SPE 113173 ESP Operation, Optimization, and Performance Review: ConocoPhillips China Inc.

Bohai Bay Project

Zhizhuang Jiang, SPE, ConocoPhillips China Inc., and Bassam Zreik, SPE, Schlumberger
Copyright 2007, Society of Petroleum Engineers This paper was prepared for presentation at the 2007 Society of Petroleum EngineersGulf Coast Section Electric Submersible Pump Workshop held in The Woodlands, Texas, 2527 April. This paper was selected for presentation by the ESP Workshop Panels (Rotating and Permanent) following review of information contained in an abstract submitted by the author(s). Contents of the paper, as presented, have not been reviewed by the ESP Workshop Panels and are subject to correction by the author(s). The material, as presented, does not necessarily reflect any position of the ESP Workshop or its panel members. The author(s) retain copyright to this paper and have given permission to the ESP Workshop to publish it in proceedings (electronic and hardcopy). Any other electronic reproduction, distribution, or storage of any part of this paper for commercial purposes without the written consent of the author(s) is prohibited.

enhancements, run life assessment and equipment dismantle findings. Introduction The Penglai 19-3 oil field is located approximately 375 km southeast of Beijing, offshore in Block 11/05 in 27 to 33 m of water depth Bohai Bay, the Peoples Republic of China (Fig. 1). The structure is a poorly consolidated fluvial deposition in a large, faulted, 4-way dip-closed wrench anticline. The reservoir is a highly complex system with variability in reservoir quality, hydrocarbon fluid properties and pressure systems. The primary oil bearing sandstone formations include the Early Miocene Guantao formation and Middle Miocene lower Minghuazhen formation (Fig. 2). The reservoir is normally pressured and the drive mechanism is solution gas, depth is 900 to 1600 m true vertical depth (TVD) with maximum oil column over 500 m. The heavy oil field is the second largest in China (although the largest offshore field), containing 3.8 billion bbl of oil in place. The Penglai 19-3 field is being developed in two phases: Phase I started in first quarter 2002, to establish early production and optimize the Phase II reservoir management and well construction methodology. Phase II started in fourth quarter 2005, with the installation of the first jacket (Platform C). Phase I development consists of a 24-slot wellhead platform (Platform A), a moored floating, production storage and offloading (FPSO) vessel and interconnecting pipelines (Fig. 3). The wells consist of 21 production wells, 2 water injection wells and 1 cuttings reinjection well. The FPSO has a maximum design capacity of 40,000 BOPD, water processing capacity of 10,000 BWPD and storage capacity of 330,000 bbl. Both Phase I and Phase II are primarily focused on developing the Guantao formation. The Phase I development area field conditions are: bubble point pressure is approximately at the original reservoir pressure, reservoir temperature 40 to 60C, oil gravity 18 to 22API, oil viscosity at reservoir conditions Guantao 10 to 13 cp and Minghuazhen 60 to 80 cp, solution gas/oil ratio (GOR) 150 to 290 scf/STB, producing GOR increasing to 1,100 scf/STB and initial well flow rates 1,000 to 6,100 BFPD (Table 1). The lack of natural reservoir drive consequently leading to the decline in reservoir pressure requires the use of artificial lift to optimize production and maximize value from the asset. ESPs were selected as the most economic artificial lift method to develop the Penglai 19-3 field. This was based on the reliability, flexibility and robustness of the ESPs to produce wells with high flow rates, lift potentially viscous emulsified heavy crude oil and the limited offshore surface facilities available for other artificial lift methods.

Abstract ConocoPhillips China Inc. (COPC) operates the Penglai 193 oil field, located offshore in Bohai Bay, the Peoples Republic of China. COPC holds a production sharing agreement with China National Offshore Oil Corporation (CNOOC). The Penglai 19-3 field is the second largest oil field in China with 3.8 billion bbl of oil in place, discovered in May 1999 and put on production in December 2002. Electrical submersible pumps (ESPs) were selected as the most economic artificial lift method to develop the field, based on the reliability, flexibility and robustness to produce wells with high flow rates and lift heavy oil in an offshore environment. The first ESP installations were challenged with high free gas and excessive sand production, resulting in operational issues and a number of failures. Even in this hostile environment, production peaked at 37,800 BOPD during November 2003, before declining as a consequence of reservoir pressure depletion. Moreover, the lower reservoir pressure increased the free gas, thereby reducing pump performance, excessive sand production lead to plugging of the pumping system and sand fill across the reservoir reduced productivity. Various enhancements to the completion and ESP system were made during subsequent well interventions improving ESP performance, maximizing and maintaining production from the field. Furthermore, performing continuous ESP data trend analysis and performance modeling enabled the artificial lift system to be analyzed and diagnosed to maintain optimum well performance. Collaboration between Operator and Service Provider through performance review meetings and changes to operational practices were also implemented. This paper reviews the operation, optimization, and performance of the ESP systems and the challenges faced during the first 3 years of production. Covering initial installations, subsequent well interventions, operation philosophy, optimization methodology, case studies demonstrating value of gas separation and handling devices, completion improvements, ESP configuration

Zhizhuang Jiang and Bassam Zreik

A performance-based contract has been implemented for Phase I, to ensure both COPC and Schlumberger have a common goal, which is to maximize the ESP system run life. In the event of a short run, a penalty is paid to help offset the cost of the workover. This ensures both parties provide the necessary resources to maximize ESP system run life. Any change to the ESP management process requires the involvement of Schlumberger. Well Completion Method and ESP Configuration: Phase IFirst Batch Oct. 2002 to Jul. 2004 The Phase I drilling operations started in April 2002 from a jack-up drilling rig cantilevered over the wellhead platform. The reservoir was developed with deviated and high-angle wells. The wells typically consisted of a 20 in. conductor down to 50 m below the mudline, 13-3/8 in. surface casing to 200 m, 9-5/8 in. production casing to well total depth or 9-5/8 in. production casing to the top of reservoir at 1000 m TVD and 8-1/2 in. openhole through the reservoir to well total depth at 1400 m TVD. A number of sand control completion techniques were assessed to determine the optimum completion method to control sand production and deliver high productivity wells. Both cased hole and openhole techniques including expandable screens in openhole, standalone screens in openhole, expandable screens in casing after fracturing, perforated casing without screens and expandable screens in perforated casing were trialed. The completion typically consisted of a tapered tubing string with 4-1/2 in. tubing to 165 m measured depth (MD) and 3-1/2 in. tubing down to the ESP assembly with intake set at 1300 m MD. A 4-1/2 in. tubing retrievable surface controlled subsurface safety valve (TRSCSSV) was included in the tubing string at 165 m MD along with a nonvented ESP packer set at 1000 m MD (3-1/2 in. production port and 2-7/8 in. power cable port). A 3/8 in. chemical injection line was included to provide the ability to initiate treatment for scale, corrosion or emulsion that may potentially have a detrimental effect on the ESP performance. COPCs primary objectives were to minimize total operating cost by maximizing ESP system life and to achieve or exceed the production goals at minimum cost. The required average ESP system run life is 2 years. The ESP systems were designed, selected and specified to handle free gas up to 50 vol%, be CO2 corrosion resistant (up to 50 mol%) and handle potentially viscous emulsions, to meet or exceed COPCs stated objectives. A brief description of the ESP assembly components and completion accessories used is as follows: Pump: A compression pump construction (impellers fixed in the diffuser) was selected because of possible abrasives, high free gas fractions and the potential for operating outside the recommended range. REDA* production system pump stage types used were the 400 Series DN3000, 540 Series GN1600, GN5600, GN7000, and the 538 Series SN3600, SN8500. Stage geometry was a combination of radial flow and mixed flow pump types. Sufficient pump stages were included to handle the potential increase in fluid viscosity as a consequence of water-in-oil emulsion formation. Flow-loop testing was conducted by COPC to study the behavior of the Bohai Bay crude oil at various water cuts to generate a ratio of viscosity of water-in-oil emulsion to viscosity of oil versus water cut

relationship. The fluid viscosity has a significant effect on centrifugal pump performance: with increasing fluid viscosity the brake horse power increases while head/flow capacity and efficiency decrease. It was concluded from this study the crude oil formed a viscous emulsion with an emulsion ratio ranging from 1.00 at 0% water cut, peaking at 6.95 at 60% water cut (i.e. the fluid viscosity would be 6.95 times the oil viscosity at a water cut of 60%), before decreasing rapidly and behaving similar to water. These viscosity ratios were used to size the ESP systems, which significantly increased the pump stage count and corresponding motor horse power. Gas Handling: An Advanced Gas Handling (AGH*) device is a highly modified multistage centrifugal pump designed to increase the primary pumps gas handling ability, was included as part of the ESP system. This was required as the Phase I completion method did not allow the use of a gas separator (non-vented packer installed). The AGH centrifugal stage design alters the pressure distribution of the impeller, creating a homogenized mixture with a smaller gas bubble size. This conditioned fluid behaves as a single phase fluid before entering the primary pump. Intake: Standard bolt-on intakes were selected with an abrasion-resistant zirconia bearing system (bushing and sleeve). Protector: Tandem bag-parallel-bag-series-labyrinth (BPBSL) modular protector configuration was selected with a high load thrust bearing to handle the load generated by the compression pump. Tandem protectors were installed, as this design provides ample oil expansion and contraction capacity. Also, offers increased protection (through redundancy) by further delaying contaminating well fluids from entering the motor and causing failure. The upper and lower protectors are identical, and supplied factory-shimmed ensuring the lower most thrust bearing carries the entire load. Motor: The Dominator* motor in upper tandem configuration was selected. Motor sizes used were 90 to 360 hp, 42.5 to 85.0 A and 1275 to 2550 V @ 60 Hz. General downhole ESP equipment specification: Redalloy* high-nickel alloy (9Cr-1Mo) housing metallurgy with Monel alloy trim to protect against possible CO2 corrosion. AFLAS elastomers because of the expected high CO2 concentration, equipment operating temperature and intended chemical treatments. Ni-Resist stage metallurgy and high strength Inconel alloy shafts. Abrasion-resistant zirconia bearings with standard 10 in. spacing for the AGH and pump, providing enhanced radial stability and reliability in abrasive well environments. Zirconia has proven to provide better overall performance (corrosion resistance, impact toughness and wear resistance) in similar well environments. While the use of various sand control completion techniques would prevent the production of sand, abrasion-resistant bearings were specified incase of limited sand production.

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ESP Operation, Optimization, and Performance Review: ConocoPhillips China Inc. Bohai Bay Project

Downhole Monitoring: A Phoenix MultiSensor* monitoring system was installed as part of each ESP system, to provide downhole data to monitor well performance and improve ESP management. The ESP intake pressure, discharge pressure, intake temperature, motor temperature, vibration and current leakage are measured and transmitted to surface through the power cable. Initially, the motor oil temperature was measured by a 4 in. J-type thermocouple positioned at the base of the motor and later a factory installed windings J-type thermocouple was used, which provided a more accurate motor operating temperature measurement. Power Cable, Motor Lead Extension (MLE) and Electrical Connectors: The main power cable is either a #2 or #4 American Wire Gauge (AWG), ethylene propylene diene methylene (EPDM) insulation, EPDM jacket and galvanized steel armor. The MLE is a #4 AWG, EPDM insulation, lead jacket and Monel alloy armor. The electrical connectors consisted of a bottom feedthrough wellhead penetrator, field attachable connectors below the tubing hanger and above the packer, and a top feedthrough packer penetrator with a #4 AWG lower pigtail. Cable Protectors and ESP Section Clamps: Cable protectors were installed on all tubing connections to protect the power cable, MLE, 1/4 in. control line (for TRSCSSV) and 3/8 in. chemical injection line during installation. If no bypass system was installed, ESP section clamps were used to protect the MLE, 1/4 in. discharge pressure transfer line and 3/8 in. chemical injection line. Bypass System: A 9-5/8 in. Phoenix logging bypass system with 2-7/8 in. bypass tubing was installed in wells where the inclination was generally less than 55 (3 to 57 inclination), to provide access below the ESP system for future production logging and well intervention. Surface Equipment and Control System: Medium voltage industrial variable-speed drives (VSDs) are used for all production wells, to aid in optimizing the ESP management by providing flexibility to respond to uncertain operating conditions and maintaining drawdown constraints during start up operations. Also, to optimize ESP power consumption and achieve target production of 40,000 BOPD. The surface and downhole data is transferred to the platform Supervisory Control and Data Acquisition (SCADA) system, where the data trends are displayed. The data is then transmitted onshore by a satellite link, to enable office based personnel access to the information. Permanent Sand Face Monitoring: Fiber-optic distributed temperature system technology was deployed in a number of the production wells to provide an assessment of inflow. This was accomplished by installing an optical fiber in the well that senses the temperature every meter along the path of the well. This temperature information is then analyzed with the help of a thermal simulator. Testing of ESP Equipment: The ESP equipment is performance tested at the manufacturing facility and retested on arrival to the Schlumberger Service Center located in Tanggu, the Peoples Republic of China (near COPCs marine base). Retesting prevents the installation of

equipment that may have sustained damage during transportation from the manufacturing facility. The service center is extensively equipped to facilitate testing of all major ESP components, providing equipment teardown and inspection services, and warehousing of backup equipment. Following installation, the ESP systems were commissioned to clean up the wells. The wells were then shut in for a bottomhole pressure survey, to assess the completion efficiency (skin factor). First production to the FPSO was achieved on the 31 December 2002. At the conclusion of the last ESP installation in October 2003, the jack-up drilling rig was demobilized. A total of 31 well interventions were conducted during the Phase I first batch of installations: 21 installations, 8 workovers and 2 sidetracks. Only 1 of the workovers was a consequence of an ESP system related failure (electrical connector failure), the remainder of the well interventions were because of excessive sand production. Two units unexpectedly developed a single phase ground fault (i.e., weak electrical insulation) and remain in operation: the cause of the ground faults are under investigation. Based on the well performance, plans were in place to install a platform rig and 50-person accommodation to facilitate future well performance optimization and interventions. ESP Operation and Optimization: Phase IFirst Batch Oct. 2002 to Jul. 2004 The ESP systems were challenged with high free gas and excessive sand production from the onset of the project. Operational problems such as instability (surging) and gas locking leading to numerous underload shutdowns were experienced, caused by producing free gas volumes in excess of 50% at the pump intake. Gas slugging occurred in a number of wells, because of wellbore geometry that further added to the number of underload shutdowns. Following the underload shutdowns, the wells were naturally flowed to vent off free gas before restarting, resulting in deferred production. In addition, the high free gas limited the drawdown and therefore production. Frequent shutdowns are not desirable, because an ESP has a finite life and can be related to the number of restarts, which cause degradation in the motor windings insulation and/or in the power cable conductor insulation, ultimately leading to failure. The excessive sand production (0.01 to >30 vol% and average 0.10%) caused plugging of the production choke, sand slugging lead to plugging of the pumping system and sand fill across the reservoir reduced productivity. High skin factors were measured in the majority of sand control completion techniques assessed. A decline in productivity was observed in a number of wells requiring higher drawdown pressures to maintain production, while the remaining wells had stabilized high skin factors. The higher drawdown pressure (lower pump intake pressure) increased the free gas fraction thereby reducing pump performance. In limited wells, the lower productivity lead to fluid pump off (at minimum speed of 30 Hz) and therefore lower operating amperage resulting in frequent underload alarms and nuisance shutdowns. The free gas at the pump intake was produced by either exposed gas sands, secondary gas cap, producing the wells below the bubble point pressure and/or reservoir pressure depletion. A water flood began in September 2003, to

Zhizhuang Jiang and Bassam Zreik

improve reservoir sweep and maintain pressure support by means of two injection wells located at opposite ends of the field. The effects of the water flood were observed in wells inside the flood pattern through a reduction in producing GOR and/or increase in the pump intake pressure. Once water break through had occurred, fines were swept into the wellbore and on occasion caused the sand screens to fail, leading to catastrophic sand production. Furthermore, water slugging caused the ESP operation to become unstable and the swept sand plugged the production chokes that required regular clearing. Sand production increased dramatically as the water cut increased, with sand contents in excess of 4% were measured. Eventually, sand production stabilized to between 0.05 to 0.10%. Before water break through, sand production had occurred in all completion types through the use of screens with sand control media that is too large to adequately stop the formation sand grains. The produced sand accumulated in the process vessels on the FPSO and had to be continuously cleaned out to minimize process upsets. The presence of free gas deteriorates the performance of the pump (head/flow degradation). The performance deterioration varies with the amount of free gas, the operating intake pressure and the liquid flow rate.1 Consequently, to improve pump performance the ESP systems were operated towards the right hand limit of the pump recommended operating range to minimize surging. Also, the ESPs were operated at higher speeds while reducing the choke size (to maintain the same drawdown), to assist with gas management. The underload protection setting was reduced and in limited cases bypassed to prevent nuisance shutdowns (units still protected by the SCADA system alarms e.g., high motor temperature). The industrial VSDs did not have sufficient functionality to facilitate current mode operation (varying the speed to maintain a target current value), to minimize underload shutdowns in wells with high free gas fractions. Given the initial sand face completion philosophy, sand production would continue, therefore ESP management will have to be adapted to cope with the sand. To improve pump performance, the ESP systems were operated at slower speeds with wider set chokes (to maintain the same drawdown), to minimize the likelihood of choke plugging. All ESP restarts were conducted at minimum speed and gradually ramped back to normal operating speed. All operational changes (speed and choke) were implemented progressively, to avoid downhole surging that may promote sand production. The formation of a viscous emulsion between the crude oil and water had been experienced in a number of wells. Fortunately, the performance of the ESP systems was not affected, as downhole demulsifier injection had been effective in breaking the emulsion. Demulsifier injection was initiated once an emulsion was detected in surface wellhead samples. Even in this hostile environment, production from the field managed to peak at 37,800 BOPD during November 2003, before declining as a consequence of reservoir pressure depletion (Fig. 4). Moreover, the lower reservoir pressure increased the free gas, thereby reducing pump performance, excessive sand production, lead to plugging of the pumping system and sand fill across the reservoir reduced productivity.

An ESP technician was present on the offshore platform to monitor and control the ESP systems, coordinate ESP related activities, provide VSD setup and troubleshooting services. On-the-job knowledge sharing has enabled COPC Production Engineering personnel to better understand all aspects of ESP application engineering, operation and diagnosis, to assist with ESP management. The surface and subsurface data have been invaluable in aiding with remote performance monitoring of the ESP systems. Moreover, improving the quality and efficiency of decision making, from commissioning, to real-time system analysis and diagnosis, and assisting with failure analysis. The SCADA system permitted remote pump start up and speed adjustments from the platform or FPSO control rooms. Alarms and trips were configured in the VSDs and SCADA system, so when an operating parameter exceeded or fell below a threshold, an alarm was activated and/or the unit was shutdown. Enabling conditions like a plugged production choke, downhole recirculation (open slidingside-door or improperly set Y-Tool blanking plug), closed SCSSV, restriction at the pump intake, gas locking, etc. to be rapidly identified and rectified, avoiding deferral of production and/or a costly well intervention. The ESP systems were constantly monitored, to maintain continuity of production from the complex dynamic subsurface system. ESP optimization is the process that enables the artificial lift system to be analyzed and diagnosed to provide optimum well performance. The optimization criteria may fall under a number of categories: well drawdown, equipment run life, system efficiency, system design, etc. or a combination of these. To assist with well/ESP performance monitoring and production allocation, the wells were production tested every 7 to 10 days by means of a 3-phase test separator and later with a multiphase flowmeter located on the wellhead platform. The ESP systems were continuously modeled using SubPUMP and DesignPro* software to monitor performance, analyze and diagnose problems, and identify opportunities for production gains. The modeling methodology and analysis workflow applied is summarized as follows: 1. Acquire the production well test data including the surface data (frequency, flowing tubing pressure, flowing tubing temperature, etc.) and the downhole MultiSensor data. 2. Condition the production data using the allocation factors for water, oil and gas. 3. Upload the information into the ESP analysis software including the well and completion details, fluid properties, ESP configuration, etc. 4. Performance analysis: a. Match the production well test and ESP parameters as follows: i. Match the discharge pressure by varying the GOR and/or water cut. ii. Match the intake pressure by varying the pump rate and head derating factors. iii. Match the motor amperage by varying the pump power derating factor. iv. Fine-tune the match by repeating steps i to iii. v. Step back and review the modeling results (validation): Is the modeling match realistic? b. Is there an opportunity for production gains and/or

2007 ESP Workshop

ESP Operation, Optimization, and Performance Review: ConocoPhillips China Inc. Bohai Bay Project

5.

6.

7.

improvements in ESP operation? i. Well restrictions: Productivity, sand production, well drawdown, etc? ii. ESP restrictions: Is the motor operating temperature excessive, is the motor overloaded, is the free gas fraction at the pump intake excessive, where is the pump operating in relation to the recommended operating range, etc? iii. System restrictions: VSD limitations, surface facility limitations (handling of water, sand, emulsion, etc.), etc? iv. SCADA system trend analysis: Is the ESP operation stable with minimal fluctuations in the surface and downhole parameters? v. Review modeling history: Step back and review the current performance compared with the previous modeling results (have the pump derating factors changed significantly, has the operating point changed, has the motor operating temperature increased, etc.). vi. Review production history: Step back and review the production data for changes in the flow rate, GOR, water cut, etc. ESP management assessment: COPC Production Engineering in collaboration with Schlumberger Artificial Lift Engineering discuss any limitations, the SCADA system trend analysis, the current and past modeling findings, and the production history to develop recommendations for production gains and/or improvements in ESP operation. Decision making and implementation: Conclude which recommendations generated in step 5 will be implemented and take these actions (adjusting the ESP speed and/or the production choke). Value realization: Measure the incremental production gained and/or monitor for improvements in ESP operation, resulting from the actions taken in step 6, thereby starting a new production optimization cycle.

GOR 643 scf/STB, surface oil rate 2,736 BOPD and no water production (Fig. 5). This well can not be produced with a pump alone, because of the high free gas. Generally a mixed flow stage could handle 25% free gas. However, the well does have the potential to flow naturally, which was established by simulation using production systems analysis software. The well was subsequently brought on natural flow in February 2005 with a 10% increase in production verses pumping. Before naturally flowing the well, the AGH was able to assist with maximizing and maintaining production by minimizing surging and gas locking, thereby increasing the well up time. Furthermore, extending ESP system run life by reducing the number of detrimental restarts and avoiding gas locking leading to a potential motor burn. Clearly, the high free gas volumes had caused ESP operational difficulties and excessive sand production had lead to a significant number of failures resulting in deferred production, increased well interventions and associated costs. To improve the situation to achieve the desired target run life, the sand control completions should be improved to reduce sand production. In addition, the completion configured to enable free gas to be vented and a gas separator to be used, resulting in increased drawdown and therefore production to be realized. Dismantle Findings and Recommendations: Phase IFirst Batch Oct. 2002 to Jul. 2004 The objective of a dismantle inspection failure analysis (DIFA) on pulled downhole equipment is to obtain information that can assist in identifying cause of system failure, root cause of component failure and other failure modes that may be in progress, but have not contributed to the units ultimate failure. This investigative method is particularly important for identifying opportunities for system enhancement, to continuously improve run life. Two pulled ESP assemblies were scheduled for DIFA, to assist with identifying the root cause of system failure. The first unit was pulled because of an electrical failure after 63 days of service. The unit consisted of a 540/562 Series ESP enclosed in a 7 in. fluid shroud landed inside the 9-5/8 in. production casing. Before the electrical failure, the well was producing 0.10 to 3.00% and average 1.44% sand. The dismantle inspection revealed significant pumping system stage erosion from fine sand production, exacerbated by the presence of free gas (Figs. 6a and 6b). The AGH stages showed the heaviest erosion, most likely caused by the higher free gas (lower fluid density) and higher velocities that increase the erosion potential. The pumping system zirconia bearings bushing internal and sleeve external surfaces exhibited abrasive wear (Fig. 7). The motor showed signs of operating at a very high temperature with failed windings insulation. Failure analysis concluded a reduction in the motor surface area available for cooling, caused by a build up of sand between the outside diameter of the ESP housing and inside diameter of the shroud, which lead to the motor failure. The second unit was pulled because of total loss of production after 17 days of service. The unit consisted of a 540/562 Series ESP landed inside the 9-5/8 in. production casing. Before the loss of production, the well was producing 0.10 to 12.00% and average 2.17% sand. The dismantle inspection revealed the intake, AGH and pump

The key to analyzing and diagnosing well/ESP performance is to understand the concept of NODAL system analysis:2 a node is any point in the production system between the reservoir drainage boundary and the separator, where the pressure can be calculated as a function of the flow rate. Furthermore, recognize the factors that affect well inflow (reservoir pressure, skin factor, etc.), tubing outflow (GOR, water cut, etc.) and the pump performance (abrasives,3 free gas, viscosity,4 etc.). Once this is understood, the methodology behind the analysis becomes apparent, resulting in rapid diagnosis of well and ESP performance issues. Case Study 1Well A13(01): A typical well has been modeled in SubPUMP software for simulation of the free gas volume being managed by the ESP system, demonstrating the value of the AGH in assisting with maximizing and maintaining production from the well. The ESP assembly consists of a 540 Series 90 stage GN7000 pump, 538 Series S70-100 AGH, 540 Series tandem protectors and 562 Series 270 hp motor with a non-vented packer installed. The modeling findings suggest the ESP is handling 59.1% free gas at the pump intake: intake pressure 888 psia,

Zhizhuang Jiang and Bassam Zreik

were plugged with sand. The tandem protectors and motor were in excellent condition. Failure analysis concluded a slug of sand created after the sand control completion had failed, resulted in catastrophic sand production that plugged the entire pumping system, which lead to the loss of production. The Penglai field well environment is similar to the Apache Stag field,5 specifically high free gas and excessive sand production. The enhancements made to the equipment for the Stag field were considered for application in the Penglai field, to take advantage of past experience. The size, hardness, shape and concentration of the abrasive material have an influence on the pump performance. Some abrasive particles are very sharp with significant angularity. A sharp abrasive particle will do more damage to an impeller and diffuser through erosion, than a similar sized round particle. Small abrasive particles tend to be more detrimental to bearing wear than larger particles. The reason being the smaller abrasive particles can get inside the bearing clearances and cause internal wear and damage to rotating surfaces. Large abrasive particles have a greater effect on stage erosion than smaller particles, because of the energy the particles carry into an impact with the stage. Furthermore, the fluid velocity within the stage and rotational speed of the pump has a direct impact on the stage erosion rate. On the basis of the DIFA findings and to improve ESP system reliability, to achieve the desired minimum run life of 2 years, it was recommended to upgrade the AGH and pump stage metallurgy from Ni-Resist to REDA 5530 alloy (a proprietary alloy with significantly better erosion resistance). Also, upgrade the AGH and pump bearing material from zirconia to silicon carbide with a full bearing housing specification (bearing every stage) for enhanced radial stability and reliability. Silicon carbide is considerably harder and more abrasion-resistant than zirconia. Additionally, controlling sand production and venting free gas will reduce the erosion potential and improve the pump performance. The mentioned enhancements combined with the previously stated ESP operational philosophy will further assist with ESP management. A number of higher specification ESP assemblies were ordered to trial in the Penglai field. Well Completion Method and ESP Configuration: Phase ISecond Batch Aug. 2004 to Dec. 2005 It was envisaged the wellhead platform would be normally unmanned and the wells and platform would be remotely operated from the FPSO. However, it was recognized personnel would have to be based on the platform to constantly monitor the wells to maintain continuity of production. A new completion workover rig and 50 person accommodation module was installed on the wellhead platform to facilitate well interventions. The second batch of well intervention operations commenced in August 2004, with the first workover being the installation of a vented ESP completion. The completion typically comprised of an ESP packer with gas vent valve (and dedicated 1/4 in. control line) set at 200 m MD and an ESP assembly with a vortex gas separator. The wellhead and flowlines were modified to incorporate the vented completion, consisting of a casing annulus vent line with check valve tied back downstream of the production choke.

Enabling both well streams to be commingled, before flowing into the production header. A casing pressure sensor and gas flowmeter were also installed, to assist with well monitoring and gas separation assessment. The vortex gas separator is a dynamic gas separation device that uses a natural vortex action created by a specially designed inlet configuration, axial flow inducer and multiple vortex generators, to provide highly effective gas separation.6 This vortex device separates the gas by first pressurizing the fluid by an axial flow inducer and spinning the fluid with a vortex generator. The spinning fluid then passes into a separation chamber. In the separation chamber the fluid naturally tends to form a vortex, with the less dense fluid near the shaft and the denser fluid near the housing. Finally, the lighter fluid is expelled back to the annulus through the discharge crossover, while the heavier fluid is directed to the AGH or pump. This type of gas separator was selected because of the higher separation efficiency and enhanced performance in abrasive applications. The rotor assembly has been designed to impart very little energy to abrasive particles produced through the separator. The internal components were upgraded to REDA 5530 alloy for significantly better erosion resistance. Silicon carbide bearings were specified for enhanced radial stability and reliability. Erosion leading to rotor assembly imbalance may lead to vibration induced failures, such as damage to protector shaft seals, thereby reducing system run life. The 540 Series G6200N and 400 Series DN3100 pump types with mixed flow stage geometry (for better free gas handling) were selected, to cover the expected well performance. Standardizing on equipment by using the same size and type gas separator, protector, motor, bypass system, etc. will minimize costly equipment inventory. Extensive studies and evaluations were conducted by multidisciplinary teams, to develop a solution to effectively control sand production. A new sand control strategy was adopted to control sand production using and standardizing on standalone premium sand screens in openhole with finer sand control media. Sand production is expected to average 0.05% with some events of short duration to 5.00%. Following installation, the ESP systems were commissioned to clean up the wells. The well drawdown was monitored and carefully controlled between 100 to 200 psi during the first 24 hours, to avoid any rapid surging downhole that may potentially damage the sand control media. This was accomplished by starting the ESPs at 30 Hz (minimum speed) and manipulating the production choke to control the rate of change in drawdown. On subsequent days, the drawdown was gradually increased by 50 to100 psi per day until the well had been fully cleaned up and stabilized. COPC Production Engineering in collaboration with Schlumberger Artificial Lift Engineering, monitored the commissioning and well clean up process in real-time through the SCADA system, from the onshore COPC office. This monitoring enabled immediate response to any well changes and decisions on well/ESP adjustments to achieve the desired well drawdown. The gradient of the fluid in the tubing above the ESP (tubing gradient, psi/ft) was calculated in real-time from the pump discharge pressure and the flowing tubing pressure measurements [(pump discharge pressure flowing tubing pressure)/pump depth TVD]. This

2007 ESP Workshop

ESP Operation, Optimization, and Performance Review: ConocoPhillips China Inc. Bohai Bay Project

was very helpful in determining what fluid was being pumped at any point in time. As of the 1 January 2006, a total of 15 well interventions were conducted during the Phase I second batch of installations: 5 workovers and 10 sidetrack. All of these well interventions were because of excessive sand production. ESP Operation and Optimization: Phase ISecond Batch Aug. 2004 to Dec. 2005 The installation of the vented completion has significantly improved the ESP performance and operation (eliminated surging and underload shutdowns), because of the reduction in free gas handled by the pump. In addition, separating and venting the free gas has permitted increased drawdown and therefore production to be realized. The implementation of the new sand control strategy has consequently reduced the amount of sand being produced. However, legacy sand control completions continue to fail, resulting in catastrophic sand production leading to plugging of the pumping system. With the inclusion of a vented packer, some casing side instability was observed, which was alleviated by applying 20 to 50 psig of backpressure by choking back on the casing annulus. Fluid pump off was intermittently observed in Well A12(01), which has a productivity limitation (completion skin factor +14) and low operating motor amperage (at minimum speed), requiring bypassing of the underload protection following frequent underload alarms and nuisance shutdowns. Voltage optimization (to improve the performance of a motor by adjusting the voltage) was successfully implemented enabling the underload protection to be reinstated.7 The ESP systems were constantly monitored through surface and subsurface data trend analysis and continued performance modeling, enabling the maximization of asset value from the stable daily production of reservoir fluids to be realized. Case Study 2Well A18(02): A typical well has been modeled in SubPUMP software for simulation of the free gas volume being managed by the ESP system, demonstrating the value of the vortex gas separator in combination with an AGH in assisting with maximizing and maintaining production from the well. The ESP assembly consists of a 540 Series 108 stage G6200N pump, 540 Series G40-80 AGH, 538 Series S20-90R VGSA vortex gas separator, 540 Series tandem protectors and 562 Series 330 hp motor with a vented packer installed. The modeling findings suggest the ESP is handling 78.5% free gas at the pump intake: intake pressure 403 psia, GOR 670 scf/STB, surface fluid rate 2,975 BFPD and 10% water cut (Fig. 8). Total downhole gas separation was estimated at 85.5%, with 34.6% free gas entering the AGH. Further modeling without an AGH (i.e., with only a gas separator and pump) suggests an estimated 29.4% reduction in total fluids production would result. This was determined by limiting the free gas amount into the pump to 25%. Generally what a mixed flow stage could handle, by artificially increasing the surface pressure. Comparing the two case studies, the well in Case Study 1 was drawn down to 888 psia intake pressure with an AGH and non-vented packer installed, while the well in Case Study 2 was drawn down to 403 psia intake pressure with a gas separator, AGH and vented packer installed. This

comparison demonstrates the significant increase in drawdown that can be realized by venting, separating and handling the free gas, even though there are minor differences in well conditions between the two case studies. The vented completion and vortex gas separator in combination with the AGH were able to assist with maximizing drawdown and therefore production, and maintaining production by minimizing surging and gas locking, thereby increasing the well up time. Furthermore, extending ESP system run life by reducing the number of detrimental restarts and avoiding gas locking leading to a potential motor burn. The joint ESP operating team was formed consisting of personnel from Schlumberger and COPC. Facilitating the engagement of multidisciplinary operational site and office based personnel in discussions on ESP related matters and service delivery. The objective being the creation of a collaborative environment for open and free communication, thereby delivering operational performance improvements, enabling enhanced productivity and increased system run life. Discussion topics included ESP performance analysis, operational challenges, well intervention schedule, equipment availability, inventory management, etc. The introduction of the vented ESP completion, the adoption of a new sand control strategy and changes to operational practices have resulted in significant improvements in ESP performance, maximizing and maintaining production from the field. The ESP installation, commissioning and operational processes are now becoming routine. Dismantle Findings and Recommendations: Phase ISecond Batch Aug. 2004 to Dec. 2005 Eight pulled ESP assemblies were scheduled for DIFA, to assist with identifying the root cause of system failure. The units were pulled because of various reasons including sand slugging leading to plugging of the pumping system, loss of production from sand bridging off in the tubing, sand falling back into the pumping system resulting in a broken shaft upon restart, sand fill across the reservoir reducing productivity and manual ESP shutdown for excessive sand production. The pulled units had run days ranging from 1 to 603 days. Generally, the dismantle inspections revealed the following: The AGH and pump impellers and diffusers showed light to heavy erosion, but did not appear to significantly affect pump performance. Before dismantle, most pumps failed the API performance test in particular the vibration component. The REDA 5530 stage metallurgy was in service for only 9 days, in a well producing 0 to 20% and average 2.52% sand, before being pulled for sand fill across the reservoir reducing productivity. The impellers and diffusers were lightly eroded. The performance of this stage metallurgy can not be fully evaluated on the basis of this short field trial alone. The abrasion-resistant bearing material (bushing and sleeve) examined included zirconia, silicon carbide and a combination of both. Bearing spacing varied from 1 bearing every stage to 1 bearing every sixth stage. The wear observed with the various abrasion-resistant bearing materials in the intake, AGH and pump was not consistent. Zirconia bearings in some equipment

Zhizhuang Jiang and Bassam Zreik

exhibited moderate wear and others only light wear. Silicon carbide bearings in all equipment held up well and wear was only light. Generally, no bearing wear trends were observed with the various bearing spacing mentioned: only a few pumps showed higher base end bearing wear. All the dismantled upper tandem protector chambers contained well fluids and the majority had a large amount of sand outside of both bags. A large number of the upper most shaft seals in the upper protectors were leaking. The majority of the lower protectors were in good working condition. All the pulled motors were still operable and therefore not dismantled. On the basis of the DIFA findings and to enhance ESP system reliability, the following recommendations were presented: ESP installations where a bypass system is required, a 31/2 in. poppet type check valve is to be installed 2 joints of tubing above the pump discharge head (below the YTool) to minimize the likelihood of sand falling back into the ESP following a shutdown. Sand fallback may cause a plugged pumping system and/or a broken shaft upon start up. The 2 joints of tubing above the pump will enable sufficient storage volume for gas to migrate up through the pump and remain below the check valve. This will minimize the possibility of gas remaining in the pump following a shutdown, avoiding a gas locked pump upon start up. For installations with no bypass system, a check valve is to be installed 2 joints of tubing above the pump discharge head. Upgrade the existing VSDs to incorporate a rocking start feature or install a VSD to be dedicated for difficult starting operations (e.g., freeing s stuck pump). As the majority of times, a shaft breakage is unavoidable following an attempt to free a stuck pump. The intake, AGH and pump abrasion-resistant bearing material to be silicon carbide. This is based on the proven field performance and the bearing tight diametric clearance (bushing inside diameter minus sleeve outside diameter) to exclude many of the expected larger formation highly angular quartz sand particles. The AGH and pump abrasion-resistant bearing spacing to be 1 bearing every third stage, to provide enhanced radial stability and reliability. The AGH and pump stage material to remain as NiResist, conditional on future sand production volumes. Upgrade the upper protector (the lower one to remain unchanged) to improve reliability by incorporating: dual ceramic bearing in the head for improved shaft stability and abrasion-resistance, elevated shaft seal and sand shroud to protect the shaft seal from abrasive damage, additional communication ports in the head and high pressure relief valve to ensure valve closure. Most of these recommendations have been implemented, whilst the remaining items are still under consideration. ESP Performance Review A total of 46 well interventions were conducted since the first ESP installation in October 2002 to 31 December 2005: 21 installations, 13 workovers and 12 sidetracks. The run times of the units has varied significantly, from less than 1

day to greater than 1,100 days: longest operating unit is 1,145 days as of end December 2005. The well interventions were broken down and grouped into reasons for failure, to determine the underlying cause for the majority of the pulls (Fig. 9). The well interventions were grouped into 3 categories: failed units, electively pulled operable units and operating units (i.e., installed units that are currently still operating). The failed units and electively pulled operable units were further broken down into subcategories until attaining the reason for failure. The data used in the evaluation was obtained from equipment DIFA reports, field pull reports, surface and subsurface SCADA system trend analysis. From the assessment, it was concluded 24 out of a total of 28 pulled units (85.7%) were as a result of sand: 9 plugged pumps, 5 sand fill across the reservoir reducing productivity, 4 burnt motors (3 caused by plugged pumps and 1 low motor cooling resulting from plugged fluid shroud), 3 sand bridge in the tubing and 3 manual shutdowns for excessive sand production. The remaining 4 causes for well intervention are summarized as follows: Pulled failed units (3): 1 unit was pulled following a motor failure and scheduled for DIFA to determine cause of failure, 1 unit was pulled because of a failed electrical connector and the remaining unit is scheduled to be pulled with a suspected seized pump subsequent to naturally flowing the well with high gas and sand production through the ESP. Electively pulled operable units (1): 1 unit was pulled to enable perforation of a new production zone. The instantaneous run time (IRT) methodology was chosen to analyze the performance of the ESP systems. The IRT is the cumulative average run time for all operating units with time. The IRT for the Penglai field is 471 days as of end December 2005 (Fig. 10a). Referring to Fig. 10a, there was a gradual increase in the IRT trend as the ESP installations progressed and a slight increase after the last installation in October 2003, before the jack-up drilling rig was demobilized. The increasing IRT trend continued until a number of long running units were electively pulled and had failed after the commissioning of the platform rig in August 2004, causing the IRT to reduce (IRT 407 days in September 2004). If the excessive sand related well interventions are discarded, a projected 2 year IRT may have been achieved in 2 years and 7 months after the first ESP installation (during April 2005). This would have been a great achievement for the project, as these ESPs were the first systems installed with no prior operating experience in this challenging field. This was determined by extrapolating the straight portion of the IRT graph from September 2003 through to August 2004 (Fig. 10b). Several more units were electively pulled and had failed from December 2004 onwards, causing the IRT to stabilize (IRT 573 days in June 2005). In late 2005, the IRT trend had declined, because several new installations had replaced failed long running units (IRT 483 days in October 2005). As previously stated, the majority of the well interventions were the result of sand that had significantly affected the IRT. The effect on the IRT was more apparent when longer running units were replaced as compared with shorter running units. Moreover, replacing multiple short running units also had a noticeable effect on the IRT.

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ESP Operation, Optimization, and Performance Review: ConocoPhillips China Inc. Bohai Bay Project

The performance of the ESP systems (and the wells) has improved significantly, even though this is not apparent in the IRT graph, through the number of electively pulled long running units. The performance improvements were because of the implementation of an effective sand control completion technique, enhancements to the ESP system to improve reliability, changes to operational practices and continuous real-time ESP monitoring. The mentioned changes should enable the ESP systems to achieve or exceed the project target average run life. Phase II Development Project and Future ESP System Enhancements As stated in the Introduction, the Penglai 19-3 oil field is being developed in two phases. The U.S. $4 billion Phase II project currently underway will consist of the installation of 5 more new wellhead platforms during the next 5 years. A total of 183 production wells equipped with ESPs will be completed to fully develop the Penglai 19-3 field, producing into one of the worlds largest FPSO: processing and handling capacity of 190,000 BOPD and 510,000 BFPD respectively with 2 million bbl storage capacity. Furthermore, 55 water injection and 6 cuttings reinjection wells will be drilled and completed. First production from Phase II is planned for second quarter 2007 from Platform C and total production from the field is expected to peak at 190,000 BOPD in 2009. The Phase II development area field conditions are similar to Phase I, the notable differences are: oil gravity 13 to 23API, oil viscosity at reservoir conditions Guantao 10 to 39 cp, producing GOR 300 to 500 scf/STB and initial well rates 500 to 8,000 BFPD. Potential future ESP system enhancements include: 1. ESP technology: the proven Phase I ESP system design and specification will not be affected by the notable differences in the Phase II well conditions. However, with more than 180 ESP installations scheduled to occur during the next 5 years, any technology that optimizes the installation process while improving service quality would be most beneficial to the project. Additional value is therefore realized by maximizing asset value through accelerating production and reducing rig associated costs. Such technologies include factory-shimmed compression type pumps, plug-andplay factory filled and factory-shimmed protectors, requiring no shimming measurements at the wellsite. Also, plug-and-play factory filled motors with plug-in type motor pothead, eliminating the need for taping electrical connections. These new technologies are delivered factory filled to the wellsite, thus eliminating the potential contamination of dielectric oil while servicing at the wellsite, therefore improving ESP system reliability. 2. ESP completion: adjust the existing completion methodology by stinging the ESP completion with deep set TRSCSSV into the sand control completion packer, thereby eliminating the vented packer, gas vent valve and associated penetrations. Therefore, simplifying the installation and improving system reliability. 3. ESP management: with the ESP population expanding from 21 to greater than 180 units during the next 5 years, there will be a substantial increase in workload for personnel responsible for commissioning, monitoring and optimizing the performance of the ESP

systems. A dedicated real-time ESP monitoring and surveillance system is required (not used in Phase I) to facilitate end-to-end data acquisition, monitoring, surveillance and management, minimizing risk, reducing operating cost (well intervention), decreasing down time and improving productivity. This system would identify trends and potential ESP and wellbore issues, in real-time, that may lead to failure or a reduction in system performance. The data provided enables a further detailed analysis and diagnosis to be conducted by trained Artificial Lift and Reservoir Engineers, so corrective or preventative action can be taken. Conclusions 1. The ESP systems were challenged with high free gas and excessive sand production from the onset of the project, the latter being the most detrimental to the ESP system performance. Contingency planning during the field development design phase may have allowed for some uncertainty regarding the sand control strategy, to effectively control sand production, to achieve the forecast production and reduce remedial well interventions. 2. The introduction of the vented ESP completion, the adoption of a new sand control strategy and changes to operational practices have resulted in significant improvements in ESP performance and operation. By enabling the free gas to be vented and a gas separator to be used in combination with an AGH, has permitted increased drawdown and therefore maximum production to be realized. Also, after installing check valves above the ESP assemblies no pump shaft failure has been experienced. 3. Conducting DIFAs on pulled equipment has been instrumental with identifying the root cause of system failure. Enabling equipment enhancements to be made for operation in the Phase I well environment, thereby improving the ESP system performance and increasing reliability to achieve and extend ESP run life beyond the average of 2 years. 4. The surface and subsurface trend data had been invaluable in aiding with remote performance monitoring of the ESP systems. Moreover, improving the quality and efficiency of decision making, from commissioning, to real-time system analysis and diagnosis, and assisting with failure analysis. Performing continuous ESP data trend analysis and performance modeling with specialist software has enabled the artificial lift system to be analyzed and diagnosed. Enabling the maximization of asset value from the stable daily production of reservoir fluids to be realized. The industrial VSDs had limited functionality, but provided the flexibility to respond to varying operating conditions and assisted with production optimization. 5. On-the-job knowledge sharing has enabled COPC Production Engineering personnel to better understand all aspects of ESP application engineering, operation and diagnosis. This has immensely assisted with ESP management through understanding the factors affecting ESP performance and equipment limitations. Also, helped maintain a close working relationship. The utilization of the ESP technician as the offshore focal

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6.

7.

point for ESP operations has proved to be extremely beneficial, ensuring commissioning and daily operations have been coordinated in an efficient manner. The formation of the joint ESP operating team had facilitated the engagement of multidisciplinary operational site and office based personnel, in discussions on ESP related matters and service delivery. Creating a collaborative environment for open and free communication, delivering operational performance improvements, enabling enhanced productivity and increased system run life during Phase I of the development. The performance-based contract has been helpful in the alignment of common goals and ensuring both parties commit the necessary resources to maximize ESP system run life. With more than 180 ESP installations scheduled to occur during the next 5 years, any technology implemented to optimize the ESP system installation process, enhance ESP system reliability to extend run life and assist with ESP management will result in significant gains in project value.

7.

Evaluation and Application Guidelines, paper presented at the 1999 SPE ESP Workshop, Houston, Texas, 2830 April. Breit, S., and Pelton, W.: Power Factor Considerations for Electrical Submergible Pumping Systems, paper presented at the 1990 SPE ESP Workshop, Houston, Texas, 30 April2 May.

SI Metric Conversion Factors API 141.5/(131.5 + API) bbl x 1.589 873 cp x 1.0 ft x 3.048 3 ft x 2.831 685 F (F 32)/1.8 hp x 7.460 43 in. x 2.54 mile x 1.609 344 psi x 6.894 757 Conversion factor is exact.

E-01 E-03 E-01 E-02 E-01 E+00 E+00 E+00

= g/cm3 = m3 = Pas =m = m3 = C = kW = cm = km = kPa

Nomenclature 538 Series Downhole equipment with outside diameter of 5.38 in. GN7000 Pump with total liquid and gas best efficiency point of 7,000 BPD @ 60 Hz. S70-100 AGH with total liquid and gas operating range of 7,000 to 10,000 BPD @ 60 Hz. S20-90R Gas separator with total liquid and gas operating range of 2,000 to 9,000 BPD @ 60 Hz. N Metallurgy of internal components is NiResist alloy. R Metallurgy of internal components is REDA 5530 alloy. Acknowledgments The authors would like to thank the management of ConocoPhillips China Inc., CNOOC and Schlumberger for permission to publish this paper. References 1. Beltur, R., Prado, M., Duran, J., and Pessoa, R.: Analysis of Experimental Data of ESP Performance under Two-Phase Flow Conditions, paper SPE 80921 presented at the 2003 SPE Production and Operations Symposium, Oklahoma City, Oklahoma, 2225 March. 2. Brown, K.E., and Lea, J.F.: Nodal System Analysis of Oil and Gas Wells, JPT (October 1985). 3. Wilson, B.L.: The Effects of Abrasives on Electrical Submersible Pumps, SPEDE (June 1990). 4. Patterson, J.C., Henry, J., and Dinkins, W.: Emulsion Viscosity Testing with ESPs, paper presented at the 2002 SPE ESP Workshop, Houston, Texas, 13 May. 5. Muecke, N.B., Kappelhoff, G.H., and Watson, A.: ESP Design Changes for High GLR and High Sand Production; Apache Stag Project, paper SPE 77801 presented at the 2002 SPE Asia Pacific Oil & Gas Conference and Exhibition, Melbourne, Australia, 810 October. 6. Lee, W.Y.: ESP Gas Separator Performance

TABLE 1Phase I Field Conditions Initial well rates, BFPD Producing GOR, scf/STB Water cut, % Oil gravity, API CO2 content, mol% H2S content, ppm Sand cut, vol% Pump intake pressure, psia Pump intake temperature, C Original shut in bottomhole pressure (SIBHP) @ pump intake, psia Bubble point pressure, psia Viscosity at pump conditions, cp Pump set depth, m MD Pump set depth, m TVD Well inclination at pump set depth, 1,000 to 6,100 150 to 1,100 0 to 22 18 to 22 0.3 to 35.1 0 to 6 0.01 to >30 400 to 950 40 to 60 1,260 to 1,710 Approximately at the original SIBHP 10 to 13 965 to 1880 865 to 1235 2 to 72

Fig. 1Penglai 19-3 Oil Field Location Map.

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ESP Operation, Optimization, and Performance Review: ConocoPhillips China Inc. Bohai Bay Project

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Fig. 2Phase I Field Map with Well Locations.

Fig. 3Phase I Field Schematic.

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Fig. 4Phase I Production Profile.

Fig. 5Case Study 1 Production Profile.

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Fig. 6aDIFA Photo of an Eroded Pump Impeller.

Fig. 6bPhoto of a New Pump Impeller.

Fig. 7DIFA Photo Comparing a Relatively New to Worn Pump Bearing Sleeve.

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Fig. 8Case Study 2 Production Profile.

Fig. 9Well Intervention Review.

Well Intervention Review

Total of 46 well interventions to 31st of December 2005

Failed Units 16

Operating Units 18

Electively Pulled Operable Units 12

Failed Units Breakdown

Unknown (DIFA TBA) 1 Seized Pump (High Gas and Sand) 1 Electrical Connector 1

Electively Pulled Operable Units Breakdown

Workover (Add Perfs) 1

Sand Related 13

Sand Related 11

Sand Related Failed Units Breakdown

Burnt Motor (Low Flow) 4

Sand Related Electively Pulled Operable Units Breakdown

Sand Bridge (Tubing) 3 Sand Fill (Low Productivity) 5

Plugged Pump 9

Excessive Sand Production 3

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Fig. 10aESP Performance Review.

Fig. 10bESP Performance Review: Projected Performance Disregarding the Excessive Sand Related Well Interventions.

*Mark of Schlumberger