E&P

AU GU S T 2 0 1 4
E P MAG. COM
Industry plugs in new technologies
to power production
POWERING
T HE OI L FI ELD
Subsea Trees
Rock Physics
Unconventional
Completion
Optimization
REGIONAL
REPORT:
NORTH SEA
REGIONAL
REPORT:
NORTH SEA
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ROCK PHYSICS
Reservoir characterization uses digital
rock physics
New method characterizes naturally
fractured reservoirs
Interdisciplinary integration made easier
UNCONVENTIONAL COMPLETION
OPTIMIZATION
Annular casing packers isolate longer laterals,
deeper wells
Redesigning stimulation, lateral placement to
boost production
SUBSEA TREES
Tree refurbishment key to Troll IOR campaign
Subsea wellheads designed for the land
Down Under
EXPLORATION & PRODUCTION
W O R L D W I D E C O V E R A G E
AUGUST 2014
VOLUME 87 I SSUE 8
A HART ENERGY PUBLI CATI ON www. EPmag. com
28
WorldVIEW:
Training tomorrows
subsea engineers
With a looming personnel shortage and
a need for technological breakthroughs, one universi-
ty is tackling the problem with help from industry.
12
68
72
76
78
84
90
94
Unconventionals: Permian
Permian Basin production
heats up
Improved technology and favorable oil
prices drive the industry to continue to unlock the plays
unconventional resources.
100
COVER STORY: POWERING THE OIL FIELD
POWERING
THE OIL
FIELD
IndustryPULSE:
Doing more with less
The upstream sector today is faced with
increasing complexity in terms of its proj-
ects as well as continually rising costs. It
must continue learning fast how to do more with less,
according to a leading panel of experts, if it is to
achieve long-term sustainable growth.
8
Dual-fuel solutions
on the rise
Powering the abyss
Renewables provide
a new alternative
E&P success: digitally
powered
30
34
40
44
REGIONAL REPORT: NORTH SEA
Standardization or innovation?
The subsea market in Norway is humming thanks
to innovative designs, but many are debating a
change in tune as standardization is seen as a
way to control costs.
124
Norwegian project conveyor
belt rolls on
Despite some industry concern over certain
aspects of Norways petroleum tax regime
and rising project costs causing spending
cutbacks, development activity in its offshore
sector remains at a healthy level.
128
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DEPARTMENTS AND COMMENTARY
COMING NEXT MONTH The September issue of E&P will focus on the many advances in
production technology. Other features will examine subsalt and presalt exploration, multilaterals
and extended-reach wells, mature and stranded assets, and floating production systems and moor-
ings, while regional reports will focus on the Utica Shale and Brazil. As always, while youre waiting for
the next copy of E&P, remember to visit EPmag.comfor news, industry updates and unique indus-
try analysis.
Printed on
recycled paper
ABOUT THE COVER Power for subsea installations is one of the great chal-
lenges facing industry and is one that companies like GE Oil & Gas are success-
fully tackling with its integrated subsea power system solutions. Left, the project
conveyor belt continues to spin in the Norwegian sector of the North Sea. (Main
image courtesy of GE Oil & Gas; cover design by Laura J. Williams)
AS I SEE IT
A change in the wind 7
MANAGEMENT REPORT
A critical component in early offshore installation design 16
MARKET INTELLIGENCE
Market tightens for well stimulation services 20
EXPLORATION TECHNOLOGY
Scanning tool offers fast results 23
DRILLING AND COMPLETION
From desert to deepwater: Tackling landmines, high-pressure BOPs 25
OFFSHORE ADVANCES
Genius or madness? 27
SHALE SOLUTIONS
Eagle Ford Shale completions evaluation 50
OFFSHORE SOLUTIONS
Deepwater offloading solution evolves 54
Collaboration on special production riser coupling meets new challenges 58
OPERATOR SOLUTIONS
Large water-management project meets with success 64
Novel water-based drilling fluid for HP/HT wells 66
INDUSTRY IMPACT
Autonomous nodal system enables surveys across harsh terrain 114
TECH WATCH
Bringing nanotechnology down to earth 116
DIGITAL OIL FIELD
Preparing for the inevitable 120
TECH TRENDS 122
INTERNATIONAL HIGHLIGHTS 132
ON THE MOVE/INDEX TO ADVERTISERS 136-138
LAST WORD
Refracks improve NPV 140
01-6 TOC-AUG_TOC 7/22/14 10:06 AM Page 4
ONLINE CONTENT AUGUST 2014
PREMIUM CONTENT Subscribe @ EPmag.com/explorationhighlights
AVAILABLE ONLY ONLINE
Production floater market
remains strong
By Velda Addison, Associate Online Editor
The second half of 2014 looks even
stronger, according to a recently
released report.
Indonesia sustains strong
start to year
By Steve Hamlen, Special to E&P
Gas finds have been made by
Premier Oil.
Chile works to diversify, grow
energy resources
By Velda Addison,
Associate Online Editor
The countrys energy agenda includes
developing its unconventional and
renewable energy resources.
Nigeria loses key US market for oil
By Obafemi Oredein, Special to E&P
India replaces U.S. as top importer of
Nigerias crude oil.
Halliburton forms fracking joint venture in China
Halliburton has signed an agreement with the SPT Energy Group Inc.
affiliate Petrotech (Xinjiang) Engineering Co. to establish a joint ven-
ture company focused on hydraulic fracturing and production
enhancement services in Xinjiang, China.
Falcon encounters gas shows in Hungary
Falcon Oil & Gas Ltd. encountered gas shows with the Besa-D-1 well, the
second of a three-well program to evaluate the gas potential of
Hungarys Algyo Formation in the Mako Trough license.
Shell makes third discovery in Norphlet
Shell encountered more than 122 m (400 ft) of net oil pay with the
Rydberg exploration well in the Norphlet Play in deepwater Gulf of
Mexicos Mississippi Canyon Block 525.
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A change in the wind
Change is inevitable. Failure to recognize what
might be coming is inexcusable.
T
he importance of the energy business playing a participatory role in todays
interconnected world cannot be overstated. Some might say it is better to just
keep your head down and get on with the job of finding and producing hydrocar-
bons. Others would argue that is an approach more akin to an ostrich burying its
head in the sand (a myth, by the way), and that for the upstream business the need
to engage fully with society is crucial.
This point was stressed at a recent European Association of Geoscientists & Engi-
neers event in Amsterdam by the Dutch scientist and commentator Wouter van
Dieren. A director at the think tank for sustainability and innovation, Instituut voor
Milieu-en Systeemanalyse, he is also a member of the global think tank The Club
of Rome.
Discussing the complexity of todays worldtechnically, politically and socially
he admitted we all remain still very dependent on fossil fuels and are faced (in
this industry) with the conflicted conundrum that we are concerned citizens on
one hand and technologists on the other.
What the oil and gas industry needs to account for, he advised, is that the value
system out there is becoming very different. The importance, therefore, of our
industry establishing shared common values with society at large is critical.
Van Dieren gave a very Dutch example, citing Fokker, once the worlds oldest and
most dominant aircraft builder, which failed to sense a change in the wind. Once
we went to see Fokker to talk about wind turbines. Your propellers are the best for
wind turbines, we said. They kicked us out the door. A few years later, they went
bankrupt. Not because of us, but because they did not see the new value chain.
What also would help the sustainability of the oil and gas industry, he added,
is strong leadership. He has been involved in numerous studies, one of them
entailing research on the decommissioning of 700 North Sea platforms. If fully
removed, this would cost about $135 billion.
He has worked with operators including BP, Shell, TAQA and ExxonMobil on a
rigs to reefs-style program. Doing this would mean estimated savings of about $68
billion and continue providing recognized seabed nature havens.
But this kind of broad program needs a coordinated approach, and Van Dieren
has identified a clear weakness: The difficulty is the lack of leadership in the oil
industry. Leadership is scarce.
If so, then we should be concerned. This business is under constant external
scrutiny. But after countless multicompany cooperative projects it remains a multi-
headed beast with no single coherent voice.
Without strong leadership, our industry will struggle to expound a relevant set
of common values to the fast-changing world outside. And as Fokker
discovered when it went bankrupt in 1996, a failure to quickly recog-
nize and adapt to changing times can put even the biggest compa-
nies into a fatal tailspin.
As I
SEE IT
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07 AsISeeIt-AUG_Layout 1 7/23/14 9:48 AM Page 7
D
emand for oil and gas is risingit always does. And
exploration and development activity likewise also
increases as it rises to the challenge of finding and produc-
ing the required resources.
But this work is taking place in an era of increasing com-
plexitycomplexity related to technological challenges,
commercial challenges, geopolitics and the wider societys
generally poor perception of the energy business.
An expert panel at the European Association of Geosci-
entists & Engineers (EAGE) annual event in Amsterdam
discussed these issues under the theme Doing more with
less, with a lineup of speakers including Ceri Powell,
executive vice president, upstream international explo-
ration, Shell; Marc Blaizot, senior vice president, explo-
ration, Total; Andrew Latham, vice president, exploration
service, Wood Mackenzie; Jose Luis Alcover, executive
director, business development, Repsol E&P; and Mario
Ruscev, vice president and CTO, Baker Hughes.
Panel chairman Dr. Mike Dalyformerly executive vice
president, exploration at BP, who joined Tullow Oil as
nonexecutive director in Junepointed out that global
oil demand is forecast to continue growing at 1% per year,
while global gas demand will rise by 3% annually.
Daly told the audience, The proposition is that the easy
oil is now gone. I would say it never was easy! But why is it
now getting more difficult? He highlighted society as a
whole as one reason things are increasingly complex,
especially in light of the rise of unconventional resources.
Society isnt really impressed with what we do. It is quick
to judge, and they do not want it in their backyards.
Upstream industry under stress
According to Latham, the exploration and development
industry is under stress with higher costs suppressing
returns. Resource discovery costs are rising, while full-
cycle returns are falling, he said.
A decade ago full-cycle returns were around the 20%
mark. Today that figure is around 12%, he told delegates.
Investors are not keen at this level. This is seen as an
industry struggling to perform.
Latham added that the issue was not a volume or sub-
surface problem, with emerging plays in areas such as
Brazil and East Africa sustaining a healthy trend of new
field barrels. Subsurface potential is not the problem.
But we have an industry struggling to increase production
and earnings.
He highlighted where costs have risen, such as in the
number of drilling days per offshore well, which have
soared since the year 2000 as explorers have had to drill to
deeper targets that are often in deeper waters. Tough
trends in exploration lead many to focus elsewhere.
Unconventional plays are now the primary growth option
for around half the industry, he pointed out. Complexity
is increasing. And this rising technical and commercial
complexity has not been matched by higher prices.
More brain cells per barrel
Powell agreed with Latham, pointing out that her own
company has been looking at the specific cost of downtime
in deepwater wells, where rig rates can be $1 million per
August 2014 | EPmag.com
8
industry
PULSE
Doing more with less
The upstream sector today is faced with increasing complexity in terms of its projects as well
as continually rising costs. It must continue learning fast how to do more with less, according
to a leading panel of experts, if it is to achieve long-term sustainable growth.
Mark Thomas, Editor-in-Chief
The increased complexity of projects due to technological, com-
mercial, social and political challenges means resource discov-
ery and development costs are rising while full-cycle returns are
falling. The average breakeven range by weighted average price
per barrel varies widely. (Source: Wood Mackenzie/Chevron)
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10
day. So I fully understand about the cost point, she said.
But Powell went on to stress the importance of some of
the softer issues, namely the need for the oil and gas
industry to find more brain cells per barrel to cope with
todays demands. Those demands include operators hav-
ing more portfolio gains but less time: Its a real conun-
druma race against the clock, she admitted. Early
de-risking through better seismic and reservoir evaluation
is now crucial before companies will commit often massive
amounts of investment dollars. Shell recently carried out a
major seismic program over the whole of Bruneis offshore
sector that helped reinvigorate what is a mature area for
the company. We drilled 10 new prospects there last year
and have 50 to be drilled in the coming years, she said.
Part of that de-risking comes from companies retaining
vital internal knowledge gained by their more experi-
enced employees while also using the fresh thinking that
comes from new recruits. More connectivity across gener-
ations is very important, Powell said, getting people
together at Shell who have maybe worked for just a few
years in the industry or in one case 40 years.
She was referring to Shells internal Rejuvenate Oppor-
tunity Now (RON) workshops, which get young and old
geoscientists together to take fresh looks at how hydrocar-
bons formed in mature basins, how they moved around
and where they might be now. That includes bringing
together geologists who are currently exploring a basin
with those who explored the same basin five, 10 and in
some cases even 30 years ago.
In one recent case in Oman, a RON workshop found
and identified new plays now already being drilled, she
added. We need more brain
power to tackle more complex
cases. But it is brain power that
needs to be connected.
Rising costs
Another panelist, Alcover, chose
to highlight the issue of cost esca-
lation, pointing out that the
annual development capex for
international oil companies has
more than doubled since 2005 to
more than $130 billion in 2012.
Blaizot agreed that the oil and
gas sector is indeed seeing higher
capex and opex but less profitabil-
ity. We have more competitors
and more databut do we have
more knowledge? And we have,
and we will have, more and more
energy demand. We have more
resources, more complexity, more
demand. But we also have more
price volatility.
In response to one audience question, he also pointed
out that when undertaking international projects, local
content does not mean lower prices.
He urged his fellow operators to do more in terms
of sharing their resources, whether through established
rig clubs or similar arrangements for the use of seismic
vessels.
Improve recovery rates
Ruscev chose to focus on the need for the E&P business
to dramatically improve reservoir recovery rates from the
present average industry level of maybe 40%, he said.
We have to rethink the whole way we do it. We need
to understand what we do. If we do something and we
do not produce 60% of it, then we do not know what we
are doing.
He asked the audience how the industry could
become more predictive in unconventionals, for exam-
ple. We have to go back and use some brain power. Go
back and understand how to create this artificial perme-
ability, he said. What will the solution look like? We
have a lot of fields. But I cannot say how it will look 15
years from now.
World-class megaprojects such as Chevrons ongoing Gorgon development offshore Western
Australiawhich has 20 subsea structures, including manifolds weighing up to 900 mthave
contributed to the general rise in upstream development costs. (Source: Chevron)
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12
Training tomorrows subsea engineers
With a looming personnel shortage and a need for technological breakthroughs,
one university is tackling the problem with help from industry.
T
he University of Houston was the first university in the
U.S. to create a subsea engineering masters degree
program, spurred by a number of factors: the schools
desire to emerge as the Energy University, the continued
industry push into deeper water and a diminishing num-
ber of experienced individuals. Apparently the school
made the right decisionwithin three years of its forma-
tion, the program is bursting at the seams.
The school is not going it alone. It has partnered with
industry giants such as FMC Technologies and KBR, and
its classes are taught by seasoned industry professionals.
The program offers required courses in applied mathe-
matics, convection heat transfer and flow assurance, and it
also offers a mix of prescribed subsea elective courses
such as riser design, pipeline design and BOP design. In
addition, students can take an additional four electives to
complete their degrees.
E&P talked to Dr. Phaneendra Kondapi, KBR adjunct
professor of subsea engineering at UH and a senior tech-
nical adviser at Granherne-KBR, about his involvement
with the program and its many successes.
What does this program mean to the University of Houston?
It means a lot to UH. The industry has been waiting for a
long time to have such a program. Its not just the Univer-
sity of Houston; the entire industry also needed this type
of training badly. And the students are excited. Its a differ-
ent program for subsea because other schools do not have
this program yet, and the students want to take these
classes. UH is glad to have started this program to serve
the industry needs with support from industry.
How do you prepare this next generation of engineers?
To replace the baby boomers, we need to train people
with enough skill sets, especially because now subsea is
going deeper and deeper. Previously we used to say deep-
water was 1,000 ft [305 m] and then 5,000 ft [1,524 m].
Now we are going to 10,000 ft [3,050 m]. The rigs are
going deeper and deeper. Not only that, the offset dis-
tances are getting up into hundreds of miles out in the
sea. Based on that, we have more and more challenges.
We need to have the technologies ready to overcome
these increased challenges. Theyre not going to come up
automatically. Who is going to create these technologies?
People, right? That means people have to understand
what subsea is. Without understanding, they cannot
develop these technologies. So we have to prepare them,
but how do we prepare? Universities alone cannot develop
these technologies. Right now the need of the program is
to shift the focus from concept to application. Once we
are able to do that, we will be able to prepare industry-
ready skilled students. Most of the students dont have any
industry knowledge. So the advantage of this program is
that the people who are teaching these courses are indus-
try professionals. That means everybodys working in the
industry, and theyre able to share their experiences with
the students. That gives them some degree of understand-
ing of what is happening in the real world. The industry
has to think in that angle so that everybody can participate
and collaborate with a supportive education system.
The education system has to be changed. Not the entire
education system, but the courses offered to the students
who are going into the industry. They need to have these
industry-ready courses, especially at the graduate level
because they need to understand the science, the con-
cepts and the application. Undergraduate courses are
Rhonda Duey, Executive Editor; and
Jennifer Presley, Senior Editor, Offshore
world
VIEW
Dr. Phaneendra
Kondapi
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fine, but once students have graduated or maybe
are in their senior year, they need to have such
courses that can orient them to the industry.
When they get into a project, how can they
immediately be productive? Thats my
intro section of the class.
When the University of Houston
asked me to come up with a
course, I said it had to be a dif-
ferent way of approaching the
students. Ive been through so
many courses throughout my
educational training. But
everything was more often
concept, theory. So when
they asked, Would you like to
teach the course? I came up with a new concept called
reverse circular teaching. Basically I give them the prob-
lem in the beginning of the class, the project, and then I
teach them the basic sciences that are required to solve
the problem. I try to help the students connect the dots
between the theory and the real-world problem. So I give
them the project, tell them the theory and then ask them
to solve the problem.
So far I have had around 200 students in my class. In
January 2014 alone, my flow assurance course had 120 stu-
dents. A typical graduate class has 15 people, 20 people. It
indicates how industry is responding to this course as well
as the subsea program in general.
What about skills like preparing presentations?
Im introducing them to the soft skills as well, such as how
to write an industry-standard report and how to prepare
and give client presentations, communication skills and
team-building skills. The reports and presentations are
completely different than what they wrote in school.
When they come into the industry, they have to write in
a certain format. I give them the format, and then I ask
them to write the report because the project I give them
is actually an industry problem that we solve daily. This
exposes students to some of the best practices in the
industry. When they come out of the program, they are
more likely to be hired because they have more practical
knowledge and exposure than other students who lack
these skills.
What are some of the other key elements of your course besides
technical content?
There are six different ways I prepare my students to be
industry-ready, including the real-world project and the
standard industry reports and presentations through my
flow assurance course. Students have to use indus-
try-standard software to complete the project,
and I help them learn it in the classroom set-
ting. Then I invite industry speakers and
guest lecturers to give them an industry
perspective and also to evaluate student
project presentations. There are
three reasons for that. Students get
confident because they know
that theyre presenting in front
of not just their classmates but
also industry professionals.
That means they try to prepare
themselves well. The second
thing is networking, so they
can get to know the industry
professionals. Thirdly, if the industry people like their pre-
sentations, they might get hired. And some of my students
have gotten jobs just based on their presentation.
And I also take them to industry facilities so that they
can actually see what is happening in labs. I show them the
actual subsea equipment videos and the animations and
the pictures in the class, so they get the idea of what sub-
sea fields and structures looks like. People may think sub-
sea is easy. But when youre operating 10,000 ft below the
surface remotely, you cant see much. And you have to be
very precise to operate safely and reliably.
Do older industry professionals benefit from the program as well?
This subsea program is for working professionals as well as
regular graduates. Even people with industry experience
can enhance their skills and understanding of subsea.
Often when they go to a meeting with people from multi-
ple disciplines, when somebody starts talking, the other
people watch or listen, but they dont understand the con-
cepts. But if they enroll in this program, they understand
what others are talking about.
The subsea students leaving today will be the ones 10, 20 years
from now developing ultradeep water out in the Gulf of Mexico.
Exactly. They are the ones who will manage these complex
projects. The challenges are increasing because we are
going deeper and further. That means more HP/HT
issues, more flow assurance issues, more operability issues.
And the growing technologies are subsea processing, sub-
sea boosting and subsea separation. The vision of the
industry is that by 2020, we want to achieve a topsidesless
subsea facility. How do we achieve that? We need to have
much better technologies. But once we have the technolo-
gies, who is going to operate the facilities if we dont start
to prepare these engineers today?
14
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Reverse circular teaching acknowledges the importance of
industry support. (Source: Phaneendra Kondapi)
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16
L
essons learned in the last two decades have resulted
in more concentrated efforts to improve human per-
formance and reduce human error through the intro-
duction of Human Factors Engineering (HFE) into the
design of offshore installations.
HFE focuses on the critical role of the human element
as the root of effective safety standards and practices.
Human behavioral and physical capabilities and limita-
tions along with traditional engineering disciplines are
integrated to produce human-system interaction that
maximizes the best of both. These practices and princi-
ples are based on system and environmental safety, com-
petent personnel, and effective performance that allow
the human and system to safely achieve required func-
tions and goals. Despite positive experiences and lessons
learned from including HFE design practices and prin-
ciples into offshore design projects, HFE has yet to
become a widely accepted and fully integrated compo-
nent of offshore design projects.
It is time to change the industrys view of HFE. Inte-
grating HFE design practices and principles that reflect
human capabilities and limitations can result in installa-
tions that are more cost-effective, safer and easier to
operate and maintain.
HFE implementation strategy
As a strategy, HFE implementation has evolved. A well-
defined approach, where the owners and contractors are
responsible, is vital to promoting the effective integration
and implementation of HFE design principles through-
out the life-cycle phases of an offshore capital project.
Ideally, this approach encapsulates the key HFE activi-
ties needed to integrate HFE into an offshore installation
design and layout and associated project management sys-
tems and considers these activities throughout the assets
life cycle. It should also consider interrelated elements
that influence how personnel can safely and efficiently
perform assigned tasks, including workspace design and
layout, ambient environmental considerations, and man-
agement and organizational issues related to installation
operations and maintenance.
The 2014 ABS Guidance Notes on the Implementa-
tion of Human Factors Engineering into the Design of
A critical component in
early offshore installation design
Integrating a well-defined HFE strategy into offshore installation design improves overall
HSE and occupational performance, which ultimately can impact the bottom line.
Kevin McSweeney and Julie Pray, ABS
management
REPORT
A proper guardrail design with toe board in the appropriate
position can reduce potential injuries by limiting falls on
elevated walkways.
16-19 ManageReport-AUG_16-19 ManageReport-AUG 7/21/14 4:06 PM Page 16
Offshore Installations (HFE Guidance Notes) provides
a strategy for integrating and implementing HFE in
the design process as a way to help improve human
performance and personnel efficiency and reduce
safety risks associated with working and living on
offshore installations.
The HFE Guidance Notes identify the HFE activities
that should be executed effectively and efficiently and
describes a strategy for integrating HFE into existing
project management systems.
The document is a roadmap for a larger effort to pro-
mote the application and understanding of HFE princi-
ples and criteria in system design and operations with the
goal of improving personnel performance and safety
while reducing the potential for human error. Although
compliance with the HFE Guidance Notes is not
required, experience shows that the earlier in the
process these principles and recommended practices
are adopted and integrated, the greater the impact
on business, health and safety performance.
Focusing on safety and productivity
While the application of HFE practices and principles
may seem like common sense, they are not. The success-
ful application of HFE requires a practitioner with a
background in multidisciplinary fields such as engineer-
ing or psychology with emphasis in human factors,
human factors engineering, physiology and ergonomics.
HFE professionals work to advance human-centered
design and optimize system operations through human
factors engineering principles, including human-system
interfaces; integration of human physical and cognitive
performance limitations; complex systems analysis;
human-automation interaction and bias; personnel
selection, readiness and training; organizational culture;
and other HFE methodologies that eliminate or reduce
the probability and consequence of human error.
Identifying the potential for human error or injury
takes many forms and must be evaluated in terms of
their impact and significance when developing potential
solutions. HFE personnel participate in risk and hazard
18
management
REPORT
EPmag.com | August 2014
19
studies, take part in design and layout, help develop
training devices and other related training materials,
participate in electronic 3-D modeling walkthroughs
involving human-machine issues and conduct periodic
visits to construction facilities throughout a project. This
allows them to gather data and track issues in an HFE
database from which reports can be generated at each
design phase.
Applied examples
Effective program planning is essential in achieving an
HFE vision, mission and objectives. Although the num-
ber and type of tasks in an HFE program depend on the
size and complexity of the design project, the following
are generally included as part of the HFE program:
Review/develop early project design documents;
Identify HFE tasks and prepare HFE implementa-
tion plan;
Select/write the HFE design aids;
Conduct HFE training for designers;
Establish an HFE tracking database;
Carry out a manning assessment;
Conduct drawing/design reviews;
Apply HFE to vendor-supplied equipment;
Prioritize HFE efforts for systems/equipment;
Incorporate a facility-wide labeling program;
Prepare/review operations, maintenance and train-
ing manuals/materials;
Participate in special design studies;
Visit the construction yard and vendor facilities; and
Prepare progress reports.
Isolating a few of these HFE activities from experience
serving major offshore engineering, procurement, con-
struction and installation (EPCI) projects illustrates
the value of implementing this practice in installation
design.
In one case, offshore personnel from a major Gulf
of Mexico production E&P company rated good label-
ing as one of the most important HFE contributions
to their project. HFE professionals worked closely with
the builder and vendor to develop a program for facility
labeling and safety signage and designated appropriate
locations for the signs. HFE professionals also partici-
pated in site surveys to identify tagging and labeling
noncompliance.
Another recommendation in the HFE strategy is to
have an HFE drawing and document review procedure
within the HFE implementation plan. The plan should
contain a master list of drawings that will be reviewed by
an HFE professional along with provisions for reviewing
drawings and revisions, a process for reviewing change
proposals, and guidelines for entering comments in the
HFE tracking database. The value in applying HFE prin-
ciples lies in improved safety and more streamlined
operations. When HFE professionals identified a num-
ber of noncompliant elements during a major offshore
EPCI project, the issues could be addressed early on so
costly rework could be avoided. Noncompliance issues
that have been resolved through HFE reviews prior to
construction include:
Improper height and orientation of manually
operated valves;
No access or limited access to critical equipment,
valves, hand wheels, etc.;
Equipment protruding into walkways that could
contribute to trips and falls;
Equipment and structures placed in or along equip-
ment removal routes;
Controls and display design that are not consistent
with HFE requirements;
Inconsistent orientation and placement of equip-
ment; and
Stair, ladder, steps and walkway designs not consis-
tent with HFE requirements.
Lessons learned
The lessons learned over the years from incidents
and accidents in which human error was the primary
cause or contributorincluding those related to rare,
high-severity offshore accidents such as the Piper Alpha
and Deepwater Horizon tragedieshave provided a histor-
ical context from which HFE professionals have gained
experience and gathered data. History has shown the
factors leading to the successful implementation of
HFE, applicable to major oil and gas design and devel-
opment projects, include commitment and support
from the owner at all levels of the project organization;
early and continuous involvement of HFE throughout
the project; effective HFE planning and monitoring/
oversight; location of HFE discipline to promote inter-
action with other design disciplines; and interaction
between HFE personnel, operators and maintainers.
This information has been applied to develop HFE as
an overall risk reduction strategy.
While some companies have been slow to recognize
HFE as a viable discipline, early adopters have found
that applying HFE to their operations has delivered bet-
ter ergonomics and improved occupational safety. There
is now a body of evidence that shows an HFE strategy,
implemented early on in the design phase for offshore
installations, optimizes human well-being and improves
overall system performance.
DOWNLOAD
THE APP
I
ts dj vu all over again for the well stimulation sector.
Equipment manufacturers for the pressure pumping
sector are filling order books once again, in some cases
experiencing manufacturing demand last seen in the
2010-2011 industry buildout. The surge indicates the
pressure pumping market is tightening more quickly
than anticipated.
The Wall Street consensus of a market destined for over-
supply into mid-decade, or at least until demand returns
from rising activity in natural gas, is crumbling. Greater
demand for pressure pumping services is already under-
way even without increased activity in the gas markets.
Pricing is moving higher in multiple regional markets.
What began as a reflection of bottlenecks in the trans-
portation of bulk commodities like sand has evolved into
5% to 10% increases over the last six months in the cost of
providing well stimulation services. Price per stage conse-
quently reversed a three-year decline and is heading
higher as utilization tightens.
Why the change? High oil prices have helped, provid-
ing more money to operators to expand field programs.
But the change is also structural. It is an outgrowth of the
transition to pad drilling and batch completions, which
now represent more than 70% of horizontal drilling. A
secondary stimulus involves the return of slickwater frac-
ture stimulation as a preferred method for completions
as operators seek to boost IP rates and expand EUR as
the resource harvest phase in the tight formation oil and
gas cycle reaches maturity.
Meanwhile, the move to longer lateral lengths, coupled
with more stages packed more closely together, is increas-
ing downhole intensity and adding to the time it takes
pressure pumping fleets to cycle through the completion
process on a given location.Previously a pressure pumping
fleet completed a single lateral of 15 to 20 stages in a week,
then rotated to the next location. Now fleets are complet-
ing four or more laterals on a single well site with stage
counts of 125 or more. Equipment is on site for three
weeks or longer, effectively removing capacity from the
market and increasing effective utilization of the existing
fleet. Concurrently, well count is expanding from improve-
ments in drilling efficiency coupled with other productivity
enhancements generated through pad drilling.
While the move to 24-hour scheduling has helped well
stimulation providers handle larger numbers of wells, it
also has increased the wear and tear on equipment, which
now operates closer to design limits for longer periods of
time. The reduction in nonproductive time for well stimu-
lation equipment has been a boon as operators embrace
techniques such as zipper fracks to increase the rate at
which stages are completed at the well site. But it also
means well stimulation providers face a double whammy
from equipment wearing out more quickly even as ven-
dors are tasked with providing additional capacity to meet
expanding demand. This one-two punch has well stimula-
tion providers back in the market for newbuild units to
expand fleets while increasing the order volume for com-
ponents to refurbish existing units.
Delivery times are increasing. In a few cases, delivery
time is stretching into early 2015, although pricing for
components and equipment has not changed materially
at this point in the cycle.
The key takeaway is that productivity enhancements first
originating as drilling efficiency in 2012 were compounded
by the industry-wide move to pad drilling and batch com-
pletions in 2013. Completion efficiency has become the
main story in 2014. This evolution emphasizes well stimula-
tionand demand for pressure pumping services.
20
market
INTELLIGENCE
Market tightens for
well stimulation services
The move to pad drilling and batch completions is tightening supply for pressure pumping
equipment, prompting operators to add capacity.
Richard Mason, Chief Technical Director
Demand for well stimulation services
is expanding
Pad drilling and batch completions keep
pressure pumping equipment on location
for longer periods of time, effectively
increasing utilization
A return to slickwater fracture stimulation
is increasing attrition rates on existing
equipment
Well stimulation providers are ordering
newbuild units to expand feet capacity
and meet rising demand
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I
f you visit youtu.be/pnbfulRwxQg, youll see a character
straight out of a spaghetti western looking like hes
about to shoot a rock. Which he doeswith a near
infrared (NIR) measurement tool. After calling out the
names of several minerals that the tool has detected, he
tells viewers to git one!
But not many energy companies are gitting it just yet.
NIR technology is a simple scanning technique that ana-
lyzes clay mineralogy quickly and inexpensively. Its been
used in the mining industry for years but, according to
Chris Sherry, senior manager, mining and energy for
PANalytical Boulder, it can bring equal value to oil and
gas exploration, particularly in shale plays, where miner-
alogy plays such a key role in finding the sweet spots.
Every major mining company has an NIR instru-
ment, usually one at every mining operation, he said.
Its widely accepted technology.
According to Sherry, the technology can bring several
benefits to petroleum exploration:
The ability to differentiate clay
minerals such as kaolinite,
smectites, illite, chlorite and
ammonium clays in seconds;
The ability to track subtle min-
eralogy changes like illite crys-
tallinity, which is an indication
of thermal maturity;
The ability to differentiate car-
bonates and track calcium and
magnesium ratios quickly; and
Portability, ease of use and real-
time results.
The tool works by shining a
halogen light source directly on
dry core or drill cuttings for a few
seconds to produce an unknown spectrum. PANalyti-
cals most recent tool is basically a point-and-click device
that provides feedback in 20 seconds. We have a spec-
tral library of minerals that we compare the unknown
spectrum to, Sherry said. Combining our spectrome-
ter with the onboard library, were able to detect up to
seven minerals in a sample. Of course we can only see
the rock surface. But when this is used on drill cores or
cuttings, its a powerful tool.
Other areas that can benefit from NIR technology
include oil sands since the technology can detect bitu-
men content. Sherry said it also can be used on cuttings
coming back from a horizontal well to help operators
ensure that theyre staying in zone or for spectral stratig-
raphy of thick shales.
How does this compare to other wellsite measure-
ments such as X-ray diffusion (XRD) and scanning elec-
tron microscopy (SEM)? Both of these technologies have
their benefits, Sherry said, but NIR has a few advantages.
Its tougher for an XRD or SEM to
see things like illite-to-smectite clay
transitions, an important indicator
of thermal maturity, he said. We
usually compare our tool against
the XRD, which also provides valu-
able data. But with our instrument
there are no radiation or transport
issues. Its a handheld device, easy
to transport and use, and you get
real-time mineral results with mini-
mal sample preparation. You could
run hundreds of samples per day.
So far the industry has expressed
some interest, particularly in oil
sands and horizontal drilling proj-
ects. Sherry said that as recently as five years ago the tool
was not well understood in the mining industry; now its
widely accepted.
In the petroleum industry were starting that whole
process over again, he said. Its not applicable every-
where, but in shales there is a very good opportunity.
Its a compelling option for determining min-
eralogyyou can infer the same infor-
mation more easily and quickly.
Scanning tool offers fast results
NIR technology is poised to provide quick and inexpensive mineralogy
measurements to field geologists.
EPmag.com
RHONDA DUEY
Executive Editor
rduey@hartenergy.com
exploration
TECHNOLOGY
23
exploration
TECHNOLOGY
The TerraSpec Halo NIR tool includes onboard
mineral identification and scalars.
(Source: PANalytical Boulder)
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T
echnology in the oil and gas industry covers the
gamut of unusual applications. On June 24, press
releases on two quite different technologies illustrated
the divergence well.
Sterling Global Operations (SGO) put a tracked,
armored vehicle to work in the field in Kurdistan, sup-
porting oil and gas operations. The Micro MineWolf
was designed and built by MineWolf Systems AG, Stock-
ach, Germany. SGO is operating the equipment to
remove landmines and other unexploded ordnance
in Iraq, Afghanistan and other parts of the world.
The remote-controlled Micro MineWolf uses a tiller
at the front of the vehicle with flails and cutters that
revolve around a circular drum, which smashes down on
buried mines and other explosive devices. The vehicle
got its first use for oil and gas companies in Kurdistan.
Unexploded ordnance left from various conflicts
around the world can be a major safety issue in the oil
patch. This is a remarkably effective new tool in over-
coming various types of explosives that up to now were
dealt with by human beings, said SGO President Alan
Weakley in the press release. And that translates into
greater safety for the oil and gas companies as well as
the people who live in the area.
At the other end of the spectrum for deepwater opera-
tions, Maersk Drilling ordered the industrys first 20,000-
psi BOP stack and riser system as part of the Project 20K
Rigs design program, which is under a joint study agree-
ment between BP and Maersk. The equipment is sched-
uled to enter service in the first half of 2018.
GE Oil & Gas will design, test and build the BOP and
riser systems at its Houston Technology Center. The
company is working with Maersk and BP to develop the
drilling system technologies to meet new ultradeepwater
production goals.
The 20,000-psi drilling system will include a number
of new, real-time monitoring and condition-based main-
tenance technologies aimed at improving uptime by
reducing unplanned maintenance, said Andrew Way,
president and CEO of GEs drilling and surface business
for GE Oil & Gas. This next-generation system can
make accessible new offshore drilling frontiers.
This new BOP stack should be a sight to see. Given
the size of the 15,000-psi system, I can only imagine how
big the new system will be. Onshore, I remember writ-
ing about Parker Drillings first 15,240-m (50,000-ft)
drilling rig. The BOP stack was immense.
Perhaps the new design will be able to reduce the size
and weight of the BOP. We will have to wait and see.
Both of these technological advances are focused on
safety and the environment. The technologies are at
opposite ends of the spectrum when it comes to applica-
tions, but the emphasis on developing the technologies
needed to solve the myriad problems facing the indus-
try is the same. Meeting those technological
challenges is the key to unlocking future oil
and gas production.
drilling &
COMPLETION
25
From desert to deepwater: Tackling
landmines, high-pressure BOPs
The first landmine-clearing tracked vehicle goes to work in Kurdistan, and GE
Oil & Gas gets order for the industrys first 20,000-psi BOP stack for deepwater.
EPmag.com
SCOTT WEEDEN
Senior Editor, Drilling
sweeden@hartenergy.com
The Micro MineWolf is about the size of a small sport utility
vehicle. It costs between $250,000 and $500,000, depending
on specifications and attachments. (Source: Sterling Global
Operations Inc.)
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I
n Oslo, Norways Frogen Park stands a bronze
statue by the famed sculptor Gustav Viegland that is
widely known as Man fighting children, but its offi-
cial name is No. 27: Man chasing four geniuses. It
depicts a man in a wild struggle with four babies.
For the full effect, I suggest a Google search.
I visited the park and saw the statue while participat-
ing in a press tour of Norways subsea industry. Once
past the initial shock of a naked metal man punting
an infant across the parks highly manicured lawn, I
was struck with how it seemed a fitting metaphor to
the internal struggle affecting the subsea industry.
Innovation, Standardization, Cost and Efficiency
could easily be the names of the four.
To a certain extent, every engineer could be
considered an artist and vice versa. Figur-
ing out how the puzzle pieces of an
invention fit together to meet the
desired resultbe it a pretty pic-
ture or a game-changing subsea
power supply systemis most
definitely an art form.
It is the process of fitting the
pieces together that introduces
madness. Countless beautiful
solutions have met brutal deaths
as the crushing weight of worldly
concerns like money, materials and
time take their toll. Balancing the artists
need to innovate with the investors need for
fiscal restraint is a cumbersomebut necessaryact.
Listening to the speakers at the recent Offshore
Technology Conference (OTC) and Underwater Tech-
nology Conference (UTC) certainly brought that mes-
sage home. However, one could also hear the
enthusiasm in the voices of each to tackle the tough
challenge of achieving balance.
Of the many worthy subsea technology development
projects that are underway, two stood out for their
unique use of a traditional tool in a nontraditional way.
Johan Sltte of Norways DNV GL presented a paper
on the last day of OTC about the technical and eco-
nomic feasibility of subsea water injection pumping
using wind power. A few weeks later, the company
announced the launch of a joint industry project to
study the new concept of combining mature water
injection technology with the latest developments in
wind power to achieve cost-effective EOR. The con-
cept, according to a release, intends to integrate
the compressor and water treatment
equipment into the substructure
of a floating wind turbine.
At UTC, the U.K.s Ocean
Resources presented its Sea
Commander as one option
for powering subsea fields.
The Sea Commander is a
buoy-based high-integrity sys-
tem that provides local con-
trol, monitoring, chemical
injection, power supply or other
services to a remote subsea devel-
opment. The system is designed to
replace the conventional umbilical control
link between an offshore production platform,
onshore terminal or subsea production facilities.
The East Spar control buoy off the northwestern
coast of Australia and a second control buoy for 10
subsea wells in the E-M field offshore South Africa are
two examples of the companys work.
Using windmills and buoys to help produce oil and
gas is almost as crazy as thinking we can produce oil
and gas from thousands of meters below the water on
the seafloor. Its a good thing the
industry is full of great thinkers
touched or notwith the gift
of madness.
27
offshore
ADVANCES
Genius or madness?
No great mind has ever existed without a touch of madness.
Aristotle
EPmag.com
JENNIFER PRESLEY
Senior Editor, Offshore
jpresley@hartenergy.com
27 offshoreCOLUMN-AUG_27 offshoreCOLUMN-AUG 7/21/14 4:07 PM Page 27
28
COVER STORY:
POWERING THE OIL FIELD
New options hold promise for
this costl ut necessary element
of oil and gas operations.
POWERING
T HE OI L FI ELD
28-49 COV-poweringoilfield_28-49 COV-poweringoilfield 7/21/14 4:07 PM Page 28
29
COVER STORY:
The oil and gas industry produces a tremendous
amount of energy, but it also uses a tremendous
amount of energy in the process. This creates a bit
of a conundrum when new discoveries are hun-
dreds of miles offshore or in extremely remote
areas. The industry is tackling the challenge on a
number of fronts.
A rapidly growing area is the use of dual-fuel
engines and pumps, where natural gas is substi-
tuted for some of the diesel in a drilling or fracking
operation to reduce cost and emissions. Several
companies are offering dual-fuel solutions to their
customers.
Offshore, a challenging area is providing power
to subsea installations. Efficiency, reliability and
standardization are all key concerns as offsets get
longer, and operators are looking at a future subsea
field in which there are no topsides installations and
the power plant is on the seafloor.
Renewable energy is an area of increasing inter-
est since many fields are in areas that receive lots
of sunshine or wind. Operators are even harnessing
the energy of their produced water to reduce elec-
tricity demands.
Finally, the use of digital technology is growing to
enable operators to digitally plan for the movement
of their hydrocarbons before a bit hits the dirt.
Streamlining operations in this way can lead to
more efficient development at a lower cost.
Power comes in many forms, and the next few
pages examine the myriad options available to the
industry today and tomorrow.
28-49 COV-poweringoilfield_Layout 1 7/22/14 10:32 AM Page 29
30
N
atural gas can be a valuable commodity, or it can
be a nuisance. When it is produced in a market
that has no use for it, it typically gets flared, and as one
famous satellite shot of the Bakken attests, thats a lot
of gas being vented into the atmosphere.
An alternative to flaring has recently gained popular-
itydual-fuel power generation. These systems are
capable of running on just diesel or a combination of
diesel and natural gas and can even use field gas as a
power source. In a fairly recent period of time several
companies have come up with dual-fuel solutions that
can replace as much as 70% of the diesel needed to
run wellsite engines, according to Baker Hughes
Connexus magazine.
According to Cummins website, the basic idea behind
dual-fuel engines is that natural gas is substituted for
diesel in the engine combustion process. Natural gas is
introduced into the air intake system. Diesel is intro-
duced near the end of the compression stroke and
ignited, which also ignites the natural gas. Dual-fuel
engines deliver the same power density, torque curve
and transient response as the base diesel engine does,
the website notes.
CAT has created a technology known as dynamic gas
blending (DGB). According to literature from CAT, the
DGB kit automatically adjusts to changes in incoming
fuel quality. This allows engines to run on a variety of
gases from associated gas to vaporized LNG with no loss
of performance, according to the company.
CAT has teamed with several companies to expand its
reach in this area. For instance, it recently announced a
distribution agreement with FlexGen Power Systems to
sell FlexGens full line of solid-state generator products,
which can pair with any of CATs natural gas engines to
improve power quality and reliability while reducing fuel
consumption, maintenance and emissions, according to
the companies. Recapture Solutions also uses CAT
industrial engines to operate its generators, which can
run on nearly all rich sweet gases, including flare gas.
They also can switch to and from propane when natural
gas isnt available.
Cummins also offers natural gas engines in the 800-hp
to 3,500-hp range for well servicing operations. The
companys website indicates that by 2020 Cummins
predicts that nearly 30% of its high-horsepower engine
production will be natural gas due to the increasing
abundance of the fuel and its relatively low cost.
Additionally, it has recently teamed with Hythane to
provide OptiBlend components on its rigs. The compa-
nies have teamed up to fully integrate the dual-fuel com-
ponents with the engine and skid structure, providing a
common control panel for both the engine controls and
the dual-fuel control. The diesel oxidation catalyst and
gas train have been integrated into the roof structure,
and protective fuses and electrical components have
been integrated into the Cummins Kato generator.
The OptiBlend system is capable of replacing approxi-
mately half of the diesel with natural gas, according to
company literature.
Baker Hughes offers what it calls its Rhino bifuel
pump. The Rhino is a hydraulic fracturing unit, and
Dual-fuel solutions on the rise
Who says you cant run a diesel engine on natural gas? Increasingly, companies
are saving money by using field gas to power their drilling, completion
and production operations.
Rhonda Duey, Executive Editor
COVER STORY:
Rhino Bifuel hydraulic fracturing pumps reduced diesel use for
Cabot Oil & Gas by burning a mixture of natural gas and diesel.
(Source: Baker Hughes)
32
many of them have now been converted using a diesel
engine and a separate bifuel conversion kit. Programma-
ble logic controllers (PLCs) signal a throttle valve that
controls the gas entering the system and the substitution
rate. Once combustion takes place, the PLCs gradually
increase the amount of gas being injected.
Baker recently completed a project with Cabot Oil
& Gas in the Marcellus Shale. While using the Rhino
system the company twice set a Cabot record of nine
fracture stages being completed in 24 hours. Cabot
estimated that the use of the system allowed it to use
110,000 fewer gallons of diesel with its own field gas.
Making energy takes energy. These types of systems
help stretch that energy a little bit farther.
COVER STORY:
W
ith unconventional oil and gas operations in North
America continuing to increase at an exponential
rate, producers and service providers are working over-
time to ensure the highest levels of productivity. However,
the sense of urgency to meet production and revenue
goals has the potential to impact job safety, causing safety
to be deprioritized or overlooked.
According to an April 2014 Bureau of Labor Statistics
report on fatal and nonfatal occupational injuries and ill-
nesses in the oil and gas industry, support activities for oil
and gas operations accounted for 58 out of 112 fatal work
injuries recorded in 2011.
The potential for incidents can be especially high in the
field of temporary power. Supplemental power installa-
tions can be one of the most dangerous services provided
on an oilfield site. Without taking this into consideration,
project engineers and managers could be cutting corners
to get production online, compromising the safety of co-
workers and customers.
Selecting a power provider with an established safety
program is essential to not only guarantee a successful
outcome of a production goal but to also ensure the over-
all well-being of all participants operating on site. When
evaluating a temporary power companys safety program,
project managers should take into account several factors.
People
People on a project site should wear proper personal pro-
tection equipment while working where hazards exist.
This requires steel-toed footwear, highly visible safety
vests, head and eye protection, and cut-proof gloves.
Technicians should provide proper certification that they
are trained to install and operate equipment in a safe and
neat manner. They should be geared with H
2
S monitoring
devices, and there should be an option proposed to lever-
age alternative fuels vs. diesel to improve air quality
around the workers.
Equipment
Oilfield equipment should be UL-listed and meet National
Electrical Code standards for intended use. Generators
need to be grounded using appropriate materials. The
installation area should be clearly marked by the local
utilities for any underground hazards, and cables must be
rated for outdoor use. Operators should ask if there is an
option to run generators via an alternative fuel source as
well as the availability of remote monitoring services or
telematics to track the performance of their temporary
power installations to identify unforeseen safety issues.
Safety culture
A strong HSE program must be evident by the providers
employees during on- and offsite operations. Power
providers should discuss job site safety during daily pre-
planning meetings, and their crews need to have Stop Work
Authority. Contractor employees should be well-hydrated
and properly rested when working in extreme weather con-
ditions and areas of higher than normal activity, and the
power provider should work with the operator to review
HSE procedures in place and identify any potential hazards.
A power provider should also insist that its subcontractors
follow established safety rules while on site.
Experience
There is nothing more credible than real-world experi-
ence in the oil patch. Temporary power providers with a
strong and established safety culture and record are valu-
able partners to add to a team. Companies promoting
new equipment and lower costs without a verifiable track
record should be examined closely. The operator should
ask for real examples of previous installations compara-
ble to its operations needs. If the power providers cannot
produce comparable examples, this will likely introduce
safety risk to the project, company and employees.
As exciting as times are in oilfield production, there can
be no compromise for safety. If power generators are not
properly installed, electricity can be very dangerous to the
team. Teams should be empowered to cautiously evaluate
and hire a temporary power provider that is engineering
for safety as well as performance and reliability. It could
require extra time and added costs to ensure everyone
makes it home in the same condition as they arrived, but its
a very small price to pay compared to experiencing an
incident that could have been prevented. n
Empowering oilfield safety practices
By David Dickert, Aggreko
34
T
odays smartphones have more processing power
than the computing system that safely guided NASAs
Apollo 11 spacecraft to the moon and back more than
45 years ago. For all of the differences between smart-
phones and the NASA system, their shared similarity is
that without a steady supply of electric power, each
would be a useless block of assembled raw materials.
On land, at sea or on the seabed, the challenge of pro-
viding a steady supply of electrical power to thirsty
industrial consumers is a global one.
As the oil and gas industry shifts more of its offshore
processing operations from the topsides to the seabed,
the subsea factory concept continues its transition
from idea to reality. In 2015 all eyes will focus on sgard
and Gullfaks as Statoil brings the worlds first subsea
compression systems online in the fields. Seen as the
next big step in the transition, its success will bring
the company closer to meeting its subsea factory goal
by 2020.
Making the transition
The shift from the traditional subsea power supply
options to the next generation is being spurred on in
part by the discovery of attractive prospects in deeper
or more remote waters. The disbursements of these
resources over a larger area will require longer step-outs
from surface platforms to multiple locations. These are
challenges that operators like Shell have been working
on for some time.
In general, when you think about discoveries in the
Gulf of Mexico and Brazil, we really havent had too
many subsea tieback systems that can be classified as
being truly remote from existing infrastructure. The
discovery itself may be a remote field, i.e. far away from
land and existing infrastructure, but the actual offset
distance to the host facility has typically been less than
30 miles [48 km], said Ajay Mehta, technology delivery
manager, Shell E&P Deepwater Projects. Given that, we
have been able to deploy traditional power supply sys-
tems even as the overall complexity of subsea systems
and the total power demand have increased.
Three specific areas of focus for the company are reli-
ability, retrieval and standardization.
The first thing everybody talks about with power sys-
tems is about efficiency and minimization of transmis-
sion losses, he said. But with efficiency improvements
as a given, we are putting a much larger emphasis on
reliability and are working closely with our key suppliers
in this area. In these deepwater settings, we also think a
lot about our intervention capability. If something goes
wrong, how are we going to fix it? Weve consequently
paid a lot of attention to the reliability of power systems.
The third area is equipment retrieval and carefully
thinking about the ease of accessing the system and
doing any remediation work on it, he said.
Another key dimension that weve focused on is look-
ing at how we can standardize some of these solutions
were implementing, he said.
The push toward standardization in subsea systems is
one that has certainly garnered considerable interest by
both operators and contractors.
The reality of the business is that there are no two
fields that are identical. Inevitably, youre going to have
to make trade-offs if you go with a standard design solu-
tion, he said. You will have situations where for some
field applications you might have more functionality
than you actually need, whereas in others you might
have to live with some of the constraints that are inher-
ent with a standard design solution. We therefore have
to carefully think about the actual requirements of a
given field with a holistic systems mindset and drive stan-
dard solutions wherever possible.
For example, when you think about subsea tree sys-
tems, you certainly can apply a similar type of tree sys-
tem for a given type of reservoir. When you talk about
power, basically you want to make sure that the overall
building blocks are the same.
Next generation
For Bjrn Rasch and his team, the subsea future is elec-
trical. Speaking at the recent Underwater Technology
Conference in Bergen, Norway, Raschhead of subsea
power for Siemens Subsea Systemsadded that he
thinks this is very much what the operators want to
achieve. That in the future, we have less topside installa-
Powering the abyss
Operators and suppliers work to overcome challenges in power delivery for subsea fields in
deeper, farther and colder climes.
COVER STORY:
36
tions and move toward complete subsea processing
plants with subsea power distribution on the seafloor.
Siemens is one of several companies working on next-
generation subsea power systems. Rasch is leading the
development of the companys Subsea Power Grid
(SPG). The SPG program started in 2010 to develop a
subsea power supply and distribution system. It is cur-
rently undergoing long-term endurance testing as part
of the qualification process.
The designs used in the R&D program were based on
proven industry systems and equipment. The four main
building blocks of the medium-voltage alternating cur-
rent (AC) SPG include transformer, switchgear and vari-
able-speed drive (VSD) and a power control and
communication system, Rasch explained.
The step-down transformer is the main interface
between the single power supply cabletypically with a
transmission voltage up to 100 kVand the power distri-
bution system. From the transformer, voltage is reduced to
36 kV before it is distributed to the switchgear and then
on to the individual VSDswhere the voltage is stepped
down again to 6.6 kVfor each pump or compressor.
The power control and communications system is
designed to provide data collected by sensors located
through SPG components back to the topsides monitor-
ing facility. It also distributes auxiliary power to the VSD
controls for status reporting before the system is fully
energized.
The system is being qualified for up to 30 years of oper-
ation in up to 3,000 m (9,843 ft) of water. A contract for
full load operation via a pilot project is expected in 2015.
Looking past 2020
What are the power challenges after 2020? Researchers
at GE Oil & Gas see a couple of areas where moving
forward will create opportunities for innovation.
Focus will be around system availability, around
improving condition monitoring andlike the rest of
the industrythere will be a focus on cost, said Kristin
Elgsaas, power product manager for GE Oil & Gas - Sub-
sea Systems. We are working to ensure that we offer an
integrated and great system. It is why GE is now moving
toward becoming a system integrator where we can
leverage our complete portfolio. To create an integrated
COVER STORY:
Components used as part of Siemens SPG include a transformer (left, dark gray), switchgear (center, white), and VSDs (right, light
gray) surrounded in a protective enclosure. (Source: Siemens)
28-49 COV-poweringoilfield_Layout 1 7/22/14 3:33 PM Page 38
39
and optimized system, you have to look at everything
from power generation through supply and then the
function.
In the near- to mid-term we can make do with AC for
quite some time. Looking into the far future, we see
increasing number of loads, deeper water and probably
very long step-outs with probably not as many loads but
a higher load, like compression, she said. We need to
start looking at these things now because the adoption
of new technology by industry takes quite a lot of time.
Solutions that use direct current (DC) voltage for
power also are under consideration in addition to other
alternatives such as low frequency transmission and
pressure tolerant electronics, simplifying the deepwater
design of electric power products.
From a conventional perspective, a DC system could
go much further and allow you to transfer considerably
more power, she said. I think it is something interest-
ing to consider, understanding that it is not going to
happen tomorrow. The DC systems we see topside today
do not necessarily fit for subsea. In the long run it is
something that could possibly address both the longer
step-out issue and the higher number of loads.
There are several challenges in working with DC sys-
tems. For example, its nature is different than AC and
will require new insulation materials, in particular for
dry and wet mate electrical connectors.
DC gives additional challenges to the insulation sys-
tem than a conventional AC system, so we think that
well need to develop, or at least qualify, new materials
for use with DC, said Svend Rocke, chief engineer of
subsea power for GE Oil & Gas - Subsea Systems. On
the insulation materials side, there needs to be more
work done on its development and qualification. We
need to understand better the long-term DC aging
mechanisms to be able to deliver high reliable systems
and products.
Very long step-outs are one of the many power supply
challenges in the development of subsea fields.
(Source: GE Oil & Gas)
F
ossil fuels and renewables dont need to be at odds.
While the hope of many is that someday renewable
energy sources will replace oil, gas and coal, the reality is
theyre not there yet. However, the technology shouldnt
be overlooked by those who need reliable power sources
to run their oil and gas operations.
Wind and solar are the main energy sources that jump
to mind when the word renewables is uttered, but there
are other potential sources, including geothermal energy
and even energy generated by ocean tides. All of these
energy sources are being examined as operators look for
novel ways to generate energy while reducing emissions.
Solar
Much of todays solar energy is stored in photovoltaic
panels, which despite improvements are not the most
efficient storage devices. In the oil industry, the power
of the sun is captured in a different wayby using mir-
rors to focus the energy to produce steam.
Chevrons Coalinga Field in California is one of the
beneficiaries of this technology. It began a pilot project
a few years ago in which more than 7,600 mirrors focus
solar energy into a boiler, producing steam to produce
the heavy oil.
Chevron has relied on steamflooding for many years
in its California fields, but the EOR project has come at
a costgenerating steam requires some form of energy,
and using fossil fuels creates emissions. Desmond King,
president of Chevron Technology Ventures, explained
in a video the need for a renewable technology. Its
important to us in areas where there may be a high
carbon cost and also important when were looking to
use steam for [EOR] in areas where hydrocarbons may
not be available or are too expensive to generate steam,
he said. Added Mike Walneuski, construction project
manager for the Coalinga Power to Steam project, I
think Chevron has stepped up in the right direction,
looking at opportunities to reduce natural gas usage,
conserve energy, take advantage of the vast solar energy
we have here in California and do better things for the
environment.
40
Renewables provide
a new alternative
New forms of energy can save on costs and reduce emissions.
COVER STORY:
The solar operation in Omans Amal West Field covers four acres.
(Source: GlassPoint Solar)
42
In another pilot project in Oman, Petroleum Develop-
ment Oman teamed with GlassPoint Solar to build what
is called an enclosed trough to create steam. The tech-
nology also relies on mirrors housed in a greenhouse
that track the sun throughout the day. By December
2013 the system was generating 500 tons of steam per
day with a success rate of 98.6% uptime, and by January
2014 the project was producing enough steam to replace
1 MMcm (36 MMcf) of natural gas.
Geothermal
According to information on the U.S. Department of
Energys website, geothermal power can be used for
oil and gas coproduction, in which low-temperature
power conversion units can generate power from pro-
duced water. A heat exchanger transfers the heat from
the produced water to a second fluid with a lower boil-
ing point. The second liquid turns to gas, driving the
turbines. This is a zero-emissions process, and the
energy produced can power the field or be sold into
the grid, the website states.
Technology benefits include capacity ranges of 500
kW to more than 10 MW, design flexibility and reduced
lead times, scalability, and the ability to use off-the-shelf
technology, it adds, estimating that the water produced
each year from oil and gas operations could generate up
to 3 GW of power.
According to information from Access Energy, which
provides an organic rankine cycle product, any well that
produces water that is at or above 82 C (180 F) is eligible
for this type of technology. In addition to offsetting the
sites electricity needs, these systems decrease net operat-
ing costs, extend the life of the field and in some cases
are eligible for renewable energy credits.
A test case funded by Gulf Coast Green Energy
(GCGE) and the Research Partnership to Secure
Energy for America used an ElectraTherm Green
Machine on a Denbury Resources producing oil well.
According to GCGEs website, the well produces at
2,896 m (9,500 ft) under geopressure and produces
800 bbl/d of oil and 4,000 bbl/d of water. The hot pro-
duced water is being used to generate energy to run the
electric submersible pump in the well. Projects like this
qualify for a 30% Investment Tax Credit from the IRS,
the website notes.
Tidal energy
One of the newest forms of renewable energy being
researched is the potential to harness ocean tides using
underwater turbines similar to wind turbines. Issues
abound, from finding stable places to house the turbines
to the potential for damage to marine life. But the con-
cept is gaining ground.
In an article on RenewableEnergyWorld.com, several loca-
tions in the U.K. were discussed that show promise for
putting energy from tides into the grid. In the article,
tidal stream technologies are described as an evolution of
the wind turbine adapted to a greater density than air.
Generating electricity with these devices requires a cur-
rent speed of 2.5 m/sec (8 ft/sec), and even in rapidly
moving currents requiring smaller rotor diameters, the
rotors can reach 12 m to 20 m (39 ft to 66 ft) in diameter
and rotate at about 15 rpm.
A study of the Severn Estuary bordering England and
Wales was completed in 2010, and it was determined that
a series of tidal lagoons could be fitted with turbines to
provide up to 1.2 TW/year of power. The plan is to use a
balanced technology approach in which different tech-
nologies can be employed collaboratively.
Several companies familiar with the oil and gas indus-
try are looking at tidal energy, but not necessarily from
an oil and gas standpoint. Siemens installed the first
commercial tidal current power plant, SeaGen, offshore
Ireland. The plant can produce up to 20 MW/d.
From a technology point of view, SeaGen looks like an
underwater windmill, said Gerda Gottschick of Siemens.
It consists of two twin axial flow rotors mounted on a
support structure. Each of its two drive trains weighs 27
[mt] and is equipped with a rotor measuring 16 m [59
ft] in diameter.
She added that the system can produce electricity for
up to 20 hours a day regardless of weather conditions.
The current project is only a starting point, she
added. Siemens believes in the potential of tidal power
plants and keeps investing in this technology.
So far, though, the company and its partners have not
made any inroads into powering offshore (or onshore)
oil and gas facilities.
Modec Inc. also is working on a hybrid turbine that
harnesses power from both wind and tides. The Savonius
Keel & Wind Turbine Darrieus (SKWID) combines
Modecs Darrieus wind turbine with its Savonius current
turbine, which will not only generate tidal energy but
also act as a ballast to provide stable performance.
So far the company hasnt tested the system to provide
power to offshore facilities, but Norihiro Yuzawa of
Modecs New Business Development Group said this
could be a further market. Now we are fabricating the
SKWID prototype and doing onshore testing, Yuzawa
said. The first SKWID will be launched offshore this
autumn, and we will start offshore testing after the
launch.
COVER STORY:
44
T
his industry is powered as much digitally as it is physi-
cally. Operators must deal with significant and con-
stantly changing information volumes. Repositories are
updated in real time with field data from measurement
equipment and sensors. As well as input and storage con-
siderations, operators must ensure that asset teams stay
productive and decisive in the face of this potential infor-
mation overload. This is possible when they are able to
access easily relevant, up-to-date information in context
and then share this information to collaboratively solve
problems in a single software platform.
In addition, E&P success depends on the quality of deci-
sions made, which shape every stage of the journey a
hydrocarbon molecule makes from discovery to recovery.
This hydrocarbon journeyor pathwaypresents an
opportunity for ideal end-to-end digital integration for the
industry. The better the industry integrates to create holis-
tic systems to drive decisions along the E&P process, the
better it will perform. Modern software allows the
required level of multidisciplinary integration to be real-
ized to enable asset teams to make investment decisions in
the digital realm and collaborate to reach optimal results.
The best investment decisions are supported by digital
models that drive rich analysis and interpretation through
the application of industry best practices. For example, an
understanding of the dynamics of charge over geologic
time can be gained by modeling hydrocarbon maturation
and migration from source rock to trap.
The hydrocarbon pathway is enabled by integration on
many levelsintegration across each exploration, devel-
opment and production phase; integration between the
physical world and digital models; and the connection of
technical experts with key decision makers. Each of these
areas of integration improves technical and financial per-
formance through increased exploration confidence,
more efficient execution of capital projects and optimized
production and recovery rates.
The hydrocarbon pathway is characterized by a series of
important digital decisions at key project investment stage
gates. For example, stochastic modeling of the key risk ele-
ments of trap, reservoir, charge and sealin an integrated
3-D software canvascan be used to inform the sanction-
ing of a wildcat well, which in turn, after appraisal, leads to
the first decision gate in field development: the concept
stage. Here multiple probable subsurface models are
tested for economic viability as possible field development
scenarios, informing critical engineering design invest-
ment decisions.
Subsurface reservoir uncertainties also can be integrated
with the optimal placement and number of wells tied to
appropriate network and surface facilities. Fiscal regimes
are digitally married to stochastic production profiles in
petroleum economics software before advancing to the
design phase, where uncertainty is further reduced with
ongoing reservoir, well and network simulation in an inte-
grated asset approach. Additional simulations are used to
understand the resultant variations in permeability and the
impact of subsidence on predicted cumulative production.
Finally, during production, EOR decisions are fre-
quently required as the industry works to increase world-
wide recovery rates. Appropriate EOR schemes must be
considered and screened before the optimal solution is
selected and scaled across many orders of magnitude
from a pore throat two microns wide to full-field studies
of chemistry, sweep, connected porosity, permeability
and wettability.
E&P success: digitally powered
Modern software applications allow operators to fuel E&P decisions digitally
before they translate to the physical realm.
Antony Brockmann, Schlumberger Information Solutions
COVER STORY:
Modern software allows the required level of multidisciplinary
integration to be realized to enable asset teams to make invest-
ment decisions in the digital realm and collaborate to reach
optimal results throughout the entire hydrocarbon pathway
from pore space to production facility. (Source: Schlumberger
Information Solutions)
46
Case study: Kuwait Intelligent Digital Field
An example of how hydrocarbon pathway principles have
been applied to a modern unconventional production sce-
nario can be witnessed in the Kuwait Intelligent Digital
Field project undertaken for the Kuwait Oil Co. (KOC).
KOC needed an integrated digital solution to increase
production and recovery rates in an HP/HT heteroge-
neous carbonate reservoir environment while helping to
reduce costs and maintain safety and reliability in the pres-
ence of H
2
S and CO
2
. The company also sought to reduce
nonproductive time (NPT) and shutdowns, better use
data to accelerate decision-making, and improve multidis-
ciplinary collaboration.
A solution combining the Avocet production operations
software platform and OFM well and reservoir analysis
software was chosen to introduce a server-based workflow-
oriented approach to production management, with data
consolidated in one environment rather than in multiple
applications. KOC also sought to create comprehensive
workflows to automate data acquisition and conditioning,
event detection, alarms and production performance
management.
The solution is able to import and store data from a
number of conventional applications to build production
workflows that deliver intelligent notifications to optimize
daily constraints. This includes ECLIPSE reservoir simula-
tion software and PIPESIM steady-state multiphase flow
simulation software, which can be seamlessly embedded to
provide model-based pressure-volume-temperature analy-
sis as well as estimations on production rate and network
pressures. KOCs new integrated solution enabled the
project team to design real-time production surveillance
and optimization workflows, automating and standardiz-
ing many existing engineering processes.
The results of these new workflows, including key per-
formance indicator (KPI) information, are accessible to
KOC users via a web-portal surveillance solution for moni-
toring production at a glance. KPIs were introduced as
part of the system implementation to provide specific, reli-
able and accurate information tied directly to strategic
production and business goals.
Immediate benefits
The new digital solution allows KOC to efficiently manage
its knowledge base of technical data and collaborative
insights. Acquired field data are better organized through
the new integrated platform. Visually integrated datasets
via management display screens improve access to tailored
production information, allowing KOC to maximize data
value through faster and more accurate decisions.
The new integrated framework provides production
workflows from the field to the main office. It has enabled
validation of high- and low-frequency data for all produc-
tion optimization processes and models, transforming
field measurements into predefined performance metrics.
In addition, multidisciplinary collaboration has improved
through the introduction of a common digital platform
and interface, streamlining operations. Routine tasks have
been automated, further increasing productivity. Produc-
tion issues can be proactively identified through the new
system, and NPT has been reduced by more than 50%.
Quantifiable safety benefits include the ability to recog-
nize potential equipment hazards digitally before they
present themselves physically. Chokes are now remotely
operated and controlled, and remote monitoring and
shutdown capability enables well closure and isolation to
be undertaken from a safe locationall important capa-
bilities given the unforgiving reservoir environment and
presence of gases.
Digitally integrated decisions
Modern integrated software platforms have evolved to
guide every key decision in moving hydrocarbons along
the pathway from pore space to balance sheet. Whether
the operating arena is conventional or unconventional,
there will always be unforeseen challenges that arise over
the life of a well. Decision-making agility, made possible by
a streamlined but deep digital evaluation process, confers
a distinct advantage to asset teamswhether thats an
improved reserve replacement ratio; lower finding costs
per barrel; fewer dry wells; or the selection of optimal field
development plans coupled with reservoir, well and net-
work models to ensure lower overall capex/bbl and faster
time to first oil.
The best investment decisions are supported by digital models
that drive rich analysis and interpretation through the applica-
tion of industry best practices. (Source: Schlumberger Informa-
tion Solutions)
DOWNLOAD
THE APP
28-49 COV-poweringoilfield_Layout 1 7/22/14 2:42 PM Page 47
C
ompletions evaluation analysis provides a mecha-
nism to better calibrate and build underlying
geomechanical and reservoir models, improving fore-
casting of fracture placement and production and
helping to accelerate optimization of future wells
and treatment designs.
The fracture created during hydraulic stimulation can
greatly deviate from the planar bi-wing textbook exam-
ple and may be more accurately represented by a com-
plex network of fractures instead.
Microseismic data and source mechanisms will con-
strain not only the location of fractures but also their
geometry and orientation in space, resulting in a dis-
crete fracture network (DFN) that serves as an impor-
tant input for reservoir simulation and from which the
total rock volume that was affected by the treatment can
be calculated. This can then be further refined by plac-
ing proppant in the DFN to help discern between the
part of the stimulated rock volume (SRV) that is
expected to contribute to production
in the long term and the part of the
SRV that showed microseismic activity
but might not contain hydraulically
connected features or fractures.
Dataset
The study dataset was acquired with a
temporary surface array for a two-lat-
eral well pad completed in the Eagle
Ford Shale for Murphy Oil. The array
consisted of 10 arms and 1,200 chan-
nels with six geophones per channel.
The processing that is employed is
similar to conventional 3-D seismic
processing. The high-fold, wide-
azimuth and large-aperture geometry
of the monitoring array provides a
consistent imaging resolution under
the entire array and provides a high-confidence estimate
of event magnitude. Another advantage is the capability
to determine source mechanisms, a crucial input for the
analysis presented in this case study. The broad areal
coverage records the polarity changes of the seismic
wavefront as it arrives at the surface, which can be
inverted to obtain the strike, dip and rake of the
associated failure plane.
Figure 1 shows that two types of source mechanisms
were observed. While induced fracture-related failure
was recorded in a dip-slip mechanism, indicating that
the maximum principal stress is vertical, a prestressed,
pre-existing feature was observed in the south-southeast/
north-northwest direction failing in strike-slip mode, indi-
cating that the maximum principal stress is horizontal.
Magnitude-calibrated DFN
To distinguish between the total SRV where microseismic
activity was observed and the part of the SRV that con-
tains proppant-filled fractures and will therefore be pro-
ductive in the long term, a magnitude-calibrated DFN
(M-DFN) is modeled onto the microseismic events.
Through source mechanism analysis, strike and dip of the
50
shale
SOLUTIONS
Eagle Ford Shale
completions evaluation
With proppant placement analysis, propped and unpropped parts of a reservoir can be
identified, implying productive and nonproductive parts of the total SRV.
Carl W. Neuhaus, Asal Rahimi Zeynal and
Sudhendu Kashikar, MicroSeismic Inc.
FIGURE 1. In the microseismic data for wells A and B, events are colored by their
respective source mechanism and sized by magnitude. (Source: MicroSeismic Inc.)
50-53 ShaleSolutions-AUG_50-53 ShaleSolutions-AUG 7/21/14 4:08 PM Page 50
failure plane are identified for each individual event. The
geometry of each individual failure plane is then deter-
mined through the magnitude of an event incor-
porating rock and fluid properties, resulting in
the M-DFN shown in Figure 2. From the
moment magnitude, the seismic moment can be
calculated, which depends on the area of the
failure plane, the displacement along the plane
and the rigidity of the rock. Assuming that the
total detected seismicity is directly related to the
injected fluid volume and that the change in vol-
ume is completely accommodated by the seismic
failure minus leak-off, the calculated fracture
volume should equal the injected fluid volume.
Since the seismic energy that was recorded dur-
ing a treatment and subsequently located as dis-
crete events is usually only a fraction of the total
emitted energy, the two volumes described above
rarely match. To account for any undetected
microseismic event population such as tensile
failure or microseismic events with a signal below the
detection threshold, a scaling factor is introduced. Each
51
shale
SOLUTIONS
FIGURE 2. In the M-DFN for wells A and B, fracture orientation is calibrated on
event source mechanism. Fracture geometry is calibrated on event magni-
tude, rock rigidity and injected fluid volume. (Source: MicroSeismic Inc.)
52
variable defining the geometry of the fracture is then
recalculated so that the fracture volume matches the
effective injected fluid volume.
Proppant placement and propped SRV
Estimating the propped half-length is performed by
filling the M-DFN with proppant from the wellbore
outward on a stage-by-stage basis. Proppant filling is
constrained by allowing only a fraction of the proppant
to populate fractures intersecting the prevalent failure
plane azimuth at high angles. The fracture volume
inside the respective stage M-DFN is filled with proppant
until all proppant that was pumped is accounted for to
obtain the proppant-filled fractures of the total M-DFN,
as seen in Figure 3. Estimated propped half-lengths are
then determined in a wellbore-centric coordinate system
by breaking up the proppant-filled fracture distances
into a perpendicular horizontal, a parallel horizontal
and a perpendicular vertical component with respect to
the corresponding
stage center.
To calculate the
total SRV, a 3-D grid
is applied to the total
M-DFN. The total
SRV is dependent on
the size of the model
cells and can be
adjusted based on
known reservoir flow
properties. It repre-
sents the total rock
volume that was
affected by the treat-
ment. To discern between the part of the SRV that
is assumed to be drained over the lifetime of the
wellbore and the remaining part of the SRV, the
grid is applied to the proppant-filled M-DFN as
well. The subset SRV that is calculated from the
part of the M-DFN containing proppant then rep-
resents the propped SRV that is expected to con-
tribute to production in the long term, as
illustrated in Figure 4.
Completion design, vertical coverage
Comparable to the wellbore spacing analysis,
an ideal stage length and spacing can be deter-
mined by measuring the longitudinal extent of the
propped fracture network as well as analyzing the
longitudinal fracture growth with the injected fluid
volume. The numbers obtained from both tech-
niques indicated an average overlap of 26% between
stages, toward the previously treated stage as well as
toward the next stage. Further analysis of the microseis-
mic data, however, showed that most overlap occurs close
to the wellbore. Therefore, stage spacing and overall
length may be decreased for increased connectivity and
complexity of the fracture network and more uniform
drainage along the lateral.
While the majority of the microseismic activity was con-
tained within the lower Eagle Ford, substantial upward
growth into the upper Eagle Ford was observed. Both
wells showed fairly symmetrical upward and downward
growth, indicating consistent treatment of the target zone
as well as some treatment of the hydrocarbon-bearing sec-
tions of the Eagle Ford above the target depth.
Acknowledgment
The authors would like to thank Murphy Oil Corp. for
generously agreeing to publish the findings of this study.
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FIGURE 4. In the total SRV and propped SRV for wells A and B, total SRV can be seen on the left side, and
propped SRV can be seen on the right side. The propped SRV represents the part of the microseismically
active rock volume that is related to proppant-filled fractures and therefore long-term production. (Source:
MicroSeismic Inc.)
FIGURE 3. This image shows the proppant-filled M-DFN for wells A and B.
(Source: MicroSeismic Inc.)
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SOLUTIONS
54
T
he U.S. Energy Information Administration places
Brazils total presalt reserves at more than 50 Bboe. To
support production growth in the region, Petrobras and
its partners are deploying a large number of converted
and newly built FPSO vessels to work in the Campos, San-
tos and Esprito Santo basins, where offloading technology
will play an even greater role in transporting crude oil
resources produced and stored on these units to the
export market.
A dynamic positioning (DP class 2+) loading and sta-
tionkeeping unit (HiLoad DP)now in its second itera-
tionwas developed over the course of 14 years to
provide a direct offloading method that could result in
considerable cost savings while exporting oil, gas and con-
densate from remote ultradeepwater areas.
Technology development
Traditional offloading of crude oil from FPSO unit to
tanker is carried out in tandem configuration or via a
remote mooring buoy solution, typically using either con-
ventional tankers or DP shuttle tankers. For ultradeep-
water fields like those in the Santos Basin, the cost of a
mooring buoy solution can be high.
Inspired by the remora fish (also known as suckerfish)
that attach to larger marine animals for transport and sus-
tenance, the HiLoad system was conceived as a solution
that would enable the safe offloading of crude oil directly
from moored FPSO vessels onto conventional tankers,
from Aframax to very large crude carrier (VLCC) size.
The HiLoad DP unit allows oil to be exported directly
from an FPSO vessel without need for transshipment of
the oil or use of remote deepwater catenary anchor-leg
mooring buoys connected to the FPSO vessel.
The unit also can provide stationkeeping to any
nondedicated tanker or barge without the need for modi-
fications to the hull structure or associated equipment,
such as mooring lines. Traced to its Latin root, the name
remora means holding back, and the unit does just
that by attaching to and keeping conventional tankers in
position when loading from offshore installations.
A total of 100,000 engineering hours were spent on
seven model tests carried out between 2001 and 2010 with
varied weather conditions representing the climate on the
coast of Brazil and West Africa to validate system function-
ality and to obtain the most reliable hydrodynamic data for
the HiLoad DP unit. A number of advanced computer sim-
ulations were carried out during initial development to
study the positioning ability of the DP loading unit while
connecting with tankers of varying size80,000 dwt,
150,000 dwt and 250,000 dwt. Results from wind tunnel
testing were used to calculate and simulate the required
thruster forces for different environmental conditions.
Second generation on order
Classification societies are an integral part of independ-
ently qualifying new technologies and work closely with
industry and regulatory bodies to verify functional specifi-
cations and technology readiness and to uphold applica-
ble safety standards.
As a first step in this third-party verification process,
Deepwater offloading solution evolves
Direct offloading concept inspired by marine life offers flexible oil transfer from
ultradeepwater fields.
Geir Ove Saltvedt, Remora AS;
and Lars Samuelsson, ABS
The HiLoad DP unit, pictured in calm waters, was developed
to withstand harsh environment and extreme metocean
conditions. (Source: Remora AS)
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56
approval in principle (AIP) covers the basics of the con-
cept design. ABS granted AIP for the first HiLoad DP in
2003, performed a generic drawing review to determine
the applicable notation and rule set for a HiLoad unit
operating in Brazil in 2012 and this year granted AIP for
the new HiLoad DP BR unit design.
In mid-2013, Remora was contracted by BG Group to
perform a FEED study for the next generation of HiLoad
DP units. The new HiLoad DP BR design will include
increased engine power and the capability to maneuver
vessels larger than Suezmax size (tankers with a carrying
capacity between 120,000 dwt to 200,000 dwt), such as
VLCCs with carrying capacity of 320,000 dwt, in Brazils
Santos Basin environment.
FEED was undertaken to develop a new unit design
that could stationkeep a VLCC next to an FPSO vessel,
while at the same time offloading directly to the VLCC
in at least 95% of the weather conditions experienced
in the Santos Basin.
Few HiLoad DP units will be capable of performing all
of the offloading required for the 15 FPSO units that will
be working in the Santos Basin by 2018. Combining this
DP loading solution with conventional tankers provides
operators with a safe and highly flexible option.
How it works
The HiLoad technologys proprietary high-capacity fender
or friction attachment system consists of heavy-duty suc-
tion cells that are capable of transferring several thousand
tons of friction force between the HiLoad DP unit and the
conventional tanker.
Like the suckerfishs mechanism, the L-shaped unit
attaches to a larger hostin this case an oil tankerby
docking onto the bottom of the tanker using the installed
ballast and friction attachment system. The hydrostatic
pressure acting on the bottom of the unit is transferred to
the tanker hull through the fender system, and the attach-
ment force on the fender system is increased, varying as a
function of the draft of the tanker. The HiLoad DP takes
control over the tanker and its movement, feeding it
through an oil transfer line hooked to the FPSO unit.
As a tanker approaches the FPSO vessel, a DP operator
calculates the optimum mating coordinates with the corre-
sponding heading based on the latest current, wind and
wave information. The operator informs the tanker mas-
ter, who brings the tanker into position with the defined
approach route while the operator monitors the
approach so the tanker can be positioned at a safe dis-
tance from the established mating point. The unit auto-
matically follows the tanker and connects to it while it is in
forward movement.
Alternate scenarios
Operators worldwide have a growing need for direct
offloading systems in deepwater and ultradeep water as
more developments come online and as safety standards
become more exacting.
For example, in both production and emergency sce-
narios, a direct offloading system might function as a
standby unit that could be deployed in emergency situa-
tions to offload liquids from existing platforms during
pipeline disruption (e.g., during hurricane conditions)
and for use in steady-state oil production operations.
Today there are many challenges associated with FLNG
offloading in the developing deepwater areas where long-
term FLNG options are being considered. Enabled for
tandem offloading of crude oil, gas and condensate, the
HiLoad DP technology has potential functionality as an
FLNG offloading solution for future installations. A sister
company to Remora called HiLoad LNG AS will be han-
dling the market for offloading LNG through a HiLoad
DP LNG unit.
New destinations
To support an international crude oil trade in the coming
decades, there is a need for direct FPSO export solutions,
particularly in deepwater and other remote access regions.
The HiLoad DP BR loading unit will be another stand-
alone option using technology inspired by marine life to
provide easier transfer of crude oil from floating produc-
tion units to conventional tankers destined for interna-
tional ports.
The HiLoad DP No. 1, which received AIP from ABS in 2003,
departed the Norwegian port of Kirstiansund in southern Norway
on the Teekay Navion Anglia shuttle tanker in August 2013, bound
for Brazils presalt fields. Working under a 10-year charter contract
with Petrobras, the unit completed first offloading from the Cam-
pos Basin in June 2014. (Source: Teekay Corp.)
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SOLUTIONS
58
T
he Campos Basin tension-leg wellhead platform
(TLWP) project called for a high fatigue-resistant
coupling to meet the environmental and system loading
conditions of a top tension riser system. To meet flow
assurance needs, the riser is coated with 2 in. of thermal
insulation. The insulation and the requirement for
cathodic protection created several challenges for run-
ning the riser and for attaching the earthing strap to
each of the submerged riser joint couplings while ensur-
ing electrical continuity.
Dril-Quip has previously developed internal running
tools (IRTs) for use with its PR-80 riser couplings along
with numerous other marine riser connections. The pro-
duction riser systems for the TLWP are designed with
weld-on and threaded-and-coupled riser joint connec-
tions. The use of two types of joint connectors results in
a reduced string weight while meeting the high fatigue
resistance and loading requirements.
Collaboration leads to new design
Seeing the opportunity to provide a single riser-joint
handling tool to run both types of riser connections,
Dril-Quip worked with Vallourec to develop the special
VAM TTR coupling with an internal handling profile
(Figure 1). The major benefits from the single IRT
include minimized rig operations and reductions in
required backup equipment. As the operator changes
between the various riser joints (PR-80 and VAM TTR)
and specialty joints, the same running tool is used to
eliminate downtime in changing out equipment as well
as reducing operator error by maintaining the same
functionality in tool makeup.
Dril-Quips IRT is hydraulically operated and func-
tions with an internal piston actuating radial segments
into the internal handling grooves of the coupling.
The tool is designed with mechanical secondary locks
and visual indicators to provide positive tool makeup
when fully installed in either the PR-80 or VAM TTR
coupling. The PR-80/VAM TTR IRT was successfully
load-tested to 2.25 times the tool rating in both cou-
plings to industry requirements.
Based on the design proposed, Val-
lourec took the challenge of incorporat-
ing the new features into its 14-in. VAM
TTR connection. This connection is a
field-proven design that features an
internal metal-to-metal seal, fatigue
enhanced threads, fatigue bending
profile (swoosh) and external metal-
to-metal seal. It was first successfully run
10 years ago in the Gulf of Mexico and
since on multiple products.
Analysis, testing
Through finite element analysis (FEA),
the coupling design with internal han-
dling grooves was modeled and tested to
verify no adverse effects on the tension,
compression or fatigue performance of
the connection. The FEA simulated the
Collaboration on special production
riser coupling meets new challenges
Two industry leaders in riser systems worked together to create and manufacture an
innovative special coupling to meet the installation requirements of a single-barrier top
tension production riser.
Darren Mills, Dril-Quip Inc.; and
Michael Tricarico, Vallourec USA Corp.
FIGURE 1. The Dril-Quip riser handling tool is installed in the VAM TTR (top) and PR-80
(bottom) riser couplings. (Source: Dril-Quip)
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63
load steps of an ISO13679 CALIII test on the pipe and
connection using techniques developed by Vallourec
within the elastic-plastic strain methodology. Compari-
son of the new coupling design to the companys large
library of FEA and physical testing of similar connec-
tions showed positive results. The stresses in critical
areas of the special coupling are consistent with stan-
dard VAM TTR connections.
Following FEA evaluation, physical testing was com-
pleted to further validate the coupling design. Vallourec
performed a full ISO13679:2002 CALIII test of the VAM
TTR connection in addition to fatigue testing using six
samples. The connection test results matched the FEA
in tensionand most importantly in compressionas
this was the area that could be most affected by the pres-
ence of the lifting grooves.
The internal handling profile and the anode-threaded
attachment hole presented areas of high stress concen-
trations, which potentially could limit the fatigue life of
the connection. Dril-Quip took this into consideration
when creating the shape of the internal handling pro-
file, allowing large radii and smooth transitions. How-
ever, the threaded area of the anode-attachment hole
with its sharp thread start was still an area of special
interest. To mitigate potential concerns, Vallourec sub-
jected the connection to fatigue cycles using the eccen-
tric mass cyclic bending method (Figure 2). In this
method the pipe and connection experience a predeter-
mined stress via bending induced by an eccentric mass.
The resulting alternating bending motion resembles
that of a school grounds jump rope at 20 Hz to 30 Hz.
By subjecting the VAM TTR connection and pipe to
the fatigue stress cycles, it was demonstrated that the
connection was able to achieve more than 6,000,000
cycles with a resulting stress amplification factor of less
than 1.5 using the DNV B1 2005 curve (air). This high
level of fatigue performance gave great confidence in
the coupling design and allowed manufacturing to
move forward.
Manufacture
Since the internal handling profile became an inherent
part of the coupling design, Vallourec had to identify
the best way to machine the profile using standard man-
ufacturing processes. The most critical point was to
machine the IRT handling profile in the correct loca-
tion within the specified tolerances while maintaining
the production efficiency. Typically the shoulder region
does not require high tolerances, thus allowing the cou-
pling-face-to-shoulder length to be controlled tightly.
The key innovation to success was to design a single
direction high-tolerance coupling. For standard cou-
plings both sides A and B are identical; no distinction is
made for which side can be made up to the pipe pin
thread. However, to accommodate proper IRT makeup,
the internal profile was indicated from one coupling
side during machining. This quality control by design
method drastically reduced the reject rate such that the
coupling could be manufactured in an economically
viable way. To ensure visual identification of the high-tol-
erance IRT engagement side, a special band was painted
on the coupling along with an explicit instruction proce-
dure for coupling to pipe makeup. The first manufactur-
ing order of the pipe and couplings was completed in
late 2012.
While the project presented challenges and required
new developments, the design synergy provided the
greatest benefit to the end user by reducing operational
time and risk. The production riser coupling met all
performance criteria and was successfully manufactured
to meet the project demands.
FIGURE 2. Vallourec VAM TTR riser coupling is shown during fatigue
testing in a resonant fatigue load frame. (Source: Vallourec)
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64
operator
SOLUTIONS
W
ater management is a critical component of
todays E&P activity. Yet, while operators often
have excellent technical and project management sup-
port, water management is typically outside of that core
focus. That is partly because water management is not
usually a revenue generator. Instead, it is often con-
tracted out to service companies.
One such company, Select Energy Services, has con-
structed and owns and operates a water pipeline system
supporting an E&P companys Haynesville Shale well
completions and hydraulic fracturing operations. The
20-km (12-mile) in-ground pipeline in DeSoto Parish,
La., has been used to supply the water needed to frac-
ture up to four wells per week since 2010. The pipeline
system uses repurposed industrial effluent water rather
than freshwater, and already hundreds of wells have
been completed using the pipeline while hundreds
more are anticipated.
The partnership between Select and the E&P com-
pany has resulted in consistently safe and reliable water
management for the companys completions at an
affordable all-in, per-barrel price. No safety or environ-
mental incidents have occurred throughout the life of
the system.
Background
Starting in late 2000 and continuing into early 2010,
shale gas exploration and production activity was at a
record high in the Haynesville Shale. During that time
severe drought conditions affected activity in the area,
and a shortage of water meant E&P demands could not
all be met, emphasizing the need for a reliable water
management plan.
Two large energy companies partnered with a plan to
manage the needone a dominant independent E&P
company in the region that conducted the drilling and
exploration and the other a large multinational natural
gas exploration company.
The companies discovered a high volume of nonhaz-
ardous wastewater was being produced at a facility in
nearby DeSoto Parish before it was returned to the Red
River under permit. That wastewater flow had the poten-
tial to meet the needs of a large portion of the projected
fracking operations planned for the area, and the eco-
nomics of repurposing this water were considerably
more attractive than negotiating with other area water
sources and land owners.
A contract was agreed upon, and water rights were
secured from the industrial facility for reuse in fracking
operations. Select was then brought in to oversee con-
struction of a pipeline.
The pipeline
Permits and land rights were acquired, and the in-
ground pipeline system was built. The system transports
the water from the source into the field. It involves a sys-
tem of pumps, an in-ground pipeline and delivery sta-
tions. Temporary transfer lines are then connected to
the delivery stations to transfer the water to the staging
Large water-management project
meets with success
Operators use pipeline to transport and recycle nearby wastewater for fracking operations.
Chris George, David Henley and Clay Maugans,
Select Energy Services
Temporary transfer lines are used to move water from each
delivery station to hydraulic fracturing operations. Above is one
of five water-delivery stations located along a 20-km pipeline
that transfers water from an industrial facility to the Haynesville
Shale. (Source: Select Energy Services)
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65
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pits or specific frack pads. This system is now part of a
wholly owned subsidiary of Select called Select Water
Reuse LLC. Select also manages the staging pits as well
as all associated field services related to moving the
water throughout the field.
The system consists of a 20-km buried pipeline built
of 24-in. concrete-lined ductile iron with bell-and-spigot
connections and air vents spaced along the pipeline. It
runs through the Holly Field of the Haynesville Shale
and is designed for a flow of 160 bbl/min with a maxi-
mum operating pressure of 200 psi. The pipeline trans-
ports water from the pump station, which uses three
variable-speed drive, 350-hp, 80 bbl/min turbine pumps.
There are five delivery points on the pipeline.
Operations
While the E&P company is responsible for providing the
completions schedule, Select takes over from there, pro-
viding all forward planning and logistics of the water
program. Additionally, Select mans and operates the
pipeline, manages any recurring regulatory compliance
requirements, and conducts the transfer from the
pipeline delivery point to the staging pits or frack pads.
Close communication between the E&P company and
Select prevents missteps
and has allowed uninter-
rupted frack jobs.
This has allowed the sys-
tem to keep pace with as
many as 22 active drilling
rigs and three to four well
completions per week. The
wells require multistage
completions that consume
more than 100,000 bbl
per well.
Results
To date, the pipeline has
delivered more than 15
MMbbl of water and is
designed to supply water
on an as-needed basis for
future completions. Truck
traffic has been signifi-
cantly reduced, with the
equivalent of more than
115,000 truckloads of
water traveling through
the pipeline since it was
put into service. Addition-
ally, that 15 MMbbl of industrial wastewater has been
reused rather than being sent to the Red River.
The repurposing of this industrial wastewater was an
innovative concept. While nonhazardous and permitted
for surface discharge, the industrial water was still dis-
tinct from typical well or surface water. Accordingly,
frack and production behavior has been continually
monitored to determine if there have been any detri-
mental effects on operations. None have been observed.
The wells that have been fracked using the systems
water have shown no signs of souring, have had good
initial production and are following normal decline
curves. Scaling tendency also was monitored, and the
wells completed with this source water are showing less
scaling behavior than those completed with other local
source waters, which is why this water will continue to be
used for as long as it is accessible.
The system has provided the E&P company with not
only a reliable and efficient source of water but also
with a consistent all-in cost per barrel of water across
the life of the drilling program. It has eliminated the
high variability of sourcing costs from well to well that
would have otherwise resulted in such a high-drought
environment.
This map shows the route of the 20-km water-reuse pipeline in DeSoto Parish, La. (Source: Select
Energy Services)
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66
operator
SOLUTIONS
W
ell construction in deep HP/HT wells has been a
major challenge over the years. The conventional
understanding was that best results were obtained when
low-toxicity, oil-based drilling fluids were used to address
the adverse drilling conditions.
However, the motivation to overcome the constraints
related with this type of well while ensuring better per-
formances and an enhanced environmental protection
has led to research and the development of an innovative
solution: a high-lubricity, water-based drilling fluid that
could prove to deliver the desired results.
The novel drilling fluid was tested in a well originally
drilled in 1989, where a sidetrack well was to be drilled
from the original wellbore to penetrate the upper reser-
voir, which was in an isolated fault block. The results
obtained were outstanding both in terms of rig-time
savings and reduced environmental impact.
Well situation
The target reservoir in the Mediterranean area lay
between 5,500 m and 6,000 m (18,040 ft and 19,680 ft) in
a HP/HT zone. Formation pressures above 14,000 psi and
temperatures of 160 C (320 F) were expected based on
offset well data. The combination of lithology and drilling
environment produced predictions of high torque, low
ROP and high wellbore instability.
Drilling plans called for a window to be cut in 7-in. cas-
ing and a sidetrack wellbore deviated from a whipstock set
at 4,800 m (15,744 ft) drilled using a 5
3
4-in. bit to the reser-
voir top at 5,632 m (18,473 ft). Inclination was built to 39
degrees and later to a maximum of 60 degrees before pen-
etrating the reservoir. After setting a 5-in. liner, a 4
1
8-in. bit
would drill to total depth (TD), planned for 5,753 m
(18,870 ft). An openhole completion was planned in a
highly competent dolostone. The drilling plan, based on
experience in offset wells, called for 87.84 days to drill the
5
3
4-in. hole section and 28.83 days to drill the 4
1
8-in. section
to TD.
As the drilling plan was being developed, comprehen-
sive laboratory tests were being conducted to establish
base data. Later, these data would be complemented by
measurements and tests conducted while drilling. It was
clear that the well called for a stable drilling fluid of high
lubricity capable of being weighted up to 17.2 ppg (2.06
sp gr). A high-temperature rheology modifier was
included to improve high-temperature stability.
Mud challenges
Historically, offset wells had been drilled with invert-emul-
sion low-toxicity oil-based muds using paraffin hydrocar-
bons as base fluid. These addressed earlier problems with
older water-based fluids used in the past, which required
continuous reconditioning and dilutionall at great cost.
Novel water-based
drilling fluid for HP/HT wells
Dedication to innovation is the key for operational excellence.
Alberto Maliardi et al., ENI E&P Division; and
Franco Arpini et al., Newpark Drilling Fluids
FIGURE 1. A chal-
lenging well plan
tested the effective-
ness of the innova-
tive drilling fluid
used. (Source: New-
park from ADIPEC
Paper No. 390)
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The switch to invert-emulsion oil-based fluids minimized
these issues to an extent. The oil-based fluids also relieved
torque and drag, instability, and frequent stuck-pipe inci-
dents experienced with the old water-based fluids.
However, a simpler and environmentally friendly solu-
tion was preferable, one that could be quickly and easily
tuned onsite using liquid additives when necessary and
that could remove the concerns about disposal and the
high cost of spent mud and cuttings remediation.
Solution involves new formulation
A new formulation of environmentally friendly water-
based drilling fluid was developed and qualified through a
battery of exhaustive lab tests. Stability under a wide range
of conditions that mirrored the anticipated well condi-
tions was a key issue. Maintenance of constant viscosity
while drilling the build and ramp sections also was critical.
With a well plan that exceeded 116 days with frequent
long-duration trips, the fluid could not degrade with time.
Hot rolling and static aging tests were conducted to verify
suitability for the proposed conditions.
Rheological properties were tested over the complete
range of downhole conditions to ensure efficient cut-
tings transport. One benefit was the lack of sag of the
weighting material that had plagued the invert-emulsion
fluid. The new fluid was tested for sag, and it performed
to specification.
But laboratory testing, no matter how comprehensive,
cannot substitute for actual field experience. Fortunately,
the Haynesville Shale of northeast Texas and northwest
Louisiana in the U.S. offers conditions similar to the
planned well. Field tests of the new drilling fluid could be
carried out and its performances verified as expected.
The high-performance water-based drilling fluid system
consists of three liquid products with an optional HP/HT
rheology modifier, including:
A synthetic polymer that acts as a primary viscosifier,
filtrate reducer and coating agent;
A performance-enhancing HP/HT lubricant blend
that combines reduced friction with thermal stability
above 200 C (392 F);
A surfactant wetting agent that ensures that weighting
material remains water-wet under all conditions; and
An optional rheology modifier that increases low shear
viscosity above 135 C (275 F).
With the new system, operators can expect a low envi-
ronmental impact water-based fluid capable of makeup
using freshwater or brine, a highly stable clay-free system
and thermal stability to more than 220 C (428 F). Because
a minimum number of liquid products make up the for-
mulation, mixing is easy under typical field conditions,
and storage for reuse is straightforward. Thixotropic prop-
erties are not affected by long static periods at high tem-
perature. The fluid has a low friction coefficient and
resists contamination from solids or CO
2
.
Higher ROP, lower NPT
The well was successfully drilled using the innovative water-
based fluid. The 5-in. liner point was achieved in 47.71 days
as opposed to the planned 87.84 days. Fluid performance
under static conditions was tested due to the failure of an
MWD tool, which caused almost 20 days of nonproductive
time (NPT). ROP in the section was 3.1 m/hr (10.2 ft/hr)
compared to an expected .8 m/hr (2.6 ft/hr).
During the drilling of the 4
1
8-in. drain hole, two stuck-
pipe incidents affected drilling. These were attributed to
differential-pressure sticking. Accordingly, total rig time
was 34.31 days as opposed to the plan of 28.83 days. Never-
theless, overall time was 34.65 days less than the original
plan. Actual costs were estimated at $11.6 million, com-
pared with the AFE plan of $15.1 million.
Torque values were low in both hole sections, varying
from 2,500 ft-lb to 4,000 ft-lb. Lubricity coefficient of fric-
tion was monitored throughout drilling and remained in
the range of 0.12 to 0.14, which is well below that typically
seen in water-based mud of this density. In future wells
that may require further torque reduction, the lubricity
can be easily improved. Cuttings transport was good, and
there was no evidence of pack-off or overpull.
A comparison of ROP for each lithology was made against
ROPs experienced in vertical offset wells. Use of modern
drilling tools and the new water-based drilling fluid was cred-
ited with achieving the greatly reduced drilling time. The
environmental impact and its associated costs also were
greatly reduced with no dangerous waste produced.
FIGURE 2. The high-performance water-based drilling fluid
exceeded ROPs recorded in two comparable offset wells.
(Source: Newpark from ADIPEC Paper No. 390)
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T
he Wolfcamp Formation has emerged as a major
unconventional resource play in Texas. There is a
wide range of oil vs. water production observed in the
hundreds of horizontal wells that have targeted this for-
mation. This variability has become a serious challenge
and leads to increased risk for many operators, and
there is a strong need to understand the cause. Using
slabbed core from the Texas Bureau of Economic Geol-
ogy (BEG) in Austin, Texas, digital rock physics (DRP)
have been applied to look for some clues. The well will
be referred to as Wolfcamp-1 and is located in the south-
ern Midland Basin.
The 51.2-m (168-ft) cored interval from Wolfcamp-1
was X-ray computed tomography (CT) imaged using
a dual-energy method. These data were used to select
the exact locations where plug samples were needed to
begin to understand the rock characteristics. Additional
detailed analysis was conducted on these plug samples to
define and quantify the key shale reservoir properties.
Methodology
DRP technology, developed by Ingrain, was applied
in the Wolfcamp-1 well using a workflow especially
designed for the characterization of shales. During
Phase 1, CoreHD dual-energy X-ray CT imaging was car-
ried out with a voxel resolution of about 0.5 mm. From
this imaging, Ingrain computed a high-resolution verti-
cal profile of rock bulk density (RhoB) and photoelec-
tric factor (PEF). Bulk density is an indicator of porosity
and organic matter content, while PEF is an indicator of
mineralogy. The density and mineralogy information
can be used to define shale facies.
This process was used to separate the data into five
facies classes and was used to characterize and identify
the zones of higher reservoir potential. In Figure 1, the
second track to the left of the depth track shows the
facies. Red and green facies represent higher porosity
and/or organic content, with green being more silica-
rich than red. Light blue is a more carbonate-dominated
zone. These data can be generated in a matter of hours
after core has been recovered, thereby aiding in hori-
zontal wellbore placement and stimulation design.
In Phase 2 of this shale core program, plugs were
selected for greater analytical detail. Initially they were
X-ray CT imaged at a resolution of 40 microns/voxel.
These CT volumes not only were used to guide the selec-
tion of subsamples but also are part of a very important
visual catalog. During this second phase, scanning elec-
tron microscope (SEM) analyses were also conducted on
ion-milled samples. SEMs allow Ingrain to obtain high-
68
Reservoir characterization
uses digital rock physics
A case study in the Wolfcamp Formation indicates that DRP can help identify shale facies.
Joel D. Walls, Ingrain Inc.
ROCK
PHYSICS
FIGURE 1. A 5.5-m (18-ft) depth interval of CoreHD data (RhoB,
facies, PEF) from the Wolfcamp 1 well shows the large variability
over small depth changes. (Source: Ingrain Inc.)
68-71 ROCK-Ingrain_68-71 ROCK-Ingrain 7/21/14 4:08 PM Page 68
69
resolution images of the shale mineral grains, solid
organic material and pore space. These images, as
shown in Figures 2 and 3, were digitally analyzed to
quantify the amount of organic matter, organic porosity,
porosity associated with organic matter (PA_OM), inter-
granular porosity and high-density minerals (usually
pyrite) present in the samples.
During Phase 3 of this project, 3-D volumes of digital
rock images were obtained from FIB-SEM (focused
ion beam combined with SEM). These image volumes
have a voxel resolution of about 5 nm to 15 nm and
form a digital rock volume that is used for computing
permeability and other types of special core analysis
data. Figure 4 shows an example.
Segmentation and image processing
allow the separation of the solid
mineral, organic matter and pore
space of these 3-D objects. Absolute
permeability was calculated in
each 3-D FIB-SEM volume using
a numerical method known as
Lattice-Boltzmann.
Results and findings
In addition to total porosity, con-
nected porosity, solid organic matter
and PA_OM, researchers also com-
puted vertical permeability, horizon-
tal permeability and pore size
distribution. Results of these tests
and hundreds of others performed
over several years show that the Wolf-
camp formation not only has large
variability in porosity and permeability but that organic
porosity and intergranular porosity are both common.
In addition, both types of porosity are well-intercon-
nected and can contribute to fluid flow.
If it is assumed that the organic-hosted porosity is pri-
marily filled with oil or gas and that water resides mainly
in the intergranular pores, then these data may help
explain why some completions result in greater water
cut than others. This also suggests that a good strategy
might be to analyze a sufficient number of samples to
determine which zones have the highest net organic
porosity and then select landing zones for greater
PA_OM, not just higher porosity in general. Figure 5
ROCK
PHYSICS
FIGURE 2. This high-resolution SEM image from the Wolfcamp-1 well
at 2,416 m (7,928 ft) clearly shows PA_OM. (Source: Ingrain Inc.)
FIGURE 3. An SEM image from the Wolfcamp-1 well at 2,443 m (8,016 ft)
shows predominantly intergranular porosity. (Source: Ingrain Inc.)
FIGURE 4. High-resolution 3-D FIB-SEM volumes are shown from the Wolfcamp 1 well. In
both images, green is solid organic material, blue is connected porosity, red is isolated
porosity and the solid mineral grains are transparent. Note that the sample on the left
(2,416 m [7,928 ft]) has much of its connected porosity closely associated with organic
material, while the sample on the right (2,443 m [8,016 ft]) has essentially no organic
material or PA_OM. (Source: Ingrain Inc.)
shows the total porosity vs. horizontal permeability for
Wolfcamp-1 compared to the upper and lower bounds
determined from other Wolfcamp samples in the
Ingrain database.
Reducing water cut
The collection and integration of the data from this
DRP study of samples from the Wolfcamp Formation
shows that rock types, porosity and permeability are
highly variable and that data from the Wolfcamp-1
well are typical of other Wolfcamp samples. The
DRP analysis further shows that some samples have
mostly intergranular pores, while other samples have
mostly porosity inside the organic material. Both types
of samples may have relatively high porosity and perme-
ability. If water resides mostly in the intergranular
pores and hydrocarbons are more common in the
organic pores, water cut may be reduced by targeting
the completion in the intervals with greatest organic
porosity.
Acknowledgments
The author would like to thank the BEG for allowing access
to core samples from the BEG core storage facility in Austin,
Texas. Thanks also to Juliana Anderson and Elliot Walls of
Ingrain Inc. for review and editing.
70
FIGURE 5. These trend lines show how samples from the Wolf-
camp-1 well compare to the upper and lower trend lines from
other Wolfcamp samples in the Ingrain database. Permeability
in this figure was computed in the horizontal plane using FIB-SEM
digital rock volumes. (Source: Ingrain Inc.)
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U
nlike complex structural plays in conventional clastic
or carbonate reservoirs, shale formations have never
been overly difficult to find or to map structurally. There-
fore, in the early days of shale field development, seismic
data were never the first tool of choice. Operators gener-
ally knew how deep, thick and laterally extensive these
unconventional resources were since they are often the
source rocks for more conventional reservoirs.
Since shale reservoir rocks were considered essentially
homogeneous, horizontal drilling and hydraulic fracture
completion strategies were the same everywhere. Perfora-
tion clusters were placed at regularly spaced intervals along
the lateral. Shales were expected to fracture and produce
hydrocarbons evenly from each completion stage.
Shale heterogeneity
In reality, production appeared almost haphazard.
Shales were alarmingly heterogeneous. The first
detailed maps of shale heterogeneity were drawn very
slowly, at enormous cost, by the drillbit. In heavily
drilled plays such as the Barnettthe first extensively
developed unconventional shale in the worldcolored
maps of production (Figure 1, left) appeared as laterally
complex and as discontinuous as highly faulted anticli-
nal structures offshore, yet without the structure. Evi-
dence of heterogeneity showed up at multiple scales,
from the field down to individual stages within a well.
According to one study, 43% of the perforations in a cer-
tain play produced almost no hydrocarbons, while 30%
produced more than 80% of total flow. Microseismic
monitoring confirmed that some stages propagated
hydraulic fractures far more extensively than others.
The question, then, was how to predictbefore
drillingwhere and in what manner a shale reservoir
would hydraulically fracture. With such information,
operators could drill and complete laterals only in the
sweet spots.
To better characterize shale heterogeneities, which rep-
resent spatial variations in rock properties, more opera-
tors have been acquiring wide-azimuth (WAZ) seismic
surveys in unconventional plays. Seismic data can provide
initial information about porosity, total
organic carbon, natural fracture den-
sity and fracture orientation as well as
in situ stresses, which impact hydrocar-
bon storage, access and hydraulic frac-
ture propagation. WAZ seismic can
provide more information about how
velocities and other key reservoir prop-
erties vary with azimuth. Nevertheless,
inversion is necessary both to enhance
resolution and to transform reflection
data into quantitative rock properties.
The seismic inversion challenge
This is where many analyses go wrong.
The inversion techniques widely used
in the industry today are not appropri-
ate for fractured shale reservoirs. They
provide a good approximation of rock
72
New method characterizes
naturally fractured reservoirs
Orthotropic inversion combined with stochastic rock physics modeling
can help map heterogeneities.
Ran Bachrach and Colin Sayers, Schlumberger
ROCK
PHYSICS
FIGURE 1. Left: The drillbit mapped 129.5 sq km (50 sq miles) of Barnett Shale
heterogeneities (red=highest production; purple=lowest production). Right: The
new seismic inversion algorithm mapped 114 sq km (44 sq miles) of Middle
Bakken heterogeneities (red=highest azimuthal anisotropy; purple=lowest
azimuthal anisotropy). (Source: Schlumberger)
72-75 ROCK-SLB_Layout 1 7/22/14 1:05 PM Page 72
73
properties only when fractures are absent, but they can-
not properly account for subsurface anisotropy, which is
essential to accurately predict how to optimize hydraulic
fracturing and understand fracture propagation in the
presence of natural fracture networks.
In an isotropic medium such as a typical homogeneous
sandstone, physical properties are essentially equal
regardless of the direction in which they are measured.
When certain properties vary with the direction of meas-
urement, the medium is anisotropic. Shales are strongly
layered systems consisting of anisotropic clay particles,
micro-cracks and kerogen aligned parallel to the bed-
ding. They create a type of anisotropy known as vertical
transverse isotropy (VTI). Among other things, a seismic
wave traveling parallel to bedding has a significantly dif-
ferent velocity to one traveling perpendicular to bedding.
Thus, measurements of seismic and rock properties in
VTI media depend on the angle between the direction of
propagation and the bedding.
Stressed and naturally fractured shales are even
more complicated. These may have more complicated
anisotropy that can be approximated as orthotropic media,
in which azimuthal variations in the wave speed are super-
imposed on an otherwise strongly layered VTI medium by
horizontal stress anisotropy and vertical fractures. The only
proper way to invert WAZ seismic data in a fractured shale
reservoir is to apply an orthotropic inversion algorithm.
Until recently, this was simply impossible. The technology
was not available. Operators typically applied conventional
amplitude vs. offset or VTI inversion methods to WAZ seis-
mic data. Without orthotropic inversion, however, one can-
not determine the horizontal stress anisotropy. Well log
data cannot provide this either.
The hydraulic fracturing process can be simulated using
the Mangrove engineered simulation design in the Petrel
platform. This shows that, in the presence of vertical frac-
tures, hydraulic fractures tend to propagate more linearly
when horizontal stress anisotropy is high; that is, when the
difference in magnitude between the maximum and mini-
mum horizontal stresses is large. Conversely, hydraulic
fractures tend to spread out more widely among existing
fracture networksmaximizing reservoir contactwhen
horizontal stress anisotropy is low. Without these details, it
may be impossible for operators to optimize both the
placement and orientation of wellbores and multistage
perforation clusters for maximum well productivity.
Orthotropic inversion of WAZ data
To address this widespread challenge, Schlumberger
recently developed the industrys first high-resolution
orthotropic inversion technique for WAZ seismic. It cor-
rectly estimates complex rock properties in strongly lay-
ered unconventional shales with natural fractures and
azimuthal stress anisotropy. This unique amplitude vs.
azimuth (AVAz) inversion workflow was first tested on syn-
thetic data and has since been applied to real WAZ 3-D
data in North America and the Middle East. Here, for
example, is how the new inversion works in the Bakken,
a naturally fractured unconventional play.
The Bakken shale consists of three distinct layers. The
low-porosity, low-permeability middle Bakken, the pri-
mary producing zone, is less than 18.3 m (60 ft) thick,
which is below seismic resolution. Operators cannot dis-
tinguish the middle Bakken from the upper and lower
shales using conventional inversion of WAZ data. It has
proven exceptionally difficult to reliably map lateral het-
erogeneities in rock properties, which are vital to locating
the sweet spots.
Nevertheless, by applying the high-fidelity orthotropic
inversion algorithm to the azimuthal seismic data,
petrotechnical experts were able to fully resolve the mid-
dle Bakken (Figure 2) in terms of thickness and lithology
as well as elastic and rock strength parameters. By build-
ing a suitable rock physics model, they also derived accu-
ROCK
PHYSICS
FIGURE 2. Top: Conventional seismic cannot distinguish the
18.3-m Middle Bakken shale from the upper and lower layers.
Bottom: Orthotropic seismic inversion successfully resolves the
target reservoir vertically and reveals heterogeneities laterally.
(Source: Schlumberger)
rate fracture density and total porosity volumes as well as
the maximum and minimum horizontal stress. As a result,
it was possible to map the orientation and magnitude of
azimuthal stress anisotropy in the middle Bakken produc-
ing interval (Figure 1, right). Interestingly, the hetero-
geneities captured in this map view mimic those highly
complex production maps in early shale plays such as the
Barnett (Figure 1, left) without having to drill hundreds
or thousands of wells.
Promise for the future
Fractured unconventional shales are heterogeneous at
multiple scales and anisotropic in multiple directions.
Historically, operators mapped heterogeneities with the
drillbit, an exceedingly expensive technique. Orthotropic
inversion of WAZ seismic and stochastic rock physics
modeling offers a promising alternative for the future.
First, operators can resolve thin layers with far greater
resolution. This enables them to localize reservoir proper-
ties to the interval of interest rather than averaging across
multiple zones. Second, they can accurately unravel each
intervals azimuthally dependent properties, including
lithology, porosity, stress anisotropy and fracture density.
With this information in hand, geoscientists and engi-
neers can identify shale heterogeneities prior to drilling
and place laterals and completions only in the best zones
to maximize reservoir contact and optimize production.
Oil and gas companies can drill fewer wells overall, mini-
mize impact on precious water resources and the environ-
ment and, ultimately, maximize return on investment.
As shale resource development continues to expand
worldwide, this breakthrough inversion technique will
become even more critical to success.
Acknowledgment
This article references SPE 168764, Recent Advances in the
Characterization of Unconventional Reservoirs with Wide-
Azimuth Seismic Data, and SPE 138427, Unlocking the Shale
Mystery: How Lateral Measurements and Well Placement Impact
Completions and Resultant Production.
74
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THE APP
T
he goal of integration has been long sought but sel-
dom achieved. Two of the main obstacles to integra-
tion are the lack of a common reference and lack of a
common platform. When it comes to the exploitation of
unconventional shale reservoirs, there is a need to inte-
grate the disciplines of geomechanics, geopressure and
quantitative seismic interpretation. Rock physics is the
most obvious link to all these domains.
Rock physics establishes the relationships between the
constituents of the rocks, the fabric of the rock, the state
of stress, the pressures, the elastic properties and the
seismic amplitudes. A software package, RokDoc, has
now made this interdisciplinary integration easier with
the addition of geomechanical tools to a platform that
already includes geopressure and quantitative seismic
interpretation. This not only allows for a more inte-
grated approach to understanding and exploiting
unconventional shale reservoirs, but it also has benefits
for many other workflows.
Unconventional shales
Even though shales comprise about 75%
of the sedimentary column, studies of
the elastic and seismic response of shales
are scarce. One of the major differences
between conventional reservoirs and
unconventional shale reservoirs is the
presence of organic matter (also known
as total organic carbon or TOC) in
shales. TOC consists of bitumen and
kerogen. Bitumen dissolves in organic
solvents, whereas kerogen does not.
When kerogen is subjected to pressure
and heat over geological time, it trans-
forms to generate hydrocarbons. This
process is known as maturation. Kerogen
maturity creates additional pore space in
the organic matter. Transformed hydro-
carbons are stored in these nano-scale pores. Thus,
hydrocarbon production from unconventional shale
reservoirs is controlled either by darcy flow (within min-
eral matrix or in fractures) or by diffusion. The sweet
spot identification in shale reservoirs usually includes
mapping the distribution of organic richness (TOC),
thickness of the organic-rich formation, levels of ther-
mal maturity and network of natural fractures. A multi-
disciplinary approach combining key independent
physical properties (e.g. elastic moduli, state of regional
and local stress, and geopressure) is required for suc-
cessful characterization of shale reservoirs.
A quantitative geoprediction workflow
Ikon Science has developed rock physics-based quantita-
tive geoprediction workflows (using multiple sources of
data) and has applied them to the number of problems
that require a resource-effective approach that can be
turned around quickly during drilling operations. The
integrated quantitative geoprediction workflow includes:
(i) Identifying incompressibility, rigidity and pore
content by facies;
76
Interdisciplinary integration
made easier
Rock physics provides the link between geomechanics, geopressure
and quantitative seismic interpretation.
Malleswara Yenugu, Ikon Science Americas;
and Jorg Herwanger, Ikon Science U.K.
ROCK
PHYSICS
FIGURE 1. Quantitative geoprediction workflows are shown for (a) unconventional play
assessment and (b) natural fracture detection/evaluation. (Source: Ikon Science)
76-77 ROCK-IKON_Layout 1 7/22/14 10:17 AM Page 76
77
(ii) Analyzing rock and TOC relationships between
the above properties based on core, log and test
data from wells;
(iii) Calibrating elastic, anisotropic and mechanical
properties and gradients; and
(iv) Interpreting most likely indicators (direct lithol-
ogy indicator for lithofacies, direct TOC indicator
for TOC and direct fracture indicator for fracture
gradient) associated with reservoir quality and
well completion to identify sweet spots in a
quantitative manner (Figure 1).
In addition to the aforementioned routines, this
approach for mapping the lithology and geomechanical
attributes uses seismic data inversion. The elastic Lames
parameters ( and ) that are indicators of incompress-
ibility () and rigidity () could be derived from ampli-
tude vs. offset inversion workflows. Figure 2 shows the
brittle and ductile zones identified from inversion results.
Geomechanical applications
More than 70% of nonproductive time and increase in
drilling costs are related to wellbore-related problems.
Geomechanics has many applications, most notably
drilling and production optimization. Geomechanical
insights help drillers avoid geohazards, plan efficient
wellbore trajectories and define safe mud weights.
Knowledge of geomechanics aids natural fracture detec-
tion, hydraulic stimulation planning and the under-
standing of the hydraulic fracture propagation.
Fundamental to the success of geomechanical applica-
tions is a detailed understanding of pore pressure, rock
properties and stress state. In the latest RokDoc release,
all of the ingredients of a wellbore-centric geomechani-
cal model are combined in one software application.
Local geological and regional geological knowledge
can be analyzed by pore pressure experts to delineate a
pressure mechanism and predict pore pressure ahead of
the bit. By combining this with rock physics modeling,
the mechanical properties of different lithologies are
assessed from well log data and integrated with forma-
tion and core measurements. The system allows for all
rock physics, geopressure and geomechanics data to be
stored in one database and shared by subsurface domain
experts across the disciplines.
Once all of the data are entered into a new project,
the core part of geomechanical analysis can begin. Users
of the software can diagnose and take action for a wider
range of subsurface conditions than before. Consider,
for example, wellbore stability-related challenges based
on the subsurface stress state, pore pressure and
mechanical properties of the lithologic column. The
software allows interactive scenario modeling of well-
bore stability. As the user changes the planned mud den-
sity, the software automatically computes whether this
mud density allows safe drilling by analyzing hoop
stresses and radial stresses in the wellbore wall and test-
ing whether there is a risk of mud losses, wellbore fail-
ure or even wellbore collapse. These safe mud weight
limits can be further interactively tested as a function of
wellbore inclination and azimuth.
In a production setting it is important to compute the
wellbore pressures needed for hydraulic stimulation. It
is vital to know whether new fractures are being initiated
or pre-existing fractures are being reactivated during
hydraulic stimulation. The physical principles adopted
in the software make it possible to know before you go.
Fracture orientations and densities are detected by image
log analysis. Along with the calibrated geomechanical
model, injection pressures at which fractures of arbitrary
orientation reactivate, whether in tension or in shear
modes, are readily computed. In a similar manner, injec-
tion pressures required to initiate and propagate new frac-
tures are computed. The uncertainty evaluation of the
well productivity has, therefore, become a robust process.
The interdisciplinary workflows that are required to
optimize the exploitation of unconventional shale reser-
voirs are made easier by the recent addition of geome-
chanical tools to the software platform. The combination
of geomechanics with geopressure and quantitative seis-
mic interpretation through the link of rock physics in a
common package promises to have great benefits for
many other workflows as well.
FIGURE 2. This map of
geomechanical attrib-
utes uses elastic prop-
erty space. (Source:
Ikon Science)
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76-77 ROCK-IKON_76-77 ROCK-IKON 7/21/14 4:09 PM Page 77
Z
onal isolation is facing new demands with advances in
unconventional wellbore construction methods and a
growing regulatory environment. New hydraulic fractur-
ing techniques, directional drilling with longer laterals
and deeper-set production strings are placing greater
demands on isolation performance. Government regula-
tion is increasingly involved in defining those perform-
ance standards over the life of the well.
A key zonal isolation objective of these applications and
regulations is preventing the creation of microannuli in
the cement and between the cement and the casing,
which can allow gas migration. Sustained casing pressure
resulting from gas migration is costly to remediate and can
present a life-of-well maintenance problem. Groundwater
contamination in naturally fractured formations further
complicates the isolation issue and increases risk.
In many of these unconventional well applications the
inflatable annular casing packer is providing a familiar
solution, while swellable technology offers newer options.
Well construction isolation options
Inflatable technology. Inflatable packers have long provided
a reliable tool for primary zonal isolation or as a cemented
component of a zonal isolation system. These can be run
individually to provide specific zone isolation or in con-
junction with conventional primary or stage cementing.
Most recently, annular casing packers (ACPs) have been
applied to a broader scope of unconventional wells where
challengesincluding depth, lateral length and complex
wellbore geometrieshave made it a natural fit. In open-
and cased-hole applications, inflatable packers provide a
high expansion ratio that conforms to the uneven geome-
tries and size of the borehole wall. In these applications,
an ACP can be a central component in an isolation sys-
tem. Weatherfords Bulldog ACP is used across a broad
scope of applications, including water/gas shutoff, pro-
duction segmentation, openhole testing, selective stimula-
tion and acidizing, and plug and abandonment.
Run as an integral part of the casing string, the Bulldog
ACP uses inflatable elements selected for wellbore fluids
and temperatures to ensure performance over the life of
the well. The inflatable element can provide isolation for
temperatures up to 343 C (650 F).
A recent technical advancement to the design is a high-
pressure valve prompted by performance requirements in
longer and deeper wells. In shallow wells with long later-
als, an ACP is often set in the vertical section. This pro-
duces high frictional pressure when cementing horizontal
sections of more than 3,049 m (10,000 ft). Deep vertical
wells have very high hydrostatic pressures that also put
increased demand on the ACP valves. To address these
conditions, a newly introduced valve allows functionality
over 5,000 psi.
Swellable technology. Weatherford swellable products and
services are engineered to meet the challenges of well
construction by using a portfolio of tool designs and elas-
tomer formulas. Issues range from short-term stimulation
concerns to long-term microannulus isolation. The com-
pany incorporates oil swell, water swell or a customizable
dual-fluid activated swellable hybrid elastomer technology
in its range of tools to meet these challenges.
The swellable Micro-Seal isolation systems (MSIS) are a
solution for controlling microannular fluid and pressure
migration. The approach is based on swellable isolation
78
Annular casing packers isolate
longer laterals, deeper wells
Zonal isolation is more critical in unconventional wells to prevent gas migration
and to support the cement column in lost-circulation zones.
Mona Desai, Weatherford
OPTIMIZATION
Shallow gas zones typically make primary cementing difficult.
An ACP provides a pressure barrier that allows the cement to
harden without gas inflow. (Source: Weatherford)
78-83 UnCOMP-Weatherford_78-83 UnCOMP-Weatherford 7/21/14 4:09 PM Page 78
80
OPTIMIZATION
seal units that are distributed along the cemented tubulars
and provide a series of response points that can control
fluid or pressure migration that results due to microannu-
lar crack formations within the cement sheath. The annu-
lar swellable packers offer the reliability and cost benefits
of conventional swellable packers with the advantages of
customized swelling performance and proprietary design
features. A patented anti-extrusion system can maintain
higher differential pressure across the tool, resulting in a
much shorter packer.
Regulatory drivers
Regulatory bodies on a global scale are defining that wells
must be designed to prevent any interconnection between
hydrocarbon-bearing formations and aquifers. This
ensures that gas is contained within the well, associated
pipework and equipment without leakage and that zonal
isolation between different aquifers is achieved.
Also, usable quality water zones are to be isolated and
sealed off to prevent contamination. Productive zones,
potential flow zones and zones with corrosive formation
fluids must be isolated to prevent vertical migration
(including gases) behind the pipe.
Lost circulation presents a challenge because the prob-
lem zone cannot sustain a column of cement. An ACP run
with a mechanical port collar or stage tool provides sup-
port for the cement column.
Swellable isolation seal units are distributed along the cemented
tubulars, providing response points that can mitigate fluid migra-
tion in the microannulus. (Source: Weatherford)
78-83 UnCOMP-Weatherford_Layout 1 7/22/14 3:43 PM Page 81
82
Shallow gas zones typically make primary cementing dif-
ficult due to gas migration. The ACP provides a pressure
barrier to the gas flow while the cement hardens. The
ACP is set just above the gas zone, and primary cementing
through the shoe inflates the packer. For long-term assur-
ance, multiple MSIS units placed in the cement can help
prevent possible migration as a result of cement sheath
damage due to fracturing or thermal stimulation.
Good industry zonal isolation practices include selec-
tion of casing hardware, including float equipment, cen-
tralizers, cement baskets, wiper plug stage tools, annular
casing and swellable packers. Such equipment can help
mitigate several potential zonal isolation issues, including
inferior cement jobs, microannular gas migration and
contaminated aquifers.
To comply with regulatory requirements, improved
cementing technologies ensure proper casing depth and
cement placement in the annulus above the ACP or
swellable packer. The ACP provides a platform for cement
placement to prevent potential gas channeling within the
cement slurry before it sets. The swellable packer provides
additional zonal isolation assurance. Thes regulations pres-
ent several additional challenges, including safety manage-
ment and record keeping. Operators must maintain a
comprehensive record for each well and ensure that con-
tractors have a complete safety management plan. Weather-
ford uses an operational excellence and performance
system to address safety, quality, reliability and training.
Record keeping is enhanced by a post-job assessment, and
best practices are reinforced through a performance-track-
ing database.
Effective isolation requires focused engineering, opera-
tional and technical support. The process must analyze the
well, identify optimal equipment and install it so that well
construction costs and risk are lowered. Annular casing and
swellable packers have provided a focused solution for tra-
ditional zonal isolation. With greater demands presented
by deep wells and long laterals, zonal isolation in complex
unconventional wells is also increasingly dependent on the
specialized capabilities of these packer options.
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I
n expanding its focus in the Mississippian play in
southern Kansas, SandRidge Energy Inc. was able to
develop an entire section640 acresfrom a single
wellbore for $5 million, which is a 44% reduction com-
pared to the standard single-well model. The company
considers its multilateral developmentdual and trilat-
erals and stacked laterals from a single vertical well-
boreto be game-changing.
We have some ongoing and exciting completion
initiatives that are showing some significant positive
results, said Aaron Reyna, senior vice president of
development for the Kansas Business Unit at SandRidge,
during the companys investor/analyst day March 4,
2014. We have an implementation of a multilateral sec-
tional development that we see will lower capex and
really improve our returns going forward.
The companys push into the Sumner County area is
a result of extensive work done by its geosciences and
engineering teams to understand the geology. By tying
the geology back to the development that was going on
in Oklahoma, the company has been quite successful
with it, he continued.
The economic performance of this play is very
encouraging and solid. Were seeing an internal rate of
return for this project at 74%. The success of the project
has added a little more than 115,000 acres to our focus
area. We plan to drill 45 wells in this project in 2014,
he continued.
Game-changing multilaterals
SandRidge has three multilateral prototypes. The first
trilateral well was drilled in September 2013 with a total
of 4,421 m (14,500 ft) of reservoir and completed with
55 stages of hybrid acid/water design (Figure 1). The
well used a retrievable inflatable-packer system that was
developed in Canada. Six multilateral sections are
planned for 2014.
The single most important thing is that the first trilat-
eral well officially developed an entire section for $5 mil-
lion. It is very, very cost effective. In the past, we would
have teed up and drilled three single horizontal wells
and built three tank batteries. The effort has yielded a
successful mechanical result. Were currently evaluating
the performance results, Reyna explained. Three dif-
ferent prototypes of wellbore design have been imple-
mented successfully as part of our 2014 program.
The company has two additional prototypes. The
stacked lateral development is very important based
on the stacked plays were seeing in the Midcontinent,
he said.
Currently, for the stacked lateral, wells are being com-
pleted in two formations. One well is being tested, one is
being completed, one is being drilled and five wells are
planned (Figure 2). Estimated savings are about $1 mil-
lion compared to drilling two single horizontal wells.
The company is now drilling the first of five planned
wells. Drilling time has been reduced by six days. This
design is scalable for multiple areas with stacked forma-
tions, he noted.
84
Redesigning stimulation, lateral
placement to boost production
By implementing stimulation initiatives and multilateral sectional development
in its wells in Sumner County, Kan., one company expects to lower capex
and improve returns going forward.
Scott Weeden, Senior Editor, Drilling
OPTIMIZATION
FIGURE 1. The first trilateral was drilling in September 2013.
An entire section was developed from one wellbore, saving
about 44% compared to a typical three-well program. (Source:
SandRidge Energy)
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86
OPTIMIZATION
The third prototype is the dual-lateral development. If
drilling three laterals from the same wellbore in a single
formation is successful, then why now drill two?
What were targeting with the dual-lateral develop-
ment are those areas where we may be landlocked and
not able to control 640 acres [Figure 3]. The two-lateral
plan will allow us to develop a half-section of property,
he said.
Redesigning mechanical completions
SandRidge sees additional opportunities for enhancing its
program economics through its downhole mechanical
FIGURE 2. One stacked lateral development well has been com-
pleted and is undergoing testing. (Source: SandRidge Energy)
FIGURE 3. The dual-lateral development is for areas where the com-
pany does not control a full section. (Source: SandRidge Energy)
89
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design changes. The company is using two different mechanical configura-
tionsan openhole packer system and a chemical-packer/sleeve-tool sys-
temto reduce completion costs and allow use of natural fractures that are
necessary for production.
Its openhole packer-completion system is used in 95% of the wells in its
current program. Weve continued to maximize the efficiency of our com-
pletions. Were now running openhole packer systems that allow production
from the entire section, which is not [obstructed] by cement and is what we
typically see in older designs, he said. Were also running electric sub-
mersible pumps [ESPs] at 90 degrees. These provide the lowest possible
pressure for the life cycle of the well.
Stimulation is an integral part of the success of the program. There are two
generalized methods for initiating fractures. The one generally accepted by
the industry is planar. This completion included a cemented 4-in. produc-
tion liner, standard 10-stage stimulation and 52-degree ESP installation. The
cost to drill and complete the well was $3.12 million. The 180-day cumulative
production was 62,200 boe.
With the openhole packer system, SandRidge uses dendritic stimulation,
which involves cycling the pump to create additional fracture networks near
the wellbore. This included a 10-stage stimulation with a 90-degree ESP
installation. The cost for drilling and completing the well was $2.93 million.
The 180-day cumulative production was 102,600 boe.
The dendritic design is the one were physically employing at the present
time. It is the result of cyclical pumping during each individual stage. What
this means is that were actually contacting more surface area, which is bene-
ficial to the performance of a well, he emphasized. What were doing right
now has been cost-neutral relative to stimulation costs from what we did in
the past. To date, the company has completed 19 wells with the new design.
Were seeing a conservative uplift in EUR of about 15% relative to the offset
planar design wells, he added. With the 180-day performance, there has
been a 68% performance gain with the dendritic design.
The second system being used by SandRidge involves a chemical packer,
which is a temporary gel system for hydraulic isolation, and a sleeve-tool
system. This design allows the company to access the wellbore through the
liner that is being run. It is a sleeve and plug-and-perf combination that is
extremely fast. This system saves about $60,000 per well and takes less than
two days to stimulate vs. an original design of six days, Reyna explained.
I am very excited about the chemical-packer and sleeve-tool system. We
believe this can really be a game-changer under the correct applications. A
well savings of $250,000 can be expected and projected with this system. It
uses polymer gel instead of permanent cement. It also uses a fully retractable
liner, he said.
I was part of a program in the Permian Basin in 2012 that successfully
implemented this in a similar carbonate reservoir, type and fracture. We per-
formed 36 jobs, and all were mechanically and operationally successful. It
has already been employed in a well in Oklahoma with operational, mechan-
ical and economical success, he continued.
Our stretch goal is to get to $2.3 million per well. One of the things were
excited about moving forward is to continue to drive costs down. These
design changes are going to supplement our efforts with multilateral devel-
opment plans, Reyna emphasized.
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A
pilot program in Norway has taken a fresh
approach to the logistics of a refurbishment project
delivering revamped subsea christmas trees to Statoil for
its giant Troll oil and gas field. So far the program is
proving that the refurbishment of equipment is a way
to both save money and make money as well.
Dubbed Pit Stop, the refurbishment initiative has
been undertaken in light of the recognized need off-
shore Norway for increased standardization and faster,
more cost-effective delivery of the required subsea
equipment. The results so far are impressive, reducing
the average delivery period for a subsea tree from
around a year to just 17 weeks.
The Pit Stop program was highlighted at the recent
Underwater Technology Conference in Bergen, Norway,
where Kristoffer Bakke, lead engineer for XMT projects
at Aker Solutions, gave an update on the refurbishment
initiative.
Oil production at 1.5 Bbbl so far
The background to the program lies in the ongoing
plans at a multitude of different levels by Troll operator
Statoil to maximize and extend the life of this world-
class North Sea gas and oil fielda giant that in May
this year achieved total oil production of 1.5 Bbbl so far
despite reservoir pressure decreasing. The operator has
been busy inserting new technologies such as more
advanced well completion and flow control systems, top-
sides gas compressors, and subsea production systems to
help enhance and extend recovery rates.
One subsea aspect recognized early on was the impor-
tance of refurbishing and, where necessary, upgrading
the fields 115 subsea trees as part of the initiative to
increase oil recovery, according to Bakke. It also was rec-
ognized that this tree cost was low compared to the cost
of operation if a tree failed.
Christmas tree upgrades
A key decision also was that the Norwegian state-owned
operator was willing to invest to reduce risk and invest in
90
Tree refurbishment key to
Troll IOR campaign
Pit Stop strategy puts subsea tree program in the fast lane.
Staff Report
SUBSEA
TREES
With subsea trees planned for the majority of Norways future offshore wells, the tree refurbishment business
will continue to grow. Aker has already refurbished seven trees this year for the
Troll Field as part of its Pit Stop program. (Source: Aker Solutions)
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92
particular in the purchasing of long lead items as a sepa-
rate project. As a result there will be an estimated 60 to
70 christmas trees to be upgraded between 2014 and
2019 on Troll.
Bakke went on to point out the large cost and risk
factors for the project in terms of new technical require-
ments and the way they are implemented. Implementa-
tion cost of extra requirements is a major cost driver, with
the cost essentially being the same whether a company
buys one component or 1,000, meaning an extreme cost
impact if low volume.
Statoil had originally wanted to refurbish up to 14 trees
per year, but Aker Solutions only originally had the capac-
ity to do seven per year (actually translating into only
three or four per year). However, thanks to the Pit Stop
initiative, Aker has already produced seven so far in 2014,
a performance rate that is good business for both sides.
Recovery rate of 52%
On Troll the aim is to raise oil recovery from 42% to
52%, including the use of four rigs drilling 10 to 15 hori-
zontal production wells per year up to around the year
2020 on top of the 122 wells already there. Over the last
five years Statoil and its partners have invested more than
$7.5 billion on the field, which came onstream in 1995.
If all goes to plan, this will mean eventually achieving
a forecast produced total of about 2.1 Bbbl by around
the year 2030. Not bad for what remains the North Seas
largest gas discovery ever made and whereduring the
1980sit was deemed too expensive to even produce
the giant fields thin oil layers.
Akers subsea tree manufacturing plant at Tranby, near Oslo,
Norway, is shown. (Source: Aker Solutions)
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Subsea trees and capex growth
Global subsea tree installations and subsea capex are
both anticipated to double over the next five years,
according to the latest report by analyst Infield Systems.
The company foresees positive prospects for growth
in the sector, with the subsea market predicted to
expand at a compound annual growth rate of 6.72%
over the 2014-2018 period. The principle driver for the
growth is the continued increasing trend toward deep-
water oil and gas development, according to Infield,
brought about by continued high oil prices, key tech-
nological improvements and the need to replace pro-
duction from maturing shallow-water basins.
As a result, the report added, subsea developments
have steadily increased over the past decade as com-
panies look to cost-effectively target reservoirs over a
much wider area.
Latin America and Africa will maintain their subsea
market dominance, together accounting for more than
half of total global forecast capex between 2014 and
2018. The primary drivers remain the massive presalt
discoveries offshore Brazil in the Santos and Campos
basins. These ultradeepwater fields are mostly oper-
ated by Petrobras, with the state oil company remain-
ing the top global subsea investor over the next five
years with a 25% share of the global capex figure.
Asia, Australasia
The Asian and Australasian regions represent emerg-
ing opportunities for the subsea sector, Infield added.
They will increase their combined market share from
8% in the last five years to 14% over the next five years.
Infield has now released the latest edition (its 10th)
of its Global Perspectives Subsea Market Report to
2018.
The growth figures also were backed up by a sepa-
rate report from another analyst, Douglas-Westwood.
It is forecasting global subsea hardware capex will
total $117 billion between 2014 and 2018. This repre-
sents growth of more than 80% compared with the
preceding five-year period.
In 2013, subsea tree installations were lower than
expected with delays in crucial projects off Brazil and
West Africa, it added. However, it is predicting an
increase through to 2018, with the major manufactur-
ers all reporting strong backlogs. n
S
ome of the largest natural gas projects in the world
currently are being developed offshore Western Aus-
tralia, where operators are pushing the envelope with
floating LNG (FLNG) vessels and subsea systems built to
feed those facilities. Subsea technology is evolving rapidly
to meet the long-term demands for producing and deliv-
ering that gas.
When you look at Australia, everybody has this percep-
tion that it is all sandy beaches, flat calm water and every-
thing is nice and easy. However, there are significant
challenges in dealing with Australia because many of
these subsea fields are long distances offshore. There is a
very long cyclone season like the hurricane season in the
U.S. That cyclone season is massively demanding, said
Mike Robinson, manager, sales and marketing, subsea sys-
tems, Australia and New Zealand, FMC Technologies.
Projects like Shells Prelude FLNG facility require newly
engineered and designed subsea equipment to meet the
challenges of supplying natural gas to the liquefaction
facility for 25, 30, 35 or even 40 years. Other projects that
have contributed to the evolution of subsea trees for Prel-
ude and Wheatstone include Woodsides Greater Western
Flank, Perseus over Goodwyn and Pluto developments.
I use the analogy that working offshore Australia is
arguably as challenging as doing work in the Arctic,
meaning that it is long distance, remote and difficult, and
you dont always have access 365 days a year, he said.
You have to make equipment reliable so it does not fail.
And you have to make equipment to be very available so
there are redundant mechanisms and systems. In addi-
tion, the equipment must be easily maintainable due to
the limited access time window.
Managing obsolescence
In developing subsea systems for offshore Australia, FMC
Technologies is designing and installing electrical, electro-
hydraulic and fiber-optic control systems on the seabed
that need to work for 25, 30 or 35 years or more. The
design and engineering are done to make sure those sys-
tems can be updated in the future either remotely or
more easily if an upgrade needs to be done.
Weve also reengineered for management of obsoles-
cence. If we think of obsolescence, we can just look at the
phones in everybodys pockets. Very few people are still
running around with an iPhone 3, and thats only two
years old. You have an iPhone 5 or an iPhone 5S, and
youre waiting for an iPhone 6, Robinson said.
Were doing everything we can to engineer equipment
to allow future technological applications that are in the
offing or may not even exist right now but that we know
ultimately will be around. We make it simple so the sys-
tem today can take advantage of improved technology
availability in years to come, he continued.
94
Subsea wellheads designed
for the land Down Under
In facing the challenge of subsea tree and system designs for Western Australias Prelude
and Wheatstone fields, one company finds success.
Scott Weeden, Senior Editor, Drilling
SUBSEA
TREES
One of the subsea manifolds for the Greater Western Flank proj-
ect is lowered to the seabed. The project can handle up to 22
subsea wells. (Source: FMC Technologies)
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96
SUBSEA
TREES
The highest technology items on subsea trees and sub-
sea manifolds, etc., are built into modules, especially Shell
Prelude and Western Flank. You can leave the bulk of the
subsea tree, which may be in the region of 50 or 60 tons
or more, on the seabed for pretty much the life of the
well, he explained.
The modules contain sophisticated electronics, meters,
choke and controls. The flow module, for example, con-
tains the choke and a meter. It is the module that will see
the high-velocity flow and over time may see some ero-
sion. That module can be recovered and replaced. Its
a smaller unit that weighs anywhere from 5 to 10 tons
depending on the design of the system, which means
over time it is much easier to replace, he added.
Not only is the equipment designed for easier mainte-
nance, but FMC Technologies also assists the operators
by ensuring that it can interface in the future with subsea
compression and separation. If they can install compres-
sion subsea, [it offers] the operators more efficiency than
they can [get] on a platform. From a capital cost stand-
point, it would be significantly less than if it was on a plat-
form or facility with people, Robinson said.
Western Australia subsea projects
For the Woodside Greater Western Flank 1, those trees
are built, and some of them are installed. The subsea
manifolds for those are physically installed on the seabed,
he continued.
Weve built a number of the Shell Prelude trees in
Malaysia and Singapore. The manifolds are still being
manufactured right now for Preludelarge-bore mani-
fold systems. Then for the Chevron Wheatstone Project,
the trees are being built in Malaysia and Singapore
again, large-bore 7-in. inside diameter (ID). The large-
bore manifold and tie-in systems are in manufacture at
a fabricator in China, he added.
All of these systems feature the latest generation of
FMC Technologies subsea controls. Again, for these last
gas projects the design life of the equipment is extended.
Typically, the design lives are 15, 20 or 25 years. In some
of these projects, we are being asked to design equipment
that has a 25-, 30-, 35- or 40-year design life.
What that means is weve used our latest generation
of subsea control systems, and these have the ability to
add in fiber optics. They can be upgraded in the future,
he explained.
Western Flank 1
The latest project FMC Technologies did for Woodside
was Greater Western Flank, involving the latest version of
the 5-in. ID enhanced vertical tree. Greater Western
Flank is a classic Australian gas project with large amounts
of infrastructure on the seabed initially but only a small
number of subsea wells to be installed.
Because its producing gas, typically what you will do
is phase the installation of trees and wells over a long
period of time. The Greater Western Flank project is
capable of handling up to 22 subsea wells, and it has
enough connection systems sitting subsea for that. But
it will only start off life with approximately five wells
being installed, Robinson explained.
Phase 1 will develop the Goodwyn GH and Tidepole
fields via a subsea tie-back to the existing platform.
Prelude trees tied to FLNG vessel
The most exciting example of subsea development in
Australia is the Shell Prelude Project, where were supply-
ing the subsea systems specially engineered for Shells
Prelude FLNG vessel. The wells will be sitting subsea and
will be very closely tied back to the FLNG system above
them, Robinson said.
Normally there is a large distance between the subsea
equipment and the host facility. In the case of Prelude,
the gas is literally going a couple of kilometers directly
above the seabed. That has driven some different require-
ments as far as reliability and availability in the system.
There are also some system design aspects because the
subsea wells and the FLNG vessel are so close, he added.
The latest version of the large-bore subsea trees are
7-in. ID and 10,000-psi working-pressure (WP) trees
designed for very high volumes of gas. Prelude has 12
well slots, and six to seven trees will probably be installed
in Phase 1.
All of the large-bore manifold and tie-in systems feature the lat-
est generation of FMC Technologies subsea controls. Some of
the equipment is being designed for up to a 40-year life.
(Source: FMC Technologies)
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The subsea systems underneath Prelude are not just
the large-bore trees into the two manifolds that were pro-
vided. These feature the latest manifold tie-in connection
systems, which are actually horizontal.
For simplified and more cost-effective installation,
take a look at the product. It is what we call a very avail-
able system. Its going to be very reliable. It has multiple
paths for the flow of gas from these wells to get to the
FLNG, providing redundancy in the overall system. That
was something that was quite different than the way they
used to do it in other subsea systems because of the link-
age to the FLNG, he explained.
Wheatstone subsea tree configuration
FMC Technologies is also delivering to the Wheatstone
Project a large-bore gas system7-in. trees, 10,000-psi
WPbut a different configuration than what is on Prel-
ude. Wheatstone has 20-plus well slots available, and
around half of those will be installed initially
Wheatstone has certainly pushed technology bound-
aries and limits. Its enhanced them, raised the bar cer-
tainly on the size, type and capability of the subsea trees.
These have some unique design requirements from the
reliability and robustness standpoint, manifold connec-
tions in the current systems, the size of the manifolds and
the thermal insulation needed, he said.
Wheatstone features a very robust, increased-function-
ality and higher standard subsea completion workover
riser system with the ability to test and intervene in wells.
Theyve raised the bar as far as a standard is concerned
for that, he continued.
The 7-in. tree systems are based on FMC Technologies
enhanced vertical deepwater trees. Its 5-in. version of the
tree has been used for many years. Weve basically taken
all the lessons weve learned and the best features of
those, using them in the 7-in. version of the tree. The
larger bore means larger mechanisms are needed to seal
the various items on it, Robinson said.
Much higher temperatures required a redesign of some
elements. Metallic seals are used to allow higher tempera-
tures in many areas.
The high-volume gas wells will ultimately produce some
sand that will likely cause erosion over time. Weve had
to be cognizant and very specific in engineering the trees
to minimize the flow velocity through the tree system to
maximize the life of those. That was a design change, he
emphasized.
Enhanced vertical trees
The enhanced vertical tree arguably has taken the best
features of the previous generations of vertical trees and
the current versions of horizontal trees and combined
them into one subsea tree, he continued.
The tree is being used in Australia by two different cus-
tomers in two different ways. One of the customers will
install and flow-test and then intervene in the wells tradi-
tionally with a completion workover riser system.
Another customer will use more of a horizontal well
intervention technique using a subsea BOP stack and sub-
sea test trees to intervene on the well. That a few years
ago could not have been possible because no vertical tree
existed that allowed that to happen. But our enhanced
vertical tree allows the functionality. It can either be inter-
vened upon like a vertical tree or a horizontal tree in that
the BOP can be installed on top of the tree, giving the
customer more flexibility, Robinson said.
FMC Technologies has large-bore trees installed in Aus-
tralia that are flowing anywhere from 10 MMcm/d to 10.1
MMcm/d (350 MMcf/d to 400 MMcf/d)maybe even in
excess of that.
We also want to make sure we design things for future
enhanced recovery techniques, he said. We want to
design things that enable the subsea systems to be worked
over as technology improves in 20 years time. Weve got a
joint venture with Edison Chouest Offshore in FTO Serv-
ices in a riserless well intervention system.
We significantly raised the bar on the completion
workover risers. While this is not classed as a BOP per se,
the capability of those systems has now been increased
significantly such that they are now able to cut and seal
much larger diameters of equipment. Their ability to cut
and seal is a lot more robust.
98
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Large-bore trees like this one for the Prelude Field can flow
10 MMcm/d to 10.1 MMcm/d or more of gas. (Source: FMC
Technologies)
T
he outlook for the Permian Basins unconventional region
compares favorably to that of the prolific Bakken and for
good reason: The Midland Basin/Wolfcamp-Cline is similar
to the Bakken in terms of gross thickness in its shale, which
means more resources, Darrel Koo, senior associate, energy
research at ITG Inc., told attendees at Hart Energys recent
DUG Permian conference in Fort Worth, Texas. The industry
could see up to 1.8 MMbbl/d of oil production growth from
the Permian by 2025, Koo continued, with a best-case esti-
mate of 3.2 MMbbl/d of oil production by 2025.
A long-time oil-producing basin, the Permians unconven-
tional region is attracting fresh interest from major companies
like Apache Corp., which is focusing on the play as one of its
four core areas of production. The Permians not a one-trick
pony, said John Christmann, Apaches executive vice president
and COO, during DUG Permian. We have more formations
and multiple basins to continue to produce. The nice thing
about this basin is everything is stacked, which creates multiple
plays and multiple targets in every net acre you own.
Permian Basin leads
domestic market resurgence
Stacked pays rival unconventional plays for activity
ramp-up.
Richard Mason, Chief Technical Director
T
he Permian Basin is on fire. And its not just the
blazing West Texas sun, either. Rig count is back
above 500 units for the first time since 2012, according
to Baker Hughes, while horizontal and directional rig
count has climbed above 300 unitsand counting.
The technological effort to develop tight oil via hori-
zontal drilling and multistage fracturing has come full
force to the Permian Basin, promising another new
chapter in a historic narrative that spans 90 years.
Operators are delineating multiple benches in the
Wolfcamp Shale in both the Midland and Delaware
basinsthe geologic gift that keeps on giving in both
geographic extent and geologic column height.
Meanwhile, high oil prices are sustaining lucrative
conventional drilling in traditional Permian targets,
providing further support to the hottest domestic
market in the U.S.
The Tao of the Permian Basin lies in two twin basins
flanking both sides of a buried structure known as the
Central Basin Platform. The Permian, in fact, resembles
a butterfly with open wings. The yin and yang of todays
Permian is evident as horizontal Wolfcamp delineation
efforts move south of the New Mexico line in the
Delaware Basin on the west and, in the Midland Basin,
migrate north out of the original core in Crockett, Rea-
gan and Irion counties into Midland and Martin counties.
The numbers tell the story. Horizontal well count was
up 25% in the Permians Delaware Basin in 2013, accord-
ing to a Morgan Stanley & Co. LLC research report, while
horizontal permits jumped 33%the largest regional
increase in the domestic market during 2013. Only the
Eagle Ford has witnessed more horizontal wells.
100
Permian Basin production heats up
Improved technology and favorable oil prices drive the industry to continue to
unlock the plays unconventional resources.
STAFF REPORT
UNCONVENTIONALS:
PERMIAN
A pumpjack targets Permian reserves in Penwell, Texas,
situated about 24 km (15 miles) west of Midland. (Photo by
Jennifer Presley)
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102
UNCONVENTIONALS:
PERMIAN
And it is getting better. While the 1,500 horizontal
permits filed by Permian operators in first-quarter 2014
ranked a distant second to the high-flying Eagle Ford
Shale, momentum is clearly swinging toward the Per-
mian, where horizontal permits jumped 87% sequen-
tially in first-quarter 2014.
Four Permian Basin counties account for the majority
of the activity increase, including Midland and Upton
counties in the Midland Basin and Reeves and Ward
counties in the Delaware Basin. Reeves witnessed a 15-
unit jump in horizontal rig count to 50 active rigs during
first-quarter 2014 to pace the Delaware, while combined
horizontal rig count in Midland and Martin counties
rose from 15 to 37 units during the same time frame.
The transition to horizontal drilling is the main narra-
tive in the ongoing Permian resurgence. Originally, oper-
ators employed horizontal drilling to exploit the Bone
Spring along both sides of the Texas/New Mexico border.
In 2011, for example, the Delaware Basin sported 60 rigs
drilling horizontally, representing 75% of horizontal work
in the Permian. Delaware horizontal rig count has added
more than 100 units since.
But the story of late centers on the rapid expansion
of horizontal drilling in the Midland Basin, which has
vaulted from 20 units in 2011 to 145 units at the end of
April 2014. Currently, horizontal rig count is almost
evenly split between the Delaware Basin at 52% and the
Midland Basin at 48%. Combined, both basins support
more horizontal rigs than any other region in the U.S.
Furthermore, the Permian is still in delineation mode
when it comes to the Wolfcamp Shale. Operators are
pushing lateral lengths, experimenting with downspac-
ing, packing more stages along the lateral and tweaking
downhole completion recipes as they extend the prospec-
tive Wolfcamp across the Delaware and Midland basins.
The optimization portion of the tight formation devel-
opment cycle is evident, primarily in Bone Spring tar-
gets in southeastern New Mexico. However, the Permian
as a region is still early in the overall tight formation
development cycle, and widespread resource harvest sits
a couple years out into the future. One proxy for the
evolution is pad drilling. Multiwell pads were few and far
between in early 2013less than 10% of horizontal
wells. Currently pads are found on more than 20% of
horizontal wells, and the number of wells per pad con-
tinues to increase, serving as a harbinger of the future.
Multiple operators are active in the play, ranging from
the majors and former majors to privately held compa-
nies. Since most acreage is already leased or held by pro-
duction, acquisitions have become the primary means of
expanding positions in the Permian. The region tallied
more than $25 billion in transactions in 2011 to 2013,
leading all other regions, including the Gulf of Mexico.
A flurry of energy IPOs in 2013 focused primarily on
the Permian as management teams backed by private
equity capital found that the stock market supported
stellar pure play acreage valuations that would under-
write expensive horizontal exploration.
And its just getting started. The Permian will be to
stacked formation plays as what the Eagle Ford and
Bakken are to unconventional shales. The latter feature
91 m (300 ft) of hydrocarbon-bearing strata. In contrast,
the Permian incorporates multiple benches in a stacked
formation column spanning more than 457 m (1,500 ft)
and nine separate geologic targets, depending on locale.
It seems that after 90 years, its dj vu all over again
in the Permian Basin. n
Midstream scrambles to keep
up with burst of production
Activity spike causes project expansions.
Joseph Markman, Associate Editor
T
heyre drilling for hydrocarbons with the urgency
of the 1920s, when Ira Yates sold leases from his
front porch in Pecos County, Texas. This time, theyre
going at it horizontally, and for midstream operators, this
era of the Permian is a bonanza. Were seeing fantastic
returns in the play40% to 100% [internal rates of
return], said Tomas Ackerman, managing director of
Horizontal drilling and hydraulic fracturing are major reasons
Permian Basin oil production has increased 64% since January
2010.
104
UNCONVENTIONALS:
PERMIAN
investment firm Natural Gas Partners. Its one of the
best plays in the world.
The Permians EOR activities have driven demand for
CO
2
, which Kinder Morgan Energy Partners LP plans to
meet by building the 343-km (213-mile), 8.5 MMcm/d
(300 MMcf/d) Lobos pipeline to move CO
2
from Ari-
zona to the Cortez pipeline in New Mexico. The $1 bil-
lion project is expected to be in service during 2016.
Drilling escalation is powering a surge in daily crude
production, forcing midstream operators to scramble to
avoid bottlenecks.
We are excited about the growing production forecast
in the Permian Basin, said Bruce Heine, Magellan Mid-
stream Partners director of government and media
affairs. Tulsa, Okla.-based Magellan has two major
pipeline systems originating in the Permian.
Our Longhorn pipeline, which has been safely trans-
porting crude oil from the Permian to Houston since
the second quarter of 2013, has a capacity of 225,000
bbl/d, Heine said. We are currently increasing the
capacity of Longhorn to 275,000 bbl/d.
Our second project is the BridgeTex pipeline, which
is a 50:50 joint venture with Occidental Petroleum, he
said. This system, which is currently under construc-
tion, will have a capacity of 300,000 bbl/d when it
becomes operational in mid-2014.
Ackermans Natural Gas Partners is backing PennTex
Midstream Partners LLCs expansion in the Delaware
Basin, the southwestern slice of the Permian. PennTex
purchased a majority interest in Atlantic Midstream
LLC in February and renamed it PennTex Permian.
By the end of the first quarter PennTex Permian had
put low- and intermediate-pressure gathering pipelines
and associated compression into service. The company
expected a July completion date for its 1.7 MMcm/d
(60 MMcf/d) cryogenic natural gas processing plant in
Reeves County, Texas, in the Wolfcamp play. Ackerman
looks forward to being part of the Permians ramping
up, especially in terms of investment opportunity in the
midstream space. Technological advances in drilling and
completion give the Permian an economic edge over
other plays.
In the midstream business, the key is to be responsive
to a producers needs, he said. Thats the key to being
competitive in a hot region like the Permian: You have
to deliver on what you promise. n
A tank is under construction for the BridgeTex pipeline system in Colorado City, Texas. When complete, BridgeTex will have 1.2 MMbbl of
storage in Colorado City. The pipeline will have an initial capacity of 300,000 bbl/d of oil to the Houston Gulf Coast area. (Source: Magel-
lan Midstream Partners)
100-113 UNCON-Permian_Layout 1 7/22/14 2:46 PM Page 106
107
UNCONVENTIONALS:
PERMIAN
Managing worker exposure
to silica-based products in
sequences of shale reservoir
stimulations operations
Donna S. Heidel, Kimberly Carson, John Baker
and John Stangline, Bureau Veritas North America
E
mploying an occupational and safety management
system to shale gas reservoir stimulation operations
assures that worker health and safety are considered at
each step in the hydraulic fracturing life cycle. Manage-
ment systems also support the ongoing reassessment
that is required as new information is developed about
the hazards of new and existing proppants and other
chemical hazards, resulting in sustainable health and
safety performance.
Exposure to crystalline silica particles of respirable
size has been identified as an occupational health hazard
associated with hydraulic fracturing operations. When
inhaled, respirable-sized particles can enter the gas-
exchange regions of the lung, according to a June 2012
hazard alert from the Occupational Safety and Health
Administration (OSHA) and National Institute for Occu-
pational Safety and Health (NIOSH) that was titled,
Worker exposure to silica during hydraulic fracturing.
Exposures are typically due to the mechanical handling
of large volumes of dry crystalline silica. Future innova-
tions, including the use of nano-enabled proppants and
lubricants, may introduce occupational health hazards
that have not yet been fully characterized.
Uncertainties exist about exposure risks and the appro-
priate controls needed to mitigate the potential risks to
worker health. These factors prompt the adoption of a
robust management system to ensure that worker health
and safety are considered at each step in the develop-
ment, use and ultimate disposal of silica and other prop-
pant materials.
Industrial hygienists at NIOSH identified eight points
of dust generation present during hydraulic fracturing
operations, according to an article in the Journal of Occu-
pational and Environmental Hygiene titled, Occupational
exposures to respirable crystalline silica during hydraulic
fracturing, by E. Esswein, M. Breitenstein, J. Snawder, M.
Kiefer and K. Sieber. These eight points can be broken
down into three groups: dust generation during sand-
mover loading, pumping operations and outside the
hydraulic fracturing process. Full-shift respirable dust sam-
ples indicated personal exposures to silica that exceeded
the OSHA-calculated permissible exposure limit, NIOSH-
recommended exposure limit and American Conference
of Governmental Industrial Hygienists Threshold Limit
Value. No studies have been published presenting expo-
sures to advanced proppants or nano-enabled lubricant
stimulations operations. Further toxicological studies are
needed. NIOSH has recommended the implementation
of a comprehensive occupational safety, health and envi-
ronmental management plan to minimize occupational
exposure risks.
Controlling silica and nano-enabled dusts at the point
of generation is the preferred method of engineering
control as it reduces the amount of dust entering work
areas. Source controls, when included in the design of
the process and equipment, are typically more effective
and less expensive than when included as a retrofit to
existing equipment, according to The Power of Collabo-
ration: Professional Safety, by J. Gambatese, M. Hallowell,
F. Renshaw, M. Quinn and P. Heckel.
Process enclosure and exhaust ventilation are estab-
lished methods of controlling hazards and can be adapted
to hydraulic fracturing with some consideration given to
the operational requirements of the process. Dust emis-
sions associated with mechanical action and drop points,
such as those associated with pumping operations, may be
adequately controlled by passive enclosures such as stilling
curtains, tent enclosures or enclosed chutes. Alternate
proppant delivery systems, including the use of gravity to
feed sand to the transfer belt, are also available and are
expected to reduce exposure risks associated with the
delivery of sand to the transfer belt. Dust collection sys-
tems and enclosures can address emissions from proppant
handling systems, but dust from the ground on the site
and roads near the well pad can also be a source of crys-
talline silica exposure, particularly in dry areas and sea-
sons. Water, amended water and ground coverings (such
as rubber pads) can be used for site dust suppression.
While easy to overlook, dust release from workers cloth-
ing is a source of exposure. If the clothing is not cleaned
or removed, the silica-containing dust may be transported
to the workers homes and families. Using a HEPA vac-
uum, engineered air showers and wet methods can con-
trol airborne dust while cleaning work clothing.
Including these and other appropriate controls into
the design of stimulations operations and the associated
process and equipment to control worker exposure risks
requires a systemic approach for identifying health haz-
ards associated with both known and novel materials and
assessing and controlling exposure risks.
An occupational health and safety management system
(OHSMS) provides a structured method to assess and
improve occupational health and safety (OHS) perform-
ance through the effective management of hazards and
risks in the workplace. An OHSMS also provides a frame-
work for including OHS considerations into the design,
operation, maintenance and eventual repurposing of
processes and equipment. In addition, an OHSMS sup-
ports the inclusion of OHS into the development of new
methods for fracturing, including nano-enabled prop-
pants and lubricants. Based on Dr. W. Edwards Demings
Plan-Do-Check-Act cycle for monitoring business per-
formance on a continual basis, OHSMS aligns OHS per-
formance. In this way, it keeps workers free from
occupational injuries, illnesses and exposures, with the
achievement of business goals. n
Unconventional activity
picking up steam in Permian
Contributed by Canary LLC
A
couple of months ago, Texas oil producer Occidental
Petroleum began an unconventional push in the
Permian Basin, where the new activity will complement
the companys ongoing conventional program there.
They [Occidental] look at their diverse Permian
acreage as a strategic advantage and their holistic, more
conservative approach as part of the execution strategy,
research analyst Jennifer Warren wrote in a recent column
for Seeking Alpha. The EOR business is the cash cow to
help double drilling rigs over the next three years to accel-
erate overall Permian resources growth.
Occidental is not alone. The Permian Basin in West
Texas and southeast New Mexico has been seeing a surge
of activity in recent months. Companies are flocking to
the area in search of unconventional hydrocarbons.
In early April, Oryx Midstream Services LLC of
Midland, Texas, announced it had received an equity
commitment totaling up to $300 million from private
investors to pursue midstream opportunities in the
basin. Also that month, Denver-based Outrigger Energy
LLC announced an expansion of its own midstream
capabilities in the Permian. This news followed a similar
announcement for the companys Delaware Basin sys-
tem in March.
Only a few years ago, the oil and gas industry viewed the
Permian as a fading resource. But in 2010 shale oil explo-
ration took off in the Midland formation. Operators
drilled nearly 2,300 exploration wells that year, and in
2013 they drilled more than 10,220 wells.
Today the Permian is a key location for unconventional
energy operations. In a recent report, the Independent
Petroleum Association of America wrote, Production in
the Permian Basin reached two million barrels per day in
the early 1970s, declined to 850,000 barrels per day in
2007, [and] has since rebounded to 1.3 million barrels
per day. And that number continues to grow: As of the
first week of April, 520 rigs were at work in the Permian,
while there were 214 in the Eagle Ford Shale, 185 in the
Williston/ Bakken and 66 in the Mississippian. Whats
more, nearly 40% of the active rigs in the Permian are
now drilling horizontal wells, and that percentage is
expected to increase.
The Permians varied resources
Not only is the Permian Basin massive (the oil field is
approximately 402 km [250 miles] wide and 483 km [300
miles] long), its diverse, too: The site comprises multiple
conventional and unconventional plays and a wide variety
of geological formations.
One of the basins appeals is its stacked plays, multiple
producing zones that can be accessed with both vertical
and horizontal wells. This feature allows companies to
extract oil and natural gas that could be too costly to pro-
duce under other circumstances.
The Permians varied resources include the Wolfcamp
Shale Formation, which is 457 m to 792 m (1,500 ft to
2,600 ft) thick at a depth of 1.6 km to 4.8 km (1 mile to 3
miles). The formation, which the Lubbock Avalanche-Journal
called one of the hottest unconventional plays around, is
believed to extend throughout most of the basin.
The Wolfcamp Formation is located within the Delaware
Basin portion of the Permian, which also is the site of the
booming Bone Spring Formation and the Avalon Shale.
Houston-based Nuevo Midstream recently completed a
major processing capacity expansion for shale gas in the
Delaware Basin. CEO Jay Lendrum said that many of the
big players, including ConocoPhillips and BHP Billiton
Ltd., have a presence there as well.
The Cline Shale, also described as Lower Wolfcamp, has
been making news as well. It spans roughly 113 km (70
miles) wide east to west and about 225 km (140 miles)
north to south, with a target zone for oil production that
is between 61 m and 152 m (200 ft and 500 ft) thick.
In 2013 the Cline Shale was estimated to hold 30 Bbbl
of recoverable oil. By early 2014, there were reports that
those estimates may have been overly optimistic. While the
amount of recoverable oil is still up for debate, most ana-
lysts believe that the massive formation still holds potential.
108
UNCONVENTIONALS:
PERMIAN
110
Just warming up
Unconventional activity has been a bit slow to become a
major presence in the Permian Basin. Until recently, the
Permian was dominated by conventional hydrocarbon
wells, which are drilled with rigs that are positioned verti-
cally. Unconventional hydrocarbons are found in shale
and other hard rock formations, and extracting the hydro-
carbons calls for the more complex and costly technique
of horizontal drilling.
Only in recent years in light of higher oil prices and the
prospect of boosting production have companies chosen
to commit to expensive horizontal drilling and hydraulic
fracturing to extract the plentiful hydrocarbons in the Per-
mian Basin. Now conventional and unconventional pro-
grams are working side by side there.
Expanding opportunities in the basin were among the
motivating factors behind Canary LLCs move into the
area through the recent acquisition of American Well-
head LLC, a wellhead sales and service company for the
Permian Basin and New
Mexico. Our national cus-
tomers wanted a location in
the Permian Basin, which
currently represents almost
25% of the U.S. oil field,
Canary CEO Dan Eberhart
said. The Permian is shifting
from vertical to horizontal
drilling, and that kind of
unconventional drilling is
right in our wheelhouse.
Unconventional activity in
the basin absolutely is on the
increase, Lendrum added.
Based on historical drilling
results, drilling efficiency
improvements and increased
drilling activity, our produc-
tion forecasts for the area
continue to rise, he said.
Jeff Stevens, president and
CEO of Western Refining
Inc., expressed similar senti-
ments after his El Paso, Texas-
based company announced a
new pipeline project in the
Permians Delaware Basin
April 17. Given the growth
of light crude oil and conden-
sate production in the
Delaware Basin, we believe
there is an opportunity to continue to expand and
enhance our logistics capabilities, he said.
Clearly, with additional companies announcing new
projects in the Permian Basin on a monthlyand some-
times weeklybasis, unconventional activity will be strong
in the basin for some time to come. n
Increasing frack efficiency
in the Wolfcamp Shale
Engineered completion design improves productivity.
Contributed by Schlumberger
T
he Wolfcamp Shale play in the Delaware Basin of West
Texas has high production potential and is liquids-
UNCONVENTIONALS:
PERMIAN
The petroleum-rich Permian Basin includes the Wolfcamp, Bone Spring and Cline plays, among
others. (Source: Devon Energy)
112
rich. The reservoir, which is characterized as unconven-
tional, consists of laminated layers with high clay content
and is deep and highly pressured. Operators in the area
are developing the play, mainly with horizontal wells.
Recent studies and evaluations of production logs indi-
cate that it is incorrect to assume that rock properties in
the horizontal wells are homogeneous, and not all stages
and/or perforation clusters contribute to production
equally, if at all. There is, therefore, a need to acquire
accurate log measurements in the lateral to evaluate the
properties of the heterogeneous formations and thus
enable an engineered completion workflow that will
deliver optimum production rates.
In the past, Clayton Williams Energy has had limited
success stimulating its horizontal wells in the Wolfcamp.
These issues can be partially attributed to the highly lami-
nated, heterogeneous nature of the formation. The equi-
distant geometrically spaced perforation program that is
typically selected when log data are not available or are
not considered in the design process can result in high
pressure differentials between perforation clusters within
a stage. The consequences can include ineffective stimula-
tion treatment, such as not placing the designed amount
of sand, screening out or skipping stages in parts of the
lateral that are landed in higher stressed rock. Clayton
Williams Energy experienced frequent instances of incom-
plete proppant placement and screenouts, which greatly
reduced well productivity and operational efficiency.
The company contracted Schlumberger to perform
openhole logging services in the lateral section of several
horizontal wells in its Wolfcamp acreage and then integrate
these measurements through an engineered staging and
perforating workflow to provide an optimized completion
design. Measurements of petrophysical and geomechanical
rock properties were acquired using ThruBit logging serv-
ices. This through-the-bit compact logging system pro-
vides a full measurement suite from a small-diameter quad-
or triple-combo tool string. The tool can withstand pres-
sures up to 15,000 psi and temperatures up to 177 C (350
F). With a diameter of only 2
1
8 in., the tool is slim enough to
pass through the center of most drillpipe, jars and collars
and out of the opening of a specialized drillbit.
The acquired log data were used as inputs for an engi-
neered staging and perforating design workflow. The
workflow was implemented using the Mangrove engi-
neered stimulation design in the Petrel platform, which
used the log measurements to locate fracture stages and
intelligently place perforation clusters within a given stage
in similarly stressed rock based on reservoir and comple-
tion quality. The use of log measurements in the lateral,
combined with the engineered completion workflow,
resulted in the first stimulation treatment being placed
100% as designed with no screenouts or skipped stages.
This first well showed a 39% increase in cumulative oil
production after 90 days compared to the best offset well
completed with the conventional geometric spacing of
fracture stages. Three wells with log measurements and
the engineered completion design delivered, on average,
a 103% increase in 90-day cumulative barrels of oil equiva-
lent compared to three geometric wells in the same area.
This significant improvement in oil produc-
tion indicates that more stages/perforation
clusters were contributing to production
thanks to increased reservoir contact.
Based on the success of the first wells,
Clayton Williams Energy used the logging
technique and engineered workflow to eval-
uate and design completions for 10 addi-
tional laterals. The workflow continued to
improve stimulation effectiveness and pro-
ductivity by increasing the percentage of
stimulated perforation clusters. A 28%
increase in designed sand volume was
pumped, and the operator also realized a
33% increase in successful stages where
more than 75% of the designed sand vol-
ume was pumped. In addition to improving
well productivity, the workflow benefited
operational efficiency, saving an estimated
average of 1.5 days per well on coiled-tubing
cleanout operations.
A comparison of the 90-day average of barrels of oil equivalent production
per lateral length, normalized to the engineered wells, is shown. (Source:
Schlumberger)
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THE APP
114
A
s a cableless seismic acquisition platform, INOVAs
Hawk autonomous nodal system allows companies to
deploy equipment across challenging, rugged terrains.
This technology supersedes cableless systems previously
developed by ION, one of which won the exploration
technology category of Hart Energys 2009 Meritorious
Awards for Engineering Innovation.
The Hawk system allows service providers to reduce their
HSE exposure with lightweight equipment that is conven-
ient to carry and that can decrease environmental impact.
With a small footprint, INOVAs cableless products are
environmentally conscious, ideal for areas where devel-
oped infrastructure such as highways, roads, cities, farms
or producing oil and gas fields are present or in areas
where steep cliffs, foothills and mountains might pose a
significant challenge for cable-based systems, said Dennis
Pavel, INOVAs strategic director of acquisition products.
The system does not require radio infrastructure such as
repeater towers and cross line radio connectivity and can
be easily integrated for use with existing acquisition sys-
tems. The technology includes Bluetooth and Wi-Fi for
local and long-range communication between the field
crews and equipment, which can improve operations
involving deployment, equipment status collection and
field data harvesting with minimal power consumption.
Constructed of aluminum alloy, Hawks housing protects
the ground station electronics from the rough handling of
seismic field crews while continuing to function in the
harshest terrains.
By employing one of two field tool optionsthe Connex
HarvestTool or Connex FieldToolcrews gain visibility into
spread quality and seismic data via Wi-Fi or Bluetooth with-
out retrieving stations from the field. Using these quality-
control (QC) tools, crews can check the hardware status of
the field stations, including their memory usage, battery
voltage, GPS performance and sensor operations in addi-
tion to gaining insight into geophysical performance by
monitoring ambient noise levels and collecting sample seis-
mic data.
A unique feature of the Hawk system is field station
support for a variety of sensor options. Each field station
unit can contain up to three analog channels supporting
any combination of 1C or 3C geophones and a digital
interface for INOVAs MEMS family of 1C and 3C digital
sensors. Separate field station units for use with analog
and digital sensors are not required, Pavel said.
When Tesla Exploration Ltd. was selected for the Willes-
den Green 3-D/3-C seismic acquisition project near Rocky
Mountain House in Alberta, Canada, the company recom-
mended the Hawk system to its client. The winter deploy-
ment covered 260 sq km (100 sq miles) and required a
system that could offer robust recording reliability in frigid
temperatures, rugged durability in cold field handling and
flexibility for crew operations. In addition, a helicopter
equipped with the Connex HarvestTool offered fly-by
spread QC to verify that stations were recording properly
and not being affected by weather or tampered with by
people or animals.
Even fully buried in snow, Hawk units maintained their
GPS lock and continuously recorded high-quality data,
according to the case study. The QC crew reported no
issues with Wi-Fi technology performance in the snow-cov-
ered terrain, and the efficient operation quickly dispelled
concerns about battery run time in the cold climate.
Despite the cold temperatures, batteries performed
according to specifications.
Mary Hogan, Associate Managing Editor
Autonomous nodal system enables
surveys across harsh terrain
Cableless land acquisition system can decrease HSE risk and improve efficiency.
industry
IMPACT
Hawk units maintain their GPS lock and continuously record
high-quality data, even when buried in snow. (Source: INOVA
Geophysical)
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T
he Advanced Energy Consortium (AEC) at the Bureau
of Economic Geology, University of Texas-Austin, was
formed with a vision: to facilitate precompetitive research
in micro- and nanotechnology materials and sensors that
have the potential to create a positive and disruptive
change in the recovery of oil and gas from new and exist-
ing reservoirs. And its gaining ground on that vision at
seemingly impossible speed.
Formed in 2008, the consortium has supported more
than 30 universities in its history, 20 of which are currently
receiving funding. Its not that were shrinking; its that
were more targeted, said Scott Tinker, director of the
consortium. Tinker and Associate Director Jay Kipper
have just completed a biannual all-projects review with
sponsors and cooperating universities. While the details of
these reviews are proprietary, the general direction of the
research shows great promise, and already some of the
technologies are moving toward actual field deployment.
Lab on a chip
As far-fetched as it sounds, this is now a reality. The AEC
has engineered a chip thats about 1 cu. mm and has
power, a sensor, storage, downloadability and a coating that
keeps it safe. All of these parts are interchangeable. This is
the thing we knew would take the longest and be the hard-
est, Tinker said. We have a little lab on a chip thats gotten
remarkably smaller than we thought it would be by now.
Its visible only with a magnifying glass, he added.
Whats the point of a lab on a chip? In the oil and gas
industry, something thats the size of a grain of sand could
come in quite handy in applications where operators actu-
ally use sand, like hydraulic fracturing. When we started in
2008, people were doing fracturing, but not to the extent
that theyre doing it today, Kipper said. Were building
these micro- and nanoscale sensors for applications that
are constantly changing and developing over time. There
are a lot of moving pieces. Its the science, and its the par-
ticular applications that the industry is calling for.
Other applications might include putting the sensors
into a reservoir thats undergoing waterflooding to see
where the water goes or deliver things into the reservoir to
enhance recovery. Right now we put a variety chemicals or
CO
2
into the reservoir for enhanced recovery, Tinker said.
116
tech
WATCH
Bringing nanotechnology
down to earth
The concept of nanomaterials may seem rather pie in the sky, but one
consortium is pushing for realistic applications.
AECs first-generation Smart
Sands modular integrated
microsystem is shown.
(Source: AEC)
Medical nanotechnology
T
he Advanced Energy Consortium (AEC) is developing
sensors and nanotechnology that are based on medical
nanotechnology. One of these is called a contrast agent.
According to Sean Murphy, a scientist with the AEC, a con-
trast agent is similar to an MRI and uses magnetic nanopar-
ticles plus a large source and receiver to monitor the
movement of a waterflood.
A second class of sensors is called nanomaterials sen-
sors. These resemble the cancer-specific binding mole-
cules being used in medicine, which can be heated to
burn the cancer cells without harming surrounding tis-
sues. The AEC is adapting this technology to free up oil
molecules more easily from the surrounding rock.
Another area being examined will be based on time-
release medicines. These nanosensors can be coated with
substances that predictably degrade over time to deliver
chemicals and tracers in the reservoir. n
Acknowledgment
This information comes from an interview that Sean Murphy and Jay
Kipper did with EarthSky.org.
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118
Maybe some of those could be
nano-sized to get in places where
other approaches cant and/or do
something when they get there
that other approaches dont.
Reservoir characterization is
another area of promise for
nano-sized particles. Already
nanobots are used in a variety
of applications, and according to
nanobot.info, advanced nanobots
will be able to sense and adapt to
environmental stimuli such as
heat, light, sounds, surface tex-
tures and chemicals; perform
complex calculations; move, com-
municate and work together; conduct molecular assembly;
and, to some extent, repair or even replicate themselves.
According to Kipper, some companies have talked about
using nanobots to essentially crawl around the reservoir
and bring back information. So far they report success at
the wellbore scale.
Theres talk about going further into the reservoir and
making some adjustments, he said. Were walking down
that path, and weve got some nice small devices that are
being designed to go out there. We would collect them
and interrogate them to find out what theyve seen.
Added Tinker, Another way to better characterize the
reservoir is to enhance what the existing tools can see.
Were working on putting things into the interwell space
that enhance what seismic and magnetics detect, to
enhance the near-wellbore environment but see farther
out than logs can see. That will definitely help with reser-
voir characterization.
Building that car
With six years of research behind it, the AEC is starting
the process of integrating what up to now have been sepa-
rate research thrusts. Tinker and Kipper use the example
of building a car. So far one team has been working on the
chassis while another team works on the engine.
Now were integrating all of these pieces together to
have an application that makes sense to our membership,
Kipper said. Were building that car as were going.
While the metaphor of transportation works for the
integration process, Tinker said that the idea of self-pro-
pelling nano-agents is kind of an urban legend. Its a
huge challenge of communication in the interwell space.
Nanotechnology in the future
Tinker said that the AEC members seem pretty happy
about the consortiums progress to date. However, our
member companies have to see us continue to move
toward application and get use out of this, he said. That
is why we are now moving into developing use cases.
He predicted that within five years the use of nanotech-
nology for reservoir characterization and EOR could be
fairly routine. But he doesnt anticipate turning off the
lights and locking the doors any time soon.
As we move into the application space, several compa-
nies are looking to join the AEC. My guess is that well
have some new members, and the consortium will con-
tinue to be strong, he said. The value proposition is one
of extracting more molecules economically. Mobility,
enhancing contrast of existing technologies, active sensing
in the reservoirthese have been our fundamental
research directions and continue to be our directions to
extract oil and gas more efficiently and economically.
What makes this exciting is that its a whole different space
in terms of researchers. Its chemists, physicists, mathe-
maticians, biologistsa whole different group of students.
Weve supported more than 400 students through the
program, and theyre getting employed in the industry.
They never would have been in the oil and gas business
without the AEC.
Added Kipper, Really, its the development of a whole
new scientific space. That in itself is exciting.
No longer is nanotechnology a solution looking for a
problem to solve. I think that over the years the AEC has
been able to show the problems that nanotechnology can
help us solve, he said. The question has been whether
its really feasible. What weve found is its not 100% feasi-
ble in every venue, but there truly are opportunities for
nanotechnology, and were developing down those paths
and coming up with specific applications that make eco-
nomic sense.
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LEFT: Nano-sized particles like Smart Sand can aid in reservoir characterization. The image
shows the first-generation Smart Sands protective casing. RIGHT: The AEC facilitates
research in micro- and nanotechnology materials and sensors that have the potential to
create change in the recovery of oil and gas.(Source: AEC)
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116-119 TechWatch-AUG_116-119 TechWatch-AUG 7/21/14 4:15 PM Page 119
I
n recent years the number of organizations that have
been subject to malicious cyberattacks has been on the
increase. Organizations as disparate as the Estonian gov-
ernment and the Japanese electronics giant Sony have all
had to cope with what is rapidly becoming the inevitable
cyberattack.
The high-profile nature of attacks such as these has
raised awareness levels around the world. In February
this year U.S. President Barack Obama made it clear
that cyberterrorism and threats against the countrys
energy suppliers were the biggest threats the country
faced.
Unsurprisingly, there has recently been a surge in
demand from companies across the energy sector for
indemnity against such attacks. However, according to a
recent report by Lloyds of London, many insurers are
now refusing to cover U.K. energy companies because in
their assessment, companies cyberdefenses are simply
inadequate when compared to the threat that exists.
No substitute for security
The challenge laid down by the insurers to the energy
companies is simple: Insurance is no substitute for security.
As one of the worlds leading defense contractors,
Lockheed Martin faces the challenge of cybersecurity on
a daily basis. As the developer of such iconic aircraft as
the F-117 Nighthawk and the new F-35 Lightning II, the
company is a high-profile target for cyberattackers of
various types.
It has learned, and continues to learn, the hard way
about what it takes to secure an operation from the
advanced persistent threat that surrounds it today.
Consequently, it is able to offer in turn cybersecurity
services to its customers in various markets, including
the energy sector.
Each day Lockheed Martin monitors, investigates,
learns and prevents attacks against its own global infra-
structure. This has led to a different way of thinking
when it comes to cyberattacks. It can recognize the steps
that would-be attackers need to make before they can
launch their assault, allowing it to mitigate an attack
before it happens.
Turning the tables
Traditional approaches to cyberdefense start from the
basic premise that to be successful, any attacker need only
to breach the defenses once, while the defender needs to
be successful every single time.
This mentality is ultimately defeatist in its outlook but,
more importantly, it isnt actually accurate. Turning the
tables on the traditional thinking about cyberdefense, the
Cyber Kill Chain, created by Lockheed Martin in 2009,
offers an alternative approach.
The Cyber Kill Chain allows a cyberattack to be turned
upside down by mapping an adversary attack into its com-
ponent stages, beginning with research into their target
(reconnaissance) through the development of an attack
mechanism (weaponization) on to the sending of an
email or link to a compromised website (delivery).
Lockheed Martin then considers how the malicious pay-
load exploits a vulnerability on the target system (exploita-
tion) through to installing the payload on the target
system (installation) before assessing how that software
is controlled (command and control) and finally looking
at how the adversary is able to go either steal proprietary
data or shut down equipment (actions on objectives).
The Cyber Kill Chain allows a shift in the balance of
power from the attacker to the defender, moving from a
position where as a defender companies are doomed to
fail to one where they are able to put in place barriers
across the various stages achieving defense in depth. As
defenders they need only to be successful at any one of
the stages to successfully stop an attack, while the
attacker has to get it right through all seven stages.
Energy industry-specific virus
But cyberdefense isnt simply an IT challenge; it also is
a challenge for operation technology (OT).
The Stuxnet worm was discovered in 2010 after a
number of investigations into OT malfunctions at a
number of industrial plants and factories. Stuxnet was
one of the first viruses designed to target those systems
that are responsible for the control of industrial
processes and operations. Where Stuxnet led, others
followed. For example, the Shamoon virus set out to
specifically target infrastructure in the energy industry,
successfully striking at least one major organization in
the sector. For obvious reasons companies were reluc-
120
digital
OIL FIELD
Preparing for the inevitable
Energy companies on the front line of the cyber war can turn the tables on cyberattacks.
Neil Logan, Lockheed Martin U.K.
120-121 DOF-AUG_120-121 DOF-AUG 7/21/14 4:15 PM Page 120
tant to acknowledge just who had been affected,
but the situation was clear: A new era of cyberat-
tacks was being entered.
As the operators of elements of critical national
infrastructure, todays energy companies find
themselves on the front line of the cyber war.
Whether state-sponsored cyber warfare, cyber-
terrorism or simply malicious or criminal behavior, the
impact that compromising an energy company can have
makes them a highly prized target.
Cultural divide
While IT-based security processes and systems will even-
tually direct day-to-day OT security operations, that is
not about to happen in the short term. Energy compa-
nies must look to address their security not just from an
IT perspective but also from the OT perspective. It is
crucial that the cultural divide that has existed between
OT and IT staff is bridgedand bridged quickly.
There are other ways energy companies can secure
their infrastructure. This could be by using Palisade, a
cybersecurity intelligence management product capable
of integrating with existing corporate security environ-
ments to deliver wide visibility of IT assets and critical
network infrastructure, or a cybersecurity managed serv-
ice offering such as Advanced Threat Monitoring. This
is where state-of-the-art hardware is combined with soft-
ware, advanced sensors and process innovation with the
expert tradecraft of analysts who identify and manage
high-confidence threat indicators.
But strengthening IT and OT are just two sides of the
triangle. Energy companies also must look to strengthen
the greatest cybersecurity challengethe human. Lock-
heed Martin has seen first-hand that modifying employee
behavior is a critical factor in preventing many compro-
mises of computing assets. Its own response to this has
been The I Campaign. Not only does it educate employ-
ees on risky behavior and individual responsibility, it is
able to measure improvements and make adjustments
throughout the program. It is certainly a plan that energy
businesses could follow.
Looking to the future, it is clear that the energy indus-
try will remain on the front line of the new cyber war.
The number of attacks will increase, and the insurance
industry is simply no longer willing to insure against the
inevitability. The challenge, therefore, is to seek to pro-
tect against the attack before it occurs.
121
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THE APP
Lockheed Martin helps
defend against cyberattacks by
recognizing the steps would-be
attackers need to make before
they can launch their assault.
(Source: Lockheed Martin)
120-121 DOF-AUG_120-121 DOF-AUG 7/21/14 4:15 PM Page 121
122
tech
TRENDS
Bearing assembly increases
safety, uptime on oil rigs
The Timken Sheave Pac bearing assembly is designed
to eliminate the need to regrease the traveling block
or crown block on oil rigs. In the past, maintenance per-
sonnel performed the task of relubricating these blocks
situated hundreds of feet above the rig platform. This
sealed-for-life sheave bearing assembly avoids the need
for that job, increasing safety for rig workers and reducing
expensive downtime, Timken said in a press release. The
Timken Sheave Pac is pregreased, preset and unitized and
was built to run an entire operating cycle between rebuilds
without the need for relubrication or additional mainte-
nance. The assembly contains the bearing cones, bearing
cup, triple-lip seals and grease and is easily interchange-
able with industry-standard bearing assemblies and seals.
timken.com/sheavepac
Smokeless combustor
reduces emissions, expenses
Aereon released a product line of enclosed combustors to
deliver regulatory compliant solutions for the upstream
industry. The Quad-O Design Enclosed Combustor
(QDEC) is a smokeless system offering quiet operation
with no visible flame, reducing emissions to comply with
NSS Subpart OOOO. The systems smokeless burner uses
flame-spreading technology to maximize the air-fuel mix-
ing, providing smokeless performance for gases even as
heavy as butane with as little as 2 oz/sq in. of supply pres-
sure. QDEC does not require electrical, steam or assist-gas
utilities to achieve smokeless performance, which reduces
capital, operational and maintenance expenses. With low
power consumption and an optional solar-powered igni-
tion panel with nine-day battery backup support, QDEC is
designed to be reliable even in remote installations. The
line offers a suite of optional equipment enabling the
product to meet varying company standards. QDEC instal-
lation is simple, which decreases the number of required
onsite personnel for deployment. aereon.com
Small GPS tracking device
provides service to new asset classes
Geoforces new device, the GT0, is the worlds smallest
industrial GPS asset tracking device that operates on a
global satellite network. Coupled with Geoforces web-
based software applications, it provides service to new
asset classes that could not be addressed with larger devices
found in the market. The GT0 has an omnidirectional
antenna, allowing placement in almost any orientation
on an asset. The product is completely sealed, providing
extreme durability and the smallest footprint of any device
in its class. It is an IP67-rated weatherproof device and has
an optional metal bezel for added protection. With an
expected five- to seven-year battery life, the tool is simple
to deploy. The devices have unique coding for mobile
scanning of product information, and communication
is 100% satellite-based for visibility in remote locations.
Applications for the GT0 include tanks, trailers, containers,
cargo units, conex containers, waste disposal bins and
more. geoforce.com
Cable helps clean up,
speed up wireline industry
EcoSeal from Camesa, a WireCo WorldGroup brand, is an
environmentally friendly wireline for the oil and gas indus-
try that eliminates the need for grease injection systems
and allows faster rigup time at the well site. The double-
seal technology features an inner sleeve and an outer
jacket, which reduce the need for additional equipment
and make a cleaner job site. With EcoSeal wireline, opera-
tors dont need additional grease pumps that inject grease
into traditional pressure control equipment. Flow tubes
and extended lubricators also can be eliminated, reducing
the operations footprint. The smooth technology allows
technicians to achieve higher running speeds without the
loss of pressure control, and the dual-polymer coating
helps eliminate common cable problems like birdcaging
and loose armor wires. camesaemc.com
Stabilized microwave systems enhance
broadband FPSO communications
The BTS and DVM systems from BATS Wireless focus
on alleviating the connectivity problems that frequently
affect operators using deepwater and ultradeepwater FPSO
vessels, floating storage and offloading units, and drillships.
BATS systems facilitate critical production communication
The Timken Sheave Pac bearing assembly eliminates the need
for maintenance personnel to perform the task of relubricating
the traveling block and crown block. (Source: Timken)
122-123 TechTrends-AUG_122-123 TechTrends-AUG 7/21/14 4:15 PM Page 122
and data capabilities between the assets and key support
vessels and structures typically used in offshore deploy-
ments. The companys stabilized microwave systems can be
integrated with almost any radio and are used to form a
high-speed, high-capacity wireless network that can offer
up to multigigabit connectivity speeds. Featuring connect
and track technology, the systems allow the dynamic con-
nection and continual movement of high-throughput
point-to-point and provide links that can automatically
adjust for movement, either due to environmental or
requirement changes. BATS systems provide a secure,
high-bandwidth, private FPSO communications and data
pipeline either back onshore, with vessels and platforms
infield, or both, without the high recurring costs typically
associated with competing satellite solutions. batswireless.com
Plug-in integrates data, analysis,
models from software
Elsevier launched Geofacets Connector for Schlumberger
Petrel and Studio, which integrates hundreds of thou-
sands of maps and associated papers with the Petrel plat-
forms analysis and workflow tools. Using the plug-in,
geoscientists can query a specific area or topic and, via a
single interface, combine georeferenced maps and scien-
tific data from Geofacets with 2-D and 3-D geological and
geophysical models created on the Petrel platform. This
integration provides a more detailed overview of a region
when investigating ways to develop and improve yields and
also enables users to validate proprietary data with exter-
nal insights from sources including the Geological Society
of America, the Geological Society of London, the Society
for Sedimentary Geology and the Society of Economic
Geologists. Geoscientists can therefore make quicker deci-
sions and assess risks relating to exploration projects. This
technology integration has the potential to improve the
efficiency of workflows and the effectiveness of research
earlier in the exploration process. elsevier.com/gfconnector
Flameless tank system reduces risk
of storing, separating volatile oil
EnviroVault Corp.s ThermoVault tank system provides
a safe alternative to the traditional firetube separation
method commonly in use in the production of volatile
crude. The ThermoVaults catalytic heaters use a flameless
radiant heat system safe for use in Class 1, Zone 1 haz-
ardous areas, making them suited for light crude oil sepa-
ration and storage. These heaters eliminate the potential
for the oil to catch fire. Light volatile crude presents many
challenges to infrastructure at all levels of production.
Upstream production and storage has challenges heating
and separating oil from water. Fire tubes with open flames
can be dangerous with highly flammable crude. The
ThermoVault also reduces space requirement on lease
sites because it eliminates the need for a heater treater
that must be 7.6 m (25 ft) away from the tank. The system
increases safety, mitigates environmental risks and is cost-
effective as it reduces reclamation costs, said EnviroVaults
general manager Mike Nielsen. envirovault.com
123
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THE APP
BATS systems facilitate communication and data capabilities
between assets and support vessels and other structures used
in offshore deployments. (Source: BATS Wireless)
ThermoVaults catalytic heaters use a flameless radiant heat
system for light crude oil separation and storage. (Source:
EnviroVault Corp.)
122-123 TechTrends-AUG_122-123 TechTrends-AUG 7/21/14 4:15 PM Page 123
I
ts been more than 40 years since first oil flowed at
Ekofisk in the Norwegian sector of the North Sea, and
in that time the energy industry has established itself as a
central component to the Norwegian economy. The
industry has grown considerably and now finds itself as a
leader in the development of the rapidly growing subsea
technology market sector.
According to Infield Systems in its recent Subsea Mar-
ket Watch 2014-2018, global subsea capex and subsea tree
installations are both anticipated to double in the next five
years, with the subsea market growing at a compound
annual growth rate of 6.72% from 2014 to 2018. In partic-
ular, Europe will become the largest region in terms of
subsea tree installations despite the fact that it will con-
tribute just 11% of subsea capex, the report said. This is
due to a lack of capital-intensive deepwater activity in the
Northwestern European Continental Shelf subregion,
with the majority of subsea tree installations tied to
smaller, more marginal accumulations in shallow waters,
according to the report. Statoil is expected to continue to
dominate the European subsea industry up to 2018.
Keeping up with global and local demand along with ris-
ing costs are just two of many challenges facing the indus-
try. Standardization is another.
New JIP seeks to standardize documentation
Standardization in all aspects of the subsea industry was a
key discussion topic at this years Underwater Technology
Conference in Bergen, Norway, mid-June. A popular
counterpoint to the discussion was the notion that stan-
dardization could stifle innovation. The documentation
process was tagged time and time again as one of the
greatest burdens in a project.
DNV GL Oil and Gas announced in May the launch
of a joint industry project (JIP) to standardize subsea
documentation. A typical subsea project can involve more
than 10,000 documents (with up to 80,000 in a complex
project) over a life cycle of 30 years, according to a com-
pany release.
To develop, maintain and verify the quality, security,
accuracy and availability of documentation, operators,
contractors and suppliers will often spend millions of dol-
lars on document management, technical review and
information management systems. Consequently, the lack
of standardization can lead to misunderstandings; a reduc-
tion in quality; and difficulty in handling approvals, distri-
bution and availability; the organization said in a release.
This further leads to increasing project lead times and
costs for both customers and suppliers.
There are multiple subsea projects, both in Norway and
elsewhere, that would benefit from an industry standard
for subsea documentation, the release said. As well as
improving documentation quality and assisting with on-
time delivery, a standard should save suppliers, contractors
and operators valuable engineering hours by reducing the
need to define and review technical documents.
The aim of this broad industry collaboration initiated
by DNV GL and the Norwegian Oil and Gas Association is
to develop a standardized set of subsea-system documents
for designing, approving, manufacturing, verifying, oper-
ating and maintaining equipment, explained the JIP proj-
ect manager Jarl S. Magnusson, project manager for DNV
GL Oil & Gas.
The collaboration originated from the 2010 KonKraft
m report, which sought options to increase hydrocarbon
recovery on the Norwegian Continental Shelf, according
to the company release. The proposal to standardize docu-
124
REGIONAL REPORT:
NORTH SEA
Standardization or innovation?
The subsea market in Norway is humming thanks to innovative designs, but many are
debating a change in tune as standardization is seen as a way to control costs.
Coast Centre Base located in gotnessouth
of Bergenis the largest supply base in the
region and one of the many businesses that
are part of NCE Subsea. (Photo by Jennifer
Presley)
124-127 RR-NorthSea-Presley_124-127 RR-NorthSea-Presley 7/21/14 4:15 PM Page 124
126
REGIONAL REPORT:
NORTH SEA
mentation arose from one of several proj-
ects developed by the Norwegian Oil and
Gas Association to drive standardization
within the subsea arena.
The outcome of this JIP will be a DNV
GL recommended practice (RP) aimed at
establishing industry guidelines and recom-
mendations required to document typical
subsea products and systems, with an associ-
ated minimum set of documentation.
Partners in the JIP include many of the
major subsea companies and organizations,
like Aker Subsea, OneSubsea and FMC
Technologies as well as operators like Sta-
toil Petroleum and Lundin Norway.
Collaborating to harvest
the Blue Acreage
The clustering of industry-focused busi-
nesses for collaboration and technology
development in a specific geographical
area is not a new strategy. For example, Cal-
ifornias Silicon Valley is one of the more
widely known clusters of like-minded peo-
ple coming together in a central area to col-
laborate and generate solutions for the
computing industry. In Norwaya country
with a coastline of more than 25,000 km
(15,534 miles)the strategy is being
applied to harvest what the countrys mar-
itime cluster calls the Blue Acreage.
The Norwegian Centers of Expertise
(NCE) program was established to enhance
innovation and globalization processes in
the countrys most dynamic and growth-ori-
ented clusters. The program accomplishes
its goals through support of long-term col-
laboration between industry, R&D and the
public sector.
Launched in 2006, there are 12 clusters
that have been selected as NCE projects
and two designated as Global Centers of
Expertise (GCE) projects. Innovation Nor-
way, along with the Research Council of
Norway and SIVA, jointly own and imple-
ment the government-funded program.
Focus areas of the NCE projects are var-
ied, ranging from food production to nano-
technology to systems engineering to
instrumentation. The two GCE projects
NODE and Blue Maritimeeach focus on
High-tech vessels, satellite communications
enable smarter, safer decisions
Technology is changing the way offshore companies and service
providers operate while at work in the North Sea.
By Blake McLane, EMC
T
odaysdeepwaterfield development vessels are designed with more
versatility and communications technology in mind than ever before and
are crafted to leverage the newest release of industry applications and tools.
The North Sea is one of the most advanced oil and gas markets as it
relates to leveraging and testing new technology. Vessels deployed there
are relying more on communications technology with the increased effi-
ciency of satellite connectivity solutions.
These optimized solutionscombined with operational applications and
drilling and exploration technologyenable smarter, safer decision-mak-
ing for offshore exploration and production.
Emerging Markets Communications (EMC), a global satellite communi-
cations (VSAT) company, is working with a major subsea construction com-
pany that specializes in project management for subsea umbilicals, risers
and flowlines in the North Sea. The companys latest vessel has been out-
fitted with new features that enhance the onboard safety for its 200-mem-
ber crew.
The VSAT connectivity that EMC provides will be available to the com-
pany and all of its partners providing services on the vessel. The reliabil-
ity of the communications is critical during the pipeline-laying process.
Lapse in service could cause safety hazards and misplacement of pipe
under the ocean.
Based on this proprietary optimization and efficiency technology, EMC
is able to deliver high-definition (HD) video services for real-time opera-
tions and enhanced HSE (with better quality video delivered in real time).
Traditionally, this was not possible because the VSAT bandwidth to
support HD video was not cost-efficient and did not meet the return-on-
investment requirements. But with EMCs Noise Reduction System and con-
figuration this technology converts more megabytes per megahertz from
the satellite to the remote location.
In addition to the safety and production benefits, optimized bandwidth
solutions also impact onboard crew morale because they are able to use
the Internet in the same way they use it onshorefor social media, Skype
and Netflix. Cellphone calls and Voice over Internet Protocol are included
in the solution and are delivered in a model that is commercially accepted
by both the operations and the crew members.
These new developments in communications technology are changing
the way that offshore companies and service providers operate at sea. Ves-
sels, rigs and platforms both fixed and mobilehave more options in the
utilization satellite connectivity for operations, safety and onboard crew. n
127
different offshore efforts. Located along the countrys
southern coast in Kristiansand, NODE represents local
companies that deliver offshore and drilling engineering
solutions. The Blue Maritime cluster is on the west coast of
Norway in Mre and comprises designers, builders and
operators of vessels.
In the Bergen areaan area long known as a center
of subsea developmentorganizations that provide prod-
ucts or services to the subsea industry are clustered under
the banner of NCE Subsea. The cluster, led by CEO Owe
Hagesther, has partnered with subsea industry leaders
like Aker Solutions, FMC Technologies, OneSubsea and
Statoil and more than 140 businesses, R&D centers and
educational institutions to strengthen and promote the
Norwegian subsea industry.
We are working to increase the revenue of our mem-
ber companies by two things, Hagesther told E&P.
One is by trying to help them, especially the smaller and
medium-range companies, create a marketplace for their
products in foreign markets. Very often, these companies
are too small to have the necessary market intelligence
and relations on their own. By bringing the Norwegian
subsea industry into foreign marketslike Brazil, Gulf of
Mexico, Southeast Asia and Africathey can gain from all
the knowledge and solutions developed in the North Sea.
The other is to facilitate and ensure more R&D devel-
opment of products and service from the industry. The
subsea industry is quite young; there are a lot of things still
left undone. We try to help and facilitate the development
of products that the industry seems to really need.
To do this, the cluster members work together to pro-
vide the environment necessary for product development.
We think that for the large companies to be competitive
and to be able to deliver, they need the smaller companies
as suppliers, he said. And the smaller companies need
the larger companies as a market and also [to have access
to] this huge environment to help them be
efficient in their product development.
For Hagesther, he sees NCE Subsea
playing a role in moving the standardiza-
tion conversation forward to the next step.
I personally think that the most impor-
tant players when it comes to standardiza-
tion are the big operators. NCE Subsea in a
way can help by bringing together all the
members to discuss ideas about which stan-
dards to choose, he said. At the Underwa-
ter Technology Conference this year, there
was much discussion about standardization
and innovation because if you standardize
too much, you can prevent innovation. We
can help by bringing up all the good arguments on which
level we should standardize in the industry.
A major concern among many in the industry is the
increasing cost of doing business. Hagesther sees this as
the biggest challenge overall, but there are ways it can be
brought down.
The subsea industry is not a very mature industry. We
have a lot to learn from more mature industries when it
comes to running processes in a cost-efficient way, the
methodology used, how they work together and standardi-
zation, he said. All of these things together are the biggest
challenges for the subsea industry today. Innovation is quite
high; there are a lot of clever people out there coming up
with new ideas, new technology solutions. I think that part
is good, but cost is the biggest challenge.
Vessels docked at the Coast Centre Base wait to take on supplies bound for one
of the six fieldsStatfjord, Gullfaks, Veslefrikk, Troll, Huldra or Kvitebjrnin the
Tampen area of the North Sea. (Photo by Jennifer Presley)
A subsea frame awaits its next destination while sitting on the dock
at OneSubseas facility in Horsy. (Photo by Jennifer Presley)
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124-127 RR-NorthSea-Presley_Layout 1 7/23/14 11:07 AM Page 127
O
ne of the highest profile projects currently under-
way is operator Statoils Johan Sverdrup develop-
ment, for which Kvaerner recently clinched a letter of
intent (LoI) to build the fields first two steel jackets.
However, with the operator now moving into the con-
struction phase for what is the largest project on the
Norwegian Continental Shelf (NCS) for 40 years and
one of the biggest ever (behind Ekofisk and Statfjord),
there are still some unanswered questions over the
development. Kvaerner signed its LoI with the state-
owned major to build the first two of four planned steel
jackets for the Sverdrup field center in June in a deal
worth approximately $486 million.
While another two steel jackets are still needed for the
planned field hub, a political question mark remains to
be settled over whether the entire Utsira High area,
including Sverdrup, should use power from shore
something that the Norwegian government initially
demanded.
Massive long-term project
The project itself will become Norways lat-
est major offshore field center to exploit
recoverable reserves estimated at between
1.8 Bboe and 2.9 Bboe (with the upper
figure recently reduced from 3.6 Bboe).
Although the onstream date also was
deferred a year to 2019, Johan Sverdrup
remains a massive long-term project with
production expected to extend to 2050.
Over the past year the field partners have worked to
understand this giant discovery, made in 2010 via the
16/2-6 well on the Avaldsnes prospect by Lundin Petro-
leum in Production License 501, followed by Statoils
2011 Aldous discovery in neighbouring PL 265. They
were later confirmed as being the same field located in a
water depth of 140 m (460 ft). In 2012 the decision was
made to unitize and rename it after the 19th century
Norwegian lawyer and political pioneer Johan Sverdrup,
the liberal Prime Minister of Norway from 1884 to 1889.
Johan Sverdrup spans three licensesPL265, PL501
and PL502and encompasses 200 sq km (77 sq miles).
Statoil and its partners Petoro (representing the Norwe-
gian state), Lundin Petroleum, Maersk Oil and Det
norske are aiming to finalize a plan for development
and operation (PDO) by early 2015.
The first phase development is planned to produce
between 315,000 boe/d and 380,000 boe/d via up to 50
production and injection wells in the Utsira High area
of the Norwegian North Sea. The initial phase is based
on a four-platform, bridge-linked field center with sub-
sea installations. Surface facilities will comprise a well-
head and drilling platform in addition to separating
128
REGIONAL REPORT:
NORTH SEA
John Bradbury, Contributing Editor
Norwegian project
conveyor belt rolls on
Despite some industry concern over certain aspects of Norways petroleum
tax regime and rising project costs causing spending cutbacks, development
activity in its offshore sector remains at a healthy level.
Kvaerner has signed an LoI with Statoil for its
yard at Verdal in Norway to deliver two steel
jackets for the operators Johan Sverdrup
Field, one for the planned riser platform and
the other for the drilling platform, in 2017 and
2018, respectively. (Source: Kvaerner)
128-131 RR-NorthSea-Bradbury_128-131 RR-NorthSea-Bradbury 7/21/14 4:15 PM Page 128
129
riser, process and living quarters platforms supported by
steel jackets.
Sverdrup also features two export lines: a 274-km
(171-mile), 36-in. oil export line to the Mongstad termi-
nal and a 165-km (103-mile), 18-in. gas export line to
the Karsto gas terminal. Total forecast capex is $16.75
billion to $20 billion.
Bumpy progress on NCS
Elsewhere on the NCS there also has been other less-
than-smooth progress. A research program to pioneer
subsea gas processing for a future phase of the deepwa-
ter Ormen Lange Field was dropped in April because
the field partners felt it was uneconomic.
Work at a test plant in Nyhamna where a 14-m (46-ft)
deep test pit was created to test subsea compressors was
halted. Field operator Shell said the project was not
economic based on the required capital investment
put at $410 millionand the expected production lev-
els. Significant new information both on reservoir
behavior and technology developments will become
available in the next few years and provide [the] basis
to reevaluate new options, said Odin Estensen, chair-
man of Shells Ormen Lange management committee,
at the time.
Johan Castberg doubts
Another cost casualty is the Johan Castberg project,
comprising the Skrugard and Havis fields which lie 240
km (150 miles) northwest of Hammerfest in the Norwe-
gian Barents Sea. This is another project operated by
Statoil, and the company wants to tap an estimated 400
MMbbl to 600 MMbbl of oil, with the crude to flow via a
proposed 250-km (150-mile) pipeline to a new oil termi-
nal at Veidnes in northern Norway.
In 2012 Sevan Marine received a contract to study the
use of its circular-hulled design on the field, while the
field partners also agreed on the new oil pipeline and
reception terminal at Veidnes. Aker Solutions also won
an early field concept study for Castberg.
However, at present the projects schedule is uncer-
tain. Citing a cut in the level of allowances within the
Norwegian petroleum tax system, ystein Michelsen,
Statoils executive vice president for Norwegian develop-
ment and production, said in May that the tax changes
had made future projects, particularly marginal fields
that require new infrastructure, less attractive.
The operator also has confirmed that a year-long five-
well exploration campaign at multiple reservoir depths
has been disappointing, with fewer new oil resources
proven in the Castberg area than expected.
Tax uncertainty
Michelsen also said there was uncertainty over the level of
state tax support for energy infrastructure projects, plac-
ing a further question mark over Castbergs viability. Origi-
nally Statoil and its partners Eni and Petoro had planned
to select a concept for the project during 2013, deliver a
PDO this year and start production by 2018.
Wood Mackenzie recently examined the project and
suggested it could still be viable after evaluating three sep-
arate development scenarios. One was the original con-
cept, designed to accommodate up to 1 Bbbl of reserves
using a semisubmersible platform, up to 38 development
wells and the Veidnes oil export pipeline.
Wood Mackenzies study then highlighted what it said
was a lower cost option using a lower specification semi-
submersible production platform with approximately 30
development wells. The number of subsea templates was
cut from 16 to 12.
Finally, it modeled an FPSO-based development with
offshore loading instead of the oil export line. Offload-
ing offshore would remove the need for the expensive
pipeline and onshore terminal development but would
require export by specialist tankers. A semisub with
offloading capabilities could also be used, but analogue
developments globally suggest an FPSO [unit] could be
preferred in this scenario given the requirement for stor-
age, said the consultancy.
Marginal economics
Given the marginal economics of Johan Castberg, it is
understood the partners are lobbying the government for
a tax break, Wood Mackenzie went on in its report. This
could be similar to the incentive granted to the Snhvit
development, which allowed faster depreciation over
three years instead of the standard six.
Wood Mackenzie suggests the FPSO development is the
most likely Castberg scenario. However, future explo-
ration success and/or fiscal incentives could promote the
viability of a pipeline development, said James Webb,
Wood Mackenzies European upstream analyst.
Most recently, Statoil signaled that it would continue to
evaluate options for Castberg until the summer of 2015,
focusing on maturing the FPSO-based solution while also
continuing to evaluate the semisub option in parallel.
More effort will go into further evaluating the financial
basis for an oil terminal at Veidnes and the export line
against offshore oil loading, and further cost savings are to
be sought while the nearby Drivis oil discovery will also be
incorporated, it said. Statoil also added in the same press
statement that government support practices for this type
of infrastructure also remain unclear.
REGIONAL REPORT
NORTH SEA
130
Pending project queue
Despite the relatively downbeat atmosphere on Johan
Castberg, which has tended to dominate the news head-
lines, there are several other major new Norwegian fields
still going ahead.
The frontier Aasta Hansteen deepwater project in the
Barents Sea is progressing well, with the pioneering spar
design to be the first ever fitted with a condensate stor-
age tank. Also featuring the 480-km (300-km) Polarled
gas export pipeline to Nyhamna, the project to exploit
the Luva Field is a typical pioneering project for Statoil.
It will sit in 1,300 m (4,264 ft) of water, use steel catenary
risers and cost an estimated $5.19 billion.
The Lundin Petroleum-operated Edvard Grieg develop-
ment, meanwhile, comprises a cluster of discoveries,
including the 1997 Luno find and the 2011 Tellus discov-
ery. Investment is forecast at $4.13 billion to provide a
fixed platform to tap 186 MMboe of recoverable reserves
from the field, which is scheduled to start production in
late 2015. This will be the first major project operated by
the Swedish company on the Norwegian Shelf, although
not the first.
A steel jacket is under construction at the Kvaerner
Verdal yard, while Kvaerner Stord is building the 20,800-
mt topsides for the platform after a FEED study carried
out by Aker Solutions. Development of Luno in PL338 is
based on 15 production wells, according to the PDO sub-
mitted to the Norwegian Ministry for Petroleum and
Energy by Lundin.
Fixed platform trend
Due onstream in 2017 is the Gina Krog project (formerly
known as Dagny), which is planned for development via
another fixed platform, an increasingly prevalent trend
once more on the NCS.
It will produce an estimated 225 MMboe of recoverable
reserves16.6 Bcm (586 Bcf) of gas and 73 MMbbl of
condensate. Gas will be exported to the Sleipner A plat-
form 30 km (18.75 miles) away, with development
approval granted in May last year.
REGIONAL REPORT:
NORTH SEA
Heerema is building the 16,500-mt jacket, and South
Koreas DSME is building the 17,500 mt of topsides for
the Gina Krog platform.
Another first-time operator on the NCS will be Det
norske, with its development of the Ivar Aasen project.
This will produce the Hanz and West Cable fields via
another fixed platform, for which Wood Group Mus-
tang won detailed engineering work in February 2013.
Singapores Sembcorp Marine is building the 13,700-mt
platform topsides, while Italys Saipem is building the
steel jacket.
Ivar Aasen will produce an estimated 143 MMboe,
with capex forecast at $4.5 billion and the field due
onstream late in 2016. Oil production will be exported
10 km (6.2 miles) for final processing at the Edvard
Grieg platform, which will also supply electrical power
for Aasen via seabed cables.
Martin Linge
Total is to operate another fixed platform offshore Nor-
way, developing its Martin Linge Field in the northern
North Sea. Discovered some 150 km (93 miles) west of
Kollsnes, it will cost an estimated $4.5 billion to exploit
189 MMboe of recoverable reserves.
Due onstream in the fourth quarter of 2016, just four
years after development approval, Martin Linge will pro-
duce the field via the fixed platform with the liquids
produced and stored in a floating storage unit for
offloading. Kvaerner is building the platform jacket,
while Technip and Samsung are constructing the
25,000-mt platform topsides comprising process,
utilities and living quarters.
In the short term, first oil will flow later this year from
the BG Group-operated Knarr Oil Field. Discovered in
2008 and formerly known as Jordbaer (Strawberry), Knarr
received development
approval in June 2011. Esti-
mated to cost around $2 bil-
lion to produce around 80
MMboe of recoverable
reserves in total, the project
will use a newbuild floating
production system supplied
by Teekay.
Also due onstream later this year is the relatively small
Brynhild development, Lundins first operated Norwegian
development, which will exploit 80 MMboe of recoverable
reserves via a two-well tieback to the Haewene Brim FPSO
vessel stationed on the Pierce Field on the U.K. side of
the border and operated by Bluewater on behalf of Shell.
Lundin says Brynhild should achieve production of 50,000
boe/d by 2015.
Expenditure curve rising
With the above queue of projects at varying stages of
development, Wood Mackenzies view of the capex curve
on the NCS is that it will continue to rise.
In real terms, it estimates capex, excluding decommis-
sioning costs, to be $130 billion on Norwegian fields over
the next five years. This is a 19% increase on the $109 bil-
lion spent during the last five-year period, it told E&P.
The spending cutbacks by some operators offshore
Norway have not apparently yet dampened the pace of
exploration, with a total of 33 wells drilled in the first six
months of this yearfive more than in the same period
last year.
A total of 23 exploration and 10 appraisal wells were
spudded, with 13 discoveries made. In the North Sea,
seven small finds were made close to existing fields, three
were made in the Norwegian Sea and another three in the
Barents Sea.
In the Norwegian Sea the most significant was southwest
of the Njord Field, where VNG Norges 6406/12-3 S Pil
well discovered 226 m (741 ft) of pay comprising a 135-m
(442.8-ft) oil column with good reservoir flow. According
to the Norwegian Petroleum Directorate, Pils recoverable
reserves are put at 37 MMbbl to 132 MMbbl of oil and 2
Bcm to 6 Bcm (70 Bcf to 212 Bcf) of gas, making it the
largest NCS discovery so far this year.
DOWNLOAD
THE APP
131
The Johan Sverdrup field
center is planned to eventu-
ally feature four bridge-linked
fixed platforms and will be
one of the largest-ever proj-
ects offshore Norway. (Source:
Det norske)
AFRICA
Total boosts production at Angola block
Total, operator of Block 17 in Angola, started up CLOV,
a major deep offshore development located 140 km (87
miles) offshore Luanda, Angola, that will contribute to
increasing Block 17 production to 700 Mbbl/d. With a pro-
duction capacity of 160 Mbbl/d, CLOV will develop proven
and probable reserves of more than 500 MMbbl, Total said
in a press release. After Girassol, Dalia and Pazflor, CLOV is
the fourth FPSO unit on Block 17. With the additional pro-
duction from CLOV, Block 17 will become Totals most pro-
lific production site, the release said.
Statoil discovers gas offshore Tanzania
Statoil and coventurer ExxonMobil discovered an addi-
tional 57 Bcm to 85 Bcm (2 Tcf to 3 Tcf) of natural gas in
place in the Piri-1 well in Block 2 offshore Tanzania. The
discovery is the companies sixth discovery and the fifth
high-impact discovery in Block 2, Statoil said in a news
release. This discovery brings the total of in-place volumes
in Block 2 up to about 566 Bcm (20 Tcf). The new gas dis-
covery was made in the same Lower Cretaceous sandstones
as the gas discovery in the Zafarani-1 well drilled in 2012.
ASIA-PACIFIC
Mubadala confirms Malaysia gas discoveries
Appraisal drilling and testing has confirmed the Pegaga
discovery in Block SK320 offshore Malaysia as a substantial
gas find with significant commercial potential, Mubadala
Petroleum said in a news release. Another discovery, Sirih-
1, also has been confirmed from the 2013-2014 explo-
ration drilling program that has targeted a series of
carbonate pinnacles within Block SK320. The Pegaga-2
appraisal well confirmed an 850-m (2,789-ft) gas column.
The Sirih-1 well penetrated a 293-m (961-ft) gas column.
Woodside discovers gas at Toro well
Woodside reported that the Toro-1 exploration well in
permit WA-430-P has intersected about 150 m (492 ft) of
gross gas and 65 m (213 ft) of net gas within the Munga-
roo Formation target, according to a press release. Follow-
ing drilling, wireline logging has been conducted and
confirmed the presence of a gas column through pressure
measurements and gas sampling. The well will now be
plugged and abandoned as planned, the company said.
Toro is located in Western Australias Exmouth Sub-Basin
and is within 22 km (14 miles) of Woodsides existing Rag-
nar-1A discovery.
EUROPE
Faroe makes discovery on Bue prospect
Faroes Bue sidetrack well (6406/12-3 A) in the Norwegian
Sea encountered an 18-m (59-ft) hydrocarbon column in
reservoir rocks of variable quality. The well was drilled to a
depth of 3,656.5 m (11,996 ft) below sea level 2.1 km (1.3
miles) northeast of the Pil discovery well 6406/12-3 S. Pres-
sure data indicate no communication between the Pil and
Bue discoveries, and Bue has proven a separate accumula-
tion of hydrocarbons. An extensive data acquisition pro-
gram was carried out including a fluid sample, and the
operators preliminary estimate of the gross size of the
Bue discovery is between 6 MMboe and 25 MMboe.
CGG conducts southeast Barents Sea survey
CGGs Robertson Geolab is performing a multiclient sur-
face geochemistry (shallow core) survey to detect seafloor
seepages of hydrocarbons in the southeast Barents Sea.
The survey covers all the blocks in this region that have
been recently proposed by the Norwegian Petroleum
Directorate as well as sampling of outlying sub-areas where
EPmag.com
READ MORE ONLINE
For additional
information on
these projects
and other global
developments:
132
international
HIGHLIGHTS
Statoil and ExxonMobil made their fifth high-impact discovery in
Block 2 offshore Tanzania. (Source: Statoil)
132-135 Highlights-AUG_132-135 Highlights-AUG 7/21/14 4:16 PM Page 132
hydrocarbon seepages are suggested to be present by
methods including satellite image analysis. The goal of the
survey is to detect active petroleum systems in the area tar-
geting both larger and smaller structures of interest.
GULF OF MEXICO
GulfSlope gains 21 GoM leases
GulfSlope Energy has received notice of award and has
completed all requirements for 21 offshore lease blocks
for which it was the high bidder at Offshore Lease Sale
231 in the central Gulf of Mexico (GoM) conducted by
the Bureau of Ocean Energy Management. With the con-
clusion of the lease award process, GulfSlope controls
98,941 acres covering 17 prospects previously identified by
the company. The blocks are located on the outer shelf
and upper slope of the GoM in water depths of less than
305 m (1,000 ft).
MIDDLE EAST
MOL finds oil in Pakistan
MOLs Ghauri joint venture (JV) has made a significant oil
discovery in the Ghauri X-1 well located in the Punjab
province of Pakistan, MOL said. The company said the
potential for the Ghauri Block could be significant but
that it was too early to give a forecast for the whole block.
The JV is made up of Mari Petroleum Co. with 35% work-
ing interest as operator, Pakistan Petroleum Ltd. with 35%
and MOL with 30%.
Qatar unveils $10.6 billion Bul Hanine plan
Qatar Petroleum (QP) has announced plans to invest
about $10.6 billion to redevelop the Bul Hanine off-
shore oil field located about 120 km (75 miles) to the
east of the Qatari coastline, according to a news release.
The project is currently at the pre-FEED stage. It is
designed to prolong the fields life by countering its pro-
duction decline and doubling its current oil production
rate, the release said. Major reservoir and fieldwide stud-
ies have been undertaken to reassess the reserves and
the long-term production prospects for each field, the
release said.
RUSSIA CIS
Roxi makes discovery at Kazakhstan BNG asset
Roxi Petroleum Plc made a discovery at its flagship BNG
asset in Kazakhstan. Well A5, the first deep well in the con-
tract area, detected oil and gas shows at a depth of 4,332
m (14,213 ft). After the completion of cleanup work to
deal with the oil and gas shows encountered, core samples
will be taken to determine the oil-bearing horizon. The
BNG contract area is located in the west of Kazakhstan 40
km (25 miles) southeast of Tengiz on the edge of Mangis-
tau Oblast.
Lundin sells assets in Russias Komi region
Lundin Petroleum AB has entered into an agreement
with Arawak Energy Russia BV to sell Lundins entire
interests in the Sotchemyu-Talyu and the North Irael fields
in the Komi Region of Russia. Lundin holds a 50% inter-
est in each of the two fields; Arawak holds the remaining
50% interest and acts as operator. Lundin reported aggre-
gate net reserves of 6.1 MMboe from the two fields as of
Dec. 31, 2013. Net production for the first half of 2014 is
estimated at 2,150 boe/d.
SOUTH AMERICA
GeoPark discovers new oil field in Chile
GeoPark Ltd. reported the discovery of a new oil field in
Chile, according to a company press release. Primavera
Sur 1 well marks the first discovery of an oil field on the
newly acquired Campanario Block in Tierra del Fuego,
Chile. GeoPark operates and has a 50% working interest
in the Campanario Block in partnership with Empresa
Nacional de Petroleo de Chile. GeoPark successfully
drilled and completed the Primavera Sur 1 well to a total
depth of 2,446 m (8,025 ft). A test conducted in the Tob-
ifera Formation resulted in a production rate of about 215
gross bbl/d of oil of 39.9API. Further production testing
will be required to determine stabilized flow rates and the
extent of the reservoir.
134
DOWNLOAD
THE APP
A survey from CGGs Robertson Geolab covers all the blocks in
the southeast Barents Sea recently proposed by the Norwegian
Petroleum Directorate. (Source: CGG)
136
on the
MOVE
PEOPLE
Borets named Keith
Russell (top left)
president of Borets
U.S., Jeremie Alley
(top right) global marketing
manager and Mark Wynot
(lower left) vice president of
operations.
Tony Durrant became CEO of Premier
Oil.
Swift Worldwide Resources
has added to its management
team with the appointment
of Janette Marx (left) as
COO and Brian Coffman as global
operations director and the promotion
of Amber Polk to business services and
safety manager for North America.
Gulfsands Petroleum selected Ian Con-
way as executive director of the firm.
Pat OBryan will become president of
Fidelity Exploration & Production Co.,
a wholly owned subsidiary of MDU
Resources Group Inc. Dennis Zander
will take on the role of vice president of
drilling and completions for Fidelity.
Occidental Petroleum Corp. named
Robert Peterson president of its wholly
owned subsidiary Occidental Chemical
Corp.
The Research Partnership to
Secure Energy for America
has chosen James M. Pappas,
P.E., (left) to fill the position
of acting president.
BW Group appointed Carsten
Mortensen as CEO.
Gerry Gutierrez has been named to
the new position of group vice presi-
dent of telecommunications systems
integration for Rignet Inc.
BlueTech Research added
Marcus Oliver Gay (right) to
its team as senior director of
research and professional
services.
Zachary Grichor has joined the corpo-
rate sales team of Circulation Solutions
LLC in the drilling fluids division.
Tekmar Energy has selected
Dr. Terry Sheldrake (left) as
nonexecutive technical direc-
tor and Charlie Sullivan as
technical sales manager.
Edward Craner (right) has
taken on the role of senior
vice president of strategy and
marketing for Holt Cat.
Layne Christensen Co. has appointed
David A.B. Brown, the nonexecutive
chairman of the board, to serve in the
additional capacities of president and
CEO.
Jean-Luc Lalo joined Ceonas advisory
committee.
Randi Martinsen (left) has
assumed the presidency of
the American Association of
Petroleum Geologists.
Leslie Shockley Beyer (right)
will serve as president of the
Petroleum Equipment Sup-
pliers Association.
Edison Investment Research
hired Peter Lynch (left) as a
U.K. oil and gas analyst.
Wood Group Intetech has
chosen Sami Halfawi (right)
to be its Middle East regional
manager.
IDC Energy Insights hired Chris Niven
as research director for oil and gas.
David Phillips has taken on the role of
head of industry and investor relations
for Aker Solutions.
Greg Alvarado joined Mobideo as sen-
ior vice president for process industries.
Questerre appointed Earl Hickok to
the board of directors.
Greenes Energy Group LLC
appointed Terry Hatcher
(right) vice president of
human resources.
Former Eni CEO Paolo Scaroni
has become deputy chairman of
Rothschild.
TransAtlantic Petroleum made Harold
Lee Muncy vice president of geo-
sciences. The board expects to appoint
Matthew W. McCann as general coun-
sel and corporate secretary.
FTS International named Ken Kenner
vice president of organizational learn-
ing and development.
Strike Energy Ltd. selected Jody Rowe
and Brendan Ostwald to be nonexecu-
tive directors.
Mark Hayes (right) became
general manager of ProSeps
manufacturing division.
COMPANIES
Element Materials Technology is com-
pleting an expansion on its laboratory
in Hitchin, U.K. The company is relo-
cating all pressure testing installations
to a new purpose-fitted facility with an
area of 1,115 sq m (12,000 sq ft). The
laboratory specializes in the testing and
evaluation of elastomers, thermoplas-
tics and composites.
Clariant will establish a research center
in Shanghai, China, that is expected to
136-139 Onthemove-AUG_136-139 Onthemove-AUG 7/21/14 4:16 PM Page 136
136-139 Onthemove-AUG_Onthemove 7/22/14 12:16 PM Page 137
ADVERTISER INDEX
ABB Inc. Measurement Products . . . . . . . . . .18
Aker Solutions . . . . . . . . . . . . . . . . . . . . . . . .55
American Jereh International Corporation . 21
Baker Hughes Incorporated . . . . . . . . . . . IFC
Bristow Group . . . . . . . . . . . . . . . . . . . . . . . .99
Cameron . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Canary . . . . . . . . . . . . . . . . . . . . . . . . . . . . .101
CGG . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Clover Tool Co. . . . . . . . . . . . . . . . . . . . . . . .95
Cudd Energy Services . . . . . . . . . . . . . . . . . 53
D&L Oil Tools . . . . . . . . . . . . . . . . . . . . . . . 117
DNV GL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
DOF Subsea . . . . . . . . . . . . . . . . . . . . . . . . . .57
Dragon Products, Ltd. . . . . . . . . . . . . . . . . . 17
E&P . . . . .2-3,48-49, 59-62, 70, 74, 86, 130, 139
Fike Corporation . . . . . . . . . . . . . . . . . . . . . .35
Flotek Industries . . . . . . . . . . . . . . . . . . . . . 109
FMC Technologies . . . . . . . . . . . . . . . . . . . . 91
Forum Energy Technologies . . . . . . . . . . . . 97
Gardner Denver (GARD) . . . . . . . . . . . . . . .33
Global Geophysical Services, Inc. . . . . . . . 71
Great Wall Drilling Company . . . . . . . . . . . 41
Henry Repeating Arms Company . . . . . . . .47
Intellian . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43
IPAA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 133
Key Energy . . . . . . . . . . . . . . . . . . . . . . . . .103
Magnum Oil Tools International . . . . . . . . . 75
Master Flo Valve Inc. . . . . . . . . . . . . . . . . . .115
Mechanix Wear . . . . . . . . . . . . . . . . . . . . . . . 37
MicroSeismic . . . . . . . . . . . . . . . . . . . . . . . .111
Momentive . . . . . . . . . . . . . . . . . . . . . . . . . . 51
Nabors Completion
& Production Services Co. . . . . . . . . . . . . .81
NAPE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .135
Newpark Drilling Fluids . . . . . . . . . . . . . . . 24
Nine Energy Service . . . . . . . . . . . . . . . . . . 87
NOV Fiber Glass Systems . . . . . . . . . . . . . . .11
OEC Pioneers . . . . . . . . . . . . . . . . . . . . . . .137
Oilfield Helping Hands . . . . . . . . . . . . . . . .119
OneSubsea . . . . . . . . . . . . . . . . . . . . . . . . . . .26
PBIOS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .80
ProTechnics . . . . . . . . . . . . . . . . . . . . . . . . . . 89
QTEC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .79
Rainbow Ceramics . . . . . . . . . . . . . . . . . . . .85
Roxar Flow Measurement . . . . . . . . . . . . . . .93
Saint-Gobain . . . . . . . . . . . . . . . . . . . . . . . . .88
Schlumberger . . . . . . . . . . . . . . . . . . . .BC, 4, 5
Scott Safety . . . . . . . . . . . . . . . . . . . . . . . . . .45
Select Energy Services . . . . . . . . . . . . . . .113
Shores Lift Solutions,
a Schlumberger Company . . . . . . . . . . . .106
Society of Exploration Geophysicists . . . 125
Summit Casing Equipment . . . . . . . . . . . . . 83
TEAM Oil Tools . . . . . . . . . . . . . . . . . . . . . IBC
United Rentals . . . . . . . . . . . . . . . . . . . . . . . 31
Universal Pressure Pumping, Inc. . . . . . . . .105
URTeC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .82
U.S. Steel Tubular Products . . . . . . . . . . . . . . 9
UT99 AG . . . . . . . . . . . . . . . . . . . . . . . . . . . . .39
Vactor HXX . . . . . . . . . . . . . . . . . . . . . . . . . . .38
Weatherford . . . . . . . . . . . . . . . . . . . . . . . . . 15
May 2013 | EPmag.com
138
begin operations by 2015. The goal
of the center is to develop catalytic
solutions tailored to Chinese market
requirements and enhance technical
service support to Chinese customers.
Statoil opened a new research center
for IOR at Rotvoll in Trondheim, Nor-
way. The center will be the largest of its
kind in Norway with the goal of devel-
oping technologies that will lead to
increased recovery rates. The heart of
the center is a new industrial scanner
with a resolution 500 times higher than
a medical scanner, allowing researchers
to follow the oil movement and flows in
various rocks on pore level. Through
high-resolution 2-D and 3-D images it
will be possible to see which IOR
method is best suited in each reservoir
while getting a deeper understanding of
how the reservoir is formed with regard
to clay, pore size and cracks.
Gall Thomson has opened a technology
center (shown below) in the U.K. that
will be used for the design, refurbish-
ment and testing of marine breakaway
couplings. The technology center is
located in Great Yarmouth, U.K., and
contains the latest in assembly line and
design technology.
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List Sales
MICHAEL AURIEMMA
Venture Direct
212.655.5130 phone
212.655.5280 fax
mauriemma@ven.com
MARKETING | SALES | CIRCULATION
on the
MOVE
136-139 Onthemove-AUG_Onthemove 7/23/14 12:32 PM Page 138
136-139 Onthemove-AUG_136-139 Onthemove-AUG 7/21/14 4:16 PM Page 139
T
he unconventional wells with the best net present value
(NPV) are the ones you dont have to drill and yet
deliver additional reserve recovery. Sound like an oxy-
moron? Its not. Thats essentially the value proposition
for refracturing existing wells.
Refracturing is catching on as a way to boost the lacklus-
ter 4% to 8% recovery factors typical of unconventional
shale wells. Operators can rejuvenate production, slow the
decline curve and increase ultimate reserve recovery by
restoring reservoir conductivity.
But its not as easy as it might seem. Not every well will
benefit equally from refracturing. A successful refractur-
ing program is dependent on a workflow process that
starts with collecting completion and production infor-
mation for a shale play and compiling it into a single
dataset. Those data are used in the well screening work-
flow to identify which wells have the greatest potential
and in the refrack economic model to determine what
the refrack is worth.
Each well is examined based on productivity and the
decline rate to determine future production potential.
Certain combinations of productivity levels and decline
parameters are used to help flag good refrack candidates.
After screening and identifying the best well candidates,
the workflow estimates post-refrack incremental produc-
tion. The output from the workflow is integrated with a
full financial model that helps determine each operators
refrack economics.
As we learn more, a variety of other factors beyond pro-
ductivity and the decline curve may prove to be positive
indicators of refrack potential. These include:
The pressure transient;
Reservoir pressure;
Perforation design;
Fracture conductivity of the initial frack; and
Proppant composition and concentrations used in
the initial frack.
Following the well selection and economic modeling
process, it is essential to complete a review of the initial
completion designincluding existing perforating clus-
tersand the condition of the wellbore. These factors
have a significant impact on the viability of a refrack job
and the potential return on investment. Does the initial
completion make it technically feasible to reenter the
well? Can existing stages and new stages be isolated for
the necessary fracturing program? Is the quality of the
wellbore sufficient for refracturing?
Data from the well screening and economic modeling
workflow are used in conjunction with a model of the
reservoir that captures the full scope of subsurface data
to design the most effective refracturing program. The
goal of the program is to:
Enlarge the fracture geometry to enhance reservoir
contact;
Increase fracture conductivity compared to the initial
frack;
Use more suitable fracturing fluids;
Reopen natural fractures;
Get more lateral coverage in horizontal wells or initi-
ate more transverse fractures; and
Reorient fractures due to stress field alterations, lead-
ing to contact of new rock.
Results of a recent Baker Hughes analysis that employed
its proprietary well screening and economic modeling
workflow identified more than 1,000 Eagle Ford shale
refrack candidates that potentially could be stimulated
with a resulting positive NPV. Thats out of more than
8,000 horizontal wells in the play. In the Bakken, 1,900
candidates were identified out of 10,000 total wells.
A successful well selection and refracturing design pro-
gram means operators can avoid time-consuming portfo-
lio analysis for potential candidate wells and highlight
opportunities to increase production and significantly
boost reserves. The process also allows operators to effec-
tively manage costs by limiting investments in wells that
are not refracturing candidates and only investing in wells
that can be rejuvenatedoften at half the cost of new
wellsnot just once but multiple times. And it limits the
requirements for costly new wells.
Based on the knowledge gained from refracturing exist-
ing wells, operators can optimize their future field devel-
opment plans and construct and fracture wells with future
refrack operations in mind. When we reach that level of
effectiveness, recovery factors from shale plays will
improve exponentially.
last
WORD
Refracks improve NPV
Determining which wells make the best candidates saves on the cost
of drilling new wells.
Alasdair Brown, Baker Hughes
140
140 LastWord-AUG_140 LastWord-AUG 7/21/14 4:16 PM Page 140

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