September 2007 ///

Special Focus

Graphical analysis of laminated sand-shale formations in the presence of anisotropic shales

Laminated sand-shale models with anisotropic shales have been discussed extensively. The interpretation methods are written in elaborate mathematical equations. However, there has not been a clear procedure to determine key parameters such as shale anisotropy, to guide the choice of solution, and, more importantly, to recognize the circumstances in which a solution is robust or sensitive to errors. A graphical crossplot gives better insights into petrophysics than a set of equations, while interactivity allows instant visualization of the solutions, thereby helping the petrophysicist in the most effective way. Objectives of graphical analysis are: To determine the shale anisotropy parameters and whether it is necessary to create multiple zones To define the region boundaries where each analytical solution is applicable To illustrate the effect of data outliers on the results To quickly perform sensitivity tests.

The status of wide-azimuth and multi-azimuth seismic acquisition: What is working and what remains to be done

To improve exploration success rates and achieve optimum well placement, better seismic imaging tools are needed. What geologists and geophysicists are learning is that for each geology type, a custom fit of carefully designed data acquisition and processing schemes is necessary for achieving the best answers. One method does not fit all. Rather, geophysicists will continue to evolve a group of tools, each for a specific purpose, including solutions for steeply dipping strata, high-velocity layers (e.g., sub-salt and sub-basalt imaging), highly anisotropic reservoirs and so on. New methods of acquisition that feature wider azimuths and variable azimuths have recently been experimented with, generally, for the purpose of greater reservoir illumination. The spate of interest in bringing the benefits of wide-azimuth and multi-azimuth seismic acquisition is reflected in the literature of the past few years, especially in the sessions from the most immediate SEG and EAGE Annual Meetings.

Will marine seismic data benefit from dual-sensor towed streamers?

For decades, it has been known mathematically that if one could simultaneously measure the acoustic pressure and particle velocity aspects of a compressional wave in water, then certain benefits would accrue. Among these benefits is the ability to tow streamers deeper, in a quieter environment, resulting in an improved “weather window,” as well as the removal of the down-going wavefield component that is reflected from the sea surface, thereby recovering significant high- and low-frequency amplitudes normally missing from conventional seismic data. Until now, the actual construction of such dual, collocated sensors on a streamer, as well as understanding how best to use them, had not been achieved. At the June EAGE annual meeting in London, PGS announced that it had made such an achievement. As one might expect, there was considerable interest in the new technology, as well as the sort of skepticism and questions that would be expected from the exploration community.

Features

A low-cost monitoring alternative for unconventional gas

Producers of unconventional gas fields are often forced to rely on group metering, since the cost of metering individual wells by conventional Supervisory Control And Data Acquisition (SCADA) cannot be justified for the lower production volumes in these fields. This can lead to higher operational costs and lower production, because operators do not have data from specific wells that would allow them to optimize service operations, minimize downtime and maximize production. A low-cost monitoring solution has been developed specifically targeted at unconventional wells. Advanced Flow Technologies’ Flow-Net is a Web-based system that is easy to install and non-intrusive, using an acoustic sensor clamped to the outside of the pipe or wellhead. An optional pressure sensor can be added. Pengrowth has applied the monitoring system to the North Twining coalbed methane (CBM) field. The system has been used to monitor new well production, optimize water removal, optimize gathering systems and enhance reporting above and beyond conventional spot-testing methods.

Co-development of Spiderman and San Jacinto fields in GOM

A unique partnership has developed from the needs of exploration and production companies and midstream energy companies to facilitate the development of several ultra-deepwater, natural gas discoveries in the eastern GOM, resulting in the Independence Project. Two of the anchor fields for this project are a natural fit for co-development. Five months after Anadarko discovered Spiderman field in November 2003, Eni announced the discovery of San Jacinto field. The proximity of these discoveries to each other along with their distance from the Independence Hub led to a beneficial commercial solution. This paper is an overview of the projects from discovery through development planning to project sanctioning. The Atwater Valley Producers Group: Anadarko Petroleum Corp., Devon Energy Corp., Eni and Hydro Gulf of Mexico along with two midstream companies: Enterprise Products Partners and Helix Energy Solutions Group, have collaborated on a deepwater hub and export pipeline system ...

Deepwater statistical report: Top 10 deepwater producing countries—2000 to 2010

As this chart illustrates, oil and gas production from the top 10 deepwater countries has more than doubled in the last six years. As global demand continues to escalate, this trend is expected to increase sharply over the next few years. Production from the top 10 deepwater producing countries is set to double again, to over 9 million boepd. Looking at the history of the key producing areas, US Gulf of Mexico has been the largest single producing region, since the beginning of the decade. Out to 2010, GOM is projected to continue its number one status, closely followed by Brazil, which will have tripled its production since 2000 and is expected to produce around 2.3 million boepd in 2009 and 2010. It is anticipated that West Africa will continue its rapid deepwater production growth, with Angola and Nigeria collectively expected to produce as much as the US GOM by the end of the decade.

Fast-track conversion transforms a supertanker into the world's largest, most intelligent FPSO

The world’s largest Floating Production, Storage and Offloading (FPSO) vessel was put into operation in the Gulf of Mexico KMZ field by BW Offshore for Pemex in late June 2007. The 360,700-ton, single-hull supertanker Berge Enterprise was converted in less than two years into a mobile facility capable of processing 600,000 bopd and 120 MMcfd of gas, Table 1. An integrated engineering and construction team for the vessel’s process automation systems, led by BW Offshore and Emerson Process Management, maintained a fast-track schedule and achieved other significant goals. The “intelligent” FPSO uses a high degree of digital instrumentation, making maximum use of field diagnostics for operation and maintenance. Fabrication and installation costs were limited through tight management and modular construction of topside process units. While modularization is not new, having the automation system built into each functional process unit during pre-fabrication was revolutionary.

Improved deepwater cementing practices reduce NPT

Over a four-year period, during which some 42 wells were constructed by BP, processes were developed to improve cement slurry design and reduce Non-Productive Time (NPT) during cementing operations on deepwater wells. Cementing best practices have been followed for many years; however, not all of these are applicable to deepwater operations, especially for the riserless sections. This article will review the results of developing slurry design practices, temperature prediction/mud removal modeling, and Subsurface Release Plugs (SRP). The cement blend used can have a profound impact on cost, both in design and supply logistics. As deepwater operations move farther from shore bases, the application of a systems approach should be considered to cover all cement design needs. The challenges vary from shallow water flow potentials to high temperature and pressure. Both conventional and foamed cement slurries can be successfully used when properly designed and placed.

Monitoring oil-in-water in offshore production

In 2006, Statoil tested an ultrasonic, in-line oil-in-water monitor on Sleipner A platform. The company found that the online monitor minimizes errors that can result from traditional manual sampling, and it also provides early warning signs of potential hazards, thus allowing preemptive measures to correct possible problems. The monitor’s real-time information on oil concentration can be used for more proactive operation and control, thus enabling better regulation of the produced water facility. GLOBAL WATER PRODUCTION The last few years have seen a dramatic increase in global water production. Globally, the average watercut is 75%, a 5% increase on watercuts 10 years ago. Watercut is also increasing on the Norwegian Continental Shelf (NCS), where water-to-oil ratios have increased substantially. According to the Norwegian Petroleum Directorate (NPD), annual oil discharges to the sea total over 3,000 tons, with a water-to-oil ratio that increased to 1.2 in 2006 from 0.93 in 2004.

Operators ride the crest of the global wave

These are plentiful times for the worldwide upstream industry. Last year, for the first time in more than two decades, the global drilling effort exceeded 100,000 wells. Although this year will be up only slightly, it will be another superlative, 100,000-plus performance in the total wells column. Furthermore, worldwide oil and condensate output squeezed out a minor gain, while global oil and gas reserves eased higher. For most of the summer of 2007, futures crude prices have traded relatively high, in a range of $65/bbl to $74/bbl, spurred by a consistently strong world economy, particularly outside the US. Oil prices remain overly sensitive to weather and military/security issues, demonstrating significant volatility on an increasingly daily basis. Healthy prices coupled with high production rates are yielding nice profits for most operators, who have plowed much of that money back into new drilling. Yet, there may be some storm clouds on the horizon.

Plugging agents add value to EOR operation

Adding chemical oil-displacement agents to steam flooding treatment has recently become a common Enhanced Oil Recovery (EOR) method. However, the significant reservoir heterogeneity in Xinjiang heavy oil reservoir has resulted in steam channeling, which may allow the injected chemicals to move to the producing well while bypassing the pay zone with high oil saturation. This has led to poor utilization efficiency and sweep efficiency of the chemicals. A new technique uses plugging agents to block the steam channels before injecting the oil-displacement chemicals. This helps to expand the sweep range of chemicals to the untouched area, improving recovery. After promising laboratory results were obtained, the method was applied to the 314 wells in regions 9(4) and 9(5) of Xinjiang field. Of these, 213 experienced increased oil production, totaling about 247,600 bbl (36,650 metric tons) over 7 yr, as well as an average reduction of more than 3% in watercut.

Project risk: A key consideration for upstream energy project management

Project management must involve detailed evaluation, assessment and mitigation of a wide range of risks in order to make the right decisions at the appropriate times. By managing risk, a company can greatly reduce project costs, improve the project schedule and ultimately increase stakeholder returns without stumbling over unexpected events. A definitive process is required in order to systematically and appropriately identify, assess, control and reduce risk (and/or exploit uncertainty and opportunity in some cases) during all phases of a project. There are three main areas of project risk: Pre-FEED or conceptual risks Technical (engineering and design) risks Execution (construction, installation, start-up and commissioning, operations) risks. If project risks, particularly project execution risks, are not managed through comprehensive assessment and measured responses, the consequences frequently come back to haunt all of the project stakeholders, and can lead to human and financial catastrophes.

Putting the well in the best place in the least time

Even when drilling a mature reservoir already pierced by 52 wells (25 of them horizontal) there can be surprises. Armed with an impressive knowledge base and a comprehensive development plan, Chevron Nigeria-operator of the Nigeria National Petroleum Corp./Chevron Nigeria Ltd. Joint Venture-turned to a new technology to help develop Meji field. Meji field, discovered in 1964, consists of stacked reservoirs arrayed along a southeast trending rollover anticline and separated by numerous faults. Deposition is of Late Miocene age. The target for the four-well drilling program was an estimated 16 million bbl of oil reserves, representing a production gain of about 9,000 bopd from the field. The reservoir consists of clean middle- to upper-shoreface delta front deposits, has a strong water drive and no gas cap. So the closer the well could be drilled to the ceiling the more reserves could be accessed. Accordingly, key objectives included staying as close to the reservoir ceiling as possible...

Unlocking the power potential of wastewater

Many US oil and gas wells produce hot water as well as hydrocarbons. These wells-which, in general, produce fluids at temperatures below 220°F-have been estimated to be capable of generating as much as 5,000 MW of power. The Rocky Mountain Oilfield Testing Center (RMOTC) recently partnered with Ormat Nevada Inc. to test the concept of using oilfield wastewater to power field production equipment. The test will be performed beginning early in 2008 at Teapot Dome Oilfield, also known as Naval Petroleum Reserve No. 3 (NPR-3), located about 35 mi north of Casper, Wyoming. NPR-3 is operated by the US Department of Energy (DOE) as both a producing oil field and a test site for new and developing oil and gas, and renewable, energy-related technologies. THE PROJECT In January 2007, Reno-based Ormat, which develops and operates geothermal power plants in three states and internationally, entered into a Cooperative Research and Development Agreement (CRADA) with the DOE.

Columns

Drilling advances

Drilling, like most other industrial operations, is actually a collection of technologies, trades and people. While it may seem somewhat distant to consider cement as an integral part of drilling, just try drilling a well without it. In ancient times, the Assyrians, Babylonians and Canaanites used various clay mixtures to bind sun-dried mud bricks to form structures with limited cohesiveness. On a visit to the historical site of Jericho, an oasis in Israel’s West Bank, our guide explained that archaeologists had determined that the mortar that held the fables walls was actually clay mortar dug from a nearby hill. That could have contributed to the walls’ catastrophic failure. Later, the Egyptians added lime and gypsum to the mortar mix as binding agents. That led to building larger, more substantial structures, including the pyramids. They are still held together by this early grout. The Romans finally got it all together.

Editorial comment

nsettling mortality. Many of you have seen the film of the elephants mulling over the bones of a long-dead elephant, almost in a strange, mournful fashion, showing that they recognize their own mortality, just as we do. Most of us who have been schooled in geology and the earth sciences know that our existence as a species might also be temporary. We see the fossils of many creatures that once roamed the Earth by the millions, but are now long gone. What caused these many mass extinctions that wiped out upwards of 50% to 95% of all the species of life on Earth? Was it an asteroid collision? A super-earthquake? Climate change? When it comes to interfering with Nature, folks generally divide into two camps: Do Something or Do Nothing. I’m slightly in the middle, but clearly leaning toward the Do Something camp.

Exploration discoveries

Asia. Hoang Long Joint Operating Co. made a gas discovery offshore Vietnam in the Cuu Long basin with its TGD-1X (Te Giac Den) exploration well. The well was drilled on Block 16-1 and found pay in two Oligocene sandstone intervals on a structure that covers 11.6 sq mi. Apache Corp.’s Julimar East-1 exploratory/appraisal well in Australia’s Carnarvon basin tested two reservoir intervals at a combined rate of 85 MMcfd of gas. The well logged 224 ft of net gas pay in six sandstone reservoirs of the Triassic Mungaroo formation. This represents a 70% increase in net pay from the company’s April 2007 Julimar-1 discovery well. Recoverable reserves for the Julimar complex could exceed 1 Tcf of gas. Reliance Industries made an oil and gas discovery in the deepwater sector of the Cauvery basin off India’s southeast coast ...

Oil and gas in the capitals

A smuggled suitcase stuffed with cash is pouring cold water on the romance between the leftist governments of Argentina and Venezuela. Argentina has issued a warrant for the arrest of the Venezuelan businessman who entered the country on Aug. 4 with almost $800,000 in undeclared $50 bills in his suitcase on a plane chartered by the state-owned oil company, Energia Argentina SA, or Enarsa. The businessman, Guido Antonini Wilson, was flying with four executives of Venezuela’s Petróleos de Venezuela (PDVSA) and three Argentine public officials. After questioning, Wilson reportedly left the suitcase with customs officials and departed the country unmolested. Statements by the government of Venezuelan President Hugo Chavez have ranged from simple denial of any connection between Wilson and PDVSA to blaming the incident on a CIA plot to damage Chavez’s credibility. Chavez has ignored Argentina’s demands for an apology . . .

What's new in exploration

WThe price of natural gas in the US (Henry Hub) dropped 30% between early June and late July 2007, from $7.89 to $5.56/MMbtu ($8.10-5.71/Mcf). From March to July, US imports of LNG surged to record levels, averaging 73% higher per month than the same period in 2006. Are the vast reserves of previously stranded gas beginning to enter the US? And will LNG imports hurt domestic gas E&P? Probably not in the near term, but it is important to understand the factors affecting the recent gas price downturn. The fundamental gap between indigenous North American gas supply and demand is undeniable (“The impending US gas supply crisis: Why prices will increase,” World Oil, June 2007), but prices are based on a short-term supply assessment that generally consists only of the current and upcoming demand seasons. A mild 2006-2007 winter and an exceptionally cool 2007 summer in the US have resulted in record amounts of gas in storage ...

What's new in production

The Sultanate of Oman is blessed with oil, but much of that oil is heavy. Oman has experienced a drop in crude production over the past six years to 737,700 bopd in 2006 from 956,000 bopd in 2001. For the first five months of 2007, production continued dropping to an average 713,000 bopd. The average Omani well produces about 400 bopd. This situation creates a problem for the treasury, since some 40% of the country’s GDP comes from oil. The government has acted and has put in motion several EOR projects to bring major heavy oil reserves into production. In 2005, Occidental Petroleum was granted a PSC to steam flood Mukhaizna field. Other fields being developed with EOR processes include Fahud, Harweel, Marmul and Qarn Alam. Mukhaizna field covers more than 40 mi2 and holds reserves of over 2 billion bbl of original-oil-in-place.

News & Resources

Companies in the news

Halliburton has agreed to purchase the entire share capital of OOO Burservice, a provider of directional drilling services in Russia. Founded in 2004, Burservice is headquartered in Usinsk, Republic of Komi, and has about 100 employees. Also, Halliburton has closed the previously announced acquisition of the entire share capital of PSL Energy Services Limited (PSLES), an Eastern Hemisphere provider of process, pipeline and well intervention services. Headquartered in the UK, PSLES has about 1,000 employees and operational bases in the UK, Norway, Middle East, Azerbaijan, Algeria and Asia-Pacific locations. IHS Inc. has acquired the assets of Strategic Decision Group Corporation’s Oil & Gas Consulting Practice (SDG O&G) for $7.6 million in an all-cash transaction. SDG O&G will be managed as a service within Cambridge Energy Research Associates (CERA), an IHS company.

Industry at a glance

World oil supply increased by 1.1 million bopd in July to 85.3 million bopd, but monthly gains from non-OPEC producers could prove short-lived as maintenance and seasonal factors will likely reverse the July increase in August and September. WTI reached a record high of over $78/bbl in July, but then fell back sharply on a combination of concerns over growth and poor refining margins. OPEC raised its forecasts of world oil demand by 130,000 bopd for this year and by 120,000 bopd for next year, but warned that the demand outlook was being clouded by a number of “emerging uncertainties.” Changes have been made to the world oil and NGL production table, as Africa-others has become Africa/Middle East-others. Also, data for the workover rig graph and table will henceforth come from Weatherford and will now include rod jobs and wells less than 1,500 ft deep.

Meetings and Events

New products

Oil shear braking system Offshore Source, LLC, has introduced an oil-shear braking system. The technology uses multiple friction disks cooled in recirculating transmission fluid. The result is precision control and greater longevity. The Drill Master Brake can serve as an energy absorber for winch, tensioning and drilling applications requiring high torque, low speed and precise weight-on-bit control. The smooth oil shear system eliminates the stick-slip and chatter common with low-speed drum rotation in hard rock formations. Also, by using the fluid for lubrication and cooling, the life under load is much longer, allowing for continuous drilling for weeks or months with no change in characteristics. The quick response piston and low inertia are also beneficial for drilling under varying load conditions such as rock to sand to shale, without interruption of drilling operations. The system features a totally enclosed design to protect equipment from the elements.

People in industry

InterAct PMTI has named Brent Boudreaux as director of Marine Operations. InterACT PMTI, formerly Pacific Management Technologies Inc., was acquired by Acteon in June. Boudreaux has more than 15 years of oil and gas experience, primarily in marine construction/decommissioning. He was previously general manager of TETRA Applied Technologies’ heavy lift decommissioning division. The East of England Energy Group’s John Best was presented with the Individual Contribution Award by the trade association Forum London for his role as chief executive of the Great Yarmouth-based energy group. Six years ago Best established EEEGR, whose members range from the oil industry to wind power and from multi-nationals to local suppliers. Pål Helsing was appointed executive VP for Aker Kvaerner’s Business Area Field Development, succeeding Simen Lieungh. Helsing comes from Subsea, one of Aker Kvaerner’s five business areas, where he was senior VP for Subsea Systems.

World of Oil

China’s crude production fell in July as heavy rain across the country flooded a number of producing wells. In July, China’s crude production reached 113.6 million barrels of oil, down 1.7% from the same period last year. Floods in the west and east of the country have crippled production at some fields, an industry official said. China’s production has been struggling to fight the natural decline in mature fields, with extra capacity in remote fields in the west just managing to offset the decline. Cambodia has stepped up naval patrols to protect newly discovered fields off the country’s southwestern coast, government officials said. The country has transferred a brigade of troops to its navy and is training the soldiers in marine skills, the Associated Press reported. Yim Sovann, head of the parliament committee on defense and the interior, said the move “responds to the routine need to protect maritime borders ...