MAY 2018 / DEFINING CONVENTIONAL, SHALE AND OFFSHORE TECHNOLOGY FOR OIL AND GAS / WorldOil.

com

EOR/IOR
Immiscible mixed gas
enhances EOR economics

WHAT’S NEW IN ARTIFICIAL LIFT

Part 1: Advances in beam/rod pumping,
linear lift, automation and control, etc.

SHALETECH: SCOOP/STACK
High-return Permian option thrives

REGIONAL REPORT:
LATIN AMERICA
The fragile market is pressured
 Tackle downhole problems

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© 2018 National Oilwell Varco | All Rights Reserved

 CONTENTS
MAY 2018 / VOL. 239 NO. 5

66 45 50

SPECIAL FOCUS: SAND CONTROL/SEPARATION COLUMNS

EOR/IOR 57 Reliable sand detection 5 First oil
helps to optimize separator Two struggling Lat Am producers
27 Immiscible mixed gas face tipping point elections
enhances EOR economics, efficiency, prevent costly
shutdowns 11 Energy issues
increases permeability Distraction reaction
in swelling clays M. Williams
13 What’s new in exploration
P. Trost / J. Wright Exploration is back on the table
32 Recovery improved in a INTERVIEW: STEPHEN CHAZEN
15 Drilling advances
brownfield heavy oil well, 60 Former Oxy chief assembles Multi-tasking, shale-style
using inflow control new Texas-based powerhouse 17 What’s new in production
technology operator Hand in glove
I. Ismail 19 Oil and gas in the capitals
G&G TECHNOLOGY Deliberate E&P obstruction
ARTIFICIAL LIFT in the South China Sea
62 Satellite/aerial imaging
37 What’s new in artificial lift? identifies structural anomalies 21 Water management
and presence of hydrocarbons The key to aeration
J. Woods / J. Flea
in oilfield water management
J. Combs / J. Drizin
O. Yatsuk 23 Executive viewpoint
FLOW ASSURANCE Energy service sector:
45 A practical approach to Time to repair the roof?
REGIONAL REPORT:
fluid integrity management 78 The last barrel
LATIN AMERICA
in secondary recovery Appalachian basin fulfills destiny
L. Roberston
66 Is Latin America’s
fragile market cracking NEWS AND RESOURCES
under pressure?
SHALETECH: SCOOP/STACK 8 World of oil and gas
E. Querubin
50 Flagships, spinoffs deliver 25 Industry at a glance
high-return Permian option 72 People in the industry
J. Redden 73 Companies in the news
74 New products and services
ABOUT THE COVER 75 Advertisers’ index
Liberty Lift’s high-efficiency (HE) 912 beam
pumping unit is installed on a well in the 76 Marketplace /
Bakken shale play of North Dakota. Photo by Advertising sales offices
Jim Blecha, courtesy of Liberty Lift Solutions. 77 Meetings and events

World Oil®!/!MAY 2018!3

 Mailing Address: PO Box 2608
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Phone: +1 (713) 529-4301
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WorldOil.com

PUBLISHER Andy McDowell

EDITORIAL
Editor Kurt Abraham
Technical Editor Craig Fleming
Associate Editor Emily Querubin
News Editor Michele Cowart
Contributing Editors
Dr. A. F. Alhajji, Middle East
Dr. Roger Bezdek, Washington
Ron Bitto, Offshore
David Blackmon, Reg. Affairs
Robert Curran, Canada
Bill Head, Exploration
Don Francis, Production
Raj Kanwar, South Asia
Saeid Mokhatab, LNG
Dr. Jeffrey M. Moore, Asia-Pacific
Mauro Nogarin, Latin America
Dr. Øystein Noreng, North Sea
Mark Patton, Water Management
Dr. William J. Pike, Energy Issues
Jim Redden, Drilling
Dr. Jacques Sapir, FSU
Mike Slaton, At Large
Russell Wright, At Large

MAGAZINE PRODUCTION / +1 (713) 525-4633

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Chairman—Dr. William J. Pike, Principal Scientist, KeyLogic, Inc., and Contractor
to the National Energy Technology Laboratory, U.S. Department of Energy
Ben Bloys, Manager, Los Alamos Technology Alliance, Chevron
Dr. DeAnn Craig, Consultant
Dan Domeracki, Vice President, Government and Industry Relations, Schlumberger,
and Chairman, Petroleum Equipment and Services Association
Deepak M. Gala, SME, Well Control Engineering and Relief Well Planning, Shell
John Gellert, CEO, SEACOR Marine Holdings, and Chairman, National Ocean
Industries Association
Alexander G. Kemp, Professor of Petroleum Economics, and Director, Aberdeen Centre
for Research in Energy Economics and Finance, University of Aberdeen
Trent Latshaw, President, Latshaw Drilling Co. LLC, and member,
IADC Executive Committee
Keith Lynch, Wells Operations Advisor—Unconventional Assets, ConocoPhillips
Dr. D. Nathan Meehan, Vice President, Baker Hughes Incorporated, and Managing
Director, Gaffney-Cline & Associates
Douglas C. Nester, Consultant
David A. Pursell, Senior Vice President, Planning and Energy Fundamentals,
Apache Corporation
Art J. Schroeder, Jr., CEO, Energy Valley, Inc.
Svein Tollefsen, Manager, Reservoir Technology, Statoil
Doug Valleau, President, Strategia Innovation and Technology Advisers, LLC
Robert E. (Bob) Warren, President, Baclenna, Inc.

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4!MAY 2018!/!WorldOil.com

Two struggling Lat Am producers
face tipping point elections
The fates of two venerable producing
countries’ E&P sectors hang in the balance,
as national elections approach. In Venezu-
ela and Mexico, those elections will be on
May 20 and July 1, respectively. The out-
look in both countries is not good.
Venezuela. In what may be an all-time
sham election, President Nicholas Maduro
faces voters for a second time after being
elected in April 2013 to succeed the late,
former President, Hugo Chavez. Maduro
has carried on Chavez’s legacy for five years
with unbridled corruption. He should be a
shoe-in, as Maduro ensured that his only
opponent is a former “Chavista” named
Henri Falcón. Yet, as one commentator
at conservative e-zine, American Thinker,
noted so brilliantly, “Maduro rigged his
country's election, and is now terrified it's
not rigged enough.”
During Maduro’s tenure, Venezuelan
oil production has gone from 3.0 MMb-
pd in 2013 to a mere 1.9 MMbpd during
2017. And April output plummeted to 1.5
MMbpd. It’s no surprise, given that main-
tenance of fields has been minimal. And
it hasn’t helped that Maduro, over the last
year, has arrested 65 PDVSA officials and
managers, plus the former oil minister,
for alleged corruption. That’s pretty rich,
considering that Maduro is the ultimate
source of the corruption. We’ve heard
rumors in Houston recently that Venezu-
elan officials are talking to U.S. and Euro-
pean operators about keeping or bringing
back a presence in the country, to help
rebuild oil production. Yet, on April 16,
two Chevron employees were arrested
by Maduro’s thugs for potential “treason.”
That’s a hell of a way to encourage opera-
tors to stay in Venezuela.
Mexico. Most of the upstream indus-
try seems to think that Mexico’s four-year-
old “opening” of its E&P sector is going
fairly well, despite some bureaucratic fail-
ings. Indeed, at an Offshore Technology
Conference (OTC) topical breakfast on
May 3, a Pemex official outlined the vari-
ous plans and initiatives that the firm has
for encouraging further participation by
FIRST OIL
KURT ABRAHAM, EDITOR
foreign operators and building back oil
production. Yet, the unmentioned big el-
ephant in the room was the fact that op-
position leftist candidate Andres Manuel
Lopez Obrador is likely to win Mexico’s
July 1 presidential election. As of May 3,
a poll showed that he held 39% of voters,
with two other principal candidates pull-
ing just 25% and 14%.
If Lopez Obrador wins, he has pledged
to review more than 90 contracts signed
since the opening, and maybe scuttle any
or all of them. That won't help Mexico’s
oil output, which has gone from 3.10
MMbpd in 2007 to 1.96 MMbpd in 2017.
Observations from OTC. You
wouldn’t know from visiting the 50th OTC
in Houston early this month that the off-
shore industry is still depressed. An air of
optimism pervaded the OTC show floor.
Most people felt that the offshore sector is
transitioning toward a good 2019.
Plenty of technological innovation
was on display, as so often happens when
the industry is pulling out of an activity
trough. And circulating among many of
the technologies displayed was the theme
of digital transformation—its presence
cannot be overstated.
This being the 50th OTC, several com-
memorative sessions took place, includ-
ing a special look at OTC’s history on the
first day. Among that session’s four speak-
ers was our company’s retired Chairman,
President and Editorial Director, Bob
Scott, who was also editor of World Oil
from 1967 into 1984. Bob presented an
intriguing, humorous look at a number of
characters and funny moments that have
graced OTC over the years.
Ironically, preliminary figures show
that attendance was down this year, at
61,300. This compares to 64,765 in 2017;
68,054 in 2016; 94,880 in 2015; and the
record 108,300 of 2014.
Last but not least, our parent firm,
Gulf Publishing Company, has changed
its name after 102 years. Please see the
full announcement and explanation on
page 7.
IN THIS ISSUE
27 Immiscible mixed gas en-
hances EOR economics. As
explained by two veteran professionals,
geochemist Paul Trost and petroleum
engineer John Wright, a mixed-gas (CO2,
N2, CO) is uniquely applicable for increas-
ing matrix permeability and enhancing oil
recovery rates. It also decreases the Mcf/
bbl ratio and increases the mobilization
of asphaltenes while operating at immis-
cible conditions. Testing shows that it is
of benefit for shale oil EOR, heavy oil re-
covery, enhanced waterfloods and CO2-
type floods.
37 What’s new in artificial
lift, Part 1. In this first of two
monthly reports, long-time contributors
Joe Woods and James Lea review signifi-
cant changes in the artificial lift industry
among companies, as well as new prod-
ucts. They highlight innovations in beam/
rod pumping, linear lift units, automation
and control, and more. Among the com-
panies with equipment profiled in this
section are BHGE, Lightning Production
Services, Forland Services, Production
Plus Energy, Schlumberger, Zedi, Lufkin
(BHGE), Comorant Engineering and
Black Jack Production Tools.
50 ShaleTech: SCOOP and
STACK plays. Unveiled by
their initial operators, Continental and
Newfield, the SCOOP and STACK plays
of Oklahoma are becoming a high-return
option for operators that don’t want to
deal with the Permian basin’s more ex-
pensive requirements. As Contribut-
ing Editor Jim Redden notes, operators
are seeing even more productivity from
these high-performing wells, now that
lawmakers have allowed the drilling of
longer-reach horizontals, to well beyond
one mile.
" KURT.ABRAHAM@WORLDOIL.COM
World Oil®!/!MAY 2018!5
 MARKET INTELLIGENCE

UPSTREAM

MIDSTREAM

DOWNSTREAM

BUSINESS STRATEGY

INFRASTRUCTURE

formerly

Learn more about the new Gulf at:
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 P. O. Box 2608, Houston, Texas 77252-2608, USA!|!Phone: +1 (713) 529-4301!|!GulfEnergyInfo.com

Welcome to the New Gulf Energy Information

Dear Reader,

Gulf Publishing Company has its roots in Spindletop, which launched the Texas oil boom
at the beginning of the 20th century. The company started as The Gulf Coast Oil Reporter of
Beaumont, Texas, and moved to Houston, Texas in 1916 when the publication was purchased
by the Dudley family. Over the decades since, Gulf Publishing Company—a name synonymous
with quality, integrity and technical excellence—has been venerated throughout the oil and
gas business, first in the United States, and then in the 1950s around the world as the company
expanded its audience base outside North America.

Today, Gulf Publishing Company is much more than a traditional publishing house. While
the name Gulf Publishing Company bears a rich history and is a source of great pride for our
employees, it no longer reflects the full breadth of the media, market intelligence and events we offer to our global customer
base. Our market-leading brands—Petroleum Economist, World Oil, Pipeline & Gas Journal, Hydrocarbon Processing, Gas Processing
& LNG, Pipeline News and Underground Construction—serve their markets with traditional print publications as well as digital
media that leverage large audiences across the upstream, midstream, downstream, business strategy and infrastructure markets.

Within these brands, our events bring our global audiences—both print and digital—and advertisers together for learning,
networking and business development. Moreover, we recently expanded our market intelligence offerings to the international
energy industry through the Energy Web Atlas (EWA), a mapping and data service that provides both granular and regional
insights into global LNG, gas processing, pipelines and renewables. Downstream project data, delivered through Hydrocarbon
Processing’s Construction Boxscore Database, will be incorporated into the EWA platform later this year, giving users access to
greater functionality and a wider breadth of project and infrastructure data.

So, it’s time to change the name of Gulf Publishing Company to better describe who we are today, and who we will be in the
future. As of May 1, 2018, Gulf Publishing Company is Gulf Energy Information. Gulf Energy Information will continue to
serve its global readers through outstanding content delivered through our traditional media, and increasingly through various
digital platforms. Coupled with strategic market insight, these offerings will help our readers and customers do their jobs better.

From our offices in London and Houston, Gulf Energy Information will continue to move the industry forward, delivering
reliable information and intelligence—across many platforms—for decades to come.

John Royall
President/Chief Executive Officer
Gulf Energy Information

World Oil®!/!MAY 2018!7

 WORLD OF OIL AND GAS
EMILY QUERUBIN, ASSOCIATE EDITOR

BUSINESS /////////////////////////////////////////////////////////////////////////////////

Gulf Publishing Company rebrands Oil majors report robust

to Gulf Energy Information
Gulf Publishing Company,
publisher of World Oil, has
rebranded to Gulf Energy
Information (Gulf) to better
reflect the scope of its offerings across the upstream, midstream
and downstream sectors of the international oil and gas industry. In
addition to World Oil, the company’s market-leading brands include
Hydrocarbon Processing, Petroleum Economist, Pipeline & Gas Journal,
Gas Processing & LNG, Underground Construction and Pipeline News.
Each brand serves its market through print publications and digital
media outlets. Additionally, the company’s market intelligence offer-
ings now include the Energy Web Atlas (EWA), a mapping and data
service that provides both granular and regional insights into global
LNG, gas processing, pipelines and renewables. The comprehensive
corporate rebrand includes a new corporate logo, website (www.
gulfenergyinformation.com) and mission statement (See page 7). “Gulf
will continue to serve its global readers through outstanding content
delivered through our traditional media, and increasingly through
various digital platforms,” said John Royall, president and CEO of Gulf.
“Gulf will continue to move the industry forward, delivering reliable
information and intelligence—across many platforms—for decades to
come. Coupled with strategic market insight, these offerings will help
our readers and customers do their jobs better.”
first-quarter earnings
Oil majors—including Statoil ASA, Royal Dutch Shell, Total, ExxonMobil
Corp., Chevron Corp. and BP Plc—presented first-quarter earnings
during the last week of April, disclosing some of the best quarterly
results seen in years. Statoil posted its highest net income since 2014,
before the industry downturn took hold. Its adjusted net profit report-
edly rose to $1.47 billion from the $1.11 billion it posted the year prior.
Shell reported an adjusted net income of $5.32 billion last quarter, up
from the $3.75 billion posted a year earlier. Similarly, Chevron posted
a first-quarter net income of $3.6 billion, compared to the $2.7 billion
reported in 2017. The earnings of both Shell and Chevron surpassed
analysts’ expectations. BP reported its highest first-quarter earnings
since 2014, as well. The company posted an adjusted net income of
$2.59 billion, which was considerably higher than analysts’ estimates
of $2.12 billion. Despite the impact of a massive earthquake in Papua
New Guinea that cost the company about $80 million, ExxonMobil
also posted an increase in first-quarter earnings. It reported earnings
of $4.7 billion, up from the $4 billion posted during first-quarter 2017.
Total also reported an increase in adjusted net income. The company
posted a net income of $2.9 billion, up from the $2.6 billion posted in
first-quarter 2017. Prolonged spending discipline and strong demand
reportedly explain the majors’ increase in net income, cash flow and
production rates. Additionally, Total reportedly pumped a record
amount of oil and gas during the first quarter, reaching more than 2.7
MMboed. This is a 5% increase over last year.

PRODUCTION /////////////////////////////////////////////////////////////////////////////
Iran exports
soar amid U.S.
sanctions threat
Before U.S. President Trump’s
decision to take America out of
an international agreement that
limits Iran’s nuclear activities, in
exchange for a reprieve from oil
sales restrictions, Iran had ramped
up its crude exports to a record
high in April. Since the alleviation
of sanctions in January 2016,
OPEC’s third-largest producer had
nearly doubled its crude output.
Accordingly, its crude exports
reached 2.61 MMbpd last month,
beating its previous record of 2.44
MMbpd, which was set in October
2016. According to Bloomberg
data, overall observed shipments
of crude and condensate rose
to 2.83 MMbpd in April, from
2.48 MMbpd in March. However,
this reportedly coincided with a
4-MMbbl drawdown from offshore
storage tankers. Although
President Trump called the U.S.-
Iran accord “a horrible agreement
for the United States,” he also
said that doesn’t mean he would
be opposed to negotiating a new
agreement. Trump’s decision on
May 8 to exit the nuclear deal
means that Iran’s output could
suffer as much as a 500,000-
bopd decline by year-end.
OPEC weighs deeper cuts,
as it faces latent supply conundrum
OPEC and its allies have worked tirelessly to reduce an interna-
tional oil glut through production cuts instigated in early 2017.
Although the deal officially expires at the end of this year, OPEC
has signaled that output restrictions could be extended into
2019. Russia reaffirmed that it is “fully committed” to the deal in
early May, despite a two-month breach of its production target.
However, the over-production will likely be counterbalanced by
the stark output decline of OPEC members including Venezuela
and Angola. The output curbs have nearly eliminated surplus oil
inventories amid a three-year high in oil prices; however, trepida-
tion is already being conveyed regarding future supply. Saudi
Arabia reportedly is urging fellow producers to continue practic-
ing output restraint to encourage investment in future supply.
According to Rystad Energy, however, the industry is already on
track to deliver the extra output needed to meet future demand.
“Over the next 10 years, we see that supply will continue to keep
up with demand growth,” Espen Erlingsen, a Rystad analyst told
Bloomberg. “The surge in North American shale activity and
startup of new fields are the main drivers for this growth.” At
a recent OPEC meeting, Saudi Arabian Energy Minister Khalid
Al-Falih reportedly said that there needs to be an additional
4-to-5 MMbpd in oil-production capacity each year to meet future global demand. Accordingly, OPEC now
risks narrowing world markets too much, sending prices to levels that either impede oil demand or incite a
new wave of supply from the U.S. Photo: OPEC.
American gas supplies see biggest expansion since 2015
Mounting natural gas production has inflated U.S. stockpiles even further. In early May, Bloomberg reported
that national gas supplies climbed by 90 Bcf, the most seen in three years. After a particularly cold month
in April, U.S. gas supplies are approximately 28% below the usual amount for this time of year. On April 27,
gas inventories stood at 1.343 Tcf. Analysts and traders reportedly are keeping a watchful eye on any U.S.
storage fluctuations, as they may help anticipate whether supply will overtake demand and send prices on a
downward spiral. Stephen Schork, president of consulting company Schork Group, told Bloomberg that “the
make-or-break point in the market is going to occur within the next two reports.”

8!MAY 2018!/!WorldOil.com
 WORLD OF OIL AND GAS ...
EMILY QUERUBIN, ASSOCIATE EDITOR
FRAC BALLS
DISCOVERIES/DEVELOPMENTS ////////////////////////////// With
Shell takes FID for Vito development in deepwater GOM
Shell Offshore Inc. (operator, 63.11%), a Shell
Attitude!
subsidiary, announced a final investment decision
(FID) for the Vito development, about 150 mi
southeast of New Orleans, in the U.S. Gulf of
Mexico (GOM). According to the company, the
decision—which has a forward-looking, break-
even price estimated at less than $35/bbl—will
advance the construction and fabrication of a new,
abridged host design and subsea infrastructure.
In 2015, the company started a redesign of Vito,
which reportedly reduced cost estimates by more
than 70% from the original project plan. The cost
savings are said to be a direct result of a more
simplified design, as well as more collaboration with vendors on concepts including well design “Good bye…”
and completions, subsea, contracting and topsides design. Vito, which is Shell’s 11th deepwater
host in the GOM, is scheduled to start producing in 2021. With estimated recoverable resources
of 300 MMboe, the development is expected to reach peak production of about 100,000 boed.
Statoil is the company’s project partner, with a 36.89% stake. Image: Shell.

Eni strikes oil in Egypt’s Faghur basin

Eni’s SWM A-2X exploration well struck oil in the Southwest Meleiha license. The well—situated
approximately 64 mi north of Siwa, in the Egyptian Western Desert—is the company’s first well
drilled to explore the geological structures of the Faghur basin. Drilled to a TD of nearly 16,700
ft, the well encountered 59 ft of light oil in the Paleozoic sandstones of the Carboniferous-age
“So long…”
Dessouky formation. The well delivered 2,300 bpd of light oil and 0.4 MMscfd of associated
gas. According to Eni, which holds a 100% stake in the license, development and appraisal of
the discovery may bring about drilling of other exploratory prospects in the region, and open
up a new productive area in Egypt.

Statoil begins offshore SDX Energy finds more natural

mobilization for hook-up,
completion of Johan Sverdrup
Statoil has reported the start of the offshore
mobilization of the giant Johan Sverdrup field,
in the North Sea. According to the company,
approximately 150 people, plus crew from
ProSafe, set sail on the floating accommoda-
tion vessel Safe Zephyrus early this month.
These crew members will work to finalize the
riser platform, the field’s first topside to be
installed. Soon thereafter, preparations for
hook-up will begin for the drilling platform.
The next topside is scheduled to arrive in early
June. Following installation of the first two
platforms, the accommodation jackup vessel
Haven reportedly will join Safe Zephyrus to
increase bed capacity to nearly 900 during
the hook-up and finalization phases. This will
enable three shifts of up to 2,400 workers
from Statoil and its suppliers to be based at
the field. Johan Sverdrup is anticipated to
start production late next year. Photo: Anette
Westgård, Woldcam/Statoil.
gas in Morroco
SDX Energy reported a gas discovery after
drilling the LNB-1 exploration well on Morocco’s “Adios…”
Lalla Mimouna permit. The well was drilled to a
TD of approximately 6,105 ft, encountering 984
ft of gas-bearing horizons. According to the
mudlog obtained through a significantly over-
pressured section, gas readings were elevated
more than 20%, with some sections above 50%.
SDX says that the gas shows are symptomatic
of a thermogenic hydrocarbon source rock, “See ya…”
which has not yet been seen in other parts of
the basin. Accordingly, the shows indicate that
a new petroleum system has been unearthed.
An unrisked, mid-case volume of about 33.4
ft of net conventional natural gas and 55,000
bbl of condensate has been estimated, based
on the mudlog shows, reservoir quality JOIN THE
information from the formation cuttings,
analogue fields, and the size of the mapped
feature. According to the company, the well
DISSOLVING
is now being completed as a conventional
gas producer in the Upper Dlalha, while the
FRAC BALL
deeper Lafkerena section is suspended until
the appropriate equipment can be mobilized to REVOLUTION
test the over-pressured section. SDX President
and CEO Paul Welch said, “ We are very excited
about the results of this exploration well. It
was a higher-risk exploration prospect than
previous drilling in Sebou, as it was a sequence
that had not been previously penetrated in a
similar structure location. We had anticipated
a higher-pressure section, based upon offset
drilling in the area, but the actual pressures www.dissolvalloy.com
encountered, the thickness of the section, and
the type and amount of shows, significantly (713) 766-3680
exceeded our expectations.”

World Oil®!/!MAY 2018!9

 BOOK
YOUR STAND
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The entire energy industry

will be there to do business.
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www.ons.no

DR. WILLIAM J. PIKE, EDITORIAL ADVISORY BOARD CHAIRMAN
Distraction reaction
Not that many months ago, I wrote
about bots, particularly chat bots, that are
evolving as a threat to our day-to-day op-
erations. An integral part of Artificial Intel-
ligence (AI), these robots, which control
many processes in our daily lives, appear
to have developed the ability to commu-
nicate beyond our understanding, in their
own languages. This could be the scenario
of many a Sci Fi movie, in which robots
take over the earth. While this may be a bit
far-fetched—at the moment—the threat is
real, according to more than a few pundits.
It’s all around you. If this threat
doesn’t worry you, take a look at your
children or grandchildren. If they are
like most, including mine, their focus is
squarely on their connection to an elec-
tronic world accessed through smart
phones. On second thought, don’t worry
about your children. Just mind the road
when you drive because the chances
are that someone (often a lot more than
someone) in your proximity is in his or
her own electronic world and impervious
to the dangers of the surrounding traffic.
But I may have been premature, over-
reactive or even unfair in my assessments.
AI is also ripe with benefits. According
to Noah Zandan, writing for Quantified
Communications (https://www.quan-
tifiedcommunications.com/blog/artifi-
cial-intelligence-in-communication), “Al-
though the term may still conjure up sci-fi
images of robots gone rogue, AI, as it is
often called for short, is actually far less
terrifying. With the development of AI,
computer systems can complete or aug-
ment tasks that would require human in-
telligence—at a much larger scale than we
could on our own—in fields that include
speech recognition, visual perception and
decision-making.”
That may be selling the issue a bit short
though, as Matt Chessen, Senior Technol-
ogy Policy Advisor at the U.S. Depart-
ment of State, noted in a paper posted on
the Atlantic Council website. He said in
2017 that machine-driven communica-
tions tools are a reality now, and artificial
ENERGY ISSUES
intelligence-enabled tools will soon dom-
inate the online information space.
“This paradigm shift isn’t limited to ar-
tificial personal assistants like Siri and rec-
reational chatbots like Xiaoice,” contin-
ued Chessen. “It refers to machine-driven
communication overwhelming Face-
book, Twitter, YouTube, Match, Reddit,
chat rooms, news site comment sections,
and the rest of the social web. All of it will
be dominated by machines talking. This
machine communication will be nearly
indistinguishable from human commu-
nication. The machines will be trying to
persuade, sell, deceive, intimidate, ma-
nipulate, and cajole you into whatever
response they’re programmed to elicit.
They will be unbelievably effective.”
What does this all have to do with
us and the upstream industry? We, of
course, are as vulnerable as anyone else,
even though very sophisticated protection
systems are in place in a good deal of the
industry. I believe, given this, that the solu-
tion lies in direct communication between
real people. It’s getting more difficult, but it
is getting much more important.
As an example, I belong to SPE’s Drill-
ing Digest group. That program creates
a safe (as safe as you can get) digital plat-
form for the exchange of information and
ideas (from well control to bit recommen-
dations) between drilling folks. Even bet-
ter—hold your technical and professional
conversations with real people, face to face.
Next week, I am headed to the Off-
shore Technology Conference in Hous-
ton. I used to go to catch up on all of the
new technology. It’s a great place to do
that. But, more recently, I have attended
to exchange ideas and opinions in a face-
to-face environment. Sure, the technolo-
gy is valuable but the insight provided by
conversations with colleagues, industry
experts and new friends is invaluable. The
same can be said for SPE’s Annual Techni-
cal Conference and Exhibition, or similar
conferences sponsored by SEG, NOIA,
IADC or any of the numerous other pro-
fessional societies.
Need something a little less expensive
and a bit closer to home? Try the monthly
meetings of your local chapter of the larger
organizations, such as the Houston Chap-
ter of SPE. Whatever the venue or what-
ever the method, try to connect with other
professionals personally. Their knowledge
and insights could be the most important
information you receive and/or a solution
to your most pressing problems. It looks
like you can’t avoid the AI world, but you
can check out long enough to touch base
with reality and the people in it.
I’ve been there. Recent news in the
industry has taken note of the rise of the
Permian basin to new heights. A good
part of my career was spent there. In the
late 1960s and early 1970s, the area was
struggling after impressive post-WWII
production numbers. Most of the fields
I worked in were populated with stripper
wells. One field produced about 1,600
bopd from 500-plus wells. Sure, we knew
something about the shale formations
back then, but not how to produce them.
Now, the Permian shale play is all about
setting records. The region will probably
become the world’s largest oil patch over
the next decade. Output in the basin is
forecast to reach 3.18 MMbopd in May,
according to EIA. That’s the highest since
the agency began compiling records in
2007. “Technology is the biggest driver,”
said Rob Thummel, managing director
at Tortoise, which handles $16 billion in
energy-related assets. “The basin, in and
of itself, could end up being the largest oil
field in the world." By contrast, top-pro-
ducing members of OPEC, such as Iran
and Iraq, pump less than 5 MMbopd. Iran
produced about 3.81 MMbopd in March,
according to data compiled by Bloom-
berg. “If the Permian was part of OPEC, it
would be the fourth-largest OPEC mem-
ber, right behind Saudi Arabia, Iran and
Iraq,” Thummel said.
" PIKE.WILLIAM@ATT.NET / Bill Pike has 50 years’ experience
in the upstream oil and gas industry, and serves as chairman of the
World Oil Editorial Advisory Board.
World Oil®!/!MAY 2018!11

WILLIAM (BILL) HEAD, CONTRIBUTING EDITOR
Exploration is back on the table
Rising oil prices, along with shale be-
ing over-extended, and world reserves de-
clining, are requiring companies to look
to exploration again. The U.S. tax cut bill
gives new hope to the Arctic. And, look
at exploration’s future being discussed at
this year’s OTC, finally!
BP—after spending tens of billions of
dollars in liability on one flowing explo-
ration well—and Petrobras—a long-time
leader in deep water exploration—have
agreed to work together, to combine mon-
ey and talent to further explore Brazil,
which seems to be better-wired for invest-
ment than they were just a few months
ago. This is encouraging, but I remember
getting nationalized by them in 1986.
We drill thousands of feet deep, aiming
from a spot at the surface precisely mea-
sured to the “foot” from a satellite map
to somewhere X,Y, Z in the sub-surface.
We believe we have a TD location, but it
often was determined with reflection seis-
mic technology, capable of plus or minus
500 ft, x, y down there, and Z of no better
than 20 ft, approximated from a theoreti-
cal 100-ft derivation. Drilling surveys tell
us you never TD from a true vertical posi-
tion off your map— that is normal.
You convince yourself that you know
more about the bit destination, only be-
cause sample theory statistically beats sig-
nal theory. CDP, 2D/3D, surfaces, “events”,
“faults”, migrations—time or depth—are
only theoretical positioning methods, sta-
tistically visualized for interpretation back
to some better geologic understanding. Do
you think it’s time to go back and resurvey
those almost-successful producers and
near-miss discoveries? The shale guys did.
Great progress. My point is look at
what advancing 3-D versus 2-D has accom-
plished. We miss this significance today,
when we extract a 2D line from a 3D vol-
ume. I show a drilled example on this page,
from the AAPG website. The three images
are the same recorded data over the exact
same positions. One (a) is not-migrated
2D. I was told by my Conoco managers
in the 1980s that they found a lot of oil on
WHAT’S NEW IN EXPLORATION
“unmigrated” data and did not need “re- whether that is for exploration or reservoir
processing.” They were not finding any that determinations. Oil companies are updat-
day. In the second image, the same line (b) ing their older data. This is an inexpensive
with 2D migration is a theoretical calcula- time to invest in your data library. I am.
tion to move seismic events closer to their WesternGeco is keeping theirs.
true subsurface position. This method, a
big advance, only uses the data under the " WJHTEXAS@AOL.COM / William (Bill) Head is a technologist with
surface seismic position directly under the over 40 years of experience in domestic and international exploration.
“in-line” of a single “cable.”
The third Image (c) is a 3D migration The improvement made in seismic images,
of the same, but using acoustic energy from 2D to 3D, is visible in this sequence
taken over the same area at the same time.
thought to be from cross-line or out-of- Images: AAPG.
plane spaces recorded on all cables from
a single shot. The distance to that out-of-
plane, or cross-line is vital. The farther
away, the less resolution and confidence.
We have drilled a lot on less.
While I worked on 3D processing
theory in the early 1970s at GSI/TI with
holograms, it took oil companies a long
time to appreciate the cost benefit of 3D.
Marathon International performed its
first, when production engineers paid for
a survey in the late 1980s. 3D made a big
difference to our geologic understand-
ing offshore Indonesia. Same for micro-
seismic. Grechka of Marathon claims
forefront microseismic advances—“the
remarkable high resolution of seismic im-
ages obtained in both [shale] case histo-
ries is unquestionable.” The Leading Edge,
October 2017, p. 822, Special Section:
Microseismic. Maybe—but understand,
we need more surveys.
The difference between 2-D and 3-D
seismic methods is more where, or how,
seismic data were recorded. Resolution
depends on surface coverage and acous-
tic frequency recorded. X,Y’s for each 3D
marine sensor are still assumed at each
shot position. The way in which migra-
tion is performed to “true” 3D imaging
is merely a statistical process, based on
where a common mid-point in the sub-
surface should be—they are never actu-
ally met. I am often amazed that this tech-
nology works at all.
If you are working on data taken or pro-
cessed more than 10 years ago, you are seri-
ously handicapped in imaging the subsurface,
World Oil®!/!MAY 2018!13
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Agile thinking. Engineering change.


Multi-tasking, shale-style
The ascension of dual-activity rig
floors, which enable different operations to
be conducted simultaneously in parallel, is
credited with helping reduce offshore well
delivery time. Marathon Oil Corp. believes
it’s high time that the methodology makes
its way into the unconventional sector.
To prove its point, Marathon conduct-
ed a series of field trials in the Eagle Ford
shale, with the aim of reducing the flat
times more typically associated with deep-
water well construction. The company
specifically set out to evaluate the potential
time-savings of offline casing running and
cementing in its largely two-string shale
wells. In separate trials, Marathon says it
proved that the concept saves time in run-
ning both the surface and production cas-
ing, but the economic results were mixed.
“We’re so efficient in our drilling rates,
that a 20% improvement in actually making
hole is not anything like a 20% reduction
in flat time,” Adrian Binnion, Marathon’s
Eagle Ford drilling engineering supervi-
sor, told the IADC Drilling Engineering
Committee (DEC) quarterly Technology
Forum on March 21. “We concentrated on
reducing flat time with the objective of re-
ducing our dollars/ft, which is king.”
Marathon began investigating the con-
cept in late 2015 with offline cementing
of the 95/8-in. surface casing. “It was rather
simple, as we didn’t have well control issues
or the BOP stack to worry about. At that
point, we looked at what else we could take
offline. The next logical step was proving
we could actually run surface casing of-
fline,” he said, during the forum devoted
to drilling unconventional resource plays.
“The expectations were that we could pos-
sibly save about 11.5 hours.”
In subsequent field trials, after the
121/4-in. surface hole was drilled to pro-
grammed depth and circulated clean, the
crew tripped out, pulled the bottom hole
assembly (BHA) above ground level and,
depending on rig type, skidded or walked
to begin work on the next well. A fit-for-
purpose configuration, featuring a 350-ton
crane, stepped in to land the casing at be-
DRILLING ADVANCES
JIM REDDEN, CONTRIBUTING EDITOR
tween 5,000 and 6,000 ft, after which ce-
menting commenced.
While the three-well field trial progres-
sively reduced casing running time from 18
hr to 13.5 hr, Binnion said, with the crane
and other equipment required, the exer-
cise proved to be an economic challenge,
essentially breaking even. “We proved we
could do this, but in order to make it work,
you have to be super-consistent. We’re still
working on a system, where we could use it
on multiple wells on a pad,” he said.
“Trickier” proposition. Undaunted,
Marathon decided to proceed with the
more complicated offline running and ce-
menting of the 51/2-in. production casing,
where risk mitigation took center stage.
“You have well control issues and the BOP
to deal with, so it becomes a bit trickier
than simply running and cementing sur-
face pipe. We’re talking about moving the
BOP stack off the well before it’s cement-
ed, so, of course, that’s going to raise a lot of
questions,” he said.
Multi-disciplinary risk assessments, in-
cluding with offshore personnel, “tried to
figure out everything that could possibly
go wrong,” Binnion said.
At the onset, to allay the pre-cementing
well control concerns, Marathon collabo-
rated with its wellhead provider to engi-
neer a cementing spool to be inserted be-
low the BOP stack. “We have two of these
cementing spools that kind of hopscotch
across the pad, so we move the BOP stack
from one to the next cementing spool.”
In operation, before drilling the 8 1/2-
in. production interval, the cementing
spool and BOP are nippled up and tested.
Upon reaching target depth, the casing
running equipment is rigged up, and the
string is run in normal fashion and circu-
lated bottoms-up.
Unlike a conventional cementing job,
taking the offline route involves first pull-
ing the landing joint and running the
pack-off and other hardware. After all is se-
cured, circulation is established across the
cementing spool. “Once we’ve established
bottoms up and are comfortable there are
no issues with gas, and we have added ECD
(equivalent circulating densities) and there
are no pack-off issues, we nipple down the
BOP and skid the rig to the next well and
rig up our work platform,” Binnion said.
Meanwhile, once the now-cemented
well is verified as exhibiting zero flow,
sequential steps include setting the back-
pressure valve, rigging down the work
platform, disconnecting the cementing as-
sembly and installing an 11-in. hydraulic
pack-off, before capping it off with instal-
lation of the tubing head. The additional
equipment and complexities notwith-
standing, Binnion said the five-well test
proved economically viable, to the tune of
saving around $20,000/well.
“We proved the concept is a technical
success, and we could save rig time,” he
said. “We wanted to prove up the concept
before investing in spools, and we also
wanted to make sure we were in a stable
market. We didn’t want to make the invest-
ment and then lay down rigs.”
Spoiler alert. While Binnion’s DEC
presentation was entitled, in part, “Think-
ing outside the rotary table,” the absence of
same, and the inability to rotate the casing,
could prove a hindrance to wholesale adop-
tion of the concept, suggests Halliburton
Principal Technical Professional Cole Pav-
lock. “We will have to figure out something
different, if we want to rotate casing for an
offline production job. For our money, for
mud displacement and best practices, cas-
ing rotation is the best thing you can do to
adequately cement the wellbore,” he said
during a separate presentation.
For many unconventional operators,
rotating casing during cementing is a stan-
dard operating procedure, especially in the
Haynesville shale, Pavlock said. “A lot of
people don’t rotate and are able to achieve
their ultimate goal of zonal isolation. I’m
just saying that casing rotation is a better
method for cement placement.”
" JIMREDDEN@SBCGLOBAL.NET / Jim Redden, a Houston-based
consultant and a journalism graduate of Marshall University, has
more than 40 years of experience as a writer, editor and corporate
communicator, primarily on the upstream oil and gas industry.
World Oil®!/!MAY 2018!15
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Hand in glove
Looking through rose-colored sun-
glasses, some people see renewable energy
as eventually, and perhaps completely,
replacing oil and gas. That is grist for an-
other mill, but looking through OSHA-ap-
proved, distortion-free safety goggles, you
can see what renewables are doing right
now—serving oil and gas production.
“Review of Renewable Energy Tech-
nologies Utilized in the Oil and Gas In-
dustry” (Choi, et. al. 2017) notes: “From
a conservative point of view, renewable
energy is a competitor to fossil fuels.
However, recently, renewable energy is
being used to extract and produce fossil
fuel resources, which makes it more dif-
ficult to view them as clear competitors.”
The study is interesting. Its purpose was
to research and analyze cases in which re-
newable energy technologies are being ap-
plied at oil and gas production sites. Cases
were analyzed according to their purpose:
photovoltaic, wind power, and geothermal
power technology applications had the
purpose of supplying electricity; whereas
the application of solar thermal technology
had the purpose of supplying heat.
Space prevents inclusion of examples
from every renewable technology, but a
few of them will illustrate the point.
Photovoltaic system powers cathod-
ic protection. Kyocera Solar is operating
7.7-, 3.9-, and 6.25-kW PV systems at the
Louisiana Bayou oil field in Louisiana.
The PV systems include PV modules,
mounting structures, controller (with
integrated solar charge regulation), stor-
age batteries, and system enclosure. The
electricity produced from the PV system
is used to prevent the oil pipeline from
corroding, using the cathodic protection
technique. The results from recent stud-
ies indicated that corrosion of transport
pipes significantly affects the production
and transportation of oil and gas. A ca-
thodic protection method that incorpo-
rates a PV system promises to be a solu-
tion to these corrosion problems.
Wind power supplies 30% of plat-
form demand. Scottish and Southern
WHAT’S NEW IN PRODUCTION
DON FRANCIS, CONTRIBUTING EDITOR
Energy, an English energy company, and
Canadian oil exploration company Talis-
man Energy, made a joint investment to
build a wind power system at Beatrice oil
field in the North Sea. Beatrice field sits
15 mi off the northeastern coast of Scot-
land and started commercial production
in 1981. Beatrice comprises three offshore
platforms. Beatrice Alpha is an oil produc-
tion plant, in the center of the oil field. Two
5-MW wind turbines were built near the
Beatrice Alpha platform. The electricity
produced from these wind turbines sup-
plies about 30% of the total electricity de-
mand of the Beatrice Alpha platform.
Solar thermal system used in EOR.
McKittrick oil field (see photo on this
page), operated by Berry Petroleum
(which was spun off by Linn Energy in
2017) is in western California, and pro-
duces approximately 1,300 bpd of crude
oil. Berry launched the solar thermal EOR
project with Glass Point Solar to apply the
EOR technique to this field. This project
installed solar thermal collectors—approx-
imately 13,388 m2—at the field, to collect
sunlight. The sunlight was used to boil wa-
ter and produce high-pressure steam. The
high-pressure steam was used to apply the
EOR technique. This project implemented
the enclosed trough technique of Glass
Point Solar for the first time. This tech-
nique allowed installation of solar thermal
collectors in oil fields with a lot of sand and
dust. A lightweight mirror was installed in
the structure, and an automatic directing
Berry Petroleum’s operations in the San
Joaquin basin of California include a solar
thermal EOR project at one of its oil fields.
Photo: Berry Petroleum.
device was mounted on the mirror to focus
the sunlight to a designated spot.
Nexus of renewables and oil and gas.
Although not a traditional oilfield service
company, U.S.-based Solarcraft offers an
example of the nexus of renewables and
oil and gas, from something like a service-
company perspective. The company is a
provider of, among other things, solar-en-
ergy systems combining solar panels and
batteries, for applications such as SCADA,
wellsite automation, and field instrumen-
tation. The company’s “Solar Insolation”
map of the continental U.S. is an interest-
ing peek at their “Typical Winter Peak Sun
Hour” rating. (The company says this is a
more useful number than the Average An-
nual Peak Sun Hour rating.) So, U.S. land
operators will be happy to know that on a
scale of 0.5 to 4.5, the Permian basin is at a
bright and shiny 3.5.
BP claims to have the largest, oper-
ated, renewable energy business of any
major oil and gas company. In the U.S., its
renewable assets include 14 onshore wind
farms, located from Hawaii to Pennsylva-
nia. The company’s U.S. wind farms have
a gross generating capacity of 2,259 MW.
That’s enough electricity to power all the
homes in a city the size of Philadelphia.
That’s a substantial stake in the ground,
but there’s a lot of space between 0% and
100%. In the eyes of Your Humble Observ-
er, few things ever get replaced completely.
New things are introduced, but only the
balance of new and old changes. Here’s one
nearby example: in 2018, the Houston Po-
lice Department still uses horses—as they
did in the Wild West 1800s—but not as
many of them, and for tasks they’re better
suited to than cars.
Just as gasoline-powered trucks drive
horses to deployments, renewables and
oil and gas production will be cooperat-
ing, in an ever-evolving balance, for a long
time to come.
" DON@TECHNICOMM.COM / For more than 30 years, Don Francis
has observed the global oil and gas industry as a writer, editor and
consultant to companies marketing upstream technologies.
World Oil®!/!MAY 2018!17
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the political action committee
of independents

ENDANGERED SPECIES METHANE ENHANCING LIFE


DR. JEFF M. MOORE, CONTRIBUTING EDITOR, ASIA-PACIFIC
Deliberate E&P obstruction
in the South China Sea
On April 3, Vietnamese state firm,
PetroVietnam, issued the following and
unusually blunt statement on its website:
“The East Sea is forecast to continue to
have uncertainty this year...affecting the
company’s efforts to attract foreign inves-
tors to invest in its open offshore fields.”
The statement followed the shutdown of
Repsol’s offshore Red Emperor project at
the insistence of the Chinese government
over the well-known “9-dashed line” ter-
ritorial dispute in the South China Sea
(SCS). None of this was too surprising.
Chinese shutdowns of E&P activity in this
area have happened before. The question
now is, What’s next for E&P in the SCS?
Repsol’s project was in Block 07/03,
where it had a 51.7% stake, and UAE-
based Mubadala Petroleum and Petro-
Vietnam owned the rest. Repsol was to
drill five wells there, beginning in April,
with the Ensco 8504 rig, which is based
in Singapore. Malaysia-based Yinson was
to provide Red Emperor with an FPSO
vessel for 10 years. U.S.-based Keppel
FloaTEC was slated to build a production
platform there. The project is estimated to
have 45 MMbl of oil and 172 Bcf of gas,
and Vietnamese hydrocarbon output is
peaking, so Hanoi needs all the produc-
tion that it can muster, as decline sets in.
Why did the project shut down? There
are two reasons. First—and this is com-
monly known—the Chinese government
claims about 90% of the southern SCS as
its own, which includes most of Vietnam’s
200-mile EEZ, and part of the EEZs of the
Philippines, Indonesia, Brunei and Malay-
sia. China has engaged in military exercises
and built artificial military island bases in
the area to stake its claim.
Second, Vietnam has angered China
by rejecting its unilateral maritime rule-
making by rallying allies and partners to
its cause. Beijing calls this “international-
izing the issue.” In January and March this
year, for example, Vietnam engaged in
highly publicized economic and defense
meetings with India, a regional nemesis of
China, to plan, among other things, future
OIL AND GAS IN THE CAPITALS
joint E&P in the SCS. The response from
Beijing was pointed: “China does not ob-
ject to the development of normal bilat-
eral relations of relevant countries in our
neighborhood. But China firmly opposes
relevant party to use it as an excuse to in-
fringe upon China’s legitimate rights and
interests in the SCS, and impair regional
peace and stability.”
Then on March 5, Vietnam accepted
a five-day port call by the American su-
percarrier, USS Carl Vinson. Many in Bei-
jing perceive America as an international
nemesis, where war is increasingly pos-
sible over the SCS and politico-military
disputes involving Taiwan and Japan.
While these developments are recent,
Vietnam asserts that China has interfered
with its E&P projects on multiple occa-
sions. It cites the following evidence:
• May 2011: Chinese patrol vessels cut
the seismic streamers of PetroVietnam
seismic ship, Binh Minh 2, as it surveyed
Block 148.
• June 2011: Chinese patrol vessels cut the
seismic streamers of a foreign vessel, pos-
sibly the Veritas Viking II, of CGG Ver-
tias, as it surveyed Block 136-03.
• September 2011: China unsuccessfully
pressured a joint, unnamed Vietnam-
India E&P project in the SCS, involving
Essar Exploration and Production Ltd.,
and ONGC Videsh. Beijing declared the
project “unlawful” and that it threatened,
“…the stability and peaceful economic
development of the entire SCS region.”
• June 2012: CNOOC offered nine off-
shore blocks in the SCS, including Viet-
nam’s Block 128, where ONGC Videsh
was to begin E&P a month later.
• May 2014: China placed its giant Ma-
rine Oil 981 rig near Vietnam’s Phu
Khanh and Nam Con Son basins and
Block 118, with a massive armada of 80
escort vessels.
• January 2016: China placed Marine Oil
981 in an area outside the Gulf of Tonkin.
• July 2017: China ordered Repsol to stop
drilling in Block 136/3, stating, “China
urges the relevant party to cease the
relevant unilateral infringing activities
and, with practical actions, safeguard
the hard-earned positive situation in the
South China Sea.”
Collectively, these cases demonstrate
that the South China Sea’s E&P risk profile
has increased. While the two 2011 seismic
vessel attacks could have cost as much as
$5 million, Repsol’s Red Emperor shut-
down cost approximately $200 million.
The wasted planning by Yinson and Kep-
pel FloaTEC probably had a combined
price tag in the low millions of dollars. The
former’s project was worth $1 billion over
10 years, and the latter’s project was esti-
mated in the tens of millions of dollars.
Additionally, the above mentioned
“intimidation cases” can wreck intricate
E&P planning that precipitates such proj-
ects, which also costs millions. This price
tag increases even more, when consider-
ing time wasted and missed opportunities
that could have been spent planning and
implementing E&P elsewhere.
Going forward, energy companies op-
erating here must reconsider if they can de-
clare a force majeure and/or tap insurance,
if driven out of a block in or near Chinese-
claimed sea areas, since such scenarios are
now reasonably foreseeable.
Furthermore, E&P in the SCS is no
longer mainly about geology and nego-
tiating production contracts with SOEs.
Politico-military factors must enter into
E&P calculus here.
Finally, under these increasingly con-
tentious conditions, energy companies in
the SCS must look further ahead and ask
hard questions, such as, “What are worst-
case scenarios…if a naval battle or a war
occurs?” They must take into consider-
ation the impact on drilling rigs, person-
nel, support vessels, gas/oil storage, and
the like, and assess the potential physical,
legal, insurance and financial fallout.
" JMOORE@MUIRANALYTICS.COM / Jeff Moore runs Muir
Analytics, a risk consulting firm specializing in deciphering threats
in conflict zones. He is author of the book, Spies for Nimitz, which
depicts America’s first modern intelligence agency. He holds a PhD
from the University of Exeter in the UK.
World Oil®!/!MAY 2018!19
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The key to aeration
in oilfield water management
I promised to cover some specific
produced water management trends. In
the introductory column, we mentioned
the growing number of produced water
and brackish water pits. More and more,
and larger and larger, allowing for more
produced water recycling. As fracs in-
crease in size and more water is needed,
the ability to store and aggregate water
is significant. As water is stored and ag-
gregated, quality worsens over time. Bac-
teria blooms, hydrogen sulfide will be
generated, and now you have lost control
of your pit.
The out-of-control pit gave rise to
the pit treatment, which involves adding
a chemical biocide to the pit to prevent
bacterial growth. Pit treatments don’t
last, thus pits may require multiple treat-
ments over time for bacterial control.
You must ensure that the chemical bio-
cide is sufficiently mixed throughout the
pit, which is difficult. The most com-
mon method is a pump, some hose and
a chemical injection system.
Most experienced water profession-
als know that a static system with one
entrance (influent) and one exit (efflu-
ent) will cause a short circuit. This is
where the water entering the pit con-
nects to the water exiting the pit, and
you end up recirculating the same water
over and over without distributing the
chemical throughout the pit. It is not
unusual to pull an effluent water sample
with great bacteria kill, but the pit is still
out of control; the short circuit strikes
again. As a result, pit treatments can be
very expensive or just ineffective. As pits
grow larger, distributing your chemical
throughout them grows more difficult.
There must be a better way, and there
is—aeration.
Aeration is simply defined as the
introduction and mixing of air with an-
other medium. In our case, we are in-
troducing air into water. The oxygen in
the air acts as an oxidant and kills the
bacteria, which can be either aerobic, re-
quiring oxygen, or anaerobic, not requir-
WATER MANAGEMENT
MARK PATTON, CONTRIBUTING EDITOR
ing oxygen. Oxygen creates an environ-
ment where anaerobic bacteria dies, but
aerobic bacteria will survive. Most pro-
duced water is oxygen-poor, so the bac-
teria living in it are mostly anaerobic
bacteria, which makes aeration a great
control measure.
The oxygen from aeration also will
oxidize sulfides and iron. If you ever had
a fish aquarium, you know what hap-
pens when you stop diffusing air into
the tank—the fish die, the water gets
cloudy, algae forms and, in time, the
smell becomes horrific. Now imagine
all of that on a large scale, and you have
an out-of-control pit; but with some air,
water quality is maintained and there is
no smell.
So, how do I introduce air? There
are many methods. The first method
we discuss is pumps and venturi educ-
tors, where the water flowing through
a venturi creates suction when air is
introduced. This aerated water is then
pumped into the pit. You need multiple
injection points throughout the bottom
of the pit to distribute the oxygen, and
allow the air to rise and oxygen to get
absorbed. This oxygen being absorbed is
referred to as dissolved oxygen.
Now, let’s talk bubble size, the smaller
the bubble, the more surface area there
is, allowing more oxygen to be absorbed.
Then there is bubble rise—the smaller
the bubble, the slower it rises. The longer
the bubble stays in the water, the more ox-
ygen is absorbed. To make small bubbles
with a pump system, we need a high flow-
rate and a small gas inlet, which restricts
the amount of air that is introduced.
Most pump systems are designed for
municipal applications where much less
air is required—when you apply these
systems to produced water they don’t
supply enough air. If you enlarge your
gas inlet to allow more air, you only cre-
ate large bubbles that rise quickly and
don’t allow oxygen absorption. Pumps
also require significant energy. In many
pump applications, the aerated water
is introduced too close to the surface,
which doesn’t allow the oxygen absorp-
tion, making the system ineffective. The
next option to consider is floating or
submersible systems.
Floating systems are easy to de-
ploy, but they only treat the top few feet.
Submersible systems are deployed at
the bottom, allowing air to rise, so more
oxygen is absorbed. Floating systems re-
quire running electrical power to them in
a pit, potentially creating a shock hazard.
Floating systems are good for tanks with
shallow depths, but not large pits. That
brings us to diffuser systems.
Diffuser systems use low-energy
blowers to flow air to a diffusion system.
This could be individual diffusers or
diffusion tubing. Because they sit at the
bottom, you improve retention time and
they can be evenly distributed through-
out the pit. The problem is sediment/
solids will build up in pits and bury these
diffusers, effectively ruining their effi-
ciency. So what is needed is a portable/
relocatable diffuser system. The mixing
prevents the solids from settling over
them and increases the transfer of oxy-
gen. Making it relocatable allows you to
inspect them without draining or taking
a pit out of service. There are only a few
of these types of systems on the market.
So you found your portable mixing
diffuser system—what now? Regularly
inspect it for leaks. Significant bubbles
coming to the surface are a sign of a leak.
Pulling regular samples at different depths
and locations, and testing for dissolved
oxygen (DO), will ensure you have an ef-
ficient system. Doing this once a week is
usually sufficient, and will ensure you are
maintainig your water quality.
Please feel free to e-mail me questions
or input on future topics that you would
like to see covered at info@hydrozonix.
com.
" MARK PATTON is president of Hydrozonix, an oil and gas focused
water management company. He is a chemical engineer with more than
25 years’ experience developing new technologies for wastewaters and
process residuals.
World Oil®!/!MAY 2018!21
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RENEE COMSTOCK, CHIEF EXECUTIVE OFFICER,
YELLOWJACKET OILFIELD SERVICES, LLC
Energy service sector:
Time to repair the roof?
The Permian basin’s output is forecast
to reach 3.18 MMbopd in May, accord-
ing to EIA, and it is widely anticipated
to become the world’s largest oil patch.
Producers are seeing higher profits, and
the companies supporting them are
steadily raising prices for offerings once
heavily discounted during the downturn,
in an effort to remain competitive. Mid-
stream companies are also burgeoning, in
line with the increased production. The
Permian is doubling other U.S. plays’ pro-
duction each month (though other U.S.
shales should not be discounted).
The Eagle Ford, which is like the
Permian’s forgotten step-sibling, has seen
an influx of private equity investment, as
major players divest to concentrate their
resources on the Gulf and the Permian.
It is unclear whether this will steadily
increase production, but with available
infrastructure, proven rock, and eager in-
vestors, it appears likely. The Haynesville
play that accelerated the shale movement
is rising again, with laterals up to 10,000
ft and strong productivity per wellbore,
making it worthwhile for producers to
invest. The Bakken also should see a 10%
output increase in the next year.
For producers, the main short-term
concern is preparing for potentially con-
strained prices that could be a result of mar-
ket oversupply. Pad drilling, longer laterals,
and quicker completions help keep costs
manageable and producers in the black, for
the present. This is a difficult model for the
smaller, more localized producers with less
established production cashflow than the
majors and large independents.
Yellowjacket Oilfield Services offers
oilfield services, including fishing and
rental, wireline and completion services
from over 20 locations throughout the
U.S., focusing on the Permian basin and in
close proximity to thousands of produc-
ing wells and drilling rigs.
Low price effects. While lower prices
impact the entire energy sector, service
companies are hit the hardest. They are
the only sector completely dependent
EXECUTIVE VIEWPOINT
on continued drilling. Excess supply,
created during a downturn, was largely
reduced through mergers and acquisi-
tions, enabling a strong rebound. This
should hold true, provided that drilling
new wells remains profitable for produc-
ers. Service companies investing in R&D
of new products and services, which allow
producers to operate more efficiently, are
best equipped to survive lower prices.
Many of Yellowjacket’s assets were
purchased during the energy-cycle down-
turn. The executive team reviewed profit
centers and services, as it integrated each
acquisition. Management reduced over-
head, discontinued unprofitable services
and streamlined service lines offered to
the industry. Now stabilized, Yellowjack-
et has turned its attention to expanding
operations and services in a targeted ap-
proach. With a young, talented and dis-
ciplined executive team, Yellowjacket is
uniquely positioned to take advantage of
the current environment.
The bottom line is that times are
good, and should be for the foreseeable
future. Yet, there is another potential fu-
ture: Depressed prices resulting from
oversupply, economic and political uncer-
tainties, or a number of other unforeseen
events. To survive these uncertain times,
businesses must remain disciplined—
those with healthy balance sheets, a fo-
cus on optimizing operations, and strong
company cultures, rise to the top.
Debt is necessary, but a load to bear in a
highly volatile industry. Service companies
must invest in, and maintain, equipment,
but they should take care to avoid overex-
tension during the boom. This prevents
them from adjusting to the lower prices
that producers will pay when the price-per-
barrel drops and can reduce break-even
cashflow levels. Leverage is a dangerous
concept for oilfield service companies. It
finances rapid growth in a rising commod-
ity market but exposes service companies
to excessive risk when the market turns,
which it inevitably does. Steady organic
growth, financed substantially by equity or
long-term capital, will allow us to grow and
prosper in a highly cyclical business.
As oil prices increase, so does de-
mand for top talent. Without competi-
tive compensation packages and a sup-
portive, inviting culture, companies face
high turnover and retention challenges. In
the service sector, great equipment opera-
tors are scarce. When found, we strive to
keep them, knowing the demand for them
in this type of market. While Yellowjacket
has an extensive inventory of specialized
equipment, we take great pride in the ex-
perienced, highly skilled talent recruited
and retained to support our service lines.
Finally, with Generation Z (the most
technologically advanced, diverse group
of people) entering the workforce, com-
panies should be prepared to capitalize
on these skills and spend more time and
money on data mining and analytics. I
believe the energy industry has barely
scratched the surface of this new era, and
the younger generations are already be-
ginning to lead us in that direction.
John F. Kennedy said it best: “The
time to mend the roof is when the sun is
shining.” The companies with the great-
est chance to weather the next storm are
those not distracted by, or reveling in, rap-
id growth, but investing in honing their
employees, operations and infrastructure
to prepare for the future.
Yellowjacket Oilfield Services is cer-
tainly doing that. We recognize each mar-
ket has different needs and opportunities,
and we will continue to focus on the right
blend of services to address those needs.
Our vision and agile model provide for
easy expansion and the ability to further
cement our place in the market.
" RENEE COMSTOCK, a West Texas native, came to Yellowjacket
Oilfield Services after serving in key director roles with several
companies, including Key Energy Services and Hy-bon Engineering.
She later moved into the tech industry at Advanced Micro Devices
(AMD). Ms. Comstock co-founded a successful management
consulting and software development firm, Verdico Solutions, which
focuses its services largely for oil and gas. Her company strategically
and systematically supported organizations to achieve business goals
and led to her current endeavor at Yellowjacket.
World Oil®!/!MAY 2018!23
 Register
Today

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October 29–30, 2018 | WGLConference.com

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 INDUSTRY AT A GLANCE
CRAIG.FLEMING@WORLDOIL.COM

The crude price recovery, buoyed by potential Middle East- WORLD OIL & NGL PRODUCTION Million barrels per day
ern supply risks, was capped by rising U.S. inventories while MAR 2018 FEB 2018 AVG. 2017 AVG. 2016
President Trump debated on whether to reimpose sanctions OPEC–CRUDE OIL
on Iran. Russia reaffirmed its pledge to OPEC’s well-publi- Saudi Arabia 9.92 9.96 9.96 10.42
cized production cuts, despite breaching its target and push- Iran 3.81 3.82 3.80 3.55
ing output to an 11-month high of 10.97 MMbopd in March and Iraq 4.44 4.46 4.47 4.42
April. In the U.S., the rig count averaged 1,011 units in April, an United Arab Emirates 2.87 2.80 2.93 3.05
increase of 2.2% compared to March. The sustained activity Kuwait 2.70 2.70 2.71 2.88
pushed production in the U.S. to 10.44 MMbopd in March, an Neutral Zone 0.00 0.00 0.00 0.00
increase of 1.6% compared to the previous month. The DUC Qatar 0.60 0.58 0.61 0.65
inventory has stabilized, with the exception of the Permian, Angola 1.52 1.57 1.64 1.71
where operators added 122 new wells. International activ- Nigeria 1.65 1.68 1.53 1.47
ity averaged 1,197 rigs in March, a loss of 7.6%, due mainly to Libya 0.99 1.03 0.83 0.39
spring break-up in Canada. Algeria 0.98 1.04 1.05 1.11
Equatorial Guinea 0.13 0.13 0.13 0.14
U.S. OIL PRODUCTION1 Thousand barrels per day Ecuador 0.52 0.51 0.53 0.55
Venezuela 1.49 1.55 1.97 2.24
DAILY AVERAGE FOR MONTH
MAR MAR FEB Gabon 0.21 0.20 0.20 0.23
STATE 20182 20173 % DIFF. 20182 NGLs & condensate1 6.91 6.91 6.87 6.78
Alabama 20 20 0.0 22 TOTAL OPEC 38.74 38.94 39.22 39.59
Alaska 526 526 0.0 525 OECD2
Arkansas 20 14 42.9 21
U.S. 14.41 14.12 13.19 12.53
California 511 498 2.6 498
Mexico 2.09 2.15 2.23 2.47
Colorado 437 296 47.6 429
Florida 5 6 –16.7 5 Canada 4.89 5.13 4.83 4.47
Illinois 25 23 8.7 25 United Kingdom 1.08 1.06 1.01 1.03
Kansas 120 101 18.8 118 Norway 1.97 2.01 1.97 1.99
Kentucky 7 8 –12.5 7 Europe-others 0.50 0.50 0.50 0.49
Louisiana4 1,580 1,557 1.5 1,543 Australia 0.34 0.34 0.32 0.35
Michigan 18 16 12.5 19
Pacific-others 0.07 0.07 0.07 0.08
Mississippi 58 51 13.7 59
TOTAL OECD 25.36 25.38 24.12 23.42
Montana 71 58 22.4 65
NON–OECD
Nebraska 6 6 0.0 7
New Mexico 569 440 29.3 565 Russia 11.35 11.34 11.36 11.34
North Dakota 1,232 1,015 21.4 1,220 FSU-others 3.12 3.14 3.00 2.90
Ohio 72 48 50.0 70 China 3.78 3.77 3.87 3.98
Oklahoma 531 445 19.3 505 Malaysia 0.68 0.68 0.69 0.71
Texas4 4,219 3,670 15.0 4,168 India 0.83 0.85 0.86 0.85
Utah 110 89 23.6 105
Indonesia 0.83 0.83 0.85 0.88
West Virginia 31 22 40.9 31
Asia-others 1.01 1.06 1.06 1.15
Wyoming 234 204 14.7 225
Others5 33 28 17.9 34 Europe 0.13 0.13 0.13 0.14
TOTAL U.S. 10,435 9,140 14.2 10,266 Brazil 2.78 2.74 2.74 2.61
LOWER 48 9,909 8,614 15.0 9,741 Argentina 0.58 0.58 0.58 0.61
1 Includes lease condensate. 2 Preliminary estimate, API. Colombia 0.85 0.83 0.86 0.88
3 DOE estimate. 4 Includes federal OCS production.
5 Includes Arizona, Indiana, Missouri, Nevada, New York, Pennsylvania, South Dakota, Tennessee and Virginia.
Latin America-others 0.38 0.34 0.37 0.38
Oman 0.98 0.97 0.98 1.01
U.S. GAS PRICES ($/MCF) & PRODUCTION (BCFD)
Syria 0.02 0.02 0.02 0.03
100 7 Yemen 0.03 0.03 0.03 0.02
Egypt 0.63 0.64 0.64 0.67
6
80 Africa/Middle East-others 1.32 1.25 1.28 1.20
5 TOTAL NON–OECD 29.32 29.19 29.32 29.34
60 4 PROCESSING GAINS3 2.32 2.32 2.29 2.27
TOTAL SUPPLY 95.74 95.84 94.96 94.62
40 3
Source: International Energy Agency. Note: Totals and subtotals may not add, due to rounding.
Monthly price (Henry Hub) 2 1 Includes condensates reported by OPEC countries, oil from non-conventional sources, e.g. Venezuelan Orimulsion
20 12-month price avg.
Production 1 (but not Orinoco extra-heavy oil) and non-oil inputs to Saudi Arabian MTBE.
2 Comprises crude oil, condensates, NGLs and oil from non-conventional sources.
0 0 3 Net of volumetric gains and losses in refining (excludes net gain/loss in China and non-OECD Europe) and marine
F M A M J J A S O N D J F M A M J J A S O N D J F M A transportation losses.
2016 2017 2018
Production equals U.S. marketed production, wet gas. Source: EIA.
WORKOVER RIG COUNT
MAR 2018 YR. AGO
SELECTED WORLD OIL PRICES ($/BBL) REGION ACTIVE AVAIL. IDLE STACKED TOTAL % UTIL. ACTIVE
Texas Gulf Coast 163 49 55 64 331 49% 163
80
ArkLaTex 57 15 51 72 195 29% 64
70 W. Texas Inter. Eastern U.S. 32 49 27 15 123 26% 37
Brent Blend South Louisiana 19 2 10 2 33 58% 18
60 Dubai Fateh
Source: DOE Mid-Continent 125 31 90 106 352 36% 133
50 West Texas / Permian 437 23 210 165 835 52% 395
Rocky Mountains 248 53 155 48 504 49% 173
40 West Coast / Alaska 165 32 141 83 421 39% 177
30 TOTAL U.S. 1,246 254 739 555 2,794 42% 1,160
Active - crewed and worked every day during the month. Source: AESC
20 Available - has crew ready to work.
A M J J A S O N D J F M A M J J A S O N D J F M A Idle - capable of being put to work in 48 hr and does not require spending in excess of $50,000.
2016 2017 2018 Stacked - cannot work without investment in excess of $50,000.

World Oil®!/!MAY 2018!25

 INDUSTRY AT A GLANCE
CRAIG.FLEMING@WORLDOIL.COM

INTERNATIONAL ROTARY RIG COUNT Monthly average INTERNATIONAL ROTARY U.S. ROTARY
MAR 2018 FEB 2018 MAR 2017 DRILLING RIGS DRILLING RIGS
REGION & COUNTRY LAND OFFSHORE LAND OFFSHORE LAND OFFSHORE
CANADA* 215 3 321 1 252 1 1,400 1,400
EUROPE 56 40 61 29 63 31
Germany 1 0 2 0 4 0 1,250 1,100
Italy 2 1 2 1 4 0
Netherlands 1 2 1 2 0 0
Norway 0 18 6 13 0 15 1,100 800
Poland 6 0 6 0 10 0
Romania 6 1 6 1 7 0 950 500
Turkey 19 0 18 0 23 0
United Kingdom 1 5 1 6 0 8
Others 20 13 19 6 15 8 800 M A M J J A S O N D J F M A M J J A S O N D J F M 200 A M J J A S O N D J F M A M J J A S O N D J F M A
2016 2017 2018 2016 2017 2018
MIDDLE EAST** 353 44 356 30 341 45
Abu Dhabi 39 12 38 13 32 16 Source: Baker Hughes, a GE company.

Egypt 22 5 18 3 24 6
Iraq 60 0 58 0 43 0
Kuwait 54 0 54 0 54 0
Oman 54 0 54 0 55 2
U.S. ROTARY RIG COUNT Monthly average

Pakistan 24 0 26 0 20 0 % DIFF.
Saudi Arabia 95 18 103 14 106 13 APRIL MAR APRIL APRIL ‘18
Syria 0 0 0 0 0 0 STATE & AREA 2018 2018 2017 APRIL ‘17
Others 5 9 5 0 7 8 ALABAMA-TOTAL 1 1 2 –50.0
AFRICA** 78 11 74 16 70 10 Land 1 1 2 –50.0
Algeria 55 0 53 0 51 0 Inland water 0 0 0 0
Angola 0 3 0 4 0 2 Offshore 0 0 0 0
Kenya 8 0 8 0 11 0 ALASKA-TOTAL 7 9 6 16.7
Libya 0 1 0 1 0 1 Land 7 9 6 16.7
Nigeria 9 3 10 6 6 4 Offshore 0 0 0 0
Others 6 4 3 5 2 3 ARKANSAS 1 1 1 0.0
LATIN AMERICA 167 26 169 30 162 35 CALIFORNIA-TOTAL 14 14 9 55.6
Argentina 68 0 69 0 58 0 Land 14 14 9 55.6
Brazil 5 9 6 11 3 13 Offshore 0 0 0 0.0
Colombia 23 0 24 0 18 1 COLORADO 30 30 29 3.4
Ecuador 8 0 6 0 7 0 FLORIDA 0 0 0 0
Mexico 9 12 6 13 3 15 KANSAS 1 0 0 —
Venezuela 41 3 43 4 51 3 KENTUCKY 0 0 0 0
Others 13 2 15 2 22 3 LOUISIANA-TOTAL 58 58 59 –1.7
ASIA-PACIFIC 133 71 129 79 122 76 North - Land 34 35 33 3.0
Australia 15 1 15 1 12 1 South - Inl. water 4 4 3 33.3
China, offshore 1 24 1 27 0 17 South - Land 4 7 3 33.3
India 84 25 84 27 81 36 Offshore 16 12 19 –15.8
Indonesia 31 3 29 5 22 2 MICHIGAN 0 0 0 0.0
Malaysia 0 9 0 8 0 5 MISSISSIPPI 5 3 3 66.7
New Zealand 0 0 0 0 0 0 MONTANA 1 1 0 —
Thailand 2 5 0 7 4 10 NEBRASKA 0 0 0 0
Vietnam 0 2 0 3 0 2 NEVADA 1 1 0 0.0
Others 0 2 0 1 3 3 NEW MEXICO 89 88 56 58.9
TOTAL 1,002 195 1,110 185 1,010 198 NEW YORK 0 0 1 —
**No data available for Iran and Sudan/South Sudan. Source: Baker Hughes, a GE company. NORTH DAKOTA 54 51 43 25.6
OHIO 23 22 22 4.5
OKLAHOMA 129 122 125 3.2
INTERNATIONAL OFFSHORE RIGS PENNSYLVANIA 40 41 34 17.6
U.S. GULF OF MEXICO NORTHWEST EUROPE WORLDWIDE SOUTH DAKOTA 0 0 0 0.0
APR 2018 APR 2017 APR 2018 APR 2017 APR 2018 APR 2017 TENNESSEE 0 0 0 0.0
Total rigs in fleet 85 95 96 107 790 823 TEXAS-TOTAL 505 492 425 18.8
Marketed Supply 47 44 78 80 650 659 Offshore 0 1 1 –100.0
Inland water 0 0 0 0
Marketed Contracted 35 30 64 55 477 464
District 1 43 36 44 –2.3
Rig utilization, % 74.5 68.2 82.1 68.8 73.4 70.4
District 2 29 31 34 –14.7
District 3 16 16 15 6.7
Source: IHS Petrodata Weekly Rig Count.*
District 4 14 14 11 27.3
District 5 3 3 2 50.0
U.S. DRILLED BUT UNCOMPLETED WELLS District 6 27 25 19 42.1
District 7B 3 1 6 –50.0
MAR FEB District 7C 34 34 41 –17.1
REGION 2018 2018 CHANGE District 8 308 303 220 40.0
Anadarko 995 991 4 District 8A 16 15 22 –27.3
Appalachia 749 764 –15 District 9 3 2 3 0.0
Bakken 716 717 –1 District 10 10 13 9 11.1
Eagle Ford 1,507 1,485 22 UTAH 8 8 8 0.0
W. VIRGINIA 16 16 12 33.3
Haynesville 175 174 1
WYOMING 29 30 19 52.6
Niobrara 506 545 –39
OTHERS 1 0 2 –50.0
Permian 3,044 2,922 122 U.S. OFFSHORE TOTAL 16 13 20 –20.0
BASIN TOTALS 7,692 7,598 94 U.S. GRAND TOTAL 1,011 989 853 18.5
Source: EIA. Note: Totals may not add, due to rounding. Source: Baker Hughes, a GE company. Note: State monthly averages may not add up to U.S. total, due to rounding.

26!MAY 2018!/!WorldOil.com
 SPECIAL FOCUS: EOR/IOR
Immiscible mixed gas enhances EOR economics,
increases permeability in swelling clays
A mixed gas (CO2, N2, CO) is uniquely
applicable for increasing matrix permeability
and enhancing oil recovery rates. It also
decreases the Mcf/bbl ratio and increases
the mobilization of asphaltenes while
operating at immiscible conditions on oils
ranging from 18° to 42°API.
" DR. PAUL B. TROST, Mtarri, and DR. JOHN D. WRIGHT,
Wright Consulting
A mixed gas consisting of CO2, N2 and minor amounts of
carbon monoxide (CO) has been found uniquely applicable to
increasing matrix permeability, enhancing the rate of oil recov-
ery, decreasing the Mcf/bbl ratio, operating at pressures lower
than typical CO2 MMP, and mobilization of asphaltenes while
operating at immiscible conditions.
Until recently, CO has never been considered beneficial to
recovering oil. In addition, there is concern about its toxicity
and potential corrosiveness. Laboratory work over the last five
A test-sized generator contains a semi-closed cycle system
to produce the mixed gas and green power. See Fig. 5 for a
schematic of the flowsheet.
years has shown utilizing diluted CO, as part of a mixed gas dis-
placement process, recovers nearly as much oil as CO2, but at
a faster rate. CO also can enhance permeability in shale reser-
voirs and mitigate the effects of any asphaltene precipitation.
Handled properly, it is safe. The method has already received
a permit for pilot testing in the state of Wyoming, under a sim-
ple sundry notice, after satisfying all safety concerns. With the
proper additive, CO is not corrosive to oilfield tubulars, due to
its being a reducing agent rather than an oxidizing agent.
EOR techniques that can be applied to shale oil are being
studied and field tested. Both miscible CO2 and light hydrocar-
bons are being evaluated. However, some initial results proved
disappointing, due to loss of the CO2 along fractures to adjacent
wells, high compression costs, large volumes of gas required per
barrel of oil recovered, extremely low matrix permeability, and/
or limited recovery factors. Additionally, Devegwoda (2018) has
suggested asphaltenes may result in pore plugging of shale oil res-
ervoir. Alternately, at least one company has reported on the suc-
cessful application of CO2 for EOR of a shale oil.
Additional applications for the mixed gas are: heavy oil re-
covery at or near reservoir temperature and pressure, augmen-
tation of poorly performing CO2 floods, lowering capital and
operating costs for new CO2 floods, and extending the operat-
ing life of an aging waterflood.
MIXED GAS COMPONENTS
The mixed gas used in these experiments consisted of CO2
World Oil®!/!MAY 2018!27
EOR/IOR

with minor amounts of N2 and CO. CO has been identified as handle safely. Furthermore, unlike H2S, CO has a density simi-
the “workhorse” in this mixture of gases. CO is far safer to han- lar to air, so it does not concentrate or collect in low spots.
dle than H2S, both in the laboratory and in the field. In fact, it Carbon monoxide is a unique, triple-bonded, molecule.
is 15 times safer than H2S, which the oil industry has learned to The triple bond allows shifting of the electron cloud between
both carbon and oxygen atoms with higher electronegativity
residing on the carbon atom. This triple bonding has similari-
Fig. 1. CO remediation of water-damaged packed column — 2 ties to certain bonds within an asphaltene molecule, plus car-
phase test. bon monoxide’s polarity may also interact with asphaltene’s
Packed column testing* 2 phase test functional groups. CO’s molecular diameter is 50% smaller
10 than CO2’s, resulting in faster movement through a reservoir
9 Note: 8.7 md and greater access to the oil-rich, lower permeability zones.
100,000 TDS saline
8 had 108 md perm Carbon monoxide is 44 times less soluble in water than CO2 at
7 50,000 ppm 70 psi and 100°F. Thus, in mature waterfloods, CO may migrate
90 hours from the more permeable watery zones into the tighter, low-per-
Permeability, mD

6 +
CO meability, poorly swept zones, thereby recovering bypassed oil.
5 4.5 md Due to carbon monoxide’s critical temperature of -222°F,
4 the mixed gas only exists at immiscible conditions. Thus an im-
3
50,000 ppm
miscible, low-pressure, mixed gas was investigated to determine
2 saline its potential technical and economic advantages as compared to
1
pure CO2.
0 Carbon monoxide has been found to be more soluble in aro-
Pre-CO treatment Post-CO treatment matic ring compounds than paraffinic compounds (Luhring,
*Brea quartz + 5% bentonite 1989, and Koelliker, 1993). Rising bubble testing, WAG studies,
and slim tube testing have shown the potential for CO to miti-
Fig. 2. CO remediation of water-damaged packed column — 3 gate asphaltene-related problems and to recover heavy, asphal-
phase test. tene-rich crudes at low reservoir temperatures and pressures. If
asphaltene-type molecules are blocking the shale oil pore throats
Packed column testing* 3 phase test
10 (Devegwoda 2018), injecting CO may remediate this problem.
8.8 Swelling clays (smectite, smectite/illite, montmorillonite,
9
and bentonite)—common to shale oil reservoirs—have signifi-
8 cant amounts of ferric oxides/hydroxides both interlayer and
7 especially on clay edges. Thermodynamics strongly favor CO
50,000 ppm
as a reducing agent for ferric oxide/hydroxide molecules and
Permeability, mD

6 plus residual
5 4.5 oil and 96 conversion to ferrous oxide (wustite), with subsequent release
hours CO of adsorbed, immobile water of hydration and a decrease in di-
4
ameter of approximately 1,161 pm to 218 pm.
3 50,000 ppm
saline 1.8
Since the swelling clays most likely occur on both sides of a
2 pore throat, the total increase in the effective pore throat diameter
50,000 ppm
1
plus residual oil would be over 90%. CO, coupled with certain other additives, has
0 shown the potential to retard tubular corrosion (Cabello, 2013)
Pre-CO treatment Pre-CO with oil and water Post-CO treatment in the presence of CO2 and water, due to the reducing capabilities
*Brea quartz + 5% bentonite + pure CO of the CO acting on oxidized tubular goods.
Recovery of oil by pure CO2, versus the mixed gas (CO2,
Fig. 3. Slim tube oil recovery—mixed gas compared to pure CO2 N2 + CO), was evaluated at different conditions and concentra-
at 900 psi or 38% of MMP. tions. Six different oils, ranging in API gravity from 18° to 42°,
Mixed gas no. 1 vs. CO2 were tested at 38% to 105% of CO2 MMP’s.
90
80 MIXED GAS DEVELOPMENT
Mixed gas no. 1
70 CO2 Five years of development, testing, and subsequent patent-
63% ing of this mixed gas technology strongly supports the potential
60
for EOR/IOR applications. The mixed gas has been subjected
PV oil recovered, %

50 to testing of interfacial tension (IFT), linear corefloods on pre-

40 served core, column testing, slim tube testing, rising bubble test-
30 28% ing, WAG testing, and all supporting analytical requirements.
20
Interfacial tension. IFT’s of a crude oil and formation water,
10 after CO introduction, were determined by Surtek, Inc., a third-
0 party laboratory, using the du Noüy ring apparatus. Test results
0 20 40 60 80 100 120
PV gas injected, % demonstrated a 16.5% reduction in IFT at atmospheric condi-
tions. At higher pressures, the IFT reduction will increase due
28!MAY 2018!/!WorldOil.com

to the increased solubility of CO in oil and water. Lower IFTs
allow the conversion of oil droplets to oil “worms” that can tran-
sect smaller pore throats and increase oil cut.
Packed column. Packed column experiments were conduct-
ed by Markey (2015). For each experiment, a 17-cm × 2.5-cm
column was filled with a mixture of 95% 140-150 mesh sand
and 5% (v/v) bentonite. The column had 35% porosity and an
absolute permeability of 108 md to 100,000 TDS brine. Inject-
ing a 50,000-ppm brine at 1,000 psi and back pressure of 500
psi dramatically lowered the permeability to 4.5 md. After the
brine injection, the column was “produced,” using gravity and
vacuum-aided drainage, and approximately 2 PV of CO were
then injected and allowed a 48-hour soak. When a second slug
of 50,000-ppm NaCl was injected subsequently, the effective
permeability had increased to 8.7 md (a 193% increase), Fig. 1.
The effects of CO on permeability having three phases pres-
ent (50,000-ppm brine, residual oil, and CO) were tested on a
fresh column. Injection sequence consisted of brine injection
followed by injection of a 36° API, 3.9-cp oil. The packed col-
umn was placed under a vacuum, then flushed with 3+ PV of
the 50,000-ppm brine solution to achieve residual oil satura-
tion. Next, 2+ PV of CO were injected and allowed to soak for
96 hr. Finally, 3 PV of the 50,000 TDS brine were again injected,
and the effective permeability measured to compare pre- and
post- CO treatment effects.
Figure 2 shows post-CO treatment effects on the three-phase-
phase system (oil, water, CO). The pre-CO absolute permeability
was 4.5 md, and the effective permeability for the oil was only
1.8 md. However, post-CO treatment, the effective permeability
to brine, in the presence of both residual oil and residual CO, in-
creased to 8.8 md. These tests demonstrated the increase in effec-
tive permeability caused by CO increasing matrix permeability.
Linear core flood testing conducted by Surtek, Inc., showed
a significant increase in core permeability, both during and
after CO injection. Fluids were injected into a 12.5 cm × 2.5
cm core plug held in a stainless-steel core holder. A preserved
Cretaceous sandstone core, from a depth of 9,359 ft., having
spotty oil shows, and a permeability of 10 nanodarcys, was
utilized. Core mineralogy was 89.2% quartz, 4.2% kaolinite,
2.2% siderite, 1.6% chlorite, 1.4% smectite/illite, and 1.1%
illite/mica. The smectite/illite is the primary swelling clay.
(Shale oil formations can have 20+% swelling clays vs this
1.4%). An 18,143-ppm TDS brine, simulating formation wa-
ter, was injected at a pressure of 1,000 psig against a 400-psig
back pressure.
The initial absolute permeability of the core was 10 nd when
saturated with formation water. A total of 2.8 pore volumes
(PV) of CO were then injected and soaked for 48 hr, followed
by another 1.55 PV of CO. The core was then flooded with
formation water, and the effective permeability was found to
be 30% higher than the previously measured absolute perme-
ability. The cycle of CO injection, shut-in, CO injection was
repeated a second time.
After the second cycle, the effective permeability to forma-
tion water was 50% higher than the initial absolute permeabil-
ity. The effective permeability to CO, at irreducible water satu-
ration, also increased during CO injection. It was three times
higher during the second cycle than during the first cycle. This
EOR/IOR
indicates successive treatments of CO injection continues to in-
crease matrix permeability with no evidence of clay migration.
Slim tube testing. A total of 32 slim tube tests were conduct-
ed at various pressures with oils ranging from 18° to 42° API
gravity. The tests required 5-20 hours of constant monitoring.
The slim tube consisted of a 60 ft., ¼-in. diameter, coiled, stain-
less steel tubing packed with a mixture of 140 to 230 mesh to
achieve typical permeabilities from 0.8 to 2.5 Darcies. Both the
rate and volume of produced fluids were recorded.
The slim tubes were prepared by injecting 1.25 PV of as-
received crude at reservoir pressures and temperatures. Mixed
gas was injected into the oil-filled slim tube at 0.1 ml/min.
At the completion of a test, the slim tube was cleaned with
hexane or hexane-methanol-hexane, and the oil content in the
cleaning fluid was measured. Injection pressures varied from
38% to 105% of the oil’s CO2 MMP. Slim tube testing results
strongly demonstrated the advantage of employing the mixed
gas for EOR/IOR as compared to pure CO2 under immiscible
conditions. A few representative, low-pressure, tests using a
36°API paraffinic oil with minor aromatics, are discussed be-
low.
As seen in Figure 3, at 38% of MMP, the mixed gas recov-
ered 63% of the OOIP when 0.6 PV had been injected- vs only
CO2’s 28%. Similar results were obtained at 47% of MMP,
where the mixed gas recovered 73% of OOIP at 0.6 PV in-
jected vs only 40% for CO2.
Another set of slim tube tests demonstrated the effectiveness
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World Oil®!/!MAY 2018!29
 EOR/IOR

of pure CO to achieve rapid oil recovery. In one run, CO was

injected until gas breakthrough at 0.4 PV injected. An ad-

900
ditional 0.6 PV of pure CO2 was then sequentially injected.
Results were compared to a pure CO2 flood. As shown in
Figure 4, the CO, being a smaller molecule, and having some
solubility in oil, resulted in a very early recovery of oil be-
fore gas breakthrough. The CO/CO2 process recovered the
same amount of oil as the pure CO2 process, but at a much
faster rate. Thus CO was again shown to be the “workhorse”
leading to the increased rate of oil recovery-in addition to its
other benefits.

Million Tons
Another slim tube test was designed to investigate recovery
of residual oil after waterflooding. A slim tube was filled with oil
and formation water injected until the oil cut was 1%. Mixed gas

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injection results were compared to pure CO2. Both the mixed gas
and pure CO2 lowered the residual oil saturation from 38% to 8%.
However, the mixed gas recovered the oil about two times faster
than the CO2. This test suggests economic extension of an ageing
waterflood, at existing reservoir pressures, may be feasible.
Based on these and other slim tube tests, the authors are con-
fident that the mixed gas of CO2 + N2 + CO can achieve a lower-
pressure, faster, more economical oil recovery, as compared to
pure CO2. The slim tubes did not contain any swelling clays.
Thus, field applications for reservoirs containing swelling clays
should enhance project economics by increasing the rate of oil
recovery while employing only 50% of the injected gas.

Fig. 4. Slim tube oil recovery of CO and CO2 compared to pure

CO2 at 79% MMP.

Mixed gas no. 1 vs. CO2 ; slim tube 10 inch,

Partner with the Proven Proppant Resource grieve oil at 1,900 psi, temperature = 138 °F
100
at FMSA.com/WorldOil CO injection
90
CO2 injection
80 Pure CO2
70
CO injection followed by CO2 injection
PV oil recovered, %

60
50
40
Pure CO2 injection
30
20
10
0
0 20 40 60 80 100 120
PV gas injected, %

Fig. 5. A schematic of EEG’s internal combustion technology.

Power N2

Air CO2
EEG
semi-closed
cycle
Fuel CO

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30!MAY 2018!/!WorldOil.com
 EOR/IOR

ON-SITE MIXED GAS PRODUCTION

Mixed gas can be generated on-site from most any hydro- Lee Solenoid Valves
carbon source at a cost comparable to purchasing CO2. Either
gasification processes or EEG’s patented internal combustion Save Space & Weight
technology are available to produce the mixed gas, Fig. 5. Addi-
tionally, “green” electrical energy is a byproduct, since all green-
house gas emissions go downhole and are recycled. Since only
in Offshore
4-5 Mcf/bbl recovered is required compared to 10-12 Mcf/bbl
for CO2, project economics are favorable.
Applications
APPLICATIONS
Based on geochemical principles, thermodynamics, and this
extensive testing, CO has been identified as the major asset or
“workhorse” for potentially increasing project economics of
various EOR/IOR projects. Application of CO contained in the
mixed gas can benefit several different types of oil reservoirs in
the following manners.

Shale oil EOR. Increase matrix effective permeability by 1.8 to

Lee Solenoid Valves shown actual size
4 times; operate at lower pressures to avoid gas losses; use 50%
less Mcf/bbl recovered (as compared to pure CO2); recover
oil 1.5-3 times faster; increase oil cut, due to lower IFT; access
smaller pore throats and tighter areas by the CO; remediate as-
phaltenes if blocking pore throats, use mixed gas as solvent; and
achieve faster, lower cost, higher EUR, utilizing either Huff-n-
Puff or displacement.

Heavy oil recovery. Recover heavy oil at, or near, natural res-
ervoir temperatures and pressures; remediate formation dam-
age caused by prior introduction of steam; lower operating and
production costs, due to need for minimal to no heating; de-
crease produced oil viscosity; help protect tubulars; mobilize
asphaltenes; minimize the Mcf/bbl recovered.

Enhanced waterfloods. Extend economic operating life of

ageing waterfloods; lower residual oil saturation; operate at
existing waterflood pressures; increase effective permeability if • Compact
swelling clays are present; lower IFT to increase oil cut. Design
CO2-type floods. Enhance economics of typical CO2 floods • Low Power
by operating at pressures of 50–70% of CO2 MMP; recover oil Consumption
1.5–3 times faster; remediate any formation damage; increase • Eliminates
matrix effective permeability if swelling clays are present; mobi- O-Rings,
lize asphaltenes; utilize 50% less Mcf/bbl recovered (compared Reduces
to pure CO2). Machining
Costs
ACKNOWLEDGEMENTS
Portions of this article were published previously in SPE paper 179540. Intellectual property • Sub-Sea
presented is protected under an issued patent and several patents pending. Compatible
Materials
PAUL B. TROST (PhD) is a geochemist and president of
Mtarri Inc. He holds the patent and patents pending on
the mixed gas technology referenced in this article. He See us at the Global
has 40 years of experience in operations, production Petroleum Show, Booth #7911
and research, which has resulted in 10 patents. PT@
mtarri.com
The Lee Company
JOHN D. WRIGHT (PhD) is a petroleum engineer and Innovation in Miniature 2 Pettipaug Road
chief engineer of Wright Consulting Co. in Golden, Colo. Westbrook, CT 06498
His 50 years’ experience include working at a major oil www.theleeco.com/mpsv
company, teaching at the Colorado School of Mines, and
35 years of consulting. He is the author of the text Oil and
860-399-6281
Gas Property Evaluation which is used at six petroleum 800-LEE-PLUG
engineering schools. john.wright@wccoilgas.com

World Oil®!/!MAY 2018!31

Lee_WorldOil_halfvert_5-2018.indd 1 3/29/18 8:56 AM

Recovery improved in a brownfield heavy oil well,
using inflow control technology
Using AICDs in heavy oil
fields can reduce water cut.
As a case study shows, the
viscosity difference between
heavy oil and water provides
a favorable mobility ratio
well-suited to this technology,
and increased oil production.
" ISMARULLIZAM MOHD ISMAIL, Tendeka
As oil reservoirs age, the optimization
of oil recovery becomes essential, if oil pro-
duction targets are to be met. This is not
least in heavy oil fields, where the challenge
is greater, due to the lower reservoir energy
and requirement for high reservoir contact.
One of the most important aspects of
heavy oil is its viscosity, which can im-
pact reservoir recovery and productivity
directly. Although there is no direct rela-
Use of AICDs in heavy oil fields to control
water can increase oil production.
32!MAY 2018!/!WorldOil.com
SPECIAL FOCUS: EOR/IOR
tionship between density and viscosity,
a reduction in API gravity scale index for
heavy oil is generally accompanied by
increased viscosity. Heavy oil usually oc-
curs in shallower formations, in marginal
geological basins formed by non-con-
solidated sand. Reservoirs tend to have
lower pressures and temperatures in com-
parison to light oil reservoirs. This gener-
ally results in lower recovery factors. Al-
though this characteristic points to more
complex production processes, factors
such as high permeability could make the
recovery process easier.
Depending on the capillary pressure;
gravitational and viscous forces; and the
interaction between these elements dur-
ing oil flow; oil is generally retained in
the reservoir. The porous media may then
be measured by the mobility ratio. The
mobility of the fluids in porous media is
defined by Darcy’s Law, which specifies a
direct relationship between pressure, per-
meability and mobility, depending on vis-
cosity and velocity. Due to an unfavorable
mobility ratio for heavy oil flow compared
to water, the primary recovery technique
may leave as much as 70% of the petro-
leum in the reservoir.
APPLICATION OF AN ICD
To increase the recovery factor and
production rates, supplementary recovery
methods—generally termed improved
oil recovery (IOR) techniques—deploy
operational strategies and the supply of
additional energy to the well to increase
oil recovery. One technique used in hori-
zontal heavy oil wells is the application
of an inflow control device (ICD). This
is an engineered nozzle or high-friction
channel that is typically made from high-
erosion resistance material, and installed
in the base pipe to create pressure drop. It
is used to control the inflow, from heel to
toe, by applying higher pressure drop in
the heel of the well to balance the inflow
in the toe of the well and overcome the
friction flow in the length of a horizontal
completion, Fig. 1.
The use of passive ICDs in horizontal
wells has been practiced widely in conven-
tional wells, to achieve the balance flux and
mitigate early breakthrough of unwanted

water or gas in oil wells. The devices are,
however, passive in nature, and once water
or gas breaks through, the choking effect
cannot be adjusted without intervention.
Furthermore, the viscosity difference be-
tween heavy oil and water creates an unfa-
vourable mobility ratio, which allows water
to flow much faster through the reservoir
and into the wellbore. This enables water
breakthrough to happen faster, displacing
oil output from producing zones.
Autonomous inflow control devices
(AICDs) are designed to automatically
react to the properties of the fluid flowing
through them. An AICD restricts the flow
of less-viscous fluids, such as water and
gas, while allowing more-viscous fluids,
such as heavy oil, to pass through with
minimum pressure drop. When used in
horizontal wells that have been compart-
mentalized using swell packers, AICDs
restrict the flow of water in high-water-cut
zones while allowing greater drawdown of
the reservoir in high-oil-saturation zones,
reducing water cut and improving oil re-
covery for the overall well.
Like ICDs, an AICD can be used in
new wells to create a more balanced in-
flow profile along a horizontal section
prior to water breakthrough. Once water
breaks through in one or more zones, the
AICDs restrict production from these
compartments and favor production from
low-water-cut zones. AICDs also can be
used in existing wells, where water break-
through has occurred already through
deployment as a retrofit string, reducing
water cut to extend economic well life and
improving sweep efficiency.
There are different types of AICDs, but
most commonly used is the Flosure AICD,
which comprises three components; valve
body, nozzle and disk, Fig. 2. The FloSure
AICD is constructed, using erosion-resis-
tant material, and is engineered to fit with-
in standard ICD housings without protru-
sion into the completion bore.
AICD DEVICE IN OPERATION
AICD functions are based on Ber-
Fig. 1. Production, with and without an inflow control device in a horizontal well.
noulli’s Principle which, by neglecting
elevation and compressible effect, can be
expressed as:
P1 + 1/2ρV12 =
P2 + 1/2ρV22 + ∆Pfriction loss (1)
P1 = Static pressure
1/2ρV12 = Dynamic pressure
∆P = Friction pressure loss
The equation states that the sum of
the static pressure, the dynamic pressure
and the frictional pressure losses along a
streamline is constant. In Figs. 3a and 3b,
the streamline or flow path through the
device is marked by arrows.
The AICD restricts the flowrate of
low-viscosity fluids by increasing flow re-
sistance. When gas or water flows through
the valve, the pressure at the flowing side of
the disk will be lower, due to the high fluid
velocity. The total force acting on the disk
will move the disc toward the inlet, and
reduce the flow area and thus the flow, as
shown in Fig. 3b. When more-viscous flu-
ids flow through the valve, the friction loss
increases and the pressure recovery of the
dynamic pressure decreases. The pressure
on the rear side of the disk will decrease,
resulting in lower force acting on the disc
toward the inlet, as shown in Fig. 3a. Thus,
the disk moves away from the inlet and the
flow area and the flow increases. Notably,
the AICD cannot shut off production, but
can only manage the rate as a function of
the fluid properties.
APPLICATIONS
AICDs have been installed in a range
of applications and reservoir types that
can be described as horizontal oil pro-
ducing wells with unwanted gas or water
production. This includes sandstone; car-
bonate; heavy oil; open-hole and cased-
hole, both as a retrofit solution and as a
primary completion. The technology is
applicable to both high-value subsea wells
producing thousands of barrels a day, and
low-yielding land wells producing just
tens of barrels per day.
In sandstone reservoirs, the AICD is
EOR/IOR
typically assembled as part of the sand
screen joint in the lower completion.
For carbonate reservoirs, the AICD can
be deployed as a stand-alone sub, with
a debris filter assembled before the inlet
of the valve. The flow path in either con-
figuration is the same, as reservoir fluids
enter the completion through the filter
and flow along the annulus between the
filter and base pipe, into the inflow con-
trol housing where the AICD is mounted.
The fluids then flow through the AICD
and into the production conduit, moving
to the surface together with the produc-
tion from the rest of the well, Fig. 4.
AICD SUITABILITY TO HEAVY
OIL APPLICATIONS
Full-scale tests on realistic heavy oil
conditions have been completed. Single-
phase and multi-phase experiments with
27-cp crude oil and water were performed
to define the characteristics of the AICD.
The characteristics are described by the
differential pressure across the AICD ver-
sus flowrate through the device.
The AICD mathematical function de-
scribed by the differential pressure across
the AICD is expressed by the function
f(ρ,μ):
⎛ ρ2 ⎞
f ( ρ ,µ) = ⎜ mix ⎟ .
⎝ ρcal ⎠
y (2)
⎛ µcal ⎞ x
⎜⎝ µ ⎟⎠ .(a A ICD ) .q
mix
aAICD, x and y are user input strength pa-
rameters based on nozzle size, q is the local
volumetric mixture flowrate and the user
inpouts ρ_cal and μ_cal are calibration
Fig. 2. AICD construction.
World Oil®!/!MAY 2018!33
EOR/IOR
density and viscosity, respectively. The ρ_ and water curves for reference. With this
mix and μ_mix are flowing mixture density degree of viscosity contrast, water will
and viscosity at downhole conditions: travel faster at a similar pressure gradient
a
compared to oil. The AICD imposes a
ρmix = α oil ρoil + much-higher pressure drop on water and
b c (3)
α gasρ gas + α water ρ gas leads to a reduction in water flow.
The mixed oil and water generates a mix-
d
ture viscosity, depending on the fraction of
µmix = α oil µoil + each fluid. The same trends were observed
f (4)
e
α gasµ gas + α water µ gas with increasing water cut. As the water cut
increases, the mixture viscosity will be re-
Items a, b, c, d, e, and f have been imple- duced, and the velocity of the mixed fluid
mented recently to the mixture equations, flow increases through the valve, resulting
to aid better descriptions of the mixture in a gain in the pressure drop. Based on the
properties at multi-phase conditions. results, the oil-water volumetric flow ratios
Figure 5 shows two-phase oil/water for 27-cp oil can be calculated. At a 15-bar
tests performed with water cut at 25%, pressure drop, oil/water ratios are about
65%, 80% and 92%. The pressure drop, six times. This means that when the zones
as a function of total volume flowrate, is have water breakthrough, the AICD will
plotted together with the single-phase oil choke the flowrate by almost 80%.
It is observed during the test at 25%
water cut, that the AICD is not effectively
Fig. 4. Autonomous ICD flow path.
choking the fluid mixture, due to a small
change in mixture viscosity. Thus, oil is
still in a continuous flowing phase. When
the water cut increases to 65%, the AICD
starts to show increased choking. As the
water cut increases to between 80% and
92%, the choking behavior strengthens,
Fig. 3a. AICD flow path and disc position with oil.
Fig. 3b. AICD flow path and disc position with water.
Fig. 5. Multi-phase production test results, with AICD as a function of volume flowrate and
pressure drop.
30
Water 80% WC
25 65% WC 25% WC
Oil 27cp 92% WC
Pressure drop across AICD, bar
20
15
10
5 accelerated oil production. This will be
0 AICD has the potential for controlling
0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4
Flowrate through AICD, m3/h
34!MAY 2018!/!WorldOil.com
resulting in reduced viscosity. A viscosity
contrast of approximately 3 cp is required
for the AICD to differentiate between wa-
ter and oil. It follows that as the viscosity
contrast between oil and water increases,
the effectiveness of the AICD increases,
making this technology particularly suit-
ed to heavy oil applications.
ANALYSIS AND SIMULATION
TECHNOLOGIES
Multiple commercial nodal analysis
tools and dynamic reservoir simulators are
equipped with AICD function in the in-
flow control device option. A static reser-
voir simulator can optimize the AICD size
and number of AICDs per joint. Dynamic
simulators are required to quantify the pro-
duction benefits of the AICD over field life.
Notably, all new wells are simulated with a
static and dynamic simulator, to design the
AICD size and number of AICDs per joint.
For example, in wells without inflow
control, the water may be drawn into the
wellbore from the down-dip oil-water
contact through high-permeability chan-
nels, reducing effective drainage of the
oil up-dip. The AICD will improve the
water sweep by balancing the inflow from
high- and low-permeability sections, and
creating additional pressure drop at high-
water-cut zones. Furthermore, the AICD
will allow a low-mobility, viscous oil to be
produced and recover the oil up-dip.
Enhanced well performance can be
achieved with AICD-completed wells,
providing that acceptable production
rates can be achieved through the AICDs,
throughout the life of the well. As viscos-
ity contrast between the oil and the un-
wanted fluid (gas/water) is present at well
conditions, some heterogeneities or non-
uniformity in water production is present
along the wellbore, and there is the ability
to achieve adequate compartmentaliza-
tion of the wellbore annulus.
Candidate selection starts with an
evaluation of the increased or accelerated
oil production. Once this is determined,
well operability factors can be considered
during the detailed well planning phase. A
main factor affecting the results of this pro-
cess is the reservoir fluids.
The AICD requires a viscosity con-
trast to provide additional increased or
the case for water control in oil fields.
water breakthrough/water production
in heavy oil applications. Comparison of
 EOR/IOR

the flow characteristics of AICDs versus
passive ICDs for the reservoir fluid is the
first screening stage for a new application.
This is performed using regression analy-
sis to define the AICD characteristics,
based on the viscosity and density of oil
and water at reservoir condition.
Figure 6 shows an example of test con-
ditions with an oil viscosity of 27 cp. The
single-phase oil flowrates for AICDs and
ICDs are matched for a given pressure
drop, and the differences in flow charac-
teristics are examined.
COMPLETION DESIGN
Effective compartmentalization is crit-
ical in AICD completions, to allow differ-
ent choking between compartments, en-
abling more contribution from sections
with the highest oil fractions. Generally,
flow capacity as a function of its inlet port to maximize oil production. Value is de-
diameter. Total capacity of the completion rived from the application of AICDs, if
must be equal to, or greater than, the target water breakthrough can be delayed, and
production rate for a given flowing condi- if water saturation development is non-
tion. The initial and maximum oil and liq- uniform along the wellbore. During early
uid production targets will be simulated to production, prior to water breakthrough,
determine the quantity and size of AICDs AICDs can optimize drainage and re-
required to ensure that maximum well de- duce the likelihood of water coning by
liverability is achieved. ensuring that inflow between the zones
The evolution of water cut, over time, is balanced. This provides a window to
is critical for AICD completion design accelerate early oil production, and then
Fig. 6. An AICD performance comparison with an ICD.
30
25
20
Pressure drop, bar

the more compartments that can be cre-

ated, the more effective AICD perfor- 15
mance will be. Limiting unwanted water
production into smaller wellbore lengths 10
allows greater contribution from zones
with higher oil saturations.
Water ICD oil
Limitations on the number of com- 5 Oil Test water
partments may be imposed by well op- ICD water Test oil
erability factors, such as hole condition, 0
weight limitations or existing comple- 0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4 1.6 1.8 2.0
tions. The location of compartments can Flowrate, litres/hour
be determined by changes in reservoir
Fig. 7. A retrofit AICD completion in an existing, stand-alone screen, with the production
factors, such as natural barriers, fractures, flow paths.
permeability or saturation contrasts. In
longer bores, locations may be simply
spaced out along the completion.
Sensitivity studies using nodal analysis
tools are required to optimize the quan-
tity and location of zonal isolation devices.
This analysis is typically reviewed, once ac-
tual well data become available, and chang-
es can be made at the rig site. Zonal isola-
tion is typically achieved using swellable
Fig. 8. One of the first AICD retrofit installations offshore China boosted oil output
rubber, mounted onto sleeves that can be significantly.
slipped over the completion tubing and se-
90 102
cured in place, providing a flexible solution Oil rate
to compartmentalization. Water cut % 100
80
For retrofit applications in inner 98
96.2% WC
strings consisting of installing AICD subs, 70 96
swellable packers are installed within the 93.6% WC
Well shut down 94
existing wellbore. In this case, compart- 60
Oil rate, m3/d

AICD installation
Water Cut %

mentalization is driven by the existing 92

50 Oil 55m3/d
wellbore, whether that be stand-alone Oil 43m3/d 90
screens or gravel-packed completions, 88
40
along with packers for zonal isolation
86
(Fig. 7), or with cased and perforated wells. 30
The quantity and sizing of AICDs (driv- 84
en by changes to the inlet port) will depend 20 82
on the overall flowrate, formation produc- 2012-06-01 2012-12-01 2013-06-01 2013-12-01 2014-06-01 2014-12-01 2015-06-01 2015-12-01 2016-06-01
Date
tivity and the well length. Each AICD has a
World Oil®!/!MAY 2018!35
 -*;1*<=#065

'()*&(+,-!
EOR/IOR

.(+$/
2%3"&
)5)9'"+ 95)*$&, $-//5)* *(+:
7&8&22$*+
4)BB'/; )'52/, .()*&+2
M)8=+3,

maintain output from high-oil-satura- hypothetical scenarios was created, and a

4,>,""%7@

tion zones, when water begins to break statistical approach adopted. 69)+

6)7@'?7 through other zones, until water satura- 6"%8'7

Where water saturation is at 96% across
!2$9:5;&#
tion increases uniformly along the entire the producing section, the AICDs cannot
An exclusive wellbore. Once water saturation is uni- add value. But where variation in water cut
M3+%+@

form along the wellbore, the AICDs no increases value, it can be demonstrated,
,5"*-% :"'!"
I%8)H 6&'',
longer improve production
$,++
performance. provided the additional *&+6
pressure drop re- (%J8'7

The AICD also acts as a check valve, sulting from the AICD does not limit well

Permian
$"%37& $'&8

4#$5$*&' preventing flow from the production production, Fig. 8. In this case, progressive
D+'?7L3,"@
I%=';%

3$661* conduit to the formation (injection di- cavity pumps were used to drive produc-
2$034/5)

Basin Map
rection). During deployment, this allows tion and, therefore, low reservoir energy
1,7>,+#538J
circulation through the completion with- was not a limiting factor. Similarly, a sta-
out deploying
3&2F5 a wash pipe, and allows tistical approach was adopted to evaluate
4''9
a hydraulic packer to be set. In later life, the success of AICD applications, with a
2nd Edition
!&/0*12&,3 !&/0*12& where chemical treatments are prescribed range in increased>&22'<!*'+&# oil production of zero to
*#&.)"&'1)(#"
to treat scale, paraffin or asphaltene prob- 165%, but with an average of 44% immedi-
M%3"
lems, requiring injection into the wellbore ately following installation. 60+&"'(1/0"
4%H,&%
67J@,+

A'BB&
6,H37'",
:"(+&2 annulus and/or ."125+ the formation,
N1<L022 a bypass
/5'.&+
Using AICDs in heavy oil fields can
2)-'',
8(29&'

valve can be installed, adjacent to the help reduce water cut. The viscosity dif-
-7$ AICD to permit injection. The bypass ference between heavy oil and water pro-
valve can be installed as part of a screen vides a favorable mobility ratio well-suit-
!5$#1*,?0+:&
assembly (with the AICD) in the lower ed to this technology and has been shown 6?,,8?%8,+

H922&#;1*
completion, or run as a separate sub. to increase oil production. The trial well 2'&/',

.7@+,?&
951"'. was flowing 3&6;%#11@
with an initial water cut of
5'"'+%@'#538J

2$037"**8
REDUCING WATER CUT:
+5$"+
"+.'&12 %"'6(+
96%. After=$;$*A,B$6;,C1D$#+
installation of AICD, the well
!"#$%&' A CASE STUDY !*'+&# produces with a 93% water cut. It is envis-
"&)$"%#1)/"',
(&)*#
+'&$,-%. ()*/7"**8 AICDs have been used in brownfield aged that the D3E#69+37E
water is coming from wet
%(6)9&$$

(%"
H95#/$*<L$6F51
LF%&&
wells across Europe, the Middle
68%78'7
East, Chi-
C1D$#+,E2$66F1F@ sand in the heel of the well, and the AICD
na and North America as a retrofit solution is choking the high-water zone area. The
E12+6/0;5,G1#;5
5'?@,7#O'+8=after water cut increases, most commonly water cut reduction enabled a resultant in-
<3@"%7@

&)65'
when water cut has reached up to 96%.
2$037"**8
crease in oil production from 43m3/d to
>&#/0;
In one of the first AICD retrofit instal- 55m3/d, or 28%. As the water is restricted )5*&
E12+6/0;5 H16;&#
lations %(.$"+.
during December 2014, in a heavy upon breakthrough, the overall recovery
M%+@,7#538J D+'78,

G,+H38 oil environment offshore China, designed of the well is improved, when compared
F@,&&%
68,+"37E#538J

:$"22)5)* 26&'$(+:
1(+*$&' C$#"&# to control water cut, it also showed a sig- to operations using conventional meth-
J1D+&*,!19;5 9"&&'(1/0"
C37; I&*D&22 nificant increase in oil production, Fig. 8. ods and passive ICDs.
The length of the well is 600 m horizontal, Use of AICDs requires a thorough un-
K9*&
3$#+<B6;&6,G1#;5 and it was completed!"#$%&##' initially with 5.5-in. derstanding of the technology, well perfor-
()#&*+,-#&$.
I='+78'7>3"", screen, with gravel pack in an 8.5-in. open mance and downhole fluid properties that M+%9,#5+,,;

hole. Retrofit AICDs have been installed will impact the design and determine ul-
1"'.
)'"+&
on-465+
4-in. pipe joints and deployed inside ex- timate recovery. The reservoir model will 6%7#.7E,"'
3$#+,!19;5
!$*+,C0226
isting 5.5-in. screen. The well'&":"+ was shut in have at least some uncertainty that needs
(LF>*0:5;. previously, due to the water cut exceeding to be addressed,
5+%7, ('(5+
using sensitivity analysis 65%3:'&&+
LFB2#1' 96%. Following installation of the AICD to ensure that the AICD performs in the
KH9,+3%" completion, a reduction in water cut to well, in all scenarios. <,+8-'7

93.6% was observed. The water cut reduc-

LFJ$/&'
tion enabled a resultant increase in oil pro-
DR. ISMARULLIZAM MOHD
duction from 43 m3/d to 55m3/d, or 28%.
</5%H,J

ISMAIL is the Subsurface

Based on the positive results of the initial H$#/&# Engineering manager at
well, there have been many more wells Tendeka, and is based in
Aberdeen, UK. He holds an MSc
within the field completed with AICDs, as degree and PhD in mechanical
a retrofit solution or primary completion -3-#&1&%!/
2)9$&()9&'
engineering from the University
ORDER YOUR
:'+8#68'/;8'7
4&)52
for new wells. of Leeds, England, and has been working on
2$033$*:
sand control and inflow control technology for
!"@'+%@'

MAP TODAY: &##"' fully implementing AICD in this field, as over One of the key challenges in success-
M$;&6
)/",,*"'01 )'5)*&66
15 years. This has been in multiple roles,
!/
mainly offshore operations, project engineering

store.GulfEnergyInfo.com/ with many late-field life applications, was and product development. He has designed
F-'7%

and modelled AICD/ICD nozzle completions for

the limited availability of well performance more than 100 wells, globally. He also holds
Permian data, production logs and dynamic reser- various patents for inflow control design.
2-665+
6'7'+%

voir models. To demonstrate the poten- Prior to joining Tendeka, he worked for various
major service companies and carried out
tial value of AICD technology, a series of university research.
36!MAY 2018!/!WorldOil.com
)-2$/"%#1)/"',

What’s new in artificial lift?
Part 1: In this first of two
monthly reports, the authors
review significant changes
in the artificial lift industry
and highlight innovations in
beam/rod pumping, linear lift
units, and more.
" JOE D. WOODS, International Pinpoint
and JAMES F. LEA, PL Tech LLC
So, what is new in artificial lift? Each
year, for over three decades, the keepers
of these pages have asked this question.
They have searched far and wide to re-
port on new products and technologies
that help improve well performance and
reduce lifting costs.
Artificial lift is recognized as a large
and technically important segment of the
oil and gas industry. Underscoring its im-
portance are the numerous mergers and
acquisitions that have altered the land-
scape of product and service providers.
Hence, it may be helpful to pause and
not only ask “what’s new?” but also to
ask “who’s new?” Or, at least, “who’s who
in artificial lift?” To that end, we offer the
following on the M&A race that has re-
shaped today’s artificial lift playing field.
WHO’S WHO IN ARTIFICIAL LIFT?
Hold on to your “nodding horses.”
They’re off and running. And, here’s how
the race is shaping up.
Baker Hughes, a GE company
(BHGE). In 1980, Hughes Tool Co.
acquired the Centrilift line of electric
submersible pumps (ESPs) from Borg
Warner. Hughes also acquired Submerg-
ible Oil Services (SOS) in 1980 and
combined it with Centrilift. In 1987,
Baker International Corp. and Hughes
Tool Co. merged to form Baker Hughes
Inc. In 1997, Centrilift strengthened its
capabilities with the acquisition of Oil
ARTIFICIAL LIFT
Dynamics, an ESP competitor with spe-
cialized technology.
Starting in 2007, GE was gaining a siz-
able toehold in the oil and gas industry
through strategic acquisitions. In 2011,
GE acquired Wood Group’s well support
division, which was comprised of three
business units – ESPs, pressure control
(surface wellheads and trees) and logging
services. This represented GE’s first ma-
jor position in the artificial lift business
(Wood Group ESP).
Then in 2013, GE acquired Lufkin
Industries, a provider of artificial lift tech-
nologies with a leading position in rod lift
systems that dates back almost a century,
Fig. 1. Through its long history, Lufkin
expanded its artificial lift offerings with
acquisitions of companies and/or assets
from Delta-X, Nabla, American Manufac-
turing, Churchill, International Lift Sys-
tems, Petro Hydraulic Lift Systems, Pen-
tagon Optimization Service and Quinn
Oilfield Supply. Combining Wood Group
ESP with Lufkin created a major presence
for GE in the artificial lift business.
Fast-forward to 2017, when Baker
Hughes and GE Oil & Gas combined to
form BHGE. Since both GE and Baker
Hughes were major players in artificial lift,
their merger established the overall global
leader in artificial lift technologies. Their
hold on the ESP business is significant,
since Baker Hughes led the ESP market
and GE held the third-place position.
The new company’s portfolio includes
ESP systems, rod lift systems, horizontal
surface pumps (HSPs), progressive cavity
pumps (PCPs), and gas lift systems, along
with monitoring and control systems.
Some might say that BHGE wins the
gold “pumpjack” award in the artificial lift
race. But, there are others in the field, and
the finish line is a moving target.
Borets. Established in Russia more than
100 years ago, Borets is a leading global
provider of ESPs. The company domi-
nates the ESP-driven market in Russia.
Headquartered in Dubai, Borets has 11
Fig. 1. The Lufkin Gen 2 conventional beam
pumping unit has been redesigned to
reduce costs and improve reliability.
manufacturing facilities in five countries,
and has a sales and service presence in
over 15 countries.
In 2008, Borets acquired 62% of the
ESP division of Weatherford Internation-
al. Weatherford retained 38% ownership.
In 2013, Weatherford sold its share of
the joint venture to Borets and exited the
ESP segment of the artificial lift business.
While Borets’ focus has been on ESPs,
they also provide HSPs, PCPs, surface
control and monitoring systems.
Dover Artificial Lift (now part of Aper-
gy). Dover Corporation is an American
conglomerate manufacturer of indus-
trial products, founded in 1955, which
built a significant presence in artificial
lift through numerous acquisitions. The
company’s artificial lift portfolio com-
prised many leading brands, such as Nor-
ris, Harbison-Fischer, Theta Oilfield Ser-
vices, PCS Ferguson, Alberta Oil Tool,
UPCO, Pro-Rod, Oil Lift Technology,
and Spirit Global Energy Solutions.
In October 2014, Dover Artificial
Lift announced that it had acquired Ac-
celerated Companies, whose core offer-
ings included ESPs, jet pumps, gas lift
systems, surface pumping and modular
process systems. In 2017, Dover added
PCPs to its portfolio with the acquisition
of PCP Oil Tools of Argentina.
World Oil®!/!MAY 2018!37
ARTIFICIAL LIFT
In December 2017, Dover Corp. an-
nounced its plan to spin off its upstream
energy business into a standalone, pub-
licly-traded company. This month a new
company, Apergy Corp., was formed.
Apergy’s principal products consist of
Dover’s artificial lift equipment and PCD
cutters for drilling. Apergy also provides
a full automation offering, consisting of
equipment, software and IoT solutions
for downhole monitoring, well site pro-
ductivity enhancement and asset integ-
rity management. Apergy has a global
presence, with operations in the United
States, Canada, Latin America and the
Middle East.
Endurance Lift Solutions. Endur-
ance was formed in 2014 and acquired
the assets and operations of John Crane
Production Solutions ( JCPS) in Octo-
ber 2016. Following the acquisition of
JCPS, Endurance combined operations
with two related companies to create a
single artificial lift company providing
reciprocating rod lift and plunger lift ap-
plications. The company operates as a
subsidiary of Synergy Energy Holdings.
Halliburton was founded in 1919 and
is considered the world’s second larg-
est oilfield services company. For years,
Halliburton has had a presence in the
artificial lift and production services seg-
ment of the oil and gas industry, but was
never considered a “major” player in arti-
ficial lift. In 2012, Halliburton acquired a
small ESP company, Global Artificial Lift,
formed in 2008.
In July 2017, Halliburton announced
the acquisition of Summit ESP, a leading
provider of ESP technology and services.
Now, Halliburton Artificial Lift offers
several key lift methods, including ESPs,
HSPs, PCPs, and the associated power,
control and monitoring systems.
Fig. 2. Global breakdown of artificial lift
units (source: ADI Analytics).
Rod pump 45%
Gas lift 30%
ESP 15%
PCP 5%
Other 5%
38!MAY 2018!/!WorldOil.com
Liberty Lift Solutions. Liberty Lift’s
core management team consists of for-
mer Weatherford and Lufkin executives,
with more than 125 combined years in
the artificial lift business. The company
is focused primarily on beam pumping
systems. However, their product line has
expanded to provide a solution for all
stages of the production lifecycle.
In addition to conventional and en-
hanced geometry beam pumps, Liberty
Lift has introduced Long Stroke pumping
units, gas lift systems for both tubing and
wireline retrievable equipment, and a line
of jet pumps with JJ Tech that incorporates
a surface power fluid system, prime mover,
surface pump and downhole jet pump.
Schlumberger was founded in Paris
in 1926, and is recognixed as the world’s
largest oilfield service company. In 1998,
Schlumberger acquired Camco Inter-
national (gas lift and gas compression),
which included REDA ESP pumps. Then,
in 2012, Schlumberger initiated a strat-
egy to bring together leading sucker rod
pump companies in North America to ex-
pand its artificial lift offering.
In 2013, Schlumberger acquired sev-
eral companies, including Shores Lift So-
lutions, which provides beam pumping
units, sucker rods, optimization solutions
and field services.
In 2014, Schlumberger acquired 12
firms, including ESP deployment tech-
nology developer ZEiTECS (once wholly
owned by Shell Technology Ventures),
KUDU Industries (PCPs), Don-Nan (a
downhole rod pump manufacturer and
pump service provider), Grimes Sales
and Service (the unique HG curved-
beam pumping units), and others. In
2015, Schlumberger acquired Cameron
International, which had a small footprint
in the artificial lift business.
Schlumberger now delivers leading
technologies across a wide artificial lift
spectrum, including rod lift, ESPs, HSPs,
gas lift and PCPs.
Valiant Artificial Lift Solutions.
Formed in 2016, Valiant is led by Gareth
C. Ford, former president and CEO of
Wood Group ESP. Valiant’s focus is on
ESPs, HSPs and PCPs. The company has
an operating presence in Oklahoma, the
Permian basin, and Bogota, Colombia.
Weatherford. On most scorecards in
the first decade of this century, Weath-
erford International emerged as the in-
dustry’s artificial lift leader, in terms of
scope of product offerings and market
share. Then, as described, the artificial
lift landscape began to change.
In late 2017, Weatherford appointed
advisors, including Morgan Stanley, to
ease its high debt burden of $7.9 billion
by disposing some business units. The
potential asset divestment previously has
been reported to include the company’s
existing artificial lift business. Pending
any final disposition, Weatherford contin-
ues to be a leader in artificial lift.
Its product offerings include auto-
mation and control, capillary injection
systems, Corod continuous rod systems,
conventional sucker rods, rod guides, gas
lift systems, jet pumps, hydraulic piston
pumps, plunger lift systems, PCPs, long
stroke pumps, beam rod pumps and sub-
surface rod pumps. As mentioned, Weath-
erford exited the ESP segment in 2013.
TURNING THE CORNER
The discussion of these companies is
meant to serve as an indicator of how the
industry is changing. Obviously, there are
many more players on the global artificial
lift field. We survey close to 100 compa-
nies each year for this feature alone.
With the development of the shale oil
boom, North America has been the pri-
mary driver for artificial lift demand and
recent M&A activity. According to ADI
Analytics, in the U.S., over 95% of oil
wells require artificial lift, with the bulk
of those utilizing rod pumps. Artificial
lift used in Asia is fairly even across ESPs,
PCPs, rod pumps and gas lift. Russia re-
lies heavily on ESPs. Rod pumping is the
leading artificial lift method globally, fol-
lowed by gas lift, ESPs and PCPs. Figure
2 illustrates the share of these artificial
lift units worldwide.
While providing our perspective on
“who’s who,” we offer the following on
“What’s new in artificial lift?” for 2018.
BEAM/ROD LIFT DEVELOPMENTS
The basic beam rod pump system
consists of three components: a surface
pump, a connecting rod string, and a
downhole plunger pump.
BHGE’s Lufkin Gen 2 beam unit.
This is a new generation of the iconic
beam pumping unit (BPU) introduced
by Lufkin in 1925, Fig. 1. The units have
been redesigned and standardized—
 ARTIFICIAL LIFT

making them safer and easier to install— Coiled rods provide strength and ex- ning Production Services (LPS) provides
while the focus remains on reliable tech- tended lifespan. The couplings of con- coiled rod for mature conventional and un-
nology that enables operators to produce ventional rods often create a concentrated conventional wells. Coiled rod offers supe-
efficiently and cost-effectively. side load where they contact the tubing. rior strength and an extended lifespan, due
The gear reducer design has been This can lead to premature wear. Coiled to increased corrosion resistance under
improved with new lifting features to rod has proven to significantly reduce side alternative loads and high service loads in
increase safety. The structural bearing- loading and frictional rod-on-tubing wear both rod-pumped and PCP wells.
to-load ratio has been improved by more by spreading the contact points across a Shot peening is an integral part of the
than 21%. Nord lock washers were added longer area of the rod and tubing. Light- LPS coiled rod manufacturing process.
to maintain torque on connections, and
slots were added in many areas to make Fig. 3. A LPS crew replacing a conventional sucker rod string with coiled rod.
assembly quicker. The crankshaft is
larger in diameter, the crank has sleeved
holes, and there isFREE
more space
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shaped to provide both minimum and
maximum weight on the crank, with no
auxiliary weights required. This reduces
the need for additional weight inventory.
STAND NO.
Super nuts are installed on crank pins to
avoid the use of hammer wrenches and
their related safety challenges. Lubrica-
tion wipers are standard issue in all gear
reducer sizes for proper lubrication, even
at very slow speeds.

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HOS T PART NE RS PRI N C I PA L S PONS ORS HOS T AS S OCIATION PROUDLY SUP P ORTED BY
ARTIFICIAL LIFT
The technique helps increase the rod’s eliminates metals and rods with surface
surface tension, reducing surface imper- inclusions that may increase corrosion re-
fections that are susceptible to corrosion lated failures. The steel is produced with
that can lead to reduced run life. clean manufacturing practices that create
With complete control of the steel mill, a reduction in non-metallic inclusions
tight surface inclusion specifications are and an improved capacity to resist con-
driven to high standards, which help pre- taminated products. The process creates a
vent the acceptance of micro-constituents superior product, even before quench and
that reduce the strength of the metal. It is tempering operations begin.
important to begin with the highest qual- LPS coiled rod is engineered and tested
ity of steel possible, which means LPS at an in-house laboratory. A series of trials
is conducted to verify the rod’s enhanced
Fig. 4. Forland’s long stroke pumping unit. properties, including the National As-
sociation of Corrosion Engineers test, in
addition to full-scale fatigue analysis in
neutral (air) and corrosive (CO2 and H2S)
environments. Finally, an engineer reviews
the rod string configuration to ensure op-
timized results in the specific application.
LPS coiled rod is available in several
configurations. To eliminate mishan-
dling or improper installation, LPS has
service locations strategically placed in
major oil and gas basins. The company’s
crews are experienced in testing with
Flushby units and perform all tasks nec-
essary for proper installation, including
onsite welding, Fig. 3.
LINEAR LIFT PUMPS
Linear lift units can provide a cost-effi-
cient, compact, lighter-weight alternative
to traditional beam pumping units in many
Fig. 5. Pump fillage by downhole multi-pad, horizontal well applications.
separation type.
100 New long stroke pumping unit.
90 Forland Services has introduced a new
80
70 generation of long stroke pumping units
Pump fillage, %
60 that includes a switched reluctance drive
50
Legend
(SRD) and integrated control system,
40
30
Max
P75
Fig. 4. The units also feature a planetary
20 Mean
P25 gear box and open-looped chain/travel-
10
0
Min
ling sprocket transmission system, inner-
HEAL Poor Packer Mud Mud Poor Packer tower counterweight system, and a flexi-
system Boy Type 1 Anchor Anchor Boy Type 2 ble load belt. The control cabinet includes
Type 1 1 2 Type 2
an integrated power supply, SRD/PLC
unit, human machine interface (HMI)
Fig. 6. The history of a HEAL System
installed in a Permian basin well (7,900 ft).
module, physical indicators/buttons, and
optional remote access module.
450 Unlike common induction motors,
400 the SRD has large overload capacity
350 and frequent commutation ability that
Total fluid rate, bpd
300 makes it ideal for adapting to field oper-
250
ating conditions. The motor commuta-
200
150
tion time can be pre-adjusted according
100 to load and stroke, so that the reversing
50 of the polished rod is softer and endures
0 less mechanical impact.
0 15 30 45 60 75 90 105 120 135 150 165 180 195 210
Days after installation These new long stroke units can
achieve independent upward and down-
40!MAY 2018!/!WorldOil.com
ward stroke speeds without a variable
frequency drive (VFD). This is espe-
cially beneficial for heavy oil wells, hori-
zontal wells and wells that are prone to
gas lock. Additionally, stroke lengths are
automatically adjusted, and the working
region of the stroke can be customized
with no sacrifice to production capacity.
The integrated SRD functions similar-
ly to a VFD for step-less motor frequen-
cy control. This means the upward and
downward speeds are individually con-
trolled through the forward and reverse
rotary frequency of the drive system.
The control system provides up-
per (lower) half stroke and the upward
(downward) stroke speed adjustment via
the HMI, and monitors operating param-
eters and the polished rod position. It de-
tects over-speed, over-load conditions or
under-load shutdown. The smart features
provide controller pauses, false alarms
and other customizable operator-defined
faults. Manual jog up/down of the drive
system is possible through the HMI, as is
shutdown and restart.
Competitive motor-driven units must
complete a defined full stroke. If well con-
ditions and fluid volumes change, their
stroke speed must be altered via pre-con-
figured VFD settings to adapt to changes
in fluid displacement. The Forland unit
automatically adjusts its speed to chang-
ing load conditions. In conditions where
other units might cause the downhole
pump to stick, the Forland unit allows
the adjustment of stroke length, avoid-
ing downhole pump damage. It also can
narrow the operating range in upper (or
lower) sections of a full stroke.
Besides slower operating speeds,
which lead to fewer pump cycles and in-
creased pump life, the unique selectable
stroke section and independent control-
lable upward/downward speed make the
Forland unit highly efficient. It is able
to solve complicated issues in high de-
viation, high fluid volume, high water-cut,
and heavy oil conditions, where other
forms of lift tend to cause excessive down
time. The 306-in. stroke Forland unit can
handle 1,500-bpd displacement at a pump
depth of 6,000 ft and 900 bpd at a pump
depth of 8,000 ft. This flexibility benefits
operators, who experience a high number
of failures or costly interventions.
Long stroke units in deep horizon-
tal wells. It can be difficult in deep,
high-rate horizontal wells to transition

early to rod pumping, to lower OPEX.
According to some manufacturers, long-
stroke units have high theoretical dis-
placements and should be able to attain
500 to 800 bpd at 100% efficiency to
depths of 10,000 ft. In reality, this is not
always achieved, which can cause deep,
high gas-to-liquid ratio wells to struggle,
leading to poor performance.
These types of wells typically ex-
perience high initial production rates
followed by a rapid decline. High gas-
to-liquid ratio increases the risk of gas in-
terference and foam generation. In some
cases, engineers are forced to use smaller
pumps and equipment because of restric-
tions caused by smaller-diameter casing
selected to minimize drilling costs. Gen-
erally, wells at deeper depths are prone
to excessive rod loads, increased power
requirements and higher frequencies of
wear holes in tubing-related workovers.
In addition to these challenges, slug
flow behavior from the horizontal has
proven to be the root cause of low volu-
metric efficiency and underperformance
in rod pumping. This causes cyclical pe-
riods of gas interference, reducing pump
reliability, efficiency and capacity. The na-
ture of slug flow encourages solids produc-
tion and transports solids that can damage
the pump. Ultimately, the compounding
effect of these behaviors limits drawdown
and reserves, and increases operating costs.
The HEAL System (a joint venture
product from Production Plus Energy
Services and Schlumberger) is a patent-
pending, downhole solution that seam-
lessly joins the horizontal as part of a
standard well completion. Designed to
perform for the life of the well and with
no moving parts, the system is made up
of a floating seal, a sized regulating string
and the Heal vortex separator.
The system mitigates slug flow in deep
wells that provides complete pump fillage
in rod lifted wells, Fig. 5. It is designed to
address three major components of artifi-
cial lift system inefficiency: 1) the system
conditions flow to minimize the causes of
slugging as much as possible; 2) efficient-
ly lifts fluids from the horizontal to the
vertical; and 3) controls solids produc-
tion and movement in the wellbore.
With slug flow managed, long stroke
pumping units can produce with high
volumetric efficiency and system re-
liability, at production rates of 500
to 600 bpd below 6,000 ft. When the
HEAL System is installed at initial comple-
Fig. 7. A Zedi SilverJack 8000 linear lift unit.
Fig. 8. Stuck open, traveling valve: Smart-
Field indicates automatic detection/manual
resolutions and, then, automatic detection/
auto resolution.
tion, natural flow can be extended beyond
what is conventionally possible. This can
close the gap between natural flow and rod
pumping, usually filled by gas lift. It makes
earlier and simplified transition to rod
pumping with lower OPEX a possibility.
HEAL Systems are field-proven in over
300 installaltions across North America,
with over 60 of those in the Permian basin.
The system has proven the high-rate capac-
ity of long stroke pumping units is possible
in the field. A system installed in the Perm-
ian with a pump depth of 7,900 ft, TVD,
demonstrated reliable 300-to-400-bpd ca-
pability, Fig. 6. An installation in the Mont-
ney shows a similar capacity for high rates.
Automated resolution of rod pump-
ing issues. In previous World Oil issues
(May 2015, May 2016), we discussed Ze-
di’s nitrogen-assisted Zedi SilverJack 6000
and 8000 hydraulic, linear lift rod pump-
ing technologies, Fig. 7. As part of its
smart-field initiative, Zedi has engineered
autonomous operation capabilities into
the SilverJack pump by installing an al-
gorithm that detects and automatically
resolves common rod-pumping issues,
Figs. 8 and 9. The algorithm is designed
to solve issues such as parted rods, a hole
in the tubing, a split barrel, gas lock and
ARTIFICIAL LIFT
Fig. 9. Read out from Zedi Go mobile app
shows gas lock issue has been detected,
and the automation is running to solve
the problem.
stuck downhole pump valves. In addition
to detection, the algorithm automates the
resolution of treatable issues like stuck
downhole pump valves and gas lock.
The algorithm is based on pump card
analysis. Once an issue is detected, the
SilverJack optimization controller can
send a notification to the site operator
or proceed with automated issue resolu-
tion. The changes made by the automatic
controller are similar to what an optimiza-
tion technician would do manually if at-
tempting to resolve the problem, includ-
ing adjustments to stroke speed/length or
changing the bottom position to tag the
pump. Aggressive steps like heavy tagging
of the downhole pump can be omitted, if
so desired.
To address the unique configuration
of each well, the algorithm can be tuned
to only use previously successful steps
for a specific well, further improving
resolution performance over time. This
automation significantly reduces issue
resolution time by eliminating the need
for manual intervention. Field testing
has shown that the time to detect and
resolve stuck downhole pump valves can
be as little as four minutes.
World Oil®!/!MAY 2018!41
ARTIFICIAL LIFT
The autonomous operation is facilitat-
ed by the hydraulic drive system of Zedi’s
SilverJack portfolio. The operational ad-
justments required are made by the opti-
mization controller with no need for me-
chanical changes. The same adjustments
can be made on both AC and gas-driven
SJ6000 and SJ8000 systems. The algo-
rithm can be added to existing deploy-
ments via a firmware upgrade.
AUTOMATION AND CONTROL
Artificial lift control systems have be-
come increasingly important, since any
production downtime is extremely costly.
Lufkin Well Manager (LWM). The
new BHGE LWM 2.0 rod pump control-
ler provides smarter, more efficient data
gathering capabilities and a more intuitive
interface that enables operators to maxi-
mize well performance while improving
artificial lift equipment operations.
More than just a standard rod pump
controller, the LWM 2.0 features advanced
pump-off control and VFD functions.
Additional improvements include a full-
color, high-resolution user interface with
WHETHER YOU’RE
BUYING OR
SELLING,
THIS CUT MONITOR’S
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42!MAY 2018!/!WorldOil.com
on-board wifi connectivity, all with no re-
quirements for proprietary software. This
allows flexibility of access for personnel,
either onsite or remotely, to retrieve the
needed information on a computer or mo-
bile device in real time. The LWM 2.0 also
functions as a standard programmable log-
ic controller, supporting ladder logic and
proportional-integral-derivative control
functions with multiple options for input
output (I/O) expansion, including analog
and digital input and output, general pur-
pose I/O, resistance temperature detector,
and thermocouple inputs.
OTHER DEVELOPMENTS
Proper artificial lift selection should
include an analysis of the individual well’s
parameters and the operational character-
istics of the available lift systems.
Lifetime lift system. Comorant En-
gineering is now offering a Lifespan Lift
System (LLS), which uses one comple-
tion from early in the well’s life until the
well is abandoned. This system utilizes
one completion into which multiple lift
techniques are deployed without the need
for any rig time after the initial installa-
tion. The same LLS surface equipment
and tubing system are utilized throughout
the well’s life cycle.
The LLS uses two pump technologies
and a velocity string to lift produced fluids.
Three different configurations are avail-
able, Fig. 10. From a completion point of
view, the inner string is coiled tubing and
serves both as a velocity string and a fluid
conduit communicating to the wellhead.
Phase 1. During the well’s initial
completion and commissioning, coiled
tubing is installed. Then as the well pres-
sures and flowrates decrease, the veloc-
ity string can be used in several arrange-
ments to manipulate the production
flow velocities and rates.
Phase 2. During the next phase of pro-
duction, a jet pump is installed inside the
coiled tubing, by circulating the pump
down the wellbore and into a landing as-
sembly previously attached to the coiled
tubing. The jet pump can be used for the
high water rates typical in the early stages
of production.
Phase 3. In the third phase of pro-
duction, a hydraulically-driven posi-
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Fig. 10. The three phases of the Lifespan Lift System.
tive displacement pump (Comorant
RETRIEVER) is used to lift well fluids.
This pump is then utilized for the dura-
tion of the well’s life. Due to the pump’s
unique features, it can be used with zero
bottomhole pressure. It will not gas lock,
even in a 100% gas environment.
This unique completion and pump
configuration reduces operating costs,
as well as capital costs. Since a rig is only
necessary to initially install the tubing in
the well, expensive rig time for change-
outs is eliminated. Figure 11 provides a
comparison to segmented lift strategies
versus the Cormorant integrated LLS.
Both of the pump types utilize the
same landing assembly, which is attached
to the end of coiled tubing. These pumps
circulate into and out of the well, allowing
easy change-out and maintenance for the
pump type, as well as for pump repair and
rebuild. The Cormorant RETRIEVER
pump is a unique, hydraulically driven re-
ciprocating pump. It offers a long life, fits
inside 1¾-in. coiled tubing for use in 4½-
in. cased wells, and is capable of 12,000+
ft without high surface unit pressures.
The surface unit is a simple jet pump
type surface unit, sized to accomplish
the lift volumes projected for the well.
During the third phase of operation with
a RETRIEVER pump, the unit will op-
erate at significantly reduced flowrates,
providing high reliability and long-life
surface performance.
Flexible gas separation technol-
ogy. Black Jack Production Tools’ pat-
ented casing gas separator (CGS) is a new
production efficiency altering tool that
improves gas handling by doubling sepa-
Fig. 11. A comparison to segmented lift strategies vs. the Cormorant integrated Lifespan
Lift system.
ration capacity in artificially lifted wells.
The low-risk system is easy to install, and
is non-disruptive to existing drilling and
completion practices, Fig. 12.
NEXT MONTH
Part 2 of this year’s “What’s new in arti-
ficial lift?” series in the coming June issue
will include a number of recent product
developments associated with ESPs, PCPs,
gas lift and plunger lift technologies.
JOE D. WOODS is president
of International Pinpoint –
a marketing services and
technical information company
in Houston. Mr. Woods has over
40 years of energy industry
experience. He was director of
marketing and associate publisher at World Oil
for over 12 years. Previously, he was vice
president of marketing at GEO International
Corporation. He also held key marketing
positions at Halliburton. With Halliburton, he
was instrumental in developing curriculum for
the Modern Well Completion Practices School.
Mr. Woods has written numerous articles on
subjects, such as sand screens, intelligent wells,
underbalanced drilling, drilling with casing,
logging, perforating, artificial lift, and fracturing.
He co-authored the Modern Sandface
Completion Practices Handbook and the
Mature Oil & Gas Wells Downhole Remediation
ARTIFICIAL LIFT
Fig. 12. The CSG, run as part of the casing
string into a newly drilled well: A) provides
a route-around for gas; B) once in place,
the sleeves dissolve; C) an ESP installation;
and D) installation with a rod pump.
Handbook. He attended Texas A&M University
and received his Bachelor's degree from the
University of North Texas.
JAMES F. LEA teaches courses
in artificial lift and production
for Petroskills. He holds BS and
MS degrees in mechanical
engineering from the University
of Arkansas and a PhD from
Southern Methodist University.
He worked for Sun Oil as a research engineer
from 1970 to 1975, taught at the University of
Arkansas from 1975 to 1978, was team leader of
production optimization and artificial lift at
Amoco EPTG from 1979 to 1999 and was
chairman of Texas Tech University’s petroleum
engineering department from 1999 to 2006. He
has contributed to this series for over 25 years.
World Oil®!/!MAY 2018!43
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FEBRUARY 2018 / DEFINING CONVENTIONAL, SHALE AND OFFSHORE TECHNOLOGY FOR OIL AND GAS / WorldOil.com
FEBRUARY 2018

2018 FORECAST
Led by the U.S., the global drilling
recovery gains momentum

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results in hard, abrasive HT formations

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G & G TECHNOLOGY
Geo-engineered completion designs
improve recovery in unconventional wells
GULF PUBLISHING COMPANY
 FLOW ASSURANCE
A practical approach to fluid integrity
management in secondary recovery
A waterflood system’s success ultimately
depends upon formation geology and
the mobility ratio of the produced oil and
injection water. Both new and mature
waterfloods can benefit greatly from
improved fluid integrity management, as
demonstrated in a maturing waterflood in
eastern Kansas.
" LES ROBERTSON, Innospec Oilfield Services, Inc.
Waterflooding continues to be an effective, economical op-
tion for secondary oil recovery in partially depleted reservoirs.
Waterflood technologies have been applied successfully in a
wide variety of oil fields worldwide, including both onshore and
offshore operations. Significant resources are invested during
the selection, design and implementation phases of secondary
recovery operations to maximize return on investment (ROI).
However, after all the engineering, manpower and capital
investments, the success of a waterflood system ultimately de-
pends upon the geology of the producing formation, and the
mobility ratio of the produced oil and injection water. For this
reason, fluid integrity management is critical to the economic
success of the secondary recovery effort throughout the life of
the waterflood to maximize ROI. Both new and mature water-
floods can benefit greatly from a comprehensive effort to im-
prove water quality. The dramatic effects of improved fluid in-
tegrity management were documented recently on a maturing
waterflood in eastern Kansas.
BACKGROUND
The subject waterflood is located in Miami County, in east-
central Kansas. Both the producing and water injection wells
are conventional, vertical cased wells, set on an augmented
5-spot pattern. This shallow waterflood produces from the
Peru, Squirrel and Hunt formations, which are siliceous lime-
stone strata. Supply water is drawn from the Mississippi (Mis-
sissippi Lime) formation. The commingled injection flood
water was being filtered through 100-micron filters prior to
displacement into the formation.
The primary issues confronting this operator were exces-
sive injection pressures in the flood water injection system, and
rapid plugging of the cartridges in the water filtration unit at the
water injection station. Water injection pressures were in excess
of 900 psi and approaching the permitted pressure limits for this
unit. The quantity of suspended solids in the injection water
was exceeding the capacity of the water filtration unit, neces-
Fig. 1. Field technicians complete an on-site membrane flow cell
analysis, evaluating the effectiveness of water-treating additives.
sitating filter replacement every 24 to 48 hr. These issues were
restricting the flood water injection rates to the point that the
formation sweep capability was being impeded, and the effec-
tiveness of the waterflood operation was degrading.
EVALUATION
Identification of the suspended solids in the flood water in-
jection system was the initial priority in this investigation. The
utilization of membrane filtration test units has proven highly
effective in evaluations such as this. These units permit the de-
termination of the composition, quantity and particle size dis-
tribution of the suspended solids in water handling systems un-
der dynamic conditions onsite, Fig. 1. Dynamic testing onsite
is critical for the accurate identification of suspended solids in a
flood water system. Pressure, temperature and velocity changes
all impact the composition and quantity of suspended solids in
an aqueous system. Augmentation of dissolved gas concentra-
tions (carbon dioxide and hydrogen sulfide), and the potential
introduction of dissolved oxygen into the flood water specimen
during laboratory testing, are detrimental and counter-intuitive
in accurate suspended solids analyses.
Suspended solids typically found in domestic United States
waterflood operations consist of produced hydrocarbons, par-
affins, asphaltenes, common oilfield mineral scales (calcite,
gypsum, barite, celestite) iron carbonate, iron sulfide, sand, silt,
clay, formation fines, bacterial sludges and other debris encoun-
tered in typical oil and gas operations. In the subject waterflood,
suspended solids in the flood injection water were qualitatively
and quantitatively identified as iron sulfide, calcite (calcium
World Oil®!/!MAY 2018!45
FLOW ASSURANCE
carbonate) and barite (barium sulfate) with trace quantities of
formation fines. These suspended solids were heavily oil-wet
with produced hydrocarbons.
The agglomeration of oil-wet solids in flood injection sys-
tems is a significant contributing factor in the reduction of wa-
terflood efficiency. The downhole effect of these agglomerated
solids in water injection wells is two-fold. The initial conse-
quence is a reduction of permeability at the formation face and
near-wellbore caused by the physical plugging of the formation
pore throats by the oil-wet solids. The second consequence is
a wettability reversal at the formation face and near-wellbore.
The vast majority of reservoir rocks are either water-wet or
mixed-wet in their native state. This propagates an environment
conducive to waterflood operations, due to a reduced hydraulic
energy requirement for water displacement into the flood reser-
voir. As oil-wet solids amass at the formation face, a coating is cre-
ated that results in a near-wellbore wettability reversal to an oil-
wet state. This wettability reversal greatly increases the interfacial
tension between the flood injection water and the formation face.
The combined two-fold effect of formation plugging and wet-
tability reversal caused by agglomerated oil-wet solids greatly re-
stricts the pumpability of flood water. This propagates not only
reduced water injection rates and increased injection pressures,
but also contributes greatly to the overall reduction in unit oil
production efficiency. Maximum waterflood efficiency is only
achieved when the quantity and velocity of the flood water is suf-
ficient to increase the mobility of entrained reservoir oil.
REMEDIATION
The initial priority in the remediation of the subject wa-
terflood was the restoration of the formation face and near-
wellbore area of the water injection wells to a water-wet state
through the removal of the accumulated oil-wet solids. The
majority of the suspended solids in the injection water of this
system were identified as heavily oil-wet acid solubles (iron sul-
fide, calcite). For this reason, downhole acid washing was de-
termined to be a viable option for this downhole remediation.
When designing acid washing treatments, both mineral and
organic acids should be considered for the remedial treatment.
The quantity and type of solids to be removed, thermal limita-
tions of some organic acids, system dynamics, and treatment
economics should all be factored into the acid selection process.
The ultimate objective of the remedial treatment is to remove ag-
glomerated solids and return the near-wellbore area to its original
condition, while minimizing tubular and formation damage. Acid
selection and application are especially critical when dealing with
Fig. 2. Typical results of an on-site membrane flow cell analysis.
4,000
Product 1, 10 ppm
3,500
Product X , 10 ppm
3,000 Blank
Cumulative flow, mL
2,500
2,000
1,500
1,000
500
0 rity of this system. Since an appreciable quantity of the injec-
0 30 60 90 120 150
Time, sec
46!MAY 2018!/!WorldOil.com
acid-reactive zones, such as limestone and dolomite formations.
Maintaining formation integrity in flood injection wells is critical
to the long-term viability of a waterflood.
In addition to acid selection, additive packages should be
selected and tailored carefully to the specific treatment require-
ments. Acid corrosion inhibitor is a critical component of all
acid washing systems, to protect surface and downhole equip-
ment. Since hydrocarbon films are impervious to the majority
of mineral and organic acids, the incorporation of mutual sol-
vents and/or surfactants is vital to the success of the acidizing
treatment. These additives de-oil and water-wet solids to allow
acid contact. The incorporation of non-emulsifiers into the acid
package is also critical to mediate the potential for downhole
acid-induced emulsions. The utilization of non-emulsifiers is
especially important when acidizing producing wells and other
systems, where copious amounts of hydrocarbons are present.
In acidizing treatments where the liberation of high concen-
trations of soluble iron is possible (such as the dissolving of iron
sulfide), the incorporation of an iron control additive in the
acid is crucial. This additive prevents the precipitation of ferric
hydroxide from heavily iron-laden spent-acid solutions. Under
specific anaerobic conditions, ferric hydroxide can revert to
form iron magnetite. Both of these solids can precipitate and
create problematic secondary downhole plugging.
The liberation of hydrogen sulfide (H2S) when iron sulfide
is dissolved by acid is a critical issue that must be addressed in
the design phase of an acid treatment. The primary concern is
the safety of field personnel and protection from this poison
gas. A secondary concern is the protection of downhole and
surface equipment from sulfide stress cracking and hydrogen
blistering/embrittlement. The incorporation of corrosion in-
hibitors and/or sulfide cracking agents is sometimes required
in these applications.
Local acid pumping companies are experts in their field and
a vital resource in designing specific acid packages to meet in-
dividual treatment needs. In addition to acid washing, matrix
acidizing and acid fracturing are valuable tools that may be used,
as needed, to maintain the long-term viability of a waterflood.
MAINTENANCE
Following restoration of the water injection wells in the
subject waterflood, a program was implemented to improve in-
jection water quality to maintain the integrity of this injection
system. The use of a membrane flow cell can be extremely valu-
able in the design of a water treating program such as this. These
field test units allow on-site evaluation of the effectiveness of
various treating additives with fluids from the system in real
time under dynamic conditions, Fig. 2. Typically, water treating
products are complex formulations of surfactants, quaternary
ammonium chlorides, ethoxylated amines and other chemis-
tries designed to provide a synergistic performance in the water
handling system. These products de-oil and water-wet suspend-
ed solids, disperse deposited solids and reduce the interfacial
and surface tension in the aqueous phase of the system.
Concurrent to the restoration of the water injection wells in
the subject water flood, additional work was implemented up-
stream in the producing wells, to assure the continued integ-
180 210 240 300
tion water in this unit was connate water from the production
system, management of water quality from this perspective
 FLOW ASSURANCE

was vital to the overall operational success of the water flood.

The suspended solids previously identified in the injection
water were oil-wet iron sulfide, calcium carbonate and barium
sulfate, with trace quantities of formation fines. Identifica-
tion of the source of these suspended solids in the production
system was the next step in maintaining fluid integrity in this
flood injection system.
While oil production is the primary purpose of waterflood
operations, it is paramount to the success of the flood that oil
concentrations are minimized in the water injection system. Oil
in water carryover concentrations may be monitored easily at
the water discharge legs of separation equipment in the produc-
tion system and typically at the water injection system pumps.
Acceptable oil-in-water carryover concentrations vary accord-
ing to system efficiencies and reservoir dynamics, but ideally
should be maintained below 100 ppm.
Common contributing factors to high oil-in-water carryover
values in oil production systems are: 1) The incomplete resolu-
tion of water internal emulsions, due to improper demulsifica-
tion; 2) The presence of invert, water external emulsions; 3)
Stable or cut emulsions caused by production equipment mal-
function or an incompatible production chemical treating pro-
gram; 4) The presence of bacterial biomass; 5) Malfunctioning
separation equipment, or equipment operated above the rated
operational capacity; and 6) High concentrations of suspended
solids in the water phase.
In properly functioning production separation equipment,
an appreciable portion of the oil-in-water carryover often can be
attributed to oil-wet suspended solids. Agglomerated oil “pig- TAKE CONTROL
gybacks” on the suspended solids present in the produced wa-
ter. In these situations, oil carryover concentrations often can
REACH DEEPER
be reduced by lowering suspended solids concentrations in the
produced water. For this approach to be effective, the suspended Whether you’re in the Gulf of Mexico, Brazil,
solids must be composed of mineral scales, bacterial sludges, etc., North Sea, Asia or elsewhere Sandvik control line
and not sand, silt, clay or other solids originating in the formation. specialists help you avoid downhole surprises.
Another option in the reduction of oil in water carryover from Our Service Centers in USA, Brazil and Malaysia
oil-wet suspended solids would be the chemical injection of a offer fast-track stocks of seamless and seam-
water treating additive into the water discharge legs of the pro- welded tube in austenitic stainless steel, duplex
duction separation equipment. This additive would de-oil and stainless or nickel alloys. From bare tube to
water-wet the suspended solids under the turbulent flow pro- coiled and encapsulated flatpacks, including
vided, as the produced water was transferred from the separation TEC lines and cable protectors, you get a one-
equipment to the water storage tank(s). Under the quiescence stop solution. All supplied directly on your reels
of the water storage facility, the oil would separate and could be
– flushed, filled, hydrotested and ready to go.
skimmed from the top of the water tank, as necessary. This would
Going deep? We help you get there.
further reduce the quantity of oil in the flood injection water.
A secondary concern with suspended solids in produced flu-
ids is the potential deposition and accumulation of these solids
in the production separation equipment. Most waterflood piping MATERIALS.SANDVIK
systems operate under turbulent, or at least transitional flow. The
quiescence of separation equipment permits the deposition of
solids into the bottom of the water phase of these vessels. This
deposition can be significant in maturing waterfloods, where
vessel cleaning and maintenance has not been a priority. These
accumulated solids reduce the retention time and operational ef-
ficiency of the treating vessels, which can contribute to reduced
fluid separation efficiency and increased oil in water carry-over.
Iron sulfide was a major component in the suspended solids
found in the injection water of the subject waterflood. Iron sul-
fide (FeS) control in sour systems is critical for effective fluid
integrity management in secondary recovery operations. While
World Oil®!/!MAY 2018!47
FLOW ASSURANCE
iron sulfide may be produced by the direct combining of iron
and sulfur under extreme heat, in aqueous systems it is typi-
cally created from the reaction of dissolved soluble iron (Fe++)
and hydrogen sulfide (H2S). Iron sulfide is a dark brown/black,
water-insoluble solid with an affinity for hydrocarbons.
Iron sulfide mitigation may be achieved by managing the
concentrations of the reaction components. Dissolved iron
concentrations can be reduced in produced fluids with the im-
plementation of a comprehensive downhole corrosion treating
program in the producing wells. Downhole corrosion control
also should be considered for water supply wells and all other
source make-up waters utilized in the flood operation.
Dissolved hydrogen sulfide concentrations often can be re-
duced by managing sulfate reducing bacterial (SRB) activity,
using biocide treatments. In severe situations, the dissolved
hydrogen sulfide concentration may be managed with strate-
gic injection of hydrogen sulfide scavengers. Systems contain-
ing profuse amounts of deposited or suspended iron sulfide
also may be managed with the application of surfactants and/
or acids.
The presence of dissolved oxygen in produced fluids is a se-
rious issue in any oil and gas system. Dissolved oxygen causes
cathodic depolarization in the electrochemical corrosion pro-
Fig. 3. The detrimental effects of dissolved oxygen in sour
systems are evident in the identical fluid samples below. The
bottle on the right is oxygen-free, while the fluid on the left
contains dissolved oxygen.
Fig. 4. Typical results of improved fluid injectivity.
2,500
Before treatment
2,000 After treatment
Cumulative flow in mL
1,500
1,000
500
0 nipulations. Precipitation of these scales is typically initiated
0 30 60 90 120 150
Time in seconds
48!MAY 2018!/!WorldOil.com
cess that greatly accelerates the corrosion rate of steel. Second-
ary reactions of the liberated iron from the corrosion process
also can contribute to significant increases in suspended solids
concentrations, such as iron oxide and iron sulfide, in aqueous
systems. In addition to direct chemical reactions, the presence
of dissolved oxygen promotes the propagation of aerobic, slime-
forming bacterial activity, and also acts as a catalyst in the for-
mation of iron sulfide, Fig. 3.
Dissolved oxygen is never found in connate produced fluids.
Its presence is always the result of surface operations that allow
the entrance of atmospheric oxygen into the system. For this
reason, best practices are critical in the prevention of fluid oxy-
genation. Mechanical repairs and operational changes should be
the first line of defense in the deoxygenation of a system. Only
after the exhaustion of all mechanical options should chemical
oxygen scavenging be considered. This approach provides the
greatest long-term ROI. Common sources of oxygen entry in
mature or maturing waterfloods include:
• Leaking wellheads on producing wells and water supply
wells
• Improperly vented annulus on producing wells and water
supply wells
• Improperly maintained stuffing boxes, polish rods and
production T’s on rod pump wells
• Improper venting of atmospheric fluid separation
equipment
• Malfunctioning thief hatch seals or open/improperly
closed thief hatches on water tanks
• Improper blanketing of water handling and storage tanks
• Cascading fluid in water tanks, resulting from missing/
malfunctioning downcomers
• Leaking pump packing/seals on water transfer pumps
• Utilization of fresh/surface water in lease operations.
As previously stated, dissolved oxygen acts as a catalyst
in the formation of iron sulfide in aqueous systems. For this
reason, in sour systems such as the subject waterflood, pre-
vention of fluid oxygenation is critical in the management of
iron sulfide concentrations.
Control of mineral scale deposition is another significant
factor in fluid integrity management. In the subject water-
flood, both calcite (calcium carbonate) and barite (barium
sulfate) were present in the analyzed suspended solids. Min-
eral scale formation can occur in brine systems when either
the physical environment of the fluid is altered or the concen-
tration of the mineral scale is increased, such as through fluid
commingling, to the point that the solubility limits of the fluid
are exceeded.
Calcite solubility is greatly influenced by the physical en-
vironment. Increasing temperature, lowering pressure and in-
creasing fluid pH all significantly reduce calcite solubility and
can induce calcite precipitation. Increasing the concentration
of the mineral-forming ions, such as can occur with commin-
gling of brines, can result in the formation of calcite in con-
centrations exceeding the solubility limits of the fluid, causing
calcite precipitation.
The solubility of sulfate scales, such as gypsum, barite and
celestite are much less affected by physical environment ma-
180 210 240 300
by fluid commingling which produces scale concentrations
that exceed fluid solubility limits. Sulfate scale supersaturation

is easily obtained, due to the limited water solubility of
these scales.
Control of both carbonate and sulfate scales can be achieved
by a combination of best practices in commingling fluids and,
when necessary, the implementation of a comprehensive chem-
ical scale inhibition program.
OPTIMIZATION
Following the remediation of the water injection wells and
the implementation of a comprehensive upstream fluid integ-
rity management program in the subject waterflood, system
dynamics improved dramatically. Flood injection water quality
was improved significantly, Fig. 4. As a direct result of this water
quality improvement, and the remediation of the water injec-
tion wells, flood water injection pressures were lowered 48%.
Flood water injection rate capabilities were increased 52%.
In addition, the improved water quality provided for the in-
corporation of smaller micron filters in the water injection sys-
tem. Prior to treatment, 100-micron filters were being plugged
every 24 to 48 hr. Following implementation of the remediation
program, water quality improved to the point that 10-micron fil-
ters could be utilized and changed weekly. This unit responded
very well to the increased fluid push, providing a 26% increase
in the daily oil production.
While the dramatic improvements of the subject waterflood
should not be considered typical, the data do illuminate the
benefits of a practical systems approach to waterflood fluid in-
tegrity management.
More than repairs, you need an Edge.
You need more than a mechanic promising a quick fix or a sales rep looking to
upsell. You need a committed engineer who can go straight to the source of your
issues and resolve them so that they stay resolved. With quick, comprehensive
and local aftermarket service solutions, Weir gives you a competitive advantage
in basins across the globe.
FLOW ASSURANCE
REFERENCES
1. Ostroff, A. G., Introduction to Oilfield Water Technology, National Association Of Corrosion
Engineers, Houston, Texas, 1979.
2. Patton, C. C., Applied Water Technology, Campbell Petroleum Series, Norman, Okla., 1995.
3. Robertson, L. V., “Internal corrosion mechanisms,” Proceedings of University of Oklahoma Corrosion
Control Course, June 1–3, 2016.
4. Bradley, H. B., Petroleum Engineering Handbook, Society of Petroleum Engineers, Richardson,
Texas, 1992.
5. Moore, K. H., “Stop sucker rod failures to save money,” Petroleum Engineer International, July 1981,
p. 24.
6. NACE: TPC Publication 3, “Microbiologically influenced corrosion and biofouling in oilfield
equipment,” NACE International, Houston, Texas, 1990.
7. NACE Standard RP0475-91: Selection of Metallic Materials to be Used in All Phases of Water handling
for Injection into Oil Bearing Formations, NACE International, Houston, Texas, 1991.
8. Uhlig, H H., Corrosion and Corrosion Control, Second Edition, John Wiley & Sons, Inc., New York,
NY, 1971.
9. Fink, Johannes Karl, Oil Field Corrosion, Gulf Professional Publishing, Burlington, Mass.,
2003.
10.Eckenfelder, W. Wesley, Jr., Water Quality Engineering For Practicing Engineers, CBI Publishing
Company, Boston, Mass., 1970.
11.Van Poollen, H. K., Fundamentals of Enhanced Oil Recovery, PennWell Books, Tulsa, Okla., 1980.
12.API: Treating Oil Field Emulsions, Third Edition, American Petroleum Institute, 1974.
LES ROBERTSON is vice president of Technology,
Production Chemicals, at Innospec Oilfield Services,
Inc. His career began as a laboratory intern for an
independent oilfield production chemical company
and has continued through a variety of technical
positions, with both independent and major oilfield
chemical companies. He holds a BS degree in
Environmental Science and Chemistry from East Central Oklahoma
State University, with continuing education studies from St.
Catherine’s College, University of Oxford, UK. He has 39 years of
oilfield chemical experience in product development, chemical
treating program design, field technical service, product
management, marketing and employee training for drilling,
production and acidizing chemicals. For the past 16 years, he also
has served as an instructor at the University of Oklahoma Corrosion
Control Course in Norman, Okla.
Oil & Gas
www.edgeservice.weir
World Oil®!/!MAY 2018!49
 Shale Energy Technology Conference
SCOOP & STACK
FLAGSHIPS, SPINOFFS DELIVER
HIGH-RETURN PERMIAN OPTION
" JIM REDDEN, Contributing Editor
Oklahoma’s entries in the national shale
playbook sound like an encrypted play call in
an American football game: SCOOP, STACK,
Merge, SCORE. Fittingly, as reflected in whole-
sale full-field developments, it is all offense in
the acronymic Anadarko basin plays, where mul-
tiple high-flowing zones draw sharp comparisons
to the big league Permian basin, but without the
fiscal pain.
Unveiled by respective first-movers Conti-
nental Resources Inc. and Newfield Explora-
tion Co., the tightly concentrated South Central
Oklahoma Oil Province (SCOOP), the Sooner
Trend Anadarko Basin Canadian and Kingfish-
er Counties (STACK), and their offshoots are
among the nation’s fastest-growing unconven-
tional oil and gas plays. “Generally, we think the
economics are pretty good and are on par with
anything in the Permian and the best unconven-
tional plays in the United States,” Imre Kugler, as-
sociate director of energy research at IHS Markit,
50!MAY 2018!/!WorldOil.com
told the The Oklahoman on Aug. 18, 2017, as the
benchmark West Texas Intermediate oil price
hovered around $48/bbl.
A concurring Rystad Energy NASWellCube
analysis shows SCOOP wells completed in the first
three months of 2018 averaging wellhead break-
even prices of $34.60/bbl, compared to $42.74/
bbl for geologically complex STACK wells.
Intersecting the delineated boundaries of the
two plays, the self-explanatory Merge is said to of-
fer near-identical attributes of both SCOOP and
STACK, and at entry costs of less than $1,000/
acre. Meanwhile, although the dual-bench Wood-
ford and Meramec, and now-developing Springer
shales capture the spotlight, Newfield’s year-old
Sycamore, Caney, Osage Resource Expansion
(SCORE) initiative looks to further expand the
prospective horizons across its 350,000-net-acre
leasehold. Reverting to the more traditional geo-
logical reference, Newfield kicked off SCORE in
2017 with a $100-million injection.
Newfield Exploration plans to run 10 to 11
rigs this year across its 350,000-net-acre
STACK/SCOOP leasehold. Image: Newfield
Exploration Co.

World Oil®!/!MAY 2018!51

SHALETECH / SCOOP/STACK

Fig. 1. Anadarko oil and gas production in May is forecast to rise 1,000 bopd and 6 MMcfd, month-over-month, to 506,000 bpd and 6.544 Bcfd,
respectively. Source: U.S. Energy Information Administration (EIA).
1,000
Anadarko regional oil production, Mbpd

Oil 3 Mbpd, 6,000 Gas +49 MMcfd

800 month-over-month month-over-month

Anadarko regional natural

5,000

gas production, MMcfd

600 4,000
3,000
400
2,000
200 1,000
0 0
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Year Year
U.S. Energy Information Administration, Drilling Productivity Report

Fig. 2. One of three rigs that Chaparral Energy has directed to its STACK 4,000+ BOED WELLS
holdings this year. Image: Chaparral Energy Inc.
High flowrates and prospects aplenty have the aptly named
STACK shaping up as the premier CanaWoodford development
target. “The Oklahoma STACK play is economic for many op-
erators at current prices, and it offers multiple drilling targets,
due to its complex geology, which is attractive for drillers seek-
ing to leverage pads to expand resources,” IHS’ Kugler wrote
in a separate investor note on Aug. 17. “While the play covers
about one-fifth the aerial extent of the Permian basin, it is at-
tractive to many operators, who find the Permian over-heated
in terms of acreage availability and cost of entry.”
Homegrown Devon Energy Corp. exemplifies the play-
wide strategy, as it transitions from appraisal to full-field devel-
opment of its multi-zone STACK assets, where five wells com-
pleted in the fourth quarter averaged 30-day initial production
(IP30) rates of 4,650 boed. Notably, the first well completed
early this year in the planned seven-well Coyote Lower Mera-
mec development hit a 24-hr IP rate of 8,200 boed.
A cumulative 12 wells in the Meramec oil window were brought
online in the fourth quarter at average IP30 rates of 3,200 boed,
helping drive quarterly STACK production to 120,000 boed. The
start-up of 50 newly completed wells has early 2018 production
Nomenclature aside, nearly all activity is huddled in the jumping to 130,000 boed.
CanaWoodford subset of the greater Anadarko basin, which “The Meramec is a little bit different than some of your un-
averaged 63 active rigs in April, compared to a 52-rig average conventional plays, and it has some conventional porosity and
in April 2017, according to Baker Hughes. Notably, those rigs permeability. And so you may actually be able to increase your
now have the green light to drill longer-reach horizontals, after EUR (estimated ultimate recoveries) and drill less wells to re-
state lawmakers in late 2017 overturned an outdated regula- cover a similar amount of hydrocarbons than you originally an-
tion that limited lateral lengths to one mile, ostensibly to avoid ticipated,” said Wade Hutchings, senior vice president of explo-
interference with innumerable legacy conventional wells. ration and production.
Mirroring the increased rig count, the regulatory Oklaho- Devon places its more than 600,000-net-acre STACK posi-
ma Corporation Commission (OCC) issued 268 new drilling tion on equal footing with its Permian Delaware leasehold, both
permits in the five core SCOOP counties—Carter, Garvin, of which are expected to see 100 new wells drilled this year.
Grady, McClain and Stephens—between Jan. 1 and April 10, Following aggressive infill development in 2017, Marathon
up from 184 new authorizations for the like period last year. Oil Corp., likewise, is moving to multi-well pad drilling in its
The OCC issued 345 permits for the more condensed STACK STACK Meramec leasehold, with plans to bring 40 to 50 operat-
play, compared to 308 permits approved between Jan. 1 and ed wells to sales. Production from its 200,000-net-acre STACK/
April 10, 2017, in the fairway of Blaine, Canadian and King- SCOOP holdings increased 10% in the fourth quarter, to 64,000
fisher counties. net boed, from 58,000 net boed in the previous three months.
Oil and gas production in the Anadarko basin were The debut Tan volatile oil infill development program
expected to reach 506,000 bpd and 6.544 Bcfd, respectively, in last year in southwestern Kingfisher County averaged 30-
May, according to the U.S. Energy Information Administration day IP rates of 1,840 boed. The nine infills comprised eight
(EIA). The agency last year saw fit to include the basin in its 10,400-ft-lateral wells and one 5,400-ft-lateral well.
monthly Drilling Productivity reports of key unconventional Meanwhile, private equity investor Bayou City Energy
plays, Fig. 1. The inaugural EIA Anadarko report, in August LLC. again opened its vault last September with a $100-mil-
2017, estimated production of 447,000 bopd and 5.879 Bcfd lion joint development agreement ( JDA) with pure play
of gas. STACK operator Chaparral Energy Inc.
52!MAY 2018!/!WorldOil.com
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SHALETECH / SCOOP/STACK
The Oklahoma City-based operator drilled or participated
in 128 gross (28 net) STACK wells in 2017, including 28 Mera-
mec and Osage wells with average gross IP30 rates of 720 boed.
A spokesperson said Chaparral plans to run three rigs through-
out 2018 and drill 61 gross wells, including 26 as part of the
joint venture, Fig. 3.
After the 2017 bolt-on acquisition of 7,000 net acres in King-
fisher County, at a cost of roughly $8,500/acre, Chaparral now
controls a 117,000-net-acre leasehold.
Fellow pure-play STACK operator Alta Mesa Resources
Inc. also signed a JDA with the Houston-based equity firm in
early 2016. Last year, the agreement funded 37 of the 134 gross
wells that Alta Mesa drilled and completed across a largely
contiguous, 130,000-net-acre position in the STACK oil win-
dow. Alta Mesa plans to maintain an eight-rig fleet throughout
the year and drill between 170 and 180 gross wells.
KEEPING SCORE
In unveiling its three-year plan on Feb. 21, STACK pioneer
Newfield Exploration said the 21 wells drilled and tested as
part of its SCORE initiative had delivered 30-day flowrates of
around 1,386 boed. The SCORE wells, which Newfield cred-
its with expanding its total Anadarko, net-effective reservoir
footprint to more than 1 million acres, comprise a mix of Syca-
more, Caney, Osage, Woodford and Meramec targets across
its STACK and SCOOP properties, with gross perforated in-
tervals (GPI) ranging from 4,412 ft to 10,460 ft.
One stacked Woodford/Osage well in eastern Canadian
County delivered IP30 rates of 1,549 boed (61% oil).
Fig. 3. The Merge play capitalizes on the best characteristics of the
SCOOP and STACK. Source: Jones Energy Inc.
54!MAY 2018!/!WorldOil.com
Over the next three years, Newfield plans to invest approxi-
mately $365 million to drill and test between 80 and 90 wells to
further hold acreage and delineate the play.
SCORE coincides with the northwest extension of the
STACK Meramec and the eastern expansion of the North
SCOOP oil plays. This year, Newfield plans to run 10 to 11
rigs in the Anadarko basin, with activity centered on multi-
well pad developments. Of the 150 wells expected to go online
during 2018, 70% will be drilled and completed in STACK,
where infill development drilling will take center stage over
the next three years.
In the fourth quarter, Newfield turned to sales what was
described as the most “technically comprehensive” of the
nearly 80 wells drilled in STACK infill spacing pilots. The
12-well, four-pad Velta June Meramec development, which
featured an assortment of fiber optics, high-resolution pres-
sure monitoring and DNA rock sequencing, went online at a
combined gross rate of more than 10,000 boed from 5,000-ft
lateral reaches.
The company put 25 wells onstream during fourth-quarter
2017, with production averaging 117,300 boed. Newfield esti-
mates the average STACK well in the three-year plan will gener-
ate around 1.3 MMboe at average well costs of $7.9 million.
SPRINGER TIME
Owing to more favorable oil prices, Continental has initi-
ated long-awaited full-field development of its 170,000-net-
acre SCOOP Springer asset. Five of the 15 rigs that Continental
plans to run this year in its basin-high 1,133,500 net reservoir
acres will be dedicated to developing the Springer shale, where
31 gross operated wells are on tap for completion this year.
“We deferred development of the Springer for several years,
patiently waiting for better oil prices,” President Jack Stark said
in a Feb. 22 earnings call. “During this time, we conducted stra-
tegic tests for optimized completions and longer laterals up to
8,300 ft long, and as expected, the longer laterals and optimized
completions clearly improved well performance.”
Stark says the Springer may be developed in combination
with the underlying Woodford and Sycamore horizons. “These
reservoirs are stacked on top of each other throughout much
of SCOOP, within a column of rock up to 2,000 ft thick. This
means, in some areas, we could be looking at as many as 18 wells
in three reservoirs, with up to 10 wells in the Woodford, four
wells in the Sycamore, and four wells in the Springer.”
A cumulative 12 gross wells were completed in the fourth
quarter, during which SCOOP net production averaged
62,242 boed in the fourth quarter, representing 22% of
Continental’s total quarterly production.
Continental also plans to operate eight rigs in its 409,500-net-
acre STACK Woodford/Meramec position, where density tests
are underway. Four to six of the STACK-directed rigs will be
dedicated to the four-year-old joint venture with South Korea’s
SDK E&S.
With the results of six largely dual-zone Meramec density
tests completed (as of Feb. 22) in the over-pressured oil win-
dow, Continental has settled on a development strategy of four
wells/zone. Assuming completed costs of $9.5 million for a
9,800-ft lateral well at $60/bbl oil and $3/Mcf gas, Continental
projects the eight-well scenario will recover 9.6 MMboe with a
96% return.

Fourth-quarter net STACK production was up 96%, year-
over-year, averaging 47,914 boed, with 23 net (63 gross) oper-
ated and non-operated wells completed. The company will al-
locate four stimulation crews to its STACK and SCOOP plays
in 2018.
BEST OF BOTH
Jones Energy Inc. says 2018 activity will focus on the newly
acquired 22,500-net-acre Merge leasehold, which it says captures
the “best of both” attributes of the STACK Meramec and the
SCOOP Upper Woodford extensions, Fig. 3. The Austin, Texas,
independent drilled six and completed 10 Merge wells in the
fourth quarter, with production averaging 5,892 boed as of Jan.
31. Jones drilled 27 gross Merge wells in 2017, targeting the up-
per and lower benches of the Woodford and Meramec, and plans
to maintain a two-rig program this year. As of year-end 2017,
Jones had 1,737 gross drilling locations in the western Anadarko.
With its transition to the Merge trend, Jones limited fourth-
quarter drilling activity in its 152,000-net-acre Western Anadar-
ko asset, in the Cleveland area, with plans to drill and complete
only five “obligatory wells” this year.
After quietly amassing a 50,000-net-acre position on the
eastern fringe of Merge at $750/acre, EOG Resources, Inc.,
has proclaimed the moderately over-pressured Woodford shale
a premium oil play, defined as those requiring a minimum 30%
direct after-tax rate of return at a flat $40/bbl oil price. EOG
plans to average two rigs and one completion spread in 2018
and complete 25 net wells.
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The Curry Woodford introductory well in McClain Coun-
ty demonstrated what David Price, executive vice president
of exploration and production, described as an atypically low
decline rate, with a 150-day rate of more than 1,100 bopd,
compared to the initial 30-day rate of around 1,500 bopd.
“The Curry well is solidly in the oil window, as opposed to
many SCOOP/STACK wells that are in the gas condensate
window,” he said.
Elsewhere, western Anadarko-centered Cimarex Energy
Co.’s 2018 guidance includes four Meramec developments,
and continued drilling and completion activity on its emerging
Lone Rock Woodford play. Cimarex was running four rigs in
the first quarter across its cumulative 253,000-net-acre Mera-
mec/Woodford position, where a total of 43 net Meramec and
Woodford wells is on tap for this year.
An aggregate 85 gross (10 net) wells were brought online
during the fourth quarter of 2017, which likewise saw the com-
pletion of a three-well, stacked Woodford/Meramec test in Ca-
nadian County. Production start-ups in 2017 included 13 Mera-
mec wells with 10,000-ft laterals, delivering average 30-day IP
rates of 2,383 boed.
As of March 27, Cimarex was drilling or completing two in-
fill spacing tests in its Lone Rock Woodford asset, where eight
to 12 wells/section are being evaluated. A revised completion
design is seeing costs for 1-mi. lateral Woodford wells running
between $7.5 million and $8 million, while the completed costs
of Meramec wells with 2-mi. laterals range from $10 million to
$11.5 million.
World Oil®!/!MAY 2018!55
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 SAND CONTROL/SEPARATION

Reliable sand detection helps to optimize

separator efficiency, prevent costly shutdowns
Awareness of sand build-up
in separator vessels is crucial
to their efficient operation.
The latest vibrating fork level
detectors provide greater
visibility of sand deposits,
helping to avoid unplanned
shutdowns and improve
production efficiency.
" MARIANNE WILLIAMS,
Emerson Automation Services
The separation of oil, gas, water and
sand/solids, typically performed by a
separator, is a crucial step in the produc-
tion process. This separation enables hy-
drocarbon recovery to be maximized and
allows the flow or production rate of the
individual component streams to be mea-
sured. This provides essential informa-
tion about the quantity of fluids produced
from each well in the field.
A major challenge for operators is to
prevent excessive sand build-up, which
can clog inlets and the separator’s sand
drain pot. Sand build-up limits the
separator’s valuable capacity, and if not
monitored and removed, can lead to a
shutdown while a cleaning-out process
takes place, which could be extremely
costly. Reliable detection of the build-up
of sand deposits in a separator is, there-
fore, vital.
phase solution separates the sand. When
well streams also contain sand and other
solid particles, separators incorporate
internal devices to collect and dispose of
this material.
Separators rely on gravity to segre-
gate the different components of the well
stream. After the well fluid has entered the
vessel, the gas quickly separates from the
liquid, because it weighs far less than either
oil or water. The gas is then routed up into
a separate chamber and exits the separator
through an outflow pipe to a gas processing
system. The liquid, meanwhile, is routed
to the bottom of the vessel, where the oil
forms a layer on top of the water, because it
is less dense. This oil layer then spills over
a weir into the vessel’s oil chamber, and
the oil and water each exit the separator to
their respective processing systems via dif-
ferent outflow pipes.
SAND CONTROL AND BUILD-UP
If the reservoir or type of production
application produces sand, it will start to
accumulate in a lower chamber of the sep-
arator. Protective sand control measures,
such as expandable sand screens and grav-
Fig. 1. A three-phase separator.
el packing, are a common requirement for
limiting the amount of sand that reaches
the separator. However, implementing
such measures is not a straightforward
process. First, well pads are often geologi-
cally different, even if they are relatively
close to each other. Some wells produce
a lot of sand and some very little, making
it difficult to predict the level of sand con-
trol required. Each well pad may need a
different sand control technology, which
adds complexity to operations. Also, the
installation of these protective measures
requires a lot of time and skilled resources.
Even if these measures are working cor-
rectly, some sand will still accumulate in
the separator over a long period. Howev-
er, a failure in sand control will accelerate
the sand build-up in the separator, which
could clog the sand drain pot. Excessive
sand in the separator encourages the for-
mation of unwanted emulsions between
oil and water, limits capacity by taking up
valuable volume, and leads to a reduction
in oil flowrate. Also, when the sand build-
up in the separator gets to a certain level,
it can get pumped out with the water,
which can lead to devices downstream of

SEPARATORS
Separators are used for periodic well
testing (as a test separator) or continu-
ous production measurement (as a pro-
duction separator). Two-, three- and
four-phase versions are deployed—
the phases referring to the number of
streams leaving the separator. Two-phase
separators are used for the separation
of the well stream into gas and liquids,
while three-phase separators are used to
separate gas, oil and water, Fig. 1. A four-
World Oil®!/!MAY 2018!57
SAND CONTROL/SEPARATION
the separator—such as pumps, valves and
flowmeters—suffering damage through
blocking, abrasion or erosion.
Should the sand build-up become
excessive, there would need to be a shut-
down, causing an expensive loss of pro-
duction, and a call-out for removal of the
sand blocking the outlet, which would
be both time-consuming and extremely
costly. Awareness of sand build-up is,
therefore, crucial in maximizing separator
Fig. 2. The Rosemount 2140 Vibrating Fork
Level Detector, from Emerson.
Fig. 3a. Sand but no beach—looking in
an inspection port shows a characteristic
build-up of sand and emulsified water that
accumulates in the separator.
58!MAY 2018!/!WorldOil.com
and production efficiency, and preventing
devices from suffering costly damage.
MONITORING SAND BUILD-UP
Most operators do not have a regular
inspection routine, and separators are typi-
cally run until a problem occurs. Technolo-
gy that provides detection and monitoring
of sand build-up, and prevents problems
from occurring is therefore of significant
benefit. Nucleonic technology—in which
a gamma source emits radiation toward a
detector at the other side of the vessel—
has been used, but it has several drawbacks.
These include the levels of risk and com-
plexity; the need for yearly validation re-
quirements; the necessity to comply with
local laws; and high cost of ownership.
This is driving operators to find alternative
solutions that are reliable and safe, and less
complex and costly.
Such an alternative is now provided
by the latest vibrating fork level detectors
(Fig. 2) from Emerson Automation Solu-
tions, which provide unique functionality
that enables constant monitoring of the
build-up of sand in a separator, thereby
eliminating the risk of an unplanned shut-
down, if the deposits exceed a critical level.
These devices, which are used traditionally
to monitor air-to-liquid interface (liquid
point level), operate by using the concept
of a tuning fork. Two fork tines are im-
mersed into the vessel, an internal piezo-
electric crystal oscillates the forks at their
natural frequency, and changes to this fre-
Fig. 3b. After a clean-out operation, all the sand is removed. Marks on the vessel walls
indicate the typical oil, water and interface levels.
quency are monitored continuously.
The frequency varies, depending on
the medium in which the prongs are im-
mersed—the denser the medium, the
lower the frequency will be. This principle
also enables the device to be used for mon-
itoring liquid-to-sand interface via a special
“sand switch” function, which makes it an
ideal choice for separator applications. The
data from the device can be transmitted to
a control room, enabling the sand build-up
to be monitored remotely.
The device is very simple to configure
for sand detection, with four sensitivity
settings for least, medium, high or most
compacted sand, since the properties vary
across different well pads. As well as de-
tecting the build-up of sand, these devices
also can be used in a control system to
automate the chamber’s clean-out cycle.
This eliminates the need for this process
to be performed manually.
These vibrating fork level detectors
have several other benefits, including being
compact, lightweight and easy to install.
The shape of the forks ensures that any
sticky or viscous material is less likely to at-
tach itself to the device and instead drains
away quickly, making the forks ideal for
separator applications. Also, there are no
moving parts that can freeze or get stuck,
which increases device reliability.
Using HART communications, these
devices deliver the benefits of advanced
smart diagnostics, providing greater in-
sight into the condition of the device, and
 SAND CONTROL/SEPARATION

supporting predictive maintenance prac-
tices by identifying potential problems
before they become serious.
Furthermore, by monitoring fork fre-
quency, it is also possible to detect media
gradually building up on the tines. While
vibrating fork technology has good resis-
tance to light-to-moderate build-up, grow-
ing deposits can lead to an incorrect wet
signal, if left unchecked, especially if the
forks become bridged. The ability to mon-
itor media buildup on level instrumenta-
tion can be particularly useful in oil and gas
production, due to the presence of coating
materials, such as paraffin wax. All diagnos-
tic information can be accessed, either di-
rectly or from the control room. The latter
option eliminates the need for field trips.
With most operators not having a reg-
ular inspection routine, it is crucial that
sand is reliably monitored, so that exces-
sive build-up can be prevented. Nucle-
onic technology can perform this task,
but has several disadvantages compared
to the latest vibrating fork level detec-
tors. The newest generation of devices
now available features a unique liquid-
to-sand interface option, which enables
reliable detection of build-up, and the
ability to optimize or automate clean-out
cycles, thereby increasing worker safety
and production efficiency.
MARIANNE WILLIAMS is a
marketing manager with
Emerson Automation Solutions.
She holds a degree in
professional marketing from the
Oxford College of Marketing
(Oxford, England, UK), and a
degree in physics with medical applications
from the University of Exeter (Exeter, England,
UK). Prior to joining Emerson in 2009 as a
marketing engineer, Ms. Williams worked as a
product specialist with Pacer Components Ltd.

EFFECTIVE SEDIMENT
BUILD-UP DETECTION
An oil and gas company in Sichuan,
China, is using a Rosemount 2140 Vibrat-
ing Fork Level Detector to detect sedi-
ment deposits in an oil, gas and water sep-
arator. As part of the shale gas extraction
process, a four-phase separator is used
for effectively de-sanding the mixture of
oil, gas and water. The sand level within
the separator must be monitored and
alarmed to avoid the problems of pipeline
corrosion and pump abrasion that can be
caused by a high sand content.
To achieve this, Emerson’s Rose-
mount 2140 has been installed and is
providing reliable detection of sediment
build-up. Qualification was straightfor-
ward, with the device meeting material SCALE
certification requirements for its wetted
parts; a necessary requirement since WORKOVERS FOR
units are installed in H2S-containing en-
vironments. Data from the vibrating fork
NEARLY 2 YEARS
are transmitted via HART communica-
tions and used to alarm when sediment A single application of SCALEGUARD proppant-delivered
deposits reach a critical level. Clean-out scale-inhibiting technology has maintained production
can be scheduled proactively. rates and eliminated costly workovers for nearly two years in
previously scale-prone wells in Manitoba, Canada. Similarly
SUMMARY impressive results have been achieved in over 200 wells
Separators play a fundamental role in
across North America.
oil and gas production. Excess build-up of
sand within a separator is undesirable, as it The numbers speak for themselves
can clog the sand drain pot, therefore lim- For more production enhancing technologies that improve
iting the separator’s capacity, Figs. 3a and your initial production, EUR and ROI numbers, talk to CARBO.
3b. This potentially causes devices down-
stream of the separator to be damaged by
sand that is pumped out with the water.
When built-up sand needs to be cleaned Read the full story
out manually from the separator’s bottom carboceramics.com/manitoba
chamber, the process requires production
to be stopped, which can prove very costly.
World Oil®!/!MAY 2018!59
 INTERVIEW: STEPHEN CHAZEN

Former Oxy chief assembles

new Texas-based powerhouse operator
Former Occidental Petroleum Chairman Steve Chazen, and his partners at private equity firm
TPG Pace Energy, have acquired assets from well-respected Texas firm Enervest to form a new,
$2.66-billion operator, Magnolia Oil & Gas. In an interview with World Oil Editor Kurt Abraham
and Associate Editor Emily Querubin, Chazen and Michael MacDougall, managing partner of
TPG Pace Energy, explained how the deal came about, and how the new firm will operate.

Fig. 1. Stephen Chazen
World Oil (WO): What is the back-
ground to this deal?
Michael MacDougall (MM): We are
TPG, a leading global investment firm.
Energy is one of our five core areas for
investment focus. When I sat down with
Steve Chazen (Fig. 1), after he stepped
down from Oxy a year-and-a-half ago, the
first question was, “What do you want
to do next?” Now, the average guy, who
has run a really large, multi-billion dollar
company, usually says, “I’m done being
public.” And Steve actually said the exact
opposite. Which is, “What I want to do
next is build a large company. Probably
larger than you’d want to put in your fund.
I want to be a $10 billion-plus company.”
So, in partnership with Steve Chazen,
we formed TPG Pace Energy and took it
public, in an initial public offering (IPO) in
May 2017. We raised $650 million of eq-
60!MAY 2018!/!WorldOil.com
uity in the IPO. We visited Steve’s top 30
investors before doing that, so they knew
what we were up to. The vast majority said,
“When you find a deal, come and tell us,
and we’d like to support you.” We spent
the second half of 2017 looking at about
15 assets. Very few met our criteria for re-
ally high-quality assets, preferably oily, that
either give you quick pay-backs on new
wells or give you good margins. This large-
scale Enervest asset, anchored by a posi-
tion in Karnes County (Fig. 2), has great
paybacks, great margins, 70% or more true
oil, and a real chance to use that cash flow
to drive organic growth and also make at-
tractive acquisitions. And then we added
the Giddings asset, which we paid a small
premium plus PDP value for, but it gives
you 300,000 net acres, where they are tak-
ing technology from Karnes, and they’re
deploying it in the Austin chalk at Gid-
dings. You get very attractive payback—six
to nine months.
WO: How did the deal finally get
done with Enervest?
MM: Steve has known the Enervest
founder, John Walker, for many years. So,
we sat down with the Enervest folks, and,
and said, how can we help you? And John
said, “I’d like to take some of my best as-
sets public. Could you help me?” So we
spent last fall going through these assets
with Steve. Out of their large portfolio, we
settled on the Karnes and Giddings acre-
age. We then spent two months, with their
technical folks, building a model that fits
Steve’s strategy, so that we can take it pub-
lic. We also met with a handful of Steve’s
longtime investors, who committed $355
million on top of our $650 million, to
the transaction. So we basically have
the equivalent of a $1-billion IPO. And
the sellers taking back a little less than a
billion-and-a-half of stock. This creates a
large-scale company, at about five times
cash flow, with a 10% cash flow yield.
And the chance to grow close to 15% per
year organically and generate a lot of cash.
We’d like to double the production base
organically, in the next five years, and gen-
erate $1 billion in additional cash.
WO: Was acreage in the Eagle Ford
one of your original goals?
Steve Chazen (SC): No. We said, first,
I want good markets for the product. So
you eliminate the Northeast and Rock-
ies gas and North Dakota. You worry a
bit about the Delaware basin—it may
be okay now, but you see the threat out
there. So, you take that screen and you
say, “well, I looked at a lot of gas oppor-
tunities.” I’ve been a bear about gas for
maybe 30 years, for a variety of reasons.
What you see is lots of gas. Some guy
talks about oil plays, but they’ve got 1/3 oil
and 2/3 gas. So, I wanted as much black oil
as possible. And then, this opportunity
came up, where we had somebody who
wanted to take their assets public. The
seller is a true believer, both in the assets
and oil price. So that was sort of how the
deal came together. I also had looked in
the SCOOP/STACK, in Oklahoma, and
at some gas in the Haynesville.
WO: Who are the other senior man-
agement members of Magnolia?
MM: Upon closing, Steve will be joined
by his long-time colleague and business
partner, Christopher Stavros, who will
serve as CFO. Most recently, Chris served
as CFO of Occidental Petroleum Corpo-
ration. Steve and Chris worked closely
with each other for many years at Oxy, and
 INTERVIEW: STEPHEN CHAZEN

we are excited to bring them back togeth-
er in this new enterprise. They share the
philosophy of generating attractive full-
cycle returns while maintaining a strong
balance sheet with low leverage. Magnolia
will also maintain a majority independent
Board of Directors. Additionally, Magno-
lia will leverage its relationship with TPG
to call upon the firm’s extensive invest-
ment and operational expertise, unique
sector focus, value-oriented approach and
global network.
WO: That was before technology
breakthroughs—now you can go Fig. 2. Two rigs will run on the Karnes
County acreage later this year.
back.
SC: So, what you do is look where the
fractures aren’t, rather than where they
were, because if you go where the frac-
tures are, the frac fluid will leak into them.
You won’t get anything. You run seismic
to find where to drill, but it’s the opposite
of the old way. Then, you put in a massive
frac. There’s lots of oil-in-place, so you
should get good wells.

WO: What swung you to the Eagle
Ford, as opposed to other places,
including the Permian?
SC: Oil and paybacks. If you look at the
Eagle Ford break-evens, in Karnes, they
are at $30/bbl. So, I wasn’t really worried
about product price change. Just look-
ing at the production in a short period of
time, you get payback effectively.
MM: The real difference is that gas/oil
mix. If you look at that lower Eagle Ford
well, it is 75% oil. That Delaware well is
45% oil. So the difference between 75%
oil and 45% oil is noticeable.
SC: So, you put it in dollars, and you can
see how it works. The returns are better.
Think how much less capital-intensive
this [Eagle Ford] stuff has to be than
where you’ve got two-year payback.
MM: If your payback is 20 months and you
drill a well, it’s two years later until you get
your money back. Whereas, if you drill a
well that has a six-month payback, it actual-
ly pays back that year, and you can use that
cash flow to pay for more drilling that year.
SC: So, even in Giddings, we are running
free cash on an annual basis. I’m only
spending 60% of my money drilling, and
I’m keeping 40%. I could make acquisi-
tions with that. I could buy stock, what-
ever. But, I won’t have to raise more money.
WO: In recent years, we haven’t
seen many companies interested in
that area around Giddings.
SC: Only three companies have enough
acreage. This one, Wildhorse and Geo-
Southern, and none of them have any
money. Down in GeoSouthern’s acreage,
they’re in an oil area, and you can see that
production is less, but there are real-high
oil percentages. Now there’s only a few
wells, and there’s a reason why—there’s a
fault that runs there. Years ago—I’ve been
working this area for 35 or 40 years—
we’d look for the natural fractures, and we
drilled from them and got oil.
WO: So, how will the relationship
between you and Enervest work?
SC: They’re a contract operator. The op-
erator is us—we own it all. They have a
division in South Texas that drills wells,
and they do a good job of it, as shown by
their IPs, compared to other operators.
They’re top-quartile. Rather than try to
build the whole team all over again, we’re
just using them.
MM: They have a hundred people, who
are dedicated to their South Texas divi-
sion, one of five divisions. This is basi-
cally a basin exit for them. So, they have
50 people in the field and 50 corporate
technical people. And they’ve offered
those folks to us on a long-term ar-
rangement. And they’ve agreed not to
compete with us for the next four years
in the basin. And beyond that, they’ve
offered to have their back office help us
with Giddings. Enervest, as a whole, has
36,000 wells and about $7 billion of as-
sets—we’re buying a third of Enervest,
the biggest division. So, it’s good for
them, and it’s good for us.
WO: In a year’s time, what do you
think your activity level might be?
SC: Modest. About 50% to 60% of our
cashflow will be used for drilling. In the
Karnes area, the goal is to extract every
barrel that you can, but not as fast as you
can. All of this is held by production, and
there’s no hurry. We want to extract every
barrel. The economics are great, and they
work at almost any oil price.
MM: We have given public guidance of
just under three rigs this year, and four
rigs next year.
SC: And that’s two (Karnes) and two
(Giddings). Giddings is an emerging play,
and we won’t put more into it than the cash
flow. We have a business model—it’s not a
geologic model. There has to be free cash,
and I’m only going to spend 60% at the
most. And that’s what we tell investors.
Fig. 3. The Giddings field holdings total
345,000 acres.
WO: So, you’re going to call the
company Magnolia Oil and Gas.
SC: Yes. We researched the name. Many
years ago, there was a Magnolia Petro-
leum. The Sealy family of Galveston
founded it, and they had trucks and gas
stations, and some production and drill-
ing. And I think they were acquired by So-
cony and later Mobil. But it wasn’t called
Magnolia Oil and Gas.
WO: At this stage in your life, you
could have easily said, “Adios, have
a great day.” But you took the other
approach. What motivated you to
do that?
SC: I like public investors. I learn from in-
vestors. That’s the real motivation. When
you’re young, you imagine that if you had
some money, you would play golf and
travel to Europe or something. But I’ve
traveled to Europe in my life, and I don’t
play golf. No, I was built for work—I enjoy
work. I will have more influence. At Oxy, I
made a billion-dollar acquisition. While I
did approve the acquisition, I didn’t actu-
ally turn the dials. Now, if I buy something
for $100 million, I get to turn the dials. I
like to turn dials.
World Oil®!/!MAY 2018!61
 G & G TECHNOLOGY
Satellite/aerial imaging identifies
structural anomalies and presence of hydrocarbons
A direct detection technology identifies
fundamental properties generated by
the interaction of super-light elementary
particles. These small, sub-atomic particles
constantly emit an intrinsic radiation
spectrum that can be tracked to draw
inferences about mineral deposits.
" JIM COMBS, JEFFERY DRIZIN
and OLEG YATSUK, Oil and Gas Discoverer, LLC
Hydrocarbons, precious metals and diamonds all generate in-
trinsic emissions and leave distinctive signatures that can be ob-
served on satellite images. These data are processed in the labo-
ratory and their spectrum can be recorded during field surveys.
Despite the similarity of chemical composition, the “intrinsic ra-
diation” spectrum has several differences, which makes it possible
to distinguish the carbon of coal from the carbon in diamonds.
The company’s Direct Detection Technology (DDT) is ap-
plied in two separate stages with written and/or verbal reports,
using data obtained during each stage of the process. DDT stage
one is the initial identification of anomalous hydrocarbon depos-
its for a defined area specified by the client, based on data obtained
from satellite images. In DDT stage two, a field survey consists of
flying a helicopter over the identified hydrocarbon anomalies, to
provide information on the exact location of deposit outlines and
subsurface bedding depth of productive horizons.
Fig. 1. The yellow patches indicate prospective hydrocarbon-
bearing formations, based on stage-one survey data
and interpretation.
62!MAY 2018!/!WorldOil.com
The field expedition includes measuring anomalous depos-
its using the company’s proprietary GEO-SCAN ML2 detec-
tor, installed onboard a helicopter or, in some cases, by ground
transport. All of the data obtained, and their interpretations,
are then presented on a geological map and 3D image provid-
ing final hydrocarbon deposit depth, size, and contour, as well
as locations for further exploration and/or development wells.
KAZAKHSTAN SURVEYS
Between 2015 and 2017, a DDT study was conducted in the
Republic of Kazakhstan. The technology is known in Kazakhstan
as “sub-atomic technology.” The operator of the hydrocarbon
concessions is MMD ( JSC Mangistaumunaigas) and the subcon-
tractor providing exploration services to MMD was TOO (KAZ-
Waterhanters LLP). The subcontractor hired the service provider
to perform a complete two-stage survey. The contract was signed
between General Director R.A. Magomadov of TOO and senior
vice president Oleg Yatsuk of OGD. The added benefits obtained
by OGD based on the two-stage DDT surveys was the permis-
sion of the subcontractor to publish a condensed version of the
report to acknowledge the validity of DDT surveys for detecting
and delineating hydrocarbon deposits to considerable depths.
In Kazakhstan, exploration has traditionally depended on
seismic reflection surveys with 2D and 3D application, fol-
lowed by drilling on identified potential subsurface struc-
tures and stratigraphy. In 2015, the developed and producing
oil fields, Alatube and Atambai-Sartube, were surveyed using
DDT to identify hydrocarbon deposits at depths up to 6,000
m. These Kazakhstan oil fields were at least 30 years old, with a
substantial number of productive wells and plugged producers.
The study served as a pilot project to identify hydrocarbon de-
posits at these depths. The company was contracted to survey
an area of 100 km2 using a stage-one survey.
Stage-one survey results. According to the outlined stage-
one survey procedures, the client provided OGD with coordi-
nates for the two concession areas, Fig. 1. The provider did not
request hydrocarbon exploration data, although a considerable
amount of information collected using standard hydrocarbon
exploration technologies over the past decades was available.
These surveys, with the analysis and interpretation of the data,
had been used to identify several drilling locations.
In the process of performing the stage-one survey, over the
100 km2 of the operator’s prospective exploration, it showed
strong- and medium-intensity signals from structural anomalies,
due to the intrinsic sub-atomic radiation of hydrocarbon-bear-
ing formations. These anomalies indicate the definite presence
of hydrocarbons in the subsurface of the client’s concessions.
Hydrocarbon anomalies identified during laboratory process-
ing of satellite images are indicated as yellow objects, Fig. 1.
 G & G TECHNOLOGY

Stage-two survey results. Based on positive stage-one sur- be excellent locations for exploratory drilling, Fig. 4. These
vey results, OGD and the subcontractor decided to run stage- anomalies are located within the contours of maximum inten-
two surveys over both of the operator’s concessions. The pro- sity anomalies (red areas).
posed grid for the helicopter pass-over of the anomalous areas For effective subsequent operation, it is necessary to locate
is shown in Fig. 2. wells within the contours of the identified red and blue anoma-
As is typically the case, the anomalies identified during the lies. It has been determined by independent geodynamic mod-
stage-two survey are more clearly defined than the satellite im- el analysis, seismic data, and the results of DDT surveys, that
ages produced in stage one. This is due to the greater mapping the contours of high-intensity anomalies correspond to highly
sensitivity of hydrocarbon emissions provided by the low-level fractured local zones. However, the survey technology does
and closely-spaced helicopter tracts, and the proprietary GEO- not merely identify existing zones and structures, but precisely
SCAN ML2 equipment installed onboard the helicopter. shows which ones contain hydrocarbons, which is superior to
Analyses and interpretation of both the surveys enabled the other exploration survey methods.
service provider to identify, and designate red and dark blue,
prospective areas for future exploration and commercial de- Fig. 3. A 3D model of intrinsic radiation anomalies, based on
velopment, Fig 3. OGD noted that there were discrepancies stage-two survey data.
between 50 and 90 m during coordinate converging, as well as
with GPS inaccuracies in the concession areas.
Based on the intensity of the hydrocarbon anomalies, the
service provider outlined the three most prospective areas for
further development (S1, S2 and S3). These areas would make
it possible to rank the intrinsic emissions by intensity and pro-
vide direct geo-references for the hydrocarbon deposits. It would
also enable the provider to determine the depth of hydrocarbon-
bearing formations at the specific locations and recommend sub-
sequent drilling targets. Finally it would substantially narrow the
area for subsequent geophysical activity and exploration drilling.
Based on the data (Fig. 3), OGD noted the S1 and S2 areas were
within the operator’s concession, but S3 is outside the outline, but
adjacent to the leasehold. These areas are considered the most
productive, with an estimated accuracy between 85% and 90%.

DETAILED ANALYSIS Fig. 4. The stage-two survey identified seven anomalies with high
Due to the different angles of satellite imaging of the earth’s emission intensities.
surface, the primary hydrocarbon anomalies identified in the
stage-one survey are somewhat different than data collected dur-
ing the stage-two survey. However, after a review of Fig. 1 and
Fig. 3 data, it became apparent that several additional hydrocar-
bon anomalies were identified during the stage-two survey.
To fully exploit the analysis, an expanded map was produced
that highlighted seven highly prospective anomalies that would

Fig. 2. A flyover pattern of the stage-two survey.

World Oil®!/!MAY 2018!63

G & G TECHNOLOGY

Based on the work, an initial drilling site was recommend-
ed at point “2” in S1, and was designated Well No. 42, Fig. 4.
To rule out biased assessment, the drilling of this type of well
in the existing field is not an automatic developmental proce-
dure predetermined by a grid arrangement. The recommended
point was fairly remote, with the distance to the nearest well ap-
proximately 1,200 m. In other words, it was determined that the
surveys had identified a new hydrocarbon deposit at the site.
Nonetheless, the well would be positioned about 1,200 m from
the most productive well in Kazakhstan that is producing ap-
proximately 1,400 metric tons/day (10,220 bopd).
Stacked production zones. The stage-two survey analysis
identified five layers of hydrocarbons, with the most produc-
tive being between 3,500 to 3,900 m and 4,900 to 5,100 m. To
confirm the selection of the most prospective production hori-
zons, a 3D model of the intensity of intrinsic radiation from the
hydrocarbon anomalies was produced, along with an intensity
scale, Fig. 5. The maximum intrinsic emission intensity is lo-
cated at the depths of 3.5–3.9 km and 4.9–5.1 km.
Experience has shown when using the DDT technology,
that the identified 2D anomalies (Fig. 1) constitute composite
signals, based on the productive zones within the given depth
interval. Or, the maximum intensity signal identified in the 3.5–
3.9-km interval is a material/energetic reflection of the multi-
zone deposit within this depth interval.
The most characteristic drill cuttings were isolated and illus-
trated on a lithologic log, Fig. 6.
A full suite of geophysical logs was completed, which fully
confirmed the presence of a multi-zone reservoir in the sec-
tion, corresponding to upper and middle Triassic formations,
Fig. 7. These results demonstrated the predictive accuracy of
DDT technology in determining the boundaries of productive
hydrocarbon-bearing horizons, and determining the contours
of anomalies, which directly indicate hydrocarbon deposits.
CONCLUSIONS
The drilling of Well No. 42 allowed conclusions to be drawn
about using DDT to identify prospective anomalies:
1. High accuracy for discovery of hydrocarbon deposits. The
extreme points recommended for drilling the first wells are
productive, with a probability of no less than 90% to 95%.
2. The error in determining the depth boundaries of the
identified productive horizons, based on practical experi-
ence, does not exceed 5% to 7%. In the present case, it was
not more than 1%.
3. The low cost, shorter turnaround, and high convergence
of survey results with actual data make it possible to confi-
Fig. 6. A lithology log of zones of interest.

RESULTS FOR WELL NO. 42

In 2017, Well No. 42 was drilled at the location discussed
above to a depth of 3,962 m. Logging conducted in the process
of drilling the well recorded the first significant gas produc-
tive horizon at 2,420 m, which was associated with coal strata.
Hydrocarbon-bearing oil horizons were identified at 3,450 and
3,900 m. These were the depth intervals presented on the 3D
block diagram, based on stage-two survey data and analysis.

Fig. 5. A 3D model of hydrocarbon-bearing horizons.

64!MAY 2018!/!WorldOil.com

dently plan for the earliest possible opening of new fields,
thereby increasing production indices.
After final reports of the survey results were produced, a
follow-up conference with the subcontractor and geologists
working in the fields concluded that all hydrocarbon anoma-
lies identified by DDT were in existing productive levels or on
levels with potential commercial deposits.
Geologists acknowledged that in the area of the DDT sur-
veys, there were different types of tectonic disruptions, which
where accurately identified in the reports. The operator and
subcontractor both agreed on the need to further modify drill-
ing plans, saving several million dollars, with an additional drill-
ing campaign commencing in 2018.
Operator’s perspective. Mr. Baipakov, director for geol-
ogy and field development, Mangistaumunaigaz, commented:
“Maps of anomalies compiled using the DDT surveys made it
possible to identify the most promising sites, based on the level
of oil saturation of prospective formations. One well was drilled,
based on the data, which did encounter a productive horizon in
a predicted interval between 3,500 to 3,900 m.”
After running logs, it was determined the productive interval
was situated between 3,444 to 3,902 m. The error predicting
the depth of productive strata was just 56 m, with respect to the
formation top, and 2 m with respect to the stratum bottom.
The operator’s management team indicated that the predict-
ed formation top/bottom was acceptable for determining the
spatial boundaries and depth of horizons.
Due to this success, JSC Mangistaumunaigaz will be drill-
Fig. 7. A geophysical log confirmed the presence of multiple
pay zones.
G & G TECHNOLOGY
ing two additional deep test wells on six other DDT high-in-
tensity anomalies.
ACKNOWLEDGEMENTS
OGD thanks Mr. U. S. Karabalin, board member of KazMunayGas National Co. and Mr. B. A. Iman-
baev, general director of JSC Mangistaumunaigaz for their trust and understanding in the course of
this experimental hydrocarbon demonstration project.
JIM COMBS is chief geophysicist at Oil and Gas
Discoverer, LLC. Dr. Combs has been with the company
since 2009 and oversees the utilization of DDT. He
provides expert geophysical, geological and
geochemical analysis, while identifying specialist to
address specific issues. Dr. Combs obtained a BS degree
in mathematics and geology from Southern Methodist
University and a PhD in geophysics from the Massachusetts Institute
of Technology.
JEFFERY M. DRIZIN is president and CEO of Oil and Gas
Discoverer, LLC. He has participated directly in the
development of Oil and Gas Discoverer Technology since
2001. Dr. Drizin is the primary technical advisor of the
team in charge of detection survey equipment and data
collection. Dr. Drizin obtained an MS degree from Riga
Polytechnics Institute in Riga, Latvia, and a PhD in
quantum physics from Latvian State University.
OLEG YATSYUK is senior V.P. of Oil and Gas Discoverer,
LLC. Dr. Yatsyuk was a principal contributor to the
development and application of GeoVision Technology.
During the past several years, he has continually
designed new generation satellite image processing and
state-of-the-art field survey equipment. Dr. Yatsyuk is
director of OGD LLC’s laboratory, where data are
processed and analyzed before final reports are prepared. Dr. Yatsyuk
received a PhD from Moscow Aviation Technology University.
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World Oil®!/!MAY 2018!65
REGIONAL REPORT

LATIN AMERICA
Is Latin America’s fragile market cracking under pressure?
" EMILY QUERUBIN, Associate Editor

Despite the rise in crude prices, many Latin American coun- of unconventional wells, international oil majors and investors
tries are still grappling with considerable debt and declining are showing more interest in the region.
production rates. However, recent discoveries and licensing Last May, Wintershall launched its second operated pilot
rounds have attracted a strong uptick in foreign investment, project, spudding the first of three horizontal pilot wells in the
which could be the region’s key to economic resurgence. Bandurria Norte Block, in western Neuquén. According to the
company, its operations had, until now, been focused primar-
ARGENTINA ily on conventional reservoirs as a non-operator. The com-
Due to high inflation and declining production, Argentina pany, alongside partner GeoPark Limited (operator, 50%),
is putting forth an effort to counteract the deterioration of its discovered a new oil field in August. The Rio Grande Oeste 1
E&P sector. Since its 2001 default, caused by a severe eco- exploration well was drilled and completed to a 5,500-ft TD
nomic recession, Argentina has worked to escape its financial in the CN-V Block of Argentina’s Mendoza Province. GeoPark
crisis. The country, home to abundant shale reserves, has gone reported that early production tests showed a flowrate of 300
from a chief net exporter to a net importer of gas in recent bopd and de-risked other delineated light oil prospects in
years. To keep its energy industry above water, the govern- the block.
ment is promoting development of complex reservoirs. Several majors partnered with state-owned YPF last sum-
Argentina’s largely undeveloped Vaca Muerta shale, in par- mer, to explore the coveted shale formation. Statoil and YPF
ticular, is said to hold upwards of 16 Bbbl of oil and 308 Tcf of (operator) entered an agreement to explore the Bajo del Toro
recoverable gas. The unconventional shale formation covers a Block of the Neuquén basin. Holding 50% each, the companies
very large area within the Neuquén basin. After numerous in- will jointly explore the 38,800-acre block in Argentina’s west-
centives were proposed by President Mauricio Macri last year, ern region. Statoil was subsequently awarded the Bajo del Toro
in an effort to reduce the high cost associated with development Este exploration license, situated east of Bajo del Toro (Fig. 1),
Left: PDVSA, Venezuela’s state-owned oil and gas company, has ambitious plans for the future, as it aims to reach 6 MMbopd by some time after 2019, despite its recent drop
in output. Photo: PDVSA. Center: Repsol has been actively operating in Trinidad & Tobago since 1995, and holds rights to four offshore blocks. Photo: Repsol. Right: Last year,
Wintershall launched its second operated pilot project in Argentina’s western Neuquén basin. Photo: Wintershall.

66!MAY 2018!/!WorldOil.com
in November. As operator, with a 90% working interest (Gas
y Petroleo del Neuquén holds 10%), the major said it is com-
mitted to one wildcat within its four-year exploration period,
beginning this year.
Additionally, a $1.15-billion joint investment in the Vaca
Muerta formation was announced in July, after the provin-
cial government divided the Aguada Pichana area into two
sections and combined it with the Aguada de Castro area.
YPF, Total, Wintershall and Pan American Energy agreed to
the joint investment, which has Total operating the eastern
part of Aguada Pichana with a 41% stake, while BP unit Pan
American Energy operates the western part, as well as Agua-
da de Castro, with a 45% stake.
ExxonMobil is another active oil major in Argentina’s
Neuquén basin. The company says that it has invested more
than $500 million in the exploration and development of its
Vaca Muerta assets since entering the region. In October, it
announced that its investment plan for the development
of resources in the Los Toldos I South Block, about 108 mi
northwest of Neuquén City, had been granted government ap-
proval. The initial $200-million investment funds a pilot proj-
ect that should put seven wells into production. It also will
support construction of production facilities and associated
export infrastructure.
President Energy—which holds a working interest and is
the operator in the Puesto Flores and Estancia Vieja conces-
sions, as well as the Puesto Guardian license and two explora-
tion areas surrounding it—announced significant upgrades to
its prospective resources in November, Fig. 2. According to a
company release, results of an integrated basin study and geo-
chemical survey showed aggregate Paleozoic gas/condensate
prospects net to the company with mean unrisked prospective
resources (MUPR) of over 7 Tcf, with an upside case of over
20 Tcf and 185 MMbbl of condensate. Additionally, results
showed previously unreported Cretaceous oil prospects of
over 40 MMbbl, MUPR.
Just a few months later, the company reported that its Neu-
quén basin 2P net reserves had increased 66%, from 4.82 MM-
boe to 8 MMboe, while its 1P reserves increased more than
30%, from 3.2 MMboe to 4.5 MMboe, since the assets were
acquired. The success is a direct result of a successful four-well
workover program at Puesto Flores. The company said that it
expects further upgrades in reserves as it moves forward with its
2018 capex program.
VENEZUELA
Although it has some of the world’s largest oil and natural
gas reserves, Venezuela has failed to retain its status as a top oil
exporter in the Americas. When the industry downturn took
hold in 2014, Venezuela’s financial situation was already pre-
carious. Since President Nicolás Maduro took office in 2013,
production reportedly has tumbled nearly 40%. Petroleum
Economist (PE) reported that approximately 600,000 bpd of
that decline took effect last year, as the nation’s economic de-
pression continued to worsen.
This year, the situation is deteriorating even further. In the
May 2017 issue of World Oil, we reported that Venezuela’s pro-
duction rate had reached a low of 2.15 MMbopd. Since then, it
has continued its unrelenting descent to a meager 1.5 MMbopd.
The country’s production decline is now five times greater than
the amount it pledged to cut in the October 2016 OPEC deal.
According to EIA, the number of active rigs in Venezuela also
has fallen, from about 70 in first-quarter 2016 to an average of
43 in the last quarter of 2017.
World Oil®!/!MAY 2018!67
REGIONAL REPORT / LATIN AMERICA
Until recently, production of extra-heavy crude from the
Orinoco Belt was helping to keep Venezuela’s industry afloat.
The belt, which is in Venezuela’s Guárico state, overlies some
of the world’s largest petroleum deposits. Nevertheless, by the
end of 2017, Orinoco output had fallen to a reported level of
882,000 bpd—a decline of more than 300,000 bpd from the
year prior.
The drop in production could, in part, be due to reports that
the quality of Venezuelan oil has been waning, as well. Refiners
in the U.S. and Asia have reported issues in crude quality, in-
cluding high salt and water content. In some cases, buyers have
turned away cargoes entirely.
Moreover, the Venezuelan government initiated a compre-
hensive purge of PDVSA’s executive leadership last year, as part
of President Maduro’s promise to temper corruption within the
state oil producer. In a matter of months, more than 50 compa-
ny officials reportedly were arrested, including former company
head Nelson Martínez and ex-oil minister Eulogio del Pino. A
number of officials at Citgo, PDVSA’s U.S. refining company,
were detained as well.
Additionally, PDVSA’s operational and cash-flow issues
continue to prevent the company from climbing out of debt.
Although the company made multi-billion-dollar debt pay-
ments late last year, it reportedly still owes millions. To shore
up its economy, Venezuela introduced its own commodity-
backed cryptocurrency earlier this year. According to the gov-
ernment, each “petro” is backed by a barrel of oil and is sold
at the same price. Despite the reservations of many, President
Maduro said that the petro is sure to be “a total success for the
welfare of Venezuela.”
PDVSA has ambitious plans for the future, however, and
says it wants to increase Venezuelan crude production to about
6 MMbpd by 2019, of which 4 MMbpd are anticipated to come
from the Orinoco belt. Additionally, the company’s national
Fig. 1. Statoil reported that it will explore Argentina’s Bajo del
Toro and Bajo del Toro Este blocks. Image: Statoil.
68!MAY 2018!/!WorldOil.com
plan calls for a significant boost in natural gas production, up
to 10.5 Bcfd by 2019. Also by 2019, it hopes to reach an export
goal of 1.3 MMbopd to Latin America and the Caribbean, and
3.2 MMbopd to Asia.
BRAZIL
While much of Latin America’s energy sector is struggling,
Brazil’s pre-salt layer remains a hotspot for explorers. The at-
tractiveness of pre-salt blocks in the deep waters of the Campos
and Santos basins helped bring in billions during the country’s
latest licensing round. In late October, key E&P players, includ-
ing Shell, Statoil and ExxonMobil, won PSCs for pre-salt blocks
in the region.
As Latin America’s largest country, Brazil’s influence on
the future of the international energy marketplace continues
to grow. Accordingly, the country joined the International
Energy Agency (IEA) as an association country in October,
inserting itself into the global discussion on important energy
policy issues. “Brazil’s experience shows that policies do mat-
ter,” said IEA Executive Director Dr. Fatih Birol. “It’s deter-
mined and ambitious long-term energy policies, developing
deepwater oil resources and expanding biofuels output, set an
example to countries around the world. As a result, our lat-
est data shows that Brazil will become a net oil exporter this
year, the first major consumer in recent history to ever achieve
such a turnaround.” According to IEA, Brazil is on track to
be a net exporter of nearly 1 MMbpd by 2022. This results
from a reported 50% increase in oil production over the last
10 years, which can largely be accredited to the country’s bud-
ding deepwater sector.
Libra, one of the world’s biggest deepwater discoveries,
began producing in November. Soon after, the Libra Consor-
tium—made up of Petrobras (operator, 40%), Shell (20%),
Total (20%), CNOOC (10%) and CNPC (10%)—affirmed
Fig. 2. President Energy recently announced significant
upgrades to its prospective resources in Argentina. Photo:
President Energy,

commerciality of the oil accumulation in the northwestern
section of the block, calling it Mero field. According to Petro-
bras, the newly-named field has an estimated recoverable
volume of 3.3 Bbbl of oil. Plans for the development of Mero
field, nearly 112 mi off the coast of Rio de Janeiro in the San-
tos basin, include four new production systems. According to
Total, Libra production should reach more than 600,000 bpd
in the coming years.
Statoil tripled its production in Brazil late last year, with the
acquisition of a 25% interest in Roncador field in the Campos
basin. The field is Petrobras’ (operator, 75%) third-largest pro-
ducing asset, with approximately 10 Bboe, in-place, and an an-
ticipated remaining recoverable volume of over 1 Bboe. During
November 2017, it was reported that the field was producing
about 240,000 bopd, in addition to about 40,000 boed of as-
sociated gas.
During Brazil’s 15th licensing round, Statoil, with several ma-
jor partners, further strengthened its position in the deep waters
of Brazil with winning bids for four blocks—C-M-755, C-M-
657, C-M-709 and C-M-793—in the southern part of the Cam-
pos basin. Other key players, including Shell and ExxonMobil,
also won deepwater blocks during the licensing round. Winter-
shall, however, bolstered its position in a big way, becoming the
country’s fourth-largest producer with newly-awarded interests
in seven licenses. As operator of four of those licenses, the com-
pany said the areas “show huge potential.”
Last month, Petrobras reported the start of production at
Bùzios field, one of its principal pre-salt projects. The P-74
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platform, situated about 124 mi off the coast of Rio de Janeiro,
reportedly is the 13th platform to begin producing in the Bra-
zilian pre-salt. According to Petrobras, the field’s potential for
high output is cause for the four additional platforms that are
planned through 2021.
GUYANA
Following a series of major discoveries by ExxonMobil,
Guyana has become a highly sought-after region for explorers.
As yet, Guyana has not been an oil producer. However, Wood
Mackenzie says it anticipates that the country will be one of Lat-
in America’s top producers by 2026, with an estimated output
of approximately 350,000-to-400,000 bopd.
ExxonMobil’s Liza development, which holds resources
between 2 Bboe and 2.5 Bboe, reached FID last June after
positive results were reported from the Liza-4 well. The first
phase of development will include a subsea production system
and an FPSO vessel capable of producing 120,000 bopd. The
field, which is approximately 118 mi offshore in the Stabroek
Block, is expected to start producing by 2020.
ExxonMobil reported more success offshore Guyana in July,
when its Payara-2 well encountered 59 ft of high-quality, oil-
bearing sandstone, confirming a second giant field in the Sta-
broek Block. The positive well results increased Payara field’s
estimated resources to approximately 500 MMboe.
By October, ExxonMobil had struck its fifth discovery off-
shore Guyana. The company’s Turbot-1 well encountered 75 ft
of high-quality, oil-bearing sandstone within the southeastern
SPEAKER:
Scott Sanderson
Principal
Deloitte Consulting LLP
SPEAKER:
Hugues De Saint
Germain
Chairman & Founder
FOROIL
MODERATOR:
Craig Fleming
Technical Editor
World Oil
World Oil®!/!MAY 2018!69
REGIONAL REPORT / LATIN AMERICA

part of the Stabroek Block. The well, situated about 30 mi
southeast of Liza, was drilled to a depth of 18,445 ft in 5,912
ft of water. “ExxonMobil continues with its successful explora-
tion campaign offshore Guyana with the discovery of Turbot.
This shows that deep water can still be attractive. After [this]
announcement, ExxonMobil’s Liza and Payara complex might
approach the 2 Bbbl mark in commercial reserves,” Pablo Me-
dina, Wood Mackenzie’s senior analyst, said in a release. “Exx-
onMobil’s Latin American footprint has increased significantly
Fig. 3. Pemex recently reported Mexico’s largest onshore
discovery in 15 years at its Ixachi-I well, in the Veracruz basin.
Photo: Pemex.
with its recent streak of discoveries in Guyana and its aggressive
bidding in Brazil’s latest licensing round.”
In January, Exxon’s sixth Stabroek Block discovery was report-
ed. The Ranger-1 exploration well encountered about 230 ft of
high-quality, oil-bearing carbonate reservoir, after it was drilled
to a depth of 21,161 ft in 8,973 ft of water. “This discovery proves
a new play concept for the 6.6-million-acre Stabroek Block, and
adds further value to our growing Guyana portfolio,” Steve Green-
lee, president of ExxonMobil Exploration Co., said in a release.
Just one month later, the oil giant—along with partners Hess
Guyana Exploration Ltd. (30%) and CNOOC Nexen Petro-
leum Guyana Limited (25%)—reported its seventh discovery
in the Stabroek Block, at the Pacora-1 exploration well. The
well, which was drilled approximately 4 mi west of the Payara-1
well, encountered about 65 ft of high-quality, oil-bearing sand-
stone reservoir. It was drilled to a depth of 18,363 ft, in a water
depth of 6,781 ft. According to the company, it will be devel-
oped in combination with Payara field, helping to bring Guyana
output to more than 500,000 bpd.

MEXICO
E&P activity in Mexico has seen a dramatic decline of late.
As the country’s drilling activity hit record lows last year, its
proven reserves have been shrinking consistently. Energy re-
form in Mexico, however, has ended a 75-year state monopoly
in the oil and gas sector, and has shifted the nation’s attention to
attracting private capital and technical expertise that could help
rebuild Mexico’s ailing economy.

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70!MAY 2018!/!WorldOil.com

During this year’s CERAWeek in Houston, Pemex CEO Car-
los Treviño said that “the new name of the game, for Pemex,
is ‘partnerships.’” Through an aggressive farm-out strategy, the
company aims to lure foreign investment through a series of as-
set auctions that will, with any luck, help reverse the country’s
output decline.
In January, Mexico awarded 19 deepwater blocks to oil ma-
jors, including Shell and Eni, reportedly bringing in billions
of dollars’ worth of investment. In March, Mexico offered 35
shallow-water areas, which will be followed by an auction for 37
onshore developments in July. Overall, the country is expected
to offer more than 100 permits to oil majors before its July elec-
tion, when President Nieto’s term ends.
With its large-scale energy reforms, Mexico became the
IEA’s first Latin American member country in February. “It is
a historic day, because we welcome our first Latin American
member country, with more than 120 million inhabitants, an
important oil producer, and a weighty voice in global energy,”
IEA Executive Director Dr. Fatih Birol said. “The ambitious
and successful energy reforms of recent years have put Mexico
firmly on the global energy policy map.” Mexico is the associa-
tion’s 30th member.
Efforts to revive Mexico’s E&P industry showed progress
last year, when Talos Energy reported a significant discovery
in the shallow waters of the Sureste basin. The Zama-1 explo-
ration well, situated about 37 mi from the Port of Dos Bocas,
reportedly was Mexico’s first well to be drilled by the private
sector. It reached an initial TVD of about 11,100 ft, encounter-
ing a contiguous gross oil-bearing interval of more than 1,100
ft, with 558–656 ft of net oil pay in Upper Miocene sandstones.
“We believe this discovery represents exactly what the energy
reforms intended to deliver: new capital, new participants and
a spirit of ingenuity that leads to local jobs and government rev-
enues for Mexico,” Talos President and CEO Tim Duncan said
in a release.
According to the company, initial gross original oil-in-place
was estimated between 1.4 Bbbl and 2 Bbbl, which exceeded
pre-drill estimates. Following the installation of a liner, Talos
says it plans to drill deeper prospects in pursuit of Zama Main
and Zama Deep targets.
Mexico’s E&P sector continued to make headlines, when
Pemex reported the country’s largest onshore discovery in 15
years in November. The Ixachi-1 well (Fig. 3), 45 mi south of
the Port of Veracruz in the Veracruz basin, showed an original
volume of over 1,500 MMboe, representing total reserves of
about 350 MMboe. The reservoir’s close proximity to existing
infrastructure reinforces its economic value further.
COLOMBIA
Canacol Energy and GeoPark are two of Colombia’s most
active operators. Last year, Canacol identified a new com-
mercial shallow gas play in the Lower Magdalena basin, after
an exploration well tested at a combined rate of approxi-
mately 8,123 boed. The Toronja 1 exploration well, drilled
to an MD of 7,200 ft on the VIM 5 Block, was the company’s
eighth consecutive gas discovery in the basin. It was report-
edly being tied into the Jobo gas processing facility, just
south of the discovery.
Soon after, the company reported its ninth discovery. Its
Pandereta 1 exploration well encountered 149 ft of gas pay in
LATIN AMERICA / REGIONAL REPORT
the Lower Tubara, Cienaga de Oro (CDO) and fractured base-
ment reservoirs. Less than two months later, in December, the
Canadonga-1 well reportedly encountered 32 ft of net gas pay in
the CDO reservoir, confirming Canacol’s tenth consecutive dis-
covery in Colombia’s Lower Magdalena basin. The Pandereta
2 appraisal well confirmed that the finds were of significance,
encountering twice the amount of net gas pay of the Pandereta
discovery well.
In September, GeoPark reported a new oil field discovery of
its own. After drilling the Curucucu 1 to a TD of 14,600 ft, pro-
duction tests resulted in a production rate of about 1,700 bpd.
While the well was drilled from an existing well pad in the re-
cently discovered Jacamar field, it reportedly is on a new fault
trend to the east of the Tigana/Jacana fault trend, contiguous to
Jacamar field. The company says the find marks its 11th discov-
ery in the Llanos 34 Block since acquiring it in 2012.
The company saw recent progress at Tigana/Jacana, as well.
Oil shows at the Tigana Norte 3 and Tigana Norte 4 appraisal
wells indicated the potential for hydrocarbons in both the Gua-
dalupe and Mirador formations. “With the success of these
recently-drilled new wells, GeoPark has moved into becoming
the third-largest oil and gas operator in Colombia, with more
growth on its way,” CEO James F. Park said in a release.
TRINIDAD & TOBAGO
BP Trinidad & Tobago (BPTT) and Repsol are two of the
most active operators in Trinidad & Tobago, the southern Carib-
bean’s twin-island state.
One of BP’s largest upstream projects of 2017, the Trinidad
Onshore Compression (TROC) project started up in April. The
facility, which reportedly has the potential to deliver about 200
MMscfd, is expected to improve production capacity by increas-
ing output from low-pressure wells in BP’s existing Columbus
basin acreage through an additional inlet compressor at the Point
Fortin Atlantic LNG plant.
Later in the year, BP announced first gas from the Juniper de-
velopment, the company’s first subsea field development in Trini-
dad. The facility produces gas from Corallita and Lantana fields
via the Juniper platform, approximately 50 mi off of Trinidad’s
southeast coast. Gas from Juniper’s five subsea wells flows to the
Mahogany B hub via a new 6-mi pipeline. The project reportedly
boosted BPTT’s gas production capacity by approximately 590
MMscfd.
BPTT also announced last year that its Angelin gas project was
sanctioned. The project will include the construction of a new
platform about 37 mi off of Trinidad’s southeastern coast, as well
as four wells with a production capacity of about 600 MMscfd.
Gas from the project will flow to the Serrette platform hub via
a new 13-mi pipeline. According to BPTT, drilling is scheduled
to begin in third-quarter 2018, and first gas is anticipated in first-
quarter 2019.
Repsol, with BPTT, reported the discovery of its largest gas
volume in five years. The Savannah and Macadamia exploration
wells uncovered approximately 2 Tcf of gas in place. Savannah
was drilled into an untested fault block of the Columbus basin,
east of Juniper. Likewise, Macadamia was drilled to test explora-
tion and appraisal segments below the existing SEQB discovery,
which is situated 6 mi south of the producing Cashima field, in
the Columbus basin. Both reservoirs will be tied back to the Juni-
per platform.
World Oil®!/!MAY 2018!71

Sophie Zurquiyah
CGG has appointed
Sophie Zurquiyah as
CEO. She will replace
Jean-Georges Malcor, who
reportedly decided not to
pursue his mandate once
the company’s restructur-
ing process was complete.
She was formerly the
COO and senior executive
V.P. in charge of the GGR
segment of Technology
and Global Operational
Excellence. Prior to joining
CGG in 2013, Zurquiyah
held a variety of global
executive positions at
Schlumberger. During her
22-year career there, she
worked in the U.S., France
and Brazil.
Susan Dio has been
named chairman and pres-
ident of BP America Inc.
She succeeds John Mingé,
who will move to chair
a study by the National
Petroleum Council (NPC)
into carbon capture
utilization and storage.
He is subsequently set to
retire from BP in March
2019, after approximately
six years as chairman and
president. For the last
three years, Dio has served
as chief executive of BP
Shipping. However, her
33-year career at BP also
has included a number
of senior commercial and
operating positions in the
U.S., UK and Australia.
James “Jim” L. Gallogly
has announced that he
is resigning from his
position on Continental
Resources’ board of
directors. His departure
reportedly is in connection
with his appointment as
president designate of the
University of Oklahoma.
According to Gallogly, his
decision to resign is to
ensure that he can devote
the necessary time and
attention to his obliga-
tions at the university.
72!MAY 2018!/!WorldOil.com
PEOPLE IN THE INDUSTRY
EMILY.QUERUBIN@WORLDOIL.COM
Janeen S. Judah
Patterson-UTI Energy Inc.
has expanded its board of
directors to eight mem-
bers with the appointment
of Janeen S. Judah. She
brings more than 35 years
of operational and mana-
gerial experience to her
new role. Most recently,
she served as president of
the Society of Petroleum
Engineers (SPE), while
on secondment from
Chevron. At Chevron, she
has held a number of lead-
ership positions, including
general manager for the
southern Africa business
unit and president of
Chevron Environmental
Management Company.
Stephen Sheppard has
been appointed to the
International Marine
Contractors Association’s
(IMCA) governing board.
As diving manager
at Helix Well Ops UK
Ltd., Sheppard brings
extensive knowledge
of diving operations to
the position. He is said
to be an industry expert
in diving health and
medical issues. Sheppard
presently serves IMCA as
chairman of the opera-
tions committee and the
diving division manage-
ment committee.
Orrick, a global law firm
focused on the technology,
energy & infrastructure, and
finance sectors, announced
that James Atkin has
joined the firm as global
co-head of their oil &
gas practice, focused on
Asian market growth and
based in Tokyo. Atkin
has extensive experience
advising on large-scale
oil and gas projects, LNG
sales arrangements, and
energy-related mergers
and acquisitions. Prior to
Orrick, Atkin was manag-
ing partner at Vinson &
Elkins in Tokyo.
Paul Lynch
Paul Lynch has been
named advanced comple-
tions director at Tendeka.
In his new role, Lynch
will help drive commer-
cialization of the com-
pany’s wireless intelligent
completions technology,
PulseEight. He brings
extensive knowledge
of production and well
optimization to his new
position. Lynch joins the
company from Delphian
Ballistics, where he was
V.P. of global technical
sales. He also co-founded
GeoKey, a tubing conveyed
perforating company that
was acquired by Paradigm
Group in 2013.
David Sealock has been
named CEO at Petroteq
Energy Inc. He brings
more than 26 years of
strategic management and
business experience to
his new position. Prior to
his appointment, Sealock
served as president of
Autus Ventures, where
he established equity
financing processes for
startup and intermediate
oil and gas companies,
and managed strategic
planning and portfolio
optimization. Prior to
that, he was V.P. of R&D
at Petroleum Technology
Alliance Canada (PTAC).
James Corbitt has joined
Permian Water Solutions
LLC as president, where he
will partner with upstream
operators, independent
water haulers and other
oilfield service companies
to provide water disposal
services across New Mexico
and West Texas. Corbitt
brings significant saltwater
disposal (SWD) market-
ing, sales and leadership
expertise to the company,
having most recently been
with Trinity Environmental
Services SWD, LLC, and
Wilson Systems, Inc.
Shane Fraser
Shane Fraser has joined
Ziyen Inc. as director
of oil intelligence. With
more than 25 years of
industry experience, he
will play an integral role
in the company’s plan for
international growth. Prior
to joining the company,
Fraser served as opera-
tions engineer for a North
Sea operator. He has held
numerous roles in senior
operations, maintenance
and project delivery in the
UK and the Middle East.
ExxonMobil’s senior V.P.,
Mark W. Albers, has
announced his retirement
following more than 38
years of service. Since his
election in 2007, Albers
has served as senior V.P.
and a member of the
company’s management
committee. Throughout
his career, he has held a
number of managerial
positions in development,
operations, production
and engineering. China
National Offshore Oil
Corporation (CNOOC)
Limited has announced
two director changes.
Wang Dongjin has been
appointed as a non-execu-
tive director and a member
of the Renumeration
Committee at CNOOC.
Throughout his career,
Dongjin held many execu-
tive leadership positions
which included chairman
of PetroChina, assistant
president of China National
Petroleum Corporation
(CNPC) and vice chair-
man of China National
Oil & Gas Exploration and
Development Corporation
(CNODC). Furthermore,
Wu Guangpi has retired
from the CNOOC board of
directors after serving 13
years as executive director,
non-executive director
and member of the
Remuneration Committee.
Dr. Fadi Feghali
Engineering and
construction services
company Drake &
Scull International
(DSI) has appointed
Dr. Fadi Feghali as
CEO effective April 1.
He previously managed
the firm’s international
business units. In his new
role, Feghali will oversee
all aspects of strategy and
business implementation
for the global DSI Group
of companies. Prior to
joining DSI in October
2017, Feghali served
as managing director
of Al Husam Group. As
a renowned industry
veteran, he brings more
than 30 years of experi-
ence in the energy, utility,
infrastructure, and oil and
gas sectors to his newest
position. His appointment
reportedly was part of
the company’s recent
organizational overhaul.
Kreuz Subsea has
announced two key
appointments to its
Singapore headquarters.
Pradeep Verma has joined
the company as chief
commercial officer, where
he will work to strengthen
its core market position in
India, Asia-Pacific and the
Middle East. He joins the
company from Larsen &
Toubro Ltd., where he was
head of offshore business
development. Prior to
that, Verma was regional
proposals and commercial
head at McDermott
International. Additionally,
Marek Kaminski has
joined Kreuz as director
of marine assets. He
most recently served
as regional vessel and
asset manager at Subsea
7. Having also worked
previously at EMAS
Offshore Ltd. and Rubicon
International, Kaminski
brings more than 30 years
of industry experience to
his new position.
 COMPANIES IN THE NEWS
EMILY.QUERUBIN@WORLDOIL.COM

across two assets in Al Shaheen president and COO, this will allow
field. Al Shaheen—situated nearly a more holistic service approach
50 mi off Qatar’s northeastern to completing rig overhauls.
coast, in the Persian Gulf—repre- Additionally, its product and
sents about half of the nation’s service offerings will be extended
oil production. With 33 platforms beyond its FDS hydraulic top
producing about 100 MMbbl of oil drives, mud pump and top drive
per annum, the field is considered repairs, and recertifications.
one of the world’s largest and
most complex. Under terms of the
contract, AISUS will employ its
gravity deployed ultrasonic scan-
ning tool, SIRIUS-X, to capture
inspection data.

Sparrows Group has been

awarded a multi-million-pound
contract with India’s Oil and
Natural Gas Corp. (ONGC) for the
refurbishment of 21 cranes. Under
terms of the agreement, Sparrows
BP is committing to two new will refurbish, repair, upgrade
North Sea developments or replace all components and
expected to produce 30,000 machinery. The project reportedly
boed, gross, at peak production. will extend the life of the cranes
Aquaterra Energy has completed the delivery of a Sea Swift The developments, Alligin and for a further 15 to 20 years. To
conductor supported platform (CSP) for DeNovo Energy in the Vorlich, are satellite fields situated reduce time and cost, refurbish-
Gulf of Paria, offshore Trinidad and Tobago. According to the close to existing infrastructure. ment of each crane will be carried
company, this is the first platform of its kind to be installed in According to BP, Alligin will be out onsite. However, the company
the country, and it was completed in just 10 months. Sea Swift tied back to the Glen Lyon FPSO says that any major boom work
was installed from a jackup rig in Iguana field, in a water depth vessel (pictured). It is a two-well will be performed at its facil-
of about 27 m. It accommodates up to four wells and includes development, West of Shetland. ity in Mumbai. The work was
local power generation, manifolds and a control system. Photo: Likewise, Vorlich will be tied back anticipated to begin in April, with
Aquaterra Energy. to the FPF-1 floating production completion expected by March
facility, at the center of Ithaca 2020. Photo: Sparrows Group.
Energy’s Greater Stella Area pro-
duction hub. It also is a two-well
On behalf of Thyna Petroleum value, broaden the partner base, development. Both fields should Opero Energy, an Audobon
Services (TPS), Xodus Group has expand technical expertise and go onstream in 2020. Photo: BP. Companies affiliate, has opened a
delivered a decommissioning and enable greater market access, the new fabrication facility in Houston,
abandonment study for wells, concessions were formed from the Texas. The 60,000-ft2 facility is
surface and subsea facilities in previous ADMA offshore conces- Fara Holdco Limited, owner part of the company’s strategy
Tunisia. During the six-week study, sion. The agreements have a term of Bibby Offshore, is merging to increase its global develop-
Xodus developed a decommis- of 40 years. with Rever Offshore AS. Rever ment and commercial capacity
sioning cost estimate for four Offshore’s subsidiaries include to meet customer demands. It
onshore fields, one offshore field CECON Contracting AS, an will be equipped with the latest
and two onshore storage and Statoil has awarded key drill- international subsea and offshore fabrication tools and technologies.
processing sites. The scope of ing contracts to Archer, KCA contractor, and two vessel According to Opero, the facility’s
work reportedly included the Deutag and Odfjell Drilling for companies. The merger of Bibby in-house capabilities will include
creation of an asset register, the drilling, completion, intervention and CECON will form a larger, engineered modular process-
development of an abandonment services, plugging, maintenance stronger offshore installation ing, as well as standardized and
strategy and site remediation in and modifications on 18 of its delivery business that will focus custom-built modules.
line with current industry best fixed platforms. Total value of the on its core diving and subsea
practices and regulations. awarded contracts is estimated at umbilicals, risers and flowlines
more than NOK 12 billion. They are (SURF) markets. According to Petroteq Energy has announced
for an initial period of four years, the company, the transaction plans to open marketing offices
China National Petroleum Corp. with three two-year extension positions it for larger and more in key international markets,
(CNPC) has signed agreements options. According to Statoil, the complex scopes of work globally. initially targeting Switzerland,
with Abu Dhabi National Oil work will employ about 2,000 Russia and Ukraine. As
Company (ADNOC), obtaining people each year. PetoBLOO—a consortium of oil
stakes in two of Abu Dhabi’s off- Henderson has secured a 30-acre and gas producers—continues
shore concession areas. Through property in Humble, Texas, to grow its membership, the
its subsidiary, PetroChina, CNPC Offshore inspection company to provide turnkey, multi-rig company is strategically expand-
has been granted a 10% interest in AISUS has secured its first major refurbishment and manufactur- ing its footprint in locations that
the Umm Shaif and Nasr conces- contract win in the Middle East. ing. The 80,000-ft2 property will will help develop a supply chain
sion, as well as a 10% interest in The contract, awarded by North accommodate consolidation of management platform for the
the Lower Zakum concession. In Oil Company (NOC), is for two the company’s three Houston oil and gas industry, based on
an effort to maximize commercial caisson inspection programs facilities. According to the firm’s advanced blockchain technology.

World Oil®!/!MAY 2018!73

 NEW PRODUCTS AND SERVICES
EMILY.QUERUBIN@WORLDOIL.COM

Remediation
Real-time, at-bit geosteering service solution separates,
mitigates delay in data transmission converts
AnTech Ltd. has launched the industry’s first real-time, at- hydrocarbons
bit geosteering service for coiled tubing drilling. RockView
is a technology that makes real-time, high resolution geo- The Clean Up 3 solution from
steering possible by using the measurements gathered from
Remediation Products Company
is designed to separate hydrocar-
the full range of sensors on the company’s latest generation
bons from soil, rocks and water,
COLT (pictured) and POLARIS BHAs. The data is combined and convert all existing hydrocar-
to determine the difficulty of drilling through particular rock bons to fuel that is rated Bunker
formations. Because traditional methods of geosteering are C or better. It has been used in
limited by the delay in data transmission, RockView mitigates delay by almost instantly provid- Alaska to clean tanks. In a fracing
ing information about conditions at the bit, as well as fine linear resolution. The directional situation, about three drums
driller can then determine which formation is being drilled by comparing to logs prepared by would be used to clean 1 million
geologists. According to AnTech, the well trajectory can be adjusted to keep the drill bit in gal of contaminated water, and all
hydrocarbons would be returned
zone, thereby avoiding the overshooting that can be caused by other geosteering methods.
to the owner or operator, accord-
Photo: AnTech Ltd. ing to the company. The operator
would have the ability to reuse
www.antech.co.uk
the water about 10 times before
water replacement is required,
but in many cases, water usage
Improved layout design improves Perforating can be extended. The addition of
drill bit durability gun system one or two aerators is required
to ensure even distribution of the
Halliburton has released an boosts reservoir product in the water storage tank.
According to the company, 100%
advanced drill bit with a more productivity of remaining materials in the tank
efficient layout design that opti- can be utilized to build or rebuild
mizes the placement of back-up the existing berm if required
cutters, improving bit durability on- or off-site. The labor required
without decreasing efficiency or is four to six employees, typically
ROP. To avoid certain limita- with no more than 10 days to
tions—such as increased heat complete.
and wear, poor bit cleaning
www.remproco.com
and reduced ROP—Halliburton
has designed the Stega drill
bit with offset back-up cutters Highly sensitive
to enhance durability with less acoustic
cutter wear. The back-up cutters
are placed 180° or more from the primary cutter which, according to Schlumberger has released its technology locates
the company, maximizes drilling efficiency compared to traditional Tempo instrumented dock- leaks in real time
dual-row or single-row cutting structures. The new bit design takes ing perforating gun system.
advantage of the bottom-hole pattern already created, removing Featuring a plug-in gun design
load from the primary cutter before rapid acceleration of wear can with real-time, advanced
begin. According to Halliburton, the Stega drill bit was deployed in downhole measurements, the
a harsh drilling application in West Texas, and drilled approximately system enables and monitors a
40% (2,400 ft) farther at an ROP that was 19% (15 ft)/hr faster than well’s dynamic underbalance to
create clean perforations that
traditional bit designs. Photo: Halliburton. Archer has released a new
boost reservoir productivity.
According to the company, the acoustic listening platform for
www.halliburton.com
compact gun system features well integrity, completion and
proprietary docking components performance evaluation, and
Specialized seals engineered that streamline the deployment turbulent flow analysis. The VIVID
platform is a highly sensitive,
specifically for the oil and gas market of up to 40 guns. This allows
acoustic technology that detects,
selective initiation to efficiently
Trelleborg Sealing Solutions has extended its FlexiMold process—a perforate multiple reservoir investigates and locates leaks
unique method of producing large-diameter, joint-free seals—to zones, with a maximized in real time. Additionally, it
include Isolast perfluoroelastomer (FFKM) materials. These three explosives payload, in a single verifies cement barrier seals
compounds (Isolast J9554, XploR J9523 and Isolast XploR J9513) trip. Additionally, the system has and characterizes downhole
are specifically engineered for oil and gas applications. According a simplified arming process that events with precision. The
increases safety and reliability platform consists of full-spectrum
to the company, each one shows outstanding chemical resistance
by eliminating the variability acoustic sensors that accurately
and mechanical performance under pressure, as well as unparalleled measure the broadest frequency
introduced by wellsite crimping
thermal properties and RGD resistance. They can be manufactured bandwidth and amplitude of
and wiring—the primary causes
using the joint-free FlexiMold process from 600 mm/24 in., up to any of misruns and misfires. The new acoustic energy. According to the
size. In addition to having no visible joint, the seals have a high level system reportedly has been field company, the sensors also can
of integrity to provide extended life, ultimately lowering overall costs tested in Egypt, Oman, Kuwait, locate previously indiscernible low
for operators. Algeria and Ecuador. energy leaks. Photo: Archer.
www.oilandgas-seals.com/en www.slb.com www.archerwell.com

74!MAY 2018!/!WorldOil.com
 ADVERTISERS IN THIS ISSUE

3M ......................................................................................16 Events—HPHT .......................................................... 75 NETZSCH Werbe- Und Service- Gmbh .................29

www.gasdetection.3M.com www.netzsch.com
Events—ShaleTech ..................................................76

AF Global ........................................................................14 NOV.................................................................................... 2

Events—WGLC .........................................................24
www.nov.com/tuboalt
www.afglobalcorp.com/drilling
Events—World Oil Awards .....................................79
Offshore Northern Seas Foundation ...................... 10
Ametek Process Instruments ...................................42
Gulf Energy Information........................................... 6 www.ons.no
www.drexelbrook.com
Petroleum Industry DVD ........................................65 Sandvik Materials Technology .................................47
Carbo Ceramics Inc. ....................................................59 www.materials.sandvik
World Oil Circulation .............................................. 44
www.carboceramics.com/manitoba
Shale Support ...............................................................53
World Oil Permian Map ..........................................36
dissolvalloy ...................................................................... 9 www.shalesupport.com
World Oil Webcast—Deloitte ...............................69
www.dissolvalloy.com Society of Exploration Geophysicists ....................20
Halliburton .................................................................... 80 www.seg.org/am
Fairmount Santrol ........................................................30
www.halliburton.com/advancedcompletions The Lee Company .........................................................31
www.fmsa.com/worldoil

Industrial Rubber ........................................................... 4 www.theleeco.com/mpsv

Global Petroleum Show .............................................55
www.iri-oiltool.com Weir..................................................................................49
www.globalpetroleumshow.com/register
www.edgeservice.weir
GWDC...............................................................................12 IPAA ..................................................................................18
World Gas Conference ...............................................39
www.gwdc.com.cn www.ipaa.org
www.wgc2018.com/visit
Gulf Energy Information nanoActiv .......................................................................22 Yellowjacket Oil Services LLC ..................................56
Data—EWA LNG .......................................................70 www.nanoActiv.com www.yjosllc.com

This index and procedure for securing additional information are provided as a service to World Oil advertisers and a convenience to our readers. Gulf Energy Information is not responsible for omissions or errors.

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December 5–6, 2018 | Norris Conference Centers - City Centre

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Resurgence of Shale
The shale resurgence that began a decade ago shows no signs of slowing down. From the
relatively new SCOOP/STACK plays in Oklahoma, to renewed interest in the Bakken, Marcellus
and Eagle Ford shales, to the Permian Basin—the largest producing area in the U.S.—shale
continues to be the prime driver behind the U.S. becoming a force in shaping the world’s oil
and gas markets. Gulf Publishing has been a strong advocate of the shale boom since the
early 2000s and continues its support by announcing “ShaleTech 2018.”

Questions: Event sponsorship or exhibits:

Contact Myron Malek, Contact Hortensia “Tish” Barroso,
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MAY
AAPG, Annual Convention &
Exhibition, May 20–23, Salt
Palace Convention Center,
Salt Lake City, Utah
P: +1 (918) 584-2555
customerservice@aapg.org
www.aapg.org/events
JUNE
SPEE, 55th Annual Conference,
June 2-5, Park Hyatt Aviara,
Carlsbad, Calif.
P: +1 (832) 972-7733
Debbie@spee.org
www.SPEE.org/2018-annual-meeting
Gulf Energy Information Events,
International Refining
& Petrochemical Conference:
Milan, June 5–6,
Milan Marriott Hotel, Milan, Italy
(See box for contact information)
European Association of
Geoscientists & Engineers
(EAGE), 80th EAGE Conference
& Exhibition, June 11–14, Bella
Center, Copenhagen, Denmark
P: +31 88 995 5055
F: +31 30 6343524
eage@eage.org
www.eageannual2018.org
dmg events, Global Petroleum
Show (GPS), June 12–14,
Stampede Park,
Calgary, Alberta, Canada
P: +1 (403) 209-3555
F: +1 (403) 245-8649
JaimieSaraceni@dmgevents.com
www.globalpetroleumshow.com
dmg events, East Africa Oil
& Gas Summit and Exhibition,
June 14–15, Intercontinental
Hotel, Nairobi, Kenya
P: + 44 1737 784 951
cjacobs@gep-events.com
www.eaogs.com
SPE, International Oilfield
Corrosion Conference and
Exhibition, June 18–19, Aberdeen
Exhibition and Conference Centre
(AECC), Aberdeen, Scotland, UK
(See box for contact information)
Noia (Canada),
Noia Conference 2018, St. Johns
Convention Centre June 18–21,
St. John’s, N. L., Canada
P: +1 (709) 758-6610
noia@noia.ca
www.noiaconference.com
IADC, World Drilling 2018
Conference & Exhibition,
June 19–20, Bella Center,
Copenhagen, Denmark
(See box for contact information)
MEETINGS AND EVENTS
MICHELLE.COWART@WORLDOIL.COM
SPE, International Oilfield Scale
Conference and Exhibition, June
20–21, Aberdeen Exhibition
and Conference Centre (AECC),
Aberdeen, Scotland, UK
(See box for contact information)
IPAA, 88th Midyear Meeting,
June 25–26, Hyatt Rgency Lost
Pines Resort and Spa,
Cedar Creek, Texas
P: +1 (202) 857-4722
kdaugherty@ipaa.org
www.ipaa.org
SPE, Trinidad and Tobago Section
Energy Resources Conference,
June 25–27, Hyatt Regency, Port
of Spain, Trinidad & Tobago
(See box for contact information)
IGU 27th World Gas Conference,
June 25–29, Walter E.
Washington Convention Center,
Washington, D.C.
P: +44 20 7978 0775
info@wgc2018.com
www.wgc2018.com
JULY
Mexico Busines Events,
Mexico Oil and Gas Summit,
July 18-19, Sheraton Maria Isabel,
Mexico City, Mexico
P: +52 55 5263 0200
www.mexicobusinessevents.com/
oilandgas/2018
ao@mexicobusinessevents.com
SPE/AAPG/SEG, Unconventional
Resources Technology
Conference, July 23–25,
George R. Brown Convention
Center, Houston, Texas
(See box for contact information)
AUGUST
NAPE, Summer NAPE,
Aug. 15–16, George R. Brown
Convention Center,
Houston, Texas
P: (817) 847-7700
F: (817) 847-7704
info@napeexpo.com
www.napeexpo.com/summer
IADC/SPE, Asia Pacific Drilling
Technology Conference and
Exhibition, Aug. 27–29, Bangkok
International Convential Centre at
Central World, Bangkok, Thailand
(See box for contact information)
SPE, Artificial Lift Conference
and Exhibition-Americas,
Aug. 28–30, The Woodlands
Waterway Marriott and
Convention Center,
The Woodlands, Texas
(See box for contact information)
AAPG, Latin America and
Caribbean Region Energy
Opportunities Conference,
Aug. 22–23, Hilton Hotel
and Convention Center,
Cartagena, Colombia
P: +1 (281) 886-8625 USA
+571 551 1187 Colombia
ellinas@aapg.org
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SEPTEMBER
dmg events, World Heavy Oil
Congress & Exhibition, Sept. 3–5,
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Centre, Muscat, Oman
P: +971 (2) 697 0504
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www.worldheavyoilcongress.com
SPE, ENGenious Symposium
& Exhibition for Upstream
Innovation, Sept. 4–6, Aberdeen
Exhibition & Conference Centre,
Aberdeen, Scotland, UK
(See box for contact information)
SPE, Liquids-Rich Basins
Conference – North America,
Sept. 5–6, The Petroleum Club,
Midland, Texas
(See box for contact information)
IADC, Advanced Rig
Technology Conference &
Exhibition, Sept. 11–12,
Hyatt Regency Austin,
Austin, Texas
(See box for contact information)
dmg events, GPEX 2018, Gastech
Sept. 17–20, Fira Gran Via,
Barcelona, Spain
P: +44 (0) 203 615 5914
sales@gpexevent.com
www.gpexevent.com
SPE, Annual Technical
Conference and Exhibition,
Sept. 24–26, Kay Bailey
Hutchison Convention Center,
Dallas, Texas
(See box for contact information)
IADC, Drilling HSE&T
Europe 2018 Conference
& Exhibition, Sept. 25–26,
Beurs van Berlage,
Amsterdam, The Netherlands
(See box for contact information)
Mexican Association
of Petroleum Geologists
(AMGP), Mexican Petroleum
Congress, Sept. 26–29,
Expo Mundo Imperial,
Acupulco, Mexico
P: + 52 (55) 5599 2860
Adolfo.alejandro.huidobro@
pemex.com
www.congresomexicano
delpetroleo.com
OCTOBER
NOIA, 2018 Fall Meeting,
Oct. 3–5, Hyatt Regency Hill
Country Resort,
San Antonio, Texas
P: +1 (202) 347-6900
ann@noia.org
www.noia.org
IADC, Contracts & Risk
Management Conference,
Oct. 9–10, Norris Conference
Center – CityCentre,
Houston, Texas
(See box for contact information)
IPAA, Oil & Gas Investment
Symposium Chicago, Oct. 10,
Mid-America Club, Chicago, Ill.
P: +1 (202) 857-4722
F: +1 (202) 293-0681
kdaugherty@ipaa.org
www.ipaa.org
AAPG, Mid-Continent Section
Field Conference, Oct. 12–14,
Cornhusker Marriott Hotel,
Lincoln, Neb.
P: (402) 472-9801
cfielding2@unl.edu
www.aapg.org/events
SEG, International Exposition
and 88th Annual Meeting,
Oct. 14–19,
Anaheim Convention Center,
Anaheim, Calif.
P: +1 (918) 497-5581
F: +1 (918) 497-5558
registration@seg.org
www.seg.org/Annual-
Meeting-2018
SPE, Russian Petroleum
Technology Conference,
Oct. 15–17, Holiday Inn Sokolniki
Hotel, Moscow, Russia
(See box for contact information)
International Association of
Drilling Contractors (IADC)
P: +1 (713) 292-1945
F: +1 (713) 292-1946
info@iadc.org
www.iadc.org/events
Society of Petroleum
Engineers (SPE)
P: +1 (972) 952-9393
F: +1 (972) 952-9435
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www.spe.org/events/
calendar
World Oil/Gulf Energy
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www.worldoil.com/events
World Oil®!/!MAY 2018!77

Appalachian basin fulfills destiny
If Edwin Drake would have drilled his
75-ft oil discovery well in northwestern
Pennsylvania, down another 3,900 ft,
he might have discovered vast quanti-
ties of natural gas in the Marcellus shale.
Drake’s discovery, which is often referred
to as the first commercial U.S. oil well,
was drilled specifically to extract “large”
quantities of higher-quality petroleum
than was being mined from surface seeps
along the banks of Oil Creek, south of
Titusville. Before the Drake discovery,
most oil producers were drilled princi-
pally for salt brine; hydrocarbons were
considered a nuisance byproduct.
Explosive growth. A century-and-a
-half after Drake’s discovery, the Appala-
chian basin is booming once again. The
expansion of U.S. natural gas production
can be attributed largely to the Marcellus
and Utica shale plays. In 2007, Appalachia
was the world’s 32nd-largest natural gas
producing region. Today it’s in third place,
trailing only the full U.S. and Russia, says
Tim Gould, head of energy supply out-
look at Deloitte. “The speed and magni-
tude of Appalachia’s emergence onto the
global natural gas scene is unprecedented,
and due mainly to the Marcellus and Uti-
ca shale plays, which reside mostly within
Pennsylvania, West Virginia and Ohio.”
Sustained increases/ample supply.
Far from plateauing, U.S. natural gas
production is projected to break do-
mestic records in 2018, and again in
2019, according to EIA. And with sup-
ply remaining strong, reports say natu-
ral gas prices nationally are expected to
remain relatively steady in upcoming
months. Natural gas from the Marcellus
and Utica shale reserves accounted for
approximately 30% of total U.S. natural
gas production in December 2017, and
the area is expected to contribute 37% of
the national output by 2040 (EIA). Greg
Kozera, director of Shale Crescent USA
said, “by 2040, the area is projected to
produce almost as much natural gas as
the entire U.S. did in 2005, prior to the
shale revolution.”
78!MAY 2018!/!WorldOil.com
THE LAST BARREL
CRAIG FLEMING, TECHNICAL EDITOR
New petrochemical hub? While con-
sumers will benefit in coming years, the
affordability of natural gas may also be ad-
vantageous to manufacturers. With gas ex-
pected to remain the most-consumed fuel
in the U.S. industrial sector, areas acces-
sible to ample reserves are gaining ground
as prime locations to build plants, says
Kozera. The exceptional growth in the
Marcellus and Utica plays has made the
northeastern U.S. an extremely desirable
location for petrochemical plants, accord-
ing to a new IHS Markit report. “Because
of the availability of natural gas and natu-
ral gas liquids, the region is positioned to
surpass the Gulf Coast as the most profit-
able place to build petrochemical plants.”
Kozera followed-up by saying, “because
of lower feedstock costs, cash costs are
23% lower than on the Gulf Coast. Addi-
tionally, IHS reported “delivery costs are
23% lower, since supply is closer to end-
users. The region’s close proximity to two
prolific shale plays has created one of the
world’s largest supplies of natural gas, and
subsequently led to the lowest fuel prices
in the developed world.”
Switch to cleaner power generation.
Although the U.S. has always had an abun-
dance of natural gas (at least from an op-
erator’s perspective), electricity providers
continued to build coal-fired plants, fear-
ing supply shortages, in spite of signifi-
cant pressure from green activists and the
international community. However, with
the Marcellus giant flexing its muscles,
this trend is beginning to change. Just a
decade ago, coal provided roughly 50%
of the fuel used to generate the U.S.’s elec-
tric power while natural gas accounted for
less than 20%, according to U.S. News and
World Report.
The advent of the shale plays (mostly the
Marcellus) has reassured power-generating
companies that new gas-fired builds will
not be subjected to low-supply or escalat-
ing feedstock prices. Combined, these fac-
tors have caused the percentage of electric-
ity generated from natural gas in the U.S.
to reach an all-time high of approximately
34% in 2016, exceeding coal’s contribution
(30.4 %) for the first time ever.
U.S. LNG exports surge. After six
decades of importing large amounts of
natural gas, the U.S. became an exporter
of the fuel in 2017, due to record produc-
tion from shale fields. In 2017, the U.S. ex-
ported 1.94 Bcfd, up from 0.5 Bcfd in 2016
(EIA). Dominion Energy’s newly con-
structed Cove Point LNG export terminal
on Chesapeake Bay (Maryland), shipped
its first commercial cargo in April, bring-
ing the total number of U.S. LNG export-
ers to two. The company said the facility is
now poised to deliver product under long-
term contracts after more than three years
of construction and a cost of $4 billion
(Bloomberg). This massive investment
speaks volumes about the sustainability of
natural gas production in the region, and
the quality and areal extent of the Marcel-
lus/Utica reservoirs.
Cove Point is the second-largest U.S.
LNG export terminal after Cheniere En-
ergy’s Sabine Pass in Louisiana. Com-
bined, these two plants have an export
capacity 3.6 Bcfd and are accelerating the
U.S.’s emergence as an LNG superpower
that should challenge Australia and Qatar
for market share in the next five years.
The prize. Recent development in the
Appalachian basin has driven gas produc-
tion in the region to surpass that of entire
continents. Additionally, U.S. gas produc-
tion is expected to double by 2040, with
much of the growth coming from the Ap-
palachian basin, says Tim Gould, Deloitte.
“The opportunity is so great that the re-
gion will undoubtedly benefit, whether it
makes an effort to do so or not. If, however,
Appalachia collectively decides to realize
more of the value inherent in its shale gas
and develops a coordinated plan to do so,
the economic implications are staggering.”
So, 159 years after the initial Titusville
discovery, the region’s enormous potential
is once again being tapped and exploited.
I think Colonel Drake would approve.
" CRAIG.FLEMING@WORLDOIL.COM
 October 11, 2018
Houstonian Hotel Club and Spa
2018 Houston, Texas

Awards Nominations Now Open!

World Oil and Gulf Energy Information are pleased to present the Categories:
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have honored the upstream energy industry’s leading innovators
• Best Data Management &
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Nominations will close Friday, July 13, 2018. The 17th Annual • Best Deepwater Technology
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• Best Drilling and Completion Fluids
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Please contact Myron Malek, Events Manager - Upstream
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Business Development Manager, at +1 (713) 520-4404
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