did not require the control line, cable, and flatpack to
be cut or spliced. The technology relied instead on custom-molded grooves to fit the control line. This eliminated a major source of reliability issues but also cut
installation time hugely, saving operators considerable
cost, Smith said.
Use of the Swellpacker cable system in major oil and gas
plays has increased despite the technology changing little
in design over the years, according to the company. Halliburton has improved upon a few aspects of the technology though, including changes in the variety of rubber
EPmag.com | Januar y 2013

Since winning Hart Energys MEA award, variations in rubber

type used in the Swellpacker have allowed Halliburton to design
an end ring capable of withstanding higher pressure ratings.
(Image courtesy of Halliburton)

used, which in turn means changes in the operating envelope and application type. Some of these variants have
allowed us to introduce a high-performance end ring,
which can permit differential pressure ratings of 10,000
psi and potentially more, Smith said. These designs have
been used along with fiber-optic technologies to permit
the monitoring of frac or stimulation jobs in real time and
subsequently monitor production performance.
In addition, operators can now use Swellsim software
to measure differential pressure and swell times for the
Swellpackers configuration of cables instead of recording these calculations by hand. This, Smith said, gives
users more flexibility with designing cable feed-through
configurations.
The company also has developed lower cost variations
for market segments that do not require such high-performance solutions; these variations have been used in
coalbed methane well segmentation and microseismic
work while fracturing.
Halliburton currently is designing a variant that
improves upon ease of installation and orientation and
that incorporates feed-through technology. This would
allow operators the advantage of quickly installing large
numbers of feed-through isolation points while also being
able to easily orient the packers to the cable configuration
without having to use timed threads, said Dustin A.
Young, product champion, Halliburton.
91

tech

WATCH

Network provides downhole visibility

Real-time, high-speed data transmission and acquisition along the entire
drillstring overcome conventional limits imposed by fluid type, fluid flow,
and water depth.
Mike Reeves and Douglas Smith,
XACT Downhole Telemetry Inc.

unique acoustic telemetry (AT) network for drilling

operations is providing real-time downhole data
in a wide range of offshore applications where conventional technologies are limited. The acoustic technology
uses the drillpipe for high-speed data transmission independent of fluid type, fluid flow, or water depth. Data
are acquired and repeated with collar-based tools that
enable the precise capture of data along the length of
the drillpipe at any depth. More than 400 deployments
have demonstrated the technologys ability to improve
efficiency and reduce risk.

real-time downhole data becomes even greater. With it,

operators can make critical adjustments that increase
operational efficiency and reduce the risk of non
productive time or catastrophic events. A number of
real-time telemetry solutions have historically been used
to deliver such data, with varying degrees of success.
In offshore drilling environments, the most common
form of downhole data transmission is mud-pulse telemetry (MPT). This technology uses a moving mechanical
device to present a temporary restriction to fluid flow,
creating a pressure pulse that propagates to surface
through the drilling mud within the internal bore of the
drillstring. While MPT has been used with great success
for many years, it is inherently limited to applications
where fluid flow is continuous; no data can be transmitted when flow is stopped. Because MPT relies on restricting fluid flow, it also restricts the pass-through inside
diameter (ID) of the pipe string. This renders the technology unsuitable for use in environments and locations
where such ID restrictions are poorly tolerated.
Electromagnetic telemetry (EMT), an alternative to
MPT, is a commonly applied onshore transmission technology. This approach uses voltage differences generated within a downhole tool to direct electromagnetic
pulses through the overlying formations to an electrode
driven into the ground at surface. While EMT is generally reliable on land, the technology is depth-limited and
historically unsuitable for use in offshore wells, where
the water depth presents a significant telemetry barrier.

Acoustic telemetry advantages

FIGURE 1. Made up as an integral part of the drillstring, the XACT

AT tool enables along-string data acquisition and transmission
in a system that is easily deployed while tripping in the hole.
(Images courtesy of XACT Downhole Telemetry Inc.)

Overcoming conventional challenges

As offshore resources are pursued in deeper reservoirs,
deeper water, and harsher environments, the value of
92

AT has been used successfully for many years in lownoise applications and is common in offshore drillstem
testing operations. The technique uses piezoelectric or
magnetostrictive materials to generate a compressional
wave that travels at high speed along the wall of the drillstring to the surface.
The use of AT in drilling applications has historically
been avoided due to the significant noise generated by
the drilling process. However, several years of development and extensive field use in a wide array of drilling
environments have resulted in the industrys first reliable AT network suitable for drilling applications.
Januar y 2013 | EPmag.com

tech

WATCH

configured to acquire different measurements at preprogrammed time

intervals, with the data stream taking
between 10 seconds and 40 seconds
to reach surface, depending on well
depth, profile, and the number of
tools deployed.
Such an AT network has a multitude of possible applications, including along-string acquisition of data
while drilling, pressure visibility during no-flow events, telemetry for
underbalanced drilling environments, and telemetry during gravel
pack and frac pack completion operations and drillstem test operations.

Along-string measurements
MPT is currently limited to the transmission of real-time downhole data
from a single location (at the bottom
of the string), which ceases during periods of low fluid
circulation and no fluid circulation. In contrast, an AT
network provides visibility of drillstring behavior and
borehole pressures at multiple locations along the wellbore and continues to provide this visibility at all times
regardless of flow conditions.
A recent demonstration of this capability was illustrated by a horizontal drilling campaign where a network of 6 -in. acoustic tools was deployed as part of
XACTs BoreSentry borehole monitoring service to
transmit real-time, along-string pressure measurements
to the surface from five locations. A number of weighted
and high-viscosity sweeps were pumped, providing an
opportunity to evaluate distributed sensor response and
determine the apparent relative effectiveness of different sweep approaches. Figure 2 shows the position of
four acoustic network tools along the drillstring at the
time of the sweep.
Figure 3 shows the annular pressure sensor responses at
each tool versus time as the sweep migrates along the
borehole to surface. As expected, as the leading edge
of the weighted sweep moves past each sensor location,
that sensor shows an increase in pressure (reflecting
the increase in average mud weight of the fluid column
above it). This increase takes several minutes to complete.
Each sensor then shows a period of constant elevated
pressure with the sweep entirely above it. Finally, as the
sweep starts to exit the annulus at surface, all sensors
show a pressure decline, returning to the original lower
baseline once the entire sweep has been circulated out.

FIGURE 2. Four acoustic network tools positioned along the drillstring provide information on mud sweeps during a horizontal drilling program.

The XACT AT network uses multiple openbore,

collar-based tools spread along the length of the drill
string. Each tool repeats the acoustic signal from the
tool below and also provides a location from which
measurement data can be captured, enabling real-time
measurements along the string. The network provides
fully calibrated outer diameter and ID pressure and temperature, torque, bending, tension, and compression
measurements. At surface, the acoustic data stream is
captured and decoded using a small accelerometer
package and then transferred wirelessly to a computer
positioned almost anywhere on location. The data can
then be distributed directly to users at the wellsite or
transmitted via the Internet to a web-based portal,
enabling data display and analysis by remote users.
This AT network technology has been deployed in more
than 400 wells in North America, where it has demonstrated robustness and reliability in a wide array of challenging environments, including underbalanced drilling,
air hammer applications, and long horizontal wells.
In addition to proven reliability, the network has
demonstrated extremely simple wellsite implementation,
with each downhole tool handled similarly to a standard
drilling tubular and installed within the string at preagreed locations while tripping in the hole (Figure 1).
The network is effective at any depth provided sufficient repeaters are deployed. Maximum tool spacing is
typically 1,525 m to 1,830 m (5,000 ft to 6,000 ft) in lowangle hole sections and 310 m to 915 m (2,000 ft to
3,000 ft) in lateral intervals. Each downhole tool can be
EPmag.com | Januar y 2013

93

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WATCH

FIGURE 3. Annular pressure sensors at each tool show the sweep as it migrates along the borehole to surface.

While the sensor responses clearly demonstrate the

ability to identify the location of an influx within the
borehole throughout its passage to surface, there are
several nuances of interest here:
The response of sensors one and two are synchronized in time despite being separated more than 520
m (1,700 ft) along the horizontal section of the well.
This is because the impact of the sweep is not seen
until it starts to contribute to the hydrostatic pressure (i.e., when it reaches the curve and starts to
move above sensors one and two vertically);
The sweep takes approximately five minutes to pass
both sensors three and four, consistent with what was
theoretically expected and strongly suggesting that
the sweep was very close to 60 bbl in volume and not
experiencing meaningful mixing or breakup as it
traveled along the annulus;
The sweep takes approximately eight minutes to
travel between sensors three and four, again consistent with what was theoretically expected and
strongly suggesting the borehole is in-gauge; and
EPmag.com | Januar y 2013

The equivalent mud weight impact of the sweep

drops slightly as it moves from sensor three to sensor
four, suggesting some minor volume of carried
solids has been lost between these points, although
overall solids carrying capacity remains largely intact
all the way to surface.
As this example shows, access to real-time distributed
data during drilling operations can enable a far greater
understanding of downhole conditions and events,
allowing decision-making based on fact rather than
assumption and ultimately reducing risk and improving
efficiency.

Great efficiency and lower risk

Field performance shows that advances in real-time
AT enable the transmission of data in high-noise
drilling environments independent of fluid type, fluid
flow, or water depth. The capability provides previously
unachievable wellbore visibility across a wide range of
drilling applications that improve drilling efficiency and
reduce risk in complex offshore environments.
95

tech

TRENDS

Gas monitor eliminates

water vapor interference
The PA4000 Photoacoustic Infrared Gas Monitor from
General Monitors eliminates interference from water
vapors when monitoring gas. It comprises a photoacoustic
infrared sensor to monitor gases including hydrocarbons,
solvents, alcohols, CO2, CO, and others. The gas monitor
eliminates cross-sensitivity to water vapor with a sensing
technique that determines the amount of water vapor in a
sample. It then subtracts those data from the gas reading,
allowing the final reading to be stable with no compromise to the sensitivity of the measurement. It is able to
operate for months without drift. The technology also can
be used by delivering a pressurized sample to the unit.
Depending on the specific configuration, the gas monitor
has a range of 0 ppm to 1,000 ppm and is accurate to
approximately 2 ppm of reading at 0 ppm to 100 ppm and
approximately 10% of reading from 100 ppm to 1,000
ppm. For certain gases it detects concentrations as low as
0.01 ppm. The monitor operates in a range of 0C to
50C (32F to 122F). It has a storage temperature range
of -55C to 70C (-67F to 158F). The technology has a
temperature effect of 0.03% per Celsius degree of reading and operates at a relative humidity range of 0% to
95%, noncondensing. generalmonitors.com.

Ball actuated frac sleeve provides 62 stages

The Super-Port ball-actuated fracturing sleeve from Peak
Completions provides operators with up to 62 independently treated stages using reduced increment ball seats. A
single ball is dropped for each stage, and hydraulic pressure shifts the sleeve open to expose stimulation ports.
The Super-Port maintains a true 10,000-psi differential
rating that offers a solution for stimulation and high frac
pressure capabilities, according to the company. The
Super-Port uses standard frac balls, which
maintain ease of millout and low costs.
By using the additional number of
large ball sizes, operators can significantly
increase the minimum inside diameter
(ID) of the system,
making it suitable
The Super-Port is available for openfor extended-reach
hole and cemented applications and
wells with high stage
for HP/HT wells. (Image courtesy of
counts, said the comPeak Completions)
pany. In addition, a
96

larger minimum ID reduces the pressure drop across

the system, providing more flexibility in operations.
peakcompletions.com.

Safety system can now

withstand high temperatures
Yokogawa Electric Corp.s ProSafe-RS R3.02.00 is its latest enhanced, safety-instrumented system that features
input/output modules that will operate reliably in hightemperature conditions, according to the company. The
ProSafe-RS helps prevent accidents by detecting abnormal conditions in plant operations and initiating emergency actions such as plant shutdown. The system can
be fully integrated and has been installed in more than
1,000 projects worldwide since its release in 2005. The
technology is primarily to be used in conditions typically
encountered in desert locations.
Conventional input/output models had to be mounted
far from each other to prevent the accumulation of heat
in already high temperatures. In the recent R3.02.00
release, the high-temperature resistant digital and analog
input/output modules can be mounted closely together
and can operate at ambient temperatures up to 70C
(158F), reducing the system footprint. To facilitate the
replacement of safety-instrumented systems and distributed control systems, the technology has Ethernet-based
Modbus/Transmission Control Protocol communications
with other systems for added support. yokogawa.com.

Updated data visualization platform includes

Matlab, seismic workbench plug-ins
INT has released the INTViewer 4.5 update to its data
visualization platform. INTViewer is a visualization solution for use on any Windows, Mac, Linux, or UNIX operating system and is designed for multiple environments
from laptops to workstations. According to the company,
it can be used as a framework for geoscientists who wish
to customize the application by adding proprietary plugins and utilities. The platform is GIGS-compliant to
ensure accurate map rendering. It also provides QC functionality such as enhanced trace header tools to extract
values into a horizon; create cross-plots or remap values;
enter mathematical formulas for well log curves, deviation curves, and markers; and provide more flexible trace
processors that are now grouped in one tab for convenience that can be applied multiple times with a customizable order of execution. Copies of horizons can be
created and manipulated, and 4-D horizons can be created from 3-D horizons. The 4.5 update introduces a Matlab plug-in that provides access to Matlab for processing
traces and executing Matlab scripts or programs plus a
Januar y 2013 | EPmag.com

tech

TRENDS

a valve actuation. It is equipped with standard data communication interfaces that make it suited to sensor and
underwater vehicle applications. According to the company, the cost of intervention is reduced and the availability of data for operational decision-making is
increased. wfs-tech.com.

Stators internal contours

minimize dimensional changes

Seismic attributes are computed in Matlab and displayed in

INTViewer. (Image courtesy of INT)

seismic workbench plug-in that provides integration to

script-based processing systems and open-source processing systems, including Seismic Un*x. int.com.

Subsea modem is mobile, wireless

The Seatooth S100, a mobile, wireless subsea modem
from WFS Technologies, can provide a digital wireless
communication link or logging device up to a 5-m (16ft) range in challenging deepwater conditions. It is suitable for a variety of underwater applications such as data
logging, upgrading subsea equipment, and wireless
backup from 100 m to 4,000 m (328 ft to 13,100 ft). The
subsea black box and subsea data recorder can integrate
wirelessly with subsea control modules and log 8 MB of
operational data. The technologys wireless backup can
initiate an alarm, an emergency disconnect sequence, or

The Seatooth S100 is tested in the Underwater Centres 1.5-mil-

The Moyno ERT Power Section, an even rubber thickness

stator from Robbins & Myers Energy Services Group, is a
stator developed with internal contours that are precisionmachined rather than hydraulically formed. The result is
an even thickness of rubber, which minimizes the rubbers
degree of dimensional change during use due to temperature, chemical attack, and loading, according to the company. Each lobe is supported with steel to ensure integrity.
The even rubber thickness design allows the tool to produce up to 100% more power output than conventional
stators, the company said, which translates to a higher
ROP. The tools design also allows the operator to use
shorter power sections with performance outputs, which
improves the motors directional response as well as MWD
and LWD measurement quality by placing sensors closer
to the bit. moyno.com.

Explosion-proof
camera unveiled
Oncam Grandeye has introduced the worlds first explosion-proof camera system for
360 surveillance. The Evolution ExD camera range has
been designed specifically for
operation in potentially explosive locations as well as in harsh
and hazardous environmental
conditions such as on an oil rig
or gas production facility. There A new dome design proare always risks associated with vides improved 360 imagelectrical devices because gases ing. (Image courtesy of
and sparks emitted on the rigs Oncam Grandeye)
can trigger an initial explosion,
which in turn may lead to further catastrophic explosions across the platform. The
explosion-proof camera system provides total situational
awareness and can be deployed in areas such as pipe
racks, valve and pump rooms, and engine/battery
rooms. oncamgrandeye.com.

lion-liter indoor seawater tank. (Photo courtesy of the Underwater Centre)

EPmag.com | Januar y 2013

Cody zcan, Assistant Editor

97

REGIONAL REPORT:
WEST AFRICA

Great expectations for West Africas

emerging frontiers
West Africa has been dominated by E&P activity in Nigeria and Angola. This heavyweight duo
has been the main target of development dollars from the majors and large independents for
years and will continue to attract the lions share in the near future but the tide is changing.
Mark Thomas, Senior Editor, Offshore

fricas west coast as a whole is getting serious competition from its east coast cousin, where a surge of
exploration success has resulted in giant gas discoveries
offshore Mozambique, Tanzania, and Kenya.
However, it is still mainly proven deepwater oil plays
with large associated gas resources that the west coast
can offer, along with an established logistical and supply
network. With the outstanding success of early fast-track
developments in countries such as Ghana led by independents Tullow Oil Plc, Anadarko Petroleum Corp., and
Ophir Energy Plc, an increasing number of new entrants
has been encouraged to join the party, tempted by the
open access and relatively attractive leasing terms.
This has fueled growing activity in previously underexplored acreage offshore Ghana, Gabon, Sierra Leone,
Liberia, Equatorial Guinea, and the Congo and also is

The Eirik Raude semisubmersible rig drilled the Fortuna West-1

discovery well offshore Equatorial Guinea, prompting operator
Ophir Energy to raise its area reserves estimate and push for a
fast-track LNG development. (Photo courtesy of Ocean Rig)

98

being increasingly driven by the analogies emerging

between the twin basins of West Africa and Brazil. The
potential for West Africas presalt and post-salt potential
to reflect the major success being enjoyed by Petrobras
and its partners in the Campos, Santos, and SergipeAlagoas basins is generating great expectations, not only
in the emerging countries but also in Angola and Nigeria.

Golden Triangle
West Africas role as one of the three points of the
Atlantic Oceans Golden Triangle is, of course, no new
occurrence. According to the latest research from analysts GlobalData, offshore oil and gas production from
the region has grown from 843.7 MMboe in 2001 to
1,564.2 MMboe in 2011.
Nigeria retains its role as the biggest producer with
output of 699.4 MMboe in 2011, accounting for 44.7%
of the total offshore output in West Africa.
GlobalData forecasted that offshore production is
expected to grow at an average rate of 3.8% between
2011 and 2020, from 1,564.2 MMboe in 2011 to 2,201.6
MMboe in 2020. It will hit 2,011.4 MMboe by 2015 due
to a number of major projects coming onstream in
Nigeria and Angola.
According to the analysts Deep Offshore Oil and
Gas Exploration and Production in West Africa to 2020
report, Angola remains the biggest source of new discoveries, accounting for 17 (36.2%) of the 47 discoveries
made in the region between 2009 and June 2012, with
operators such as Total and BP having outstanding success. After Angola, however, it is one of the newer kids
on the block Ghana that comes in second, with 11
discoveries recorded over the same period.
This is where one of the more adventurous companies
in the region has built its reputation. Tullows giant
Jubilee project in Ghanas deep waters has been a company-maker for the independent, with the development
viewed by many as a prime example of how to tackle a
major scheme in the emerging Gulf of Guinea.
Tullow partnered with fellow pioneers in the area like
Kosmos Energy and Anadarko to develop the field, which
Januar y 2013 | EPmag.com

REGIONAL REPORT:
WEST AFRICA

it described as satellite-class discoveries. In Cte

dIvoire, however, the company described the CI-103
Block where it made the Paon-1 discovery as having
TEN-type exploration potential. Paon-1 hit 31 m
(102 ft) of net oil pay.

Surrounding potential
The Kwame Nkrumah FPSO is now producing around 90,000
b/d from the Jubilee field offshore Ghana. (Photo courtesy of
Tullow Oil Plc)

is now flowing at around 90,000 b/d of oil after Phase 1

began flowing in late 2010. This is partly due to a successful acid stimulation program on certain problematic
wells, which helped raise output from 63,000 b/d earlier
in 2012.
The Jubilee Phase 1A development also is progressing
well, Tullow reported, with five of eight wells drilled, all of
which have encountered good quality reservoir. Capacity
production for the FPSO in the West Cape Three Points
Block is expected to be reached in the first half of 2013
as further Phase 1A production and injection wells come
online.

TEN plan submitted

Tullow and partners also submitted their plan of development to Ghanas Ministry of Energy in November for the
second major offshore project in Ghanas deep waters:
the Tweneboa, Enyenra, and Ntomme (TEN) complex.
The company said the development is being designed
with sufficient flexibility to allow both TEN resources and
nearby discoveries to be tied into the planned FPSO.
Following the recent Wawa discovery in the Anadarkooperated Deepwater Tano Block last July, an appraisal program is now being evaluated. Results also were expected
from the Okure exploration well to the south as E&P went
to press. The rig will then move to drill the Sapele exploration well to the southwest of Jubilee, completing the current exploration campaign on the block.
Although Tullow has other producing assets in the
region offshore Equatorial Guinea on the Ceiba field and
from the MBoundi field offshore Congo (Brazzaville), it
continues to look to extend its interests. The company
recently acquired a 40% stake and operatorship of a deepwater block in the Transform Margin offshore the republic of Guinea, where it plans to drill a well by April 2014.
Tullow also is continuing with its exploration program
offshore Sierra Leone, Liberia, and the Cte dIvoire. In
the first two countries, the company has proven an oil
and gas condensate system but has so far only found what
EPmag.com | Januar y 2013

Anadarko is keen to stress the continued exploration

potential around the TEN and Jubilee hub areas. Flagging
the Wawa discovery in its latest operations report, with the
find hitting 13 m (43 net ft) of light oil pay and 20 m (65
net ft) of gas condensate pay in Turonian-age reservoirs,
the company said pressure data indicated it is a separate
distinct accumulation from the adjacent TEN complex.
The company also highlighted a successful drillstem
test on the Akasa-1 well, demonstrating strong flow rates
of good quality oil. The results are being incorporated
into an evaluation of development options and further
appraisal plans for the Mahogany, Teak, Akasa, and
Banda (MTAB) complex adjacent to the Jubilee field in
the West Cape Three Points Block. A first phase of development for MTAB may well see it tied back to the existing
Jubilee field facility, although multiple scenarios including a standalone facility are also on the drawing board.
Another independent, Ophir Energy, is focusing mainly
on Equatorial Guinea and Gabon, where it said it has
defined significant new oil plays and prospects.
In Equatorial Guinea, the company is targeting a fasttrack LNG development. After successfully completing
a three-well drilling program in Block-R during 2012,
resulting in the discovery of an additional 1 Tcf of recoverable resources in the Fortuna West-1 exploration well
and increasing contingent recoverable resource estimates
to 3 Tcf, the company wants to proceed with a single LNG
train supplied by the Block R gas.
Fortuna West-1 was drilled by the Eirik Raude semisubmersible rig in a water depth of 1,758 m (5,768 ft) and
was the sixth gas discovery in the block, which Ophir
operates with an 80% stake.

West Africa: Forecasted offshore

facilities (2011 to 2020)
63 fixed concepts;
57 FPSO units;
2 tension leg platforms;
1 semisubmersible; and
10 other floaters
(concept not yet chosen).
(Data courtesy of Technip)

99

international
HIGHLIGHTS

For additional
information on
these projects
and other global
developments:

READ MORE ONLINE

EPmag.com

NORTH AMERICA
Guatemala exploratory well has oil and gas shows
In Block 1-2005 of the South Peten basin in Guatemala,
Citation Resources said that oil and gas flowed to surface
after shows were discovered at exploration well #4-Atzam.
According to the company, the shows were intersected
in the C14 and C15 carbonates, including more than
15 m (50 ft) in C14, which will be tested in the primary
reservoir zones once drilling is completed. The well has
reached 508 m (1,665 ft), and the rig is drilling toward the
next potential reservoir zone in the Cretaceous C13 sand
at about 549 m (1,800 ft). Citation is the operator of Block
1-2005 and the Atzam field with a 70% interest; Latin
American Resources has the remaining 30% interest.
Nova Scotia quartet for BP
BP has acquired four deepwater exploration blocks off the
coast of Nova Scotia, Canada. The UK major was confirmed
by the Canada-Nova Scotia Offshore Petroleum Board as
the successful bidder for Blocks 5, 6, 7, and 8 in the Call for
Bids NS12-1. The blocks cover an area of almost 14,000 sq
km (5,405 sq miles) and are located approximately 300 km
(186 miles) off the coast of Nova Scotia. Water depths
range from 100 m to 3,000 m (328 ft to 9,843 ft).

GULF OF MEXICO
ExxonMobil gets nod for sidetrack at Lucius development
ExxonMobil has permitted the second sidetrack of an
exploratory test at the offshore Lucius development.
According to IHS Inc., #1 (ST-2) OCS G32654 is set
to be kicked off at 4,452 m (14,605 ft) from a site in
the southeastern portion of Keathley Canyon Block 918.
The water depth in the area is 2,256 m (7,400 ft). The initial sidetrack was permitted to be kicked off at 4,495 m
(14,748 ft). ExxonMobil is also conducting another Lucius
test on neighboring Block 919. The #4KC OCS G21447
was last reported at 3,962 m (13,000 ft). The four-tract
Lucius development is operated by Anadarko Petroleum
Corp. and encompasses Keathley Canyon blocks 918, 919,
874 (OCS G26771), and 875 (OCS G21444). Anadarko
has an agreement with ExxonMobil to jointly develop
wells completed in the area.
100

LLOG permits Mississippi Canyon bypass test

North of the Mars field, LLOG Exploration Co. has
permitted a bypass of a test in the Mississippi Canyon
area. The #1 (ST/BP) OCS G28025 well is in Mississippi
Canyon Block 761. The permit indicates that the bypass
is expected to be kicked off at 5,253 m (17,233 ft) in 924
m (3,030 ft) of water. In September 2012, LLOG began
drilling a sidetrack. The original hole was drilled in early
2008 to 6,541 m (21,460 ft) in Miocene. The reentry
was outlined in a revised exploration plan; the original
exploration plan, filed in 2007, called for up to three
tests to be drilled from separate surface locations in
the northeastern part of the tract.

EUROPE
Eni discovers gas condensate in Barents Sea
Italys Eni has made a gas condensate discovery from
an exploration well in the Norwegian Barents Sea. The
#7220/10-1 well is on the Salina structure on the west
flank of the formations Loppa High. The discovery,
located in Block 7220/10 in PL533, reached 2,371 m
(7,778.9 ft) and has proven two gas columns in sandstone
of Cretaceous and Jurassic age. Preliminary calculations
made by the Norwegian Petroleum Directorate give a
range of gross discovered volume in the Salina structure
of between 176 Bcf and 247 Bcf of recoverable gas and
condensate. Eni is the operator of PL533, Block 7220/10,
and the discovery well with a 40% interest in partnership
with Lundin, holding 20%. RWE Dea holds a 20% interest, and Det Norske Oljeselskap also holds a 20% interest.
Providence releases Drombeg prospect estimates
Irish independent Providence Resources said its
Drombeg ultra-deepwater prospect in the southern Porcupine basin offshore southwest Ireland could hold up
to 872 MMbbl of recoverable oil reserves. The company
issued the P50 reserves estimate in a technical resource
update on Licensing Option 11/9 (Drombeg), in which
it holds an 80% stake as operator, with its partner being
Sosina Exploration (20%). Drombeg lies in a water depth
of 2,500 m (8,202 ft) and is 3,000 m (9,843 ft) below the
seabed, around 220 km (137 miles) offshore.

ASIA PACIFIC
Japex unlocks oil and gas find onshore Japan
Japan Petroleum Exploration (Japex) produced oil from
the Ayukawa field in Akita Prefecture, Japan. Current estimates indicate there may be about 5 MMbbl of recoverable oil. Japex acid-treated the Onnagawa shale at 1,800
Januar y 2013 | EPmag.com

international
HIGHLIGHTS

m (5,905 ft) and initially recovered 426 bbl of fluid with

57 bbl of oil. During a second test, the company recovered 843 bbl of fluid and 260 bbl of crude. At a site in
Niigata Prefecture, southeast of the oil discovery, Japex
also announced a gas discovery. An extension well, #1Katakai SK-29D, produced approximately 10 MMcf of gas
and 276 bbl of crude
Chevron strikes gas in greater Gorgon area
Chevron recently made another offshore western Australia completion. The greater Gorgon area exploration
well, #2-Satyr, is in the Carnarvon basin and confirmed
approximately 39 m (128 ft) of net gas pay in the WA374-P permit area approximately 120 km (75 miles)
northwest of Barrow Island. The well was drilled in 1,088
m (3,570 ft) of water to 3,796 m (12,454 ft). The #2-Satyr
is Chevrons 15th discovery in Australia since mid-2009.
Chevron is the operator of WA-374-P with a 50% interest,
while Shell and ExxonMobil each hold a 25% interest.
Crowning glory for Santos offshore western Australia
Santos Crown-1 exploration well, located in the Browse
basin offshore western Australia, has proven to be a
major deepwater gas discovery. The well in permit
WA-274-P is located approximately 500 km (311 miles)
north of Broome, approximately 60 km (37 miles) west
of the Ichthys field and 20 km (12 miles) east of the
Poseidon field. Wireline logging has so far confirmed
61 m (200 ft) of net gas pay in the Jurassic-age Montara,
Plover, and Malita reservoirs between 4,873 m and 4,998
m (15,988 ft and 16,398 ft), and the well has not intersected a gas-water contact, the operator said. The well is
being drilled by the Jack Bates semisubmersible rig in a
water depth of 440 m (1,444 ft). Santos holds 30% as
operator of WA-274-P with partners Chevron (50%)
and Inpex (20%).

MIDDLE EAST
RWE Dea discovery results from Nile Delta well
In Egypts Nile Delta, RWE Dea has confirmed a further
extension of the #1x-South Sidi Ghazy discovery at confirmation well #1-2-SSG on the Disouq project in the
South Sidi Ghazy structure. The #1-2-SSG well was
drilled to 2,833 m (9,295 ft) about 1.3 km (0.8 miles)
northwest of the discovery and confirms the extension
of the gas resources and Messinian (Abu Madi) reservoir
properties in a northwesterly compartment of the field.
The Disouq concession covers an onshore area of 5,375
sq km (2,075 sq miles) within the Nile Delta. It is operated by RWE Dea with 100% interest.
EPmag.com | Januar y 2013

Aramco makes gas field discovery in deepwater Red Sea

Aramco has a significant gas field discovery in the Saudi
Arabian deepwater sector of the Red Sea. According to
Oil and Gas International, a 5,395-m (17,700-ft) discovery well flowed 10 MMcf/d of gas during testing. The
discovery will be followed by additional wells on the
prospect to determine the size of the field. Aramco is
planning additional exploration in the Red Sea to
increase the Kingdoms oil recovery volumes from
50% to 70% over the next few years.

AFRICA
Genel moves deeper into Morocco
UK independent Genel Energy has expanded its
deepwater position off the coast of northern Africa,
snapping up a 75% stake in a frontier block offshore
Morocco. The company has become the operator of
the Mir Left Offshore Block after signing an agreement
with the Office National des Hydrocarbures et des
Mines, which will hold the remaining 25% stake. Genel
is initially obliged to acquire a minimum of 389 sq km
(150 sq miles) of 3-D seismic data and drill one well
during the first three-year exploration period. The
Mir Left Block lies next to the Sidi Moussa Offshore
Block in which Genel bought a 60% interest in
August 2012.
Chariot up and rolling with Mauritania shoot
Africa-focused independent Chariot Oil and Gas Ltd. is
underway with a 3-D seismic shoot offshore Mauritania.
The company said the survey in Block C19, a license it
acquired in April 2012 with a 90% working interest and
operatorship, is being carried out by Fugro-Geoteam
AS. The 3,500-sq-km (1,351-sq-mile) shoot will take
place in water depths ranging from 30 m to 2,000 m
(98 ft to 6,562 ft). The program is anticipated to take
90 days to complete.

SOUTH AMERICA
FPSO heads for Sapinhoa
BG Group said the Cidade de Sao Paulo FPSO system has
left the shipyard and is headed for the Santos basin offshore Brazil. The 120,000 b/d unit will head for the
Petrobras-operated Sapinhoa field following the integration of its hull and topsides at the Brasfels Shipyard in
Angra dos Reis, Brazil. The FPSO will head to the southern part of the field, where it will begin mooring and
hookup operations, with first production targeted for
early this year.
101

on the
MOVE

PEOPLE
Daniel Valot was elected to sit on
CGGVeritas board of directors on
behalf of the Fonds Strategique d
Investissement, having served as a
director of CGGVeritas since 2001.
John England has been selected by
Deloitte to lead its US oil and gas
sector. He will oversee the companys
professional services work in his
new role.
Exxon Mobil Corp. announced that
Donald D. Humphreys, senior vice
president and principal financial officer, will retire in February 2013. Having spent more than 36 years with the
corporation, Humphreys had also
served on its management committee
since January 2006.
During the Platts Global Energy
Awards, Antonio Brufau, executive
chairman of Repsol, earned CEO
honors. Royal Dutch Shell was named
the energy company of the year and
won a commodity excellence award
for natural gas. Commodity excellence awards also went to CNOOC
Ltd., Peabody Energy, and PJM Interconnection. Pierre Gadonneix won
the lifetime achievement award for
his work as an advisor and advocate
of green energy.

The Energistics Board of Directors

elected Eric Toogood, Diskos manager
for the Norwegian Petroleum Directorate, and Espen S. Johansen, Ph.D.,
vice president of Marketing and Commercialization Production and Completion Systems for Weatherford to
serve as members.

neering and Construction Ltd., an

Acteon company, where she will also
join the companys senior leadership
team.

George Leggate (right)

assumed responsibilities
as director of Glacier Energy
Services Wellclad well overlay
technology operation.

Prospectiuni SA selected Andrew Clark

as president. In his new role, Clark will
assume some of the responsibilities of
the current CEO and will manage the
companys daily business activity.

Paul Crute (left) was

appointed COO of
DownUnder GeoSolutions,
where he will oversee growth
objectives.
David E. Roberts Jr. has resigned
from his position as executive vice
president and CEO of Marathon Oil
Corp. During his time there, he contributed greatly to Marathons success
in the upstream sector.
Sapphire Energy Inc. announced that
Jeff Webster will assume responsibilities as COO, overseeing corporate
affairs, business operations, and project
development.

Senergy appointed
Rhys Medler
(top left) as vice
Jim Renfroe (left) has joined
president, Quality,
Expro International Group
Health, Safety,
Holdings Ltd. as a nonexecuSecurity, and Environment
tive director. He brings to
and Compliance. Dick Hall
the position over 39 years of experi(bottom left) has been
ence in oilfield services.
named Senergys Alternative Energy and Power Engineering
Carlos Martin (left) has
global coordinator. Tony Morton
taken the reins as director
(right) has been selected as Senergys
of HSEQ, Latin America, for global technical head, Power Systems.
Superior Energy Services.
With 25 years of experience, Martin
Jenny Bamford (left) has
will manage HSEQ programs across
been named vice president,
all company operations.
Commercial of Aquatic Engi-

102

R.S. Sharma was appointed by Lloyds

Register as chairman of operations for
Southwest Asia.

Brian Anderson (right) has

joined C&C Technologies
as the technical sales manager of autonomous surface
vehicles.
COOPER Valves named Doug R. Jones
as division manager of COOPER Quarter Turn Products.
SOR Inc. has tapped Lance Cooper as
its new pressure and temperature product manager.
The Oil and Gas UK Awards honored
Cyberhawk Innovations and Stork
Technical Services with first place in
the business efficiency category for
conducting the first offshore asset
inspection in the North Sea using a
remotely operated aerial vehicle.

EXPANSIONS
VAM USA plans to grow its connection
technology center, which serves Gulf of
Mexico and shale projects. VAM USA is
a joint venture between Vallourec,
Sumitomo Corp., and Nippon Steel
and Sumitomo Metal Corp.
Grinaker-LTA Nigeria changed its
name to Aveon Offshore Ltd. after a
successful acquisition by Nigerian
investors.

Januar y 2013 | EPmag.com

?P

on the
MOVE

MARKETING | SALES | CIRCULATION

Group Publisher
RUSSELL LAAS
Tel: 713-260-6447
rlaas@hartenergy.com

Associate Publisher
DARRIN WEST
Tel: 713-260-6449
dwest@hartenergy.com

United States
Canada / Latin America
1616 S. Voss Road, Suite 1000
Houston, Texas 77057 USA
Tel: 713-260-6400
Toll Free: 800-874-2544
Fax: 713-627-2546

Since Swire Oilfield Services established its Southeast Asian regional

headquarters in Singapore, the company has established an office in
Kuala Lumpur and new supply bases
in Malaysia and Maura, Brunei. The
company is currently completing new
operational support facilities in Karratha, Australia, as part of its Australasian operation.
Expro announced plans to open a
well intervention facility in Aberdeen,
Scotland. The new location will combine the companys cased-hole logging,
well intervention, wireline, and well
integrity services.

Regional Sales Manager

JULIE B. FLYNN
Tel: 713-260-6454
jflynn@hartenergy.com

United Kingdom / Europe

Africa / Middle East
Eden House
64-66 High Street
Chobham
Surrey GU 24 8AA, UK
Tel: 44 (0) 7930 380782
Fax: 44 (0) 1276 482806

InterMoor has expanded its presence

to Singapore with the opening of a new
mooring equipment yard at Loyang
Offshore Supply Base. The new loca-

tion will support the companys maintenance, preparation, mobilization, and

storage services.
Chesapeake Oilfield Services affiliate
Performance Technologies has relocated its corporate headquarters to El
Reno, Okla., with the opening of a new
facility.
QTEC International, an independent
oil and gas service company, has transferred to new offices in Aberdeen,
Scotland, to better accommodate its
growing workforce.
OFS Energy Fund and CSL Capital Management partnered with other investors
to acquire a majority interest in Rotary
Drilling Tools. The company serves the
downhole drilling sector by manufacturing and repairing drilling tools.

ADVERTISER INDEX

Baker Hughes Incorporated . . . 37

Fugro Jason . . . . . . . . . . . . . . . . . 61

Bluebeam Software, Inc. . . . . . . .19

Halliburton . . . . . . . . . . . . . . . . . . 6

Sales Manager
Eastern Hemisphere

Bourbon . . . . . . . . . . . . . . . . . . . .32

IPAA . . . . . . . . . . . . . . . . . . . . . . .90

DAVID HOGGARTH
Tel: 44 (0) 7930 380782
Fax: 44 (0) 1276 482806
dhoggarth@hartenergy.com

Cameron . . . . . . . . . . . . . . . . . . . 17

LAGCOE . . . . . . . . . . . . . . . . . . . .69

Carbo Ceramics . . . . . . . . . . . . . 23

MRC Global . . . . . . . . . . . . . . . . 28

CGGVeritas . . . . . . . . . . . . . . . . .59

Mewbourne College
of Earth & Energy . . . . . . . . . . . 11

Advertising Coordinator
CAROL NUNEZ
Tel: 713-260-6408
cnunez@hartenergy.com

Subscription Services
PO BOX 5800
Harlan, IA 51593
Tel: 713-260-6442
Fax: 713-840-1449
custserv@hartenergy.com

Checkers Industrial
Safety Products . . . . . . . . . . . . . 81
Dragon Products, Ltd. . . . . . . 42-45

National Oilwell Varco 13,26,63,75

Gardner Denver . . . . . . . . . . . . . .73

Oilfield Improvements . . . . . . . . . 4

GEFCO . . . . . . . . . . . . . . . . . . . . .71
Great Wall Drilling Company . . 30
E&P . . . .IBC,2-3,22,50,85,86-87,94

List Sales
MICHAEL AURIEMMA
Venture Direct
Tel: 212-655-5130
Fax: 212-655-5280
mauriemma@ven.com

EPmag.com | Januar y 2013

Momentive . . . . . . . . . . . . . . . . . 79

FlexSteel Pipeline
Technologies, Inc. . . . . . . . . . . .39
FMC Technologies . . . . . . . . . . . 83

Schlumberger . . . . . . . . . . . . . 5, BC
Spectrum Geo . . . . . . . . . . . . . . .60
TAM International . . . . . . . . . . IFC
Weatherford
International, Ltd. . . . . . . . . 20,21

Forum Energy Technologies . . . .49

WellEz Information
Management, LLC . . . . . . . . . . .47

Frontier Energy Group, Inc . . . . .46

Xplore Technologies . . . . . . . . . .51

October 2012 | EPmag.com103

last

WORD

The emperor has no clothes

Why are we often left naked by IT?
or working in Australia, users know on a daily basis that
coverage is not universal.
Here is the reasoning for advocating an HTML5 solution:
istory is littered with technologies that are hyped by IT
HTML5 coding skills are easily available in the market
as the next major wave with fabulous capabilities. They
as they are the same skills required in web developburn brightly for a few years until their lackluster performment, so at a large consultancy firm, the staff is already
ance becomes common conversation in the market. Their
trained;
enduring legacy is the end user who was saddled with a
Ongoing maintenance is easier since the HTML5 is
poor solution and has a heightened distrust of IT.
centrally controlled. If users have a change, they just
The common vendor example is the large and costly
update their servers, and that is what everyone now
enterprise resource planning system that took years to
sees. In contrast, a native app needs to be updated
install and is little better than the system it replaced. Howon every mobile device, which is much more work;
ever, the more acute examples come when the IT main HTML5 will be a standard one day, in contrast to
stream industry backs a technology set that turns out to be
developing on a vendors platform for mobile, which
inappropriate to the problem. So how can this happen? IT
is proprietary to that vendor. Skills for a specific venpeople are generally smart enough, so why do they laud
dor are not valued unless the vendor becomes marketsolutions that work so poorly? Often, it is because they
dominant in a significant category; and
insist on their selected solution when the business is ask HTML5 comes cheaply from current vendors, like
ing for something else. Let us look at a current example
scheduling or accounts, and though it is not a great fit,
ITs rapture with HTML5 as the universal answer to wireit is fully integrated so companies wont have to worry
less applications to see if it reveals any answers.
about setting up the connections between their legacy
systems and their mobile capabilities.
HTML5 vs. native wireless apps
For these reasons, it is easier for IT all around;
Apples success with apps is all about the
however, it is very unfortunate that the
app being local, or native, on the
end-user experience is poor and,
device. This approach allows strong
consequently, the business benefits
integration by the app with the device
achieved in the project are at risk.
features like the camera or GPS
But without a happy end user it
while also delivering good performwill always come to a bad end. The
ance and reliability irrespective
emperor is declared to have no
of wireless coverage.
clothes as the market moves to a
HTML5 apps assume that the
new entrant that has a different
Their enduring legacy is
user has coverage, and they do not
approach.
work with the camera or GPS feaIf one looks at the last decade
the end user who was saddled
tures of the device, have no local
with search engines, sales force
with a poor solution and has automation, or social media, the
data, and require the server or website to drive the app; this is just fine for
market behaved exactly like this
a heightened distrust
booking airline tickets but awful for the
brand vendors and IT pundits laying a
of IT.
technician fixing a dishwasher, the sales
roadmap that was unappealing to the end
representative making a call, or a nurse providuser, only to be overturned by a new entrant
ing home care services.
that breaks all the rules but is loved by its customers.
So why is the IT industry advocating the HTML5 route
The best IT shops are business- and end user-centric; we
as a universal solution when the underpinning assumption
need to applaud their courage at not just following the
that one is always in mobile coverage is demonstrably
pack. If a companys IT department is not in this league,
untrue? Whether driving down US Highway 101 in Silicon
the people at the top need to change their attitudes.
Valley, Calif., sitting in a restaurant in downtown London,
We all deserve clothes.
Mary Brittain-White, Retriever Communications

104

Januar y 2013 | EPmag.com

DUG CONFERENCES - The largest un con ventional resource eve nts in the world.

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CANADIAN UNCONVENTIONALS

DEVELOPING UNCONVENTIONALS

Hart Energy is once again proud to host our latest DUGTM Series
conference and exhibition. Together with the Canadian Society
for Unconventional Resources (CSUR), we will bring DUG
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impressive production gains. And classic oil-saturated reservoirs such as the Slave Point in the
Peace River Arch are in the midst of major rejuvenation.
Prese ithrd by:

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The 2ND ANNUAL DUG CANADA CONFERENCE AND EXHIBITION

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If your company is involved in Canada 's resource plays,or if you

UNCONVENTI NAL
OIL&GAS CE
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want to explore the opportunities in Canada now and into the

futu re, plan now to attend this conference .

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Sampling with 3D Radial Probe

Recovers Fluids from Tight Dolomite
Switching from an extralarge-diameter conventional sampling probe to the Saturn 3D radial probe,
an operator in the Middle East acquired fluids from a low-permeability dolomite at 6.5x the flow rate
and A of the drawdown to confirm mobile oil where openhole logs were inconclusive.
the case study at

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