September 2006 ///

Special Focus

Experience is crucial to expanding CSEM use

It’s been more than 30 years since the idea of using resistivity measurements for large-scale ocean reconnaissance in exploration was first proposed in academia. In shallow water, electromagnetic energy reaching the sea surface is transmitted through the air and subsequently back through the water, swamping most of the readings coming from the geological targets, so, making sea bed resistivity measurements a commercial business would have to wait until deepwater exploration became commonplace. Obviously, both of these events have now occurred. Since 2002, over 200 sea bed electromagnetic surveys have been conducted worldwide. Data from only a few of them have been released. Companies that were not part of the original development may have seen only modest proof of the efficacy of the technology. In addition to illustrating the technique, this article presents three examples of Shell’s Sea Bed Logging (SBL) experiences.

Is Utah's “Jurassic Wedge" a major petroleum province?

The recent discovery and development of a new oil field in the central Utah fold-and-thrust belt has put Utah in the spotlight for renewed onshore exploration in the Rocky Mountain region of North America, Fig. 1. This would not have been surprising a few decades ago, but after major oil companies drastically reduced their ventures in the Rockies, the discovery, by the Wolverine Oil & Gas Corp., has amplified significance. REGIONAL FRAMEWORK Utah is divided into four physiographic regions: Central Rocky Mountains (northwest), Colorado Plateau (east), Basin and Range province (west) and the High Plateaus (Transition Zone) in central Utah. The Central Utah Fold-and-Thrust Belt is largely included in the Transition Zone, although it does extend westward. The Transition Zone is structurally complex, having being affected by the compressional Sevier orogeny of Late Jurassic-Eocene, as well as Basin-and-Range extensional tectonics and volcanism of Oligocene-Neogene.

Unconventional exploration technologies: Take another look

There’s something about human nature that wants it both ways. We like it when some simple technology, something supposedly overlooked, succeeds wildly. It’s a bit cultural too: The less educated especially like it. It’s like poking a stick in the eye of megabucks PhD research and development. Conversely, we are suspicious of anything that’s too cheap, too easy. Surely, we think, the "big boys" with all their money and know-how, didn’t overlook this simple idea. They probably looked into it, and deemed it unworthy. All too often, the inventor or practitioner of the technology is unwilling to allow the technique to be critiqued, examined or make any attempt to prove its utility. "Why should I? I’ll find all the oil and make all the money!" they would say. (But that doesn’t stop them from asking me to publish them!) In such cases, it is fitting that their technology should remain largely unused.


Alarm systems greatly affect offshore facilities amid high oil prices

Reliability of oil and gas production facilities has never been more important. Poorly performing alarm systems negatively impact reliability and production. They can interfere with, rather than assist, the operator in handling an abnormal situation. This article covers the problem’s origin, its nature and a seven-step methodology for significant improvement of alarm systems. BUTTERFLIES AND OIL PRICES Small changes can have drastic consequences. Chaos Theory’s “Butterfly Effect” proposes that the fluttering of a butterfly’s wings in the South China Sea could cause tiny changes in atmospheric conditions, which, over time, can propagate into hurricanes in the Gulf of Mexico. These are followed by offshore oil production losses and oil price increases. This effect applies to all sorts of processes that are sensitive to initial conditions and small changes, including hydrocarbon production processes and the systems that control them. Oil production facilities deal with this effect every day – in the alarm system.

High prices, instability keep activity high

In the face of continued strong demand for oil and gas, global crude and condensate output remained roughly even last year, as did reserves, while drilling reached heights not seen since the mid-1980s. This year, the exclamation point on drilling activity should be even more pronounced. Futures crude prices have gone from a $48-to-$55/bbl range two years ago, to a $58-to-$68/bbl interval last year and now a $68-to-$78/bbl trading average in 2006. As this issue of World Oil went to press, the NYMEX price for WTI crude was rising back to the mid-$70s, due to the threat of new, damaging tropical weather in the Gulf of Mexico’s peak hurricane season, plus strong global demand and instability in the Middle East. We need not repeat the litany of reasons for the pressure on global oil and gas production and reserves, as well as the significant hike in drilling.

Preserving well integrity with pre-job testing

The Netherlands is home to underground gas storage wells that are used to inject and store natural gas during summer months. Throughout the winter, the wells produce gas during peak delivery periods. To ensure that Nederlandse Aardlie Maatschappij’s (NAM) Grijpskerk Underground Gas Storage met its contractual obligation to deliver adequate gas during the peak period (total peak capacity 2,000 MMcfd) Well GRK-47 needed its production and injection rate restored. NAM performed a coiled tubing (CT) acid stimulation to restored the well’s capacity. The well’s performance declined by 52.5 MMcfd over the years, leading the operator to suspect scale, fines and/or drilling damage. Since the well was completed with pre-packed screens in a sandstone reservoir, the impairment increased the drawdown over the screen to 1,450 psi, jeopardizing screen integrity, as well. The screen has a differential pressure rating of 1,000 psi. An acid screen wash and mud acid squeeze was proposed to remove the impairment and reduce drawdown.

Progress made in removing water soluble organics from GOM produced water

Oilfield produced water contains a diverse mixture of compounds that varies from formation to formation. Of particular importance are the organic compounds classified as “Oil and Grease” (O&G) by the Clean Water Act. O&G must be removed to meet environmental, political and operational goals. Excessive O&G in re-injected water can foul the equipment or the formation. Discharged water must meet legal or contractual standards. The O&G in water discharged to the Gulf of Mexico (GOM) is limited to a 29-mg/L yearly average. THEORY AND DEFINITIONS For the purpose of discharge, O&G is a legal category. It comprises the residue of compounds that extract into n-hexane from water at pH < 2, after boiling away the solvent.2 The EPA uses ALOLA (a lot of long acronyms) to categorize different portions of this material. The term “Water Soluble Organics” (WSO) is often used to describe the polar, non-strictly-hydrocarbon portion of the O&G compounds, which adsorb onto silica gel.

Special Report

Deepwater Technology: Engineering the Benguela-Belize compliant piled tower

The Benguela-Belize project is an oil and gas production development located in Block 14 offshore Angola, West Africa. It represents the first application of compliant piled tower (CPT) technology outside of the US Gulf of Mexico, where two such structures have previously been installed. In its finished configuration, the CPT is the fifth-tallest, free-standing structure in the world, more than 30% higher than New York’s Empire State Building. The fast-track project created a bottom-founded production hub facility for six oil pools in 1,280 ft (390 m) water depth. The Benguela-Belize structure was designed to support 40 wells, 16 risers and an operating payload exceeding 40,000 metric tons. This article focuses on the process for selecting the CPT concept, and the considerations and challenges overcome, while designing and engineering the supporting tower for the drilling and production platform.

Deepwater Technology: Flow assurance requires specific design

An accurate flow assurance method requires a comprehensive look at the entire field life and changing reservoir forecasts, suggesting that customized solutions are more reliable than a generic approach. This case history addresses thermal issues encountered during the detailed design of a deepwater field offshore West Africa. The technical solutions proposed along with the detail and final design decisions made by the operating company are explored. FIELD LAYOUT AND ISSUES The field is in 1,200 – 1,600 m water depth and is produced through two drill centers (DC). Water is injected at one end of the reservoir and gas is injected at the other, presenting a wide range of fluid properties to consider. Each DC has two daisy-chained manifolds connected to six wells. The production is extracted through two 10-in. flowlines and processed to a host facility midway between the DCs. A 6-in. test line extends from each DC’s manifold to the host.

Deepwater Technology: Hurricanes of 2005 highlight need for improved mooring systems

Now that the calendar has turned and the offshore oil industry is facing another September of hurricane potential in the Gulf of Mexico (GOM), it is appropriate to review the state of mooring systems and advances that have been made. The industry is progressing in modeling and materials, some of which were presented at this year’s Offshore Technology Conference (OTC). What follows are highlights of the significant work presented there that point to the industry’s deeper-water future. MAJOR DAMAGE The Atlantic basin produced 27 named storms in 2005, exceeding the 21-storm record set in 1933. Of the 27 storms, 14 became hurricanes, which set a single-year record. The season produced three Category 5 storms: Katrina, Rita and Wilma. The panel discussion held at OTC 2005 reviewed the damage caused by the storms and the industry’s response. Aside from knocking out production, destroying 114 platforms on the shelf and upending the Typhoon tension leg platform . . .

Petroleum Technology Digest: Lightweight proppants in slick water fracs boost flush output, cut post-frac decline

Over time, various hydraulic fracturing treatments have been favored in the Southwest Westbrook Unit’s Clearfork reservoir in Mitchell County, Texas, depending on various operators and stimulation technology evolution. There is a natural tendency to stay with the “tried and true,” as regards both the technology and the service provider. While results with this philosophy may be acceptable, they are not necessarily optimum. Beginning in 2004, experimentation with slick water treatments using lightweight proppants began. Results showed that flush production following treatment was increased, and post-frac production decline was less severe. This applied to both new infill wells and recompletions. Success in 2004 led to continued development in 2005 and 2006, and plans for 2007. Exploitation through 2007 should boost unit recovery by 6.6 million bbl of oil. Individual well incremental reserves, ranging from 35,000 to 50,000 bbl, are quite attractive, even with very conservative economics.

World Oil's 2006 Drill Bit Classifier Tables

Annual comprehensive listing of major manufacturers’ commercial bits. Divided into six formation types, from soft/sticky to extremely hard; tables show name, IADC code, size and performance of each firm’s offerings.


Drilling advances

Post-event analysis. Let’s face it – things do go wrong in the oilpatch. Murphy, or someone with the same last name, developed his first “Law” years ago at NASA in Houston. We all know it: If anything can go wrong, it will. Murphy was right. A lesser known law developed by Murphy says: Nature always sides with the hidden flaw. Unfortunately, the hidden flaw has an annoying way of developing into serious problems on occasion. The drilling rig is a place where the unexpected can occur at any time. When this leads to an event that results in a dangerous situation, an injury or fatality, loss of property or significant loss of time, the first question is “How did it happen?” Sadly, the answer is often “I don’t know” or mere speculation is offered without in-depth forensic analysis of the event.

Editorial Comment

Cogito ergo, spud. I’ve noticed that comedians often use the name Kimba to describe a hungry child. I suppose it’s the emblematic name for starvation . . . It was the aid worker’s first gig, feeding the hungry in some far-flung impoverished country. They had just received a shipment from Toys For The Needy, and she was handing out the toys to the children. It made perfectly good sense to her. She was from a huge, wealthy country, with purple mountains and amber waves of grain. What child doesn’t want American toys? Made in China. She handed Kimba his toy. It was a Mr. Potato, the idea being to dress up a potato into a man: push on the arms, the glasses and a top hat – although nowadays, there’s also a Darth ‘Tater version – you get the picture. The generous donor was kind enough to include a real potato to play with.

International Politics

Bolivia’s gas sector nationalization. Almost two centuries after Bolivia proclaimed its independence from Spain, Bolivian President Evo Morales opened a newly elected Constituent Assembly, where the first task is to rewrite the country’s constitution. Morales’ focus is on empowering the majority indigenous population for the first time. Outside of Bolivia, particular focus will be on whether the assembly places any further controls on energy or other economic sectors, especially foreign investment. In the new assembly, elected on July 2, Morales’ party, MAS, (Movement Toward Socialism) has a thin majority. MAS does not have the two-thirds needed to control the assembly completely. A good portion of the opposition, particularly from the powerful department (equivalent to a US state) of Santa Cruz, will fight Morales on any move that discourages foreign investment. President Morales announced the nationalization of energy in May, causing great consternation in Washington and Brasilia.

What's new in production

Diamondoid update. If one takes to heart the musings of the general media, the worst element on the planet is carbon, especially oxide of carbon. However, an old song prized and celebrated carbon: “Diamonds are a girl’s best friend.” In the oilfield, for cutting ability, wear resistance, and heat tolerance, natural diamond and man-made diamond cutters have a hallowed place in the driller’s heart. Carbon also has good electrical conductivity, so is suitable for high-temperature electrical products. Carbon is a most useful element. Three years ago World Oil brought the news of diamondoids to your attention (World Oil, January 2003, p. 17). These are hydrocarbons with the chemical structure C4n+6H4n+12 that occur naturally in oil and gas. A gallon of condensate can carry a couple of spoonfuls of diamondoids, according to Chevron.

What's new in exploration

Exactly when did that happen? Explorationists spend a lot of time correlating events. Over the last few decades, our ability to determine geological time frames has become much more refined, because we have better tools, such as the ion microprobe and the refinement of radionuclide parent-daughter relationships. Precision still requires two things to match up: the isotopic evidence (geochronology) and the depositional history and relative location of the sample (chronostratigraphy). Most folks know that the end of the Cretaceous Period (K) and the beginning of the Tertiary Period, known as the K-T boundary, occurred about 66 million years ago, accompanied by the mass extinction of dinosaurs. The prevailing theory is that a massive asteroid slammed into the Gulf of Mexico, just offshore Yucatan, and triggered the extinction event. However, recent study of melted rock ejected far from the Chicxulub impact crater suggests that the impact was too early to have caused the mass extinction, about 300,000 years too early.

News & Resources

Companies in the news

Fabrication and construction firm Dynamic Industries, Inc., has acquired the assets of Mid-Fab (formerly UNIFAB) of New Iberia, La. Construction and fabrication facilities for Dii will increase from 107 acres to over 274 acres. Included in the purchase is a 35,000-sq-ft dedicated roll mill shop, while total facility space increases from 187,500 to nearly 513,000 sq ft. Covered shop space will now exceed 218,000 sq ft. European private equity and venture capital company 3i will sell its stake in Aberdeen-based Specialised Petroleum Services Group Ltd (SPS), a provider of wellbore clean-up products and services for the oil and gas industry, to M-I Swaco. The purchase price for the whole company is about $165 million (£89 million). 3i and managed funds held a 51% stake in SPS. M-I Swaco is jointly owned by Smith International Inc. and Schlumberger Ltd.

Industry at a glance

According to IEA, OPEC crude supply fell 225,000 bopd in July, while world oil supply gained 615,000 bpd, totaling 85.5 million bpd. This is 800,000 bpd higher (0.94%) than levels one year ago. IEA forecasts restricted supply in August and September due to outages in Alaska, Nigeria and Iraq, as well as heavier maintenance in the North Sea. World oil demand remains unchanged from last month at 84.8 million bpd. IEA predicts future oil prices will rise as a result of violence in Lebanon, Israel and Palestine, as well as Iran’s indications of using oil as a response to UN sanctions. In the Gulf of Mexico, seven deepwater discoveries were made in 2006. The US Minerals Management Service expects the trend to continue. In August, a Romanian-owned rig, the Orizont, was attacked by an Iranian warship, damaging a crane and cabins. The conflict arose from contractual disagreements.

New products

Laser-based moisture analyzer SpectraSensors, Inc., has introduced a new moisture analyzer technology that outperforms traditional gas sensors. The laser-based analyzer can obtain consistently accurate readings on wet gas. Unaffected by the contaminants in natural gas streams, especially wet ones, the natural gas analyzer offers a precision alternative to the problems of inaccurate and slow measurements that can result in excessive treatment costs or shut-ins. Using a “tunable-diode” laser-based technology, the analyzer accurately monitors moisture content by precisely measuring the absorbance of light by moisture molecules, thereby measuring the exact amount of water (or carbon dioxide). There are no chemical conversions involved, and no natural gas sensor contact with the sample gas. This eliminates “coating” problems, erratic measurements, and exceeded tariffs. Erosion-resistant control valves Metso Automation’s Neles E Series ceramic-lined ball valve, using a new generation of ceramic material, provides the most erosion-resistant control valve currently available.

People in industry

Wood Group ESP, a subsidiary of John Wood Group PLC, has named Andrey Ostisty as business development manager for the company’s operations in Russia and other CIS countries. Based in Moscow, Ostisty has 19 years of industry experience. Also, Wood Group ESP appointed Trevor Adams to the new position of country manager for Libya. He has over 25 years of experience in the oil and gas industry, including 12 years in the electric submersible pump market. Adams has been with WGESP since 2004. W&T Offshore, Inc., has promoted Stephen L. Schroeder to COO. He joined the company in 1998 as staff reservoir engineer, and served as production manager from 1999 until July 2005. Schroeder most recently served as VP, Production. Prior to joining W&T Offshore, he was with Exxon for 13 years.

World of Oil

Murkowski's loss throws Alaskan gas line into doubt Alaska Gov. Frank Murkowski's defeat in last month's Republican primary leaves the future of his proposed natural gas pipeline project with ExxonMobil, BP and ConocoPhillips in jeopardy. Murkowski used his re-election bid as a referendum on the proposed contract. Public response was overwhelmingly negative – just under 19% of primary voters backed Murkowski and, symbolically, the proposed contract. Voters gave 51% of their support to Sarah Palin, a former small-town mayor who ran on an anti-politician platform. Palin faces former two-term Democratic governor Tony Knowles in the November general election. Palin and Knowles have said that they want to see other proposals before deciding how to proceed with the gas line deal-making. Murkowski's contract would set the tax and other terms for North Slope natural gas development and lead to construction of a $25-billion pipeline to Canada to deliver that gas into the US Midwest.


06-09_High-Abraham_T2.htm (Sep-2006)

  Forecast of 2006 World Drilling &#150; Comparisons with 2005 and 2004 (Data compiled by World Oil, with assistance from governmental agencies, industry associations, oil companies and private sources.)

06-09_High-Abraham_T3.htm (Sep-2006)

  World Crude/Condensate Production and Wells Actually Producing &#150; 2005 Versus 2004 (Data complied by World Oil, with aid of governmental agencies, industry associations, oil companies and private sources.)