Weatherford operations in South America

By Kyle Chapman, Weatherford International

COLOMBIAN OPERATIONS

Growing activity levels are increasing service and equipment demand across a broad scope of applications. In response, Weatherford has significantly expanded its footprint in Colombia with the recent addition of new service and product lines for well design and performance improvement. In line with the rapidly growing oil and gas market in Colombia, Weatherford is increasing its presence—and offerings—to support clients from the Barinas to the Marañon basin.

The introduction of the Contract Drilling product line is one way Weatherford is progressing in Colombia. Two 1,500-hp drilling units are now in the country working on a three-year contract in the Castilla and Chichimene fields for Ecopetrol. The rigs are located in the Llanos area south of Bogotá, where multilateral wells are being developed. Anticipated increases in activity may soon require additional rigs to be added to the fleet. These drilling operations are using Weatherford service lines, including wireline services, well construction, cased-hole completions and artificial-lift systems.

Fracturing, stimulation and coiled-tubing services have recently been introduced into the Colombian marketplace. A total of 12,000 hp of fracturing and stimulation equipment, along with a 1 1/2-in. coiled-tubing unit, are already at work. Engineered Chemistry and drilling fluids are now available in Colombia, offering one of the most complete portfolios for oilfield applications. Through-tubing operations will be used with our coiled-tubing services, providing inflatable, milling and fishing capabilities to our clients—offering up-front alternatives to potential workover operations.

To date, successful milling operations have been carried out for several companies. Drillstem testing offers the first introduction of this service in the Latin American region by Weatherford. Work has already been performed for a number of oil operators. Conventional slickline units from Canada are now providing slickline service to Colombian clients. Heavy-duty wireline fishing (HDWF) brings a complete surface package to Colombia, and operator interest is high as many wells are shut-in because of wellbore and fishing-related problems. Initially the HDWF service provides an alternative method to working over existing production wells.

Early production facilities (EPFs) are also part of the Secure Drilling services offering. This market typically involves facility construction and equipment sales that include operation and management. To date, there are ongoing projects with several oil companies. Solid expandables offer strong potential in Colombia. Various systems for cased-hole applications have been run for several clients to date, and
additional opportunities with other companies are being evaluated.

OPPORTUNITIES AND CHALLENGES IN BRAZIL

Brazil offers rich growth potential for Weatherford. Weatherford has the opportunity to grow well above the market because we anticipated client needs in Brazil, develop long-range strategic plans and take well-considered risks to meet those needs, all with a nationalistic approach. The company’s objective in Brazil is to increase its clients’ productivity and efficiency. After gaining a foothold in 1995, Weatherford steadily acquired technologies and in-country manufacturing capabilities, built infrastructure and expanded our services and capabilities. The company continues to expand our technological reach across all product and service lines to match Brazil’s challenges, with a focus on deepwater operations.

Weatherford pioneered the development of a unique deep-water drillpipe riser system in Brazil that has been applied extensively in the Santos, Campos and Espiritu Santo basins. Most recently, it added surface logging systems, integrated laboratory services, wireline services and integrated well construction, drawing on our full range of competencies. Weatherford is building differentiating capabilities on existing technology platforms such as managed pressure drilling and drilling services. Additionally, we are introducing younger technologies, including the GC-TRACER surface gas detector and the SeaLance subsea drilling-with-casing (DwC) system, the world’s first DwC system designed explicitly to optimize drilling in deepwater environments. With Petrobras alone set to spend more than $118 billion on E&P in Brazil through 2014, and offshore exploration shifting to development drilling, Weatherford is well prepared. The company’s product and service portfolio in Brazil spans the life cycle of the well.

Weatherford has 1,850 employees in Brazil, four service bases, three manufacturing facilities, and one laboratory facility, for samples analysis and core storage. In 2010, the company commissioned a new, very large artificial lift manufacturing facility just outside Rio de Janeiro, with Brazil as its primary market focus. Brazil will remain a major hub of exploration and production activities, leading Latin America to represent a substantial share of Weatherford’s revenues by 2014.

Brazil: Focus on offshore deepwater presalt projects
Drill pipe and Early Production Riser are two systems that allow Petrobras to perform workovers and extended well test such as those in the presalt by using drill pipe as the riser system instead of running a conventional riser. This provides savings in terms of rig times and is safer to run than conventional riser.

Managed Pressure Drilling
A growing percentage of the new and high commercial hydrocarbons discoveries in Brazil are happening and will continue to happen in deep waters of Brazil. The prospectus exploratory campaign for well to be drilled in the presalt area are extremely challenging for conventional drilling practices, facing high cost and high risk if intended to be drilled without MPD. Many of the drilling challenges are going to be addressed by drilling with more precise management of the wellbore pressure profile than cannot be accomplished with a conventional open-to-atmosphere mud returns system.

Some of the wells are going to be drilled in the exploratory area of the presalt with considerable pore pressure unknowns, coupled with narrow pore-fracture drilling window characteristic of HPHT conditions in offshore Brazil. Two MPD packages will be assigned for this scope. Some other wells are going to be drilled in mature fields where formation pressure depletion results in a very challenging problem at the moment where new wells will need to be drilled in order to maintain/increase the production quote of Marlim Leste and Sul fields that have also 1,500-to 2,000-m water depth as additional challenge. Drilling in this environment with normal drilling practices is basically and non-technically viable, extremely high circulation losses combined with gas kicks can make an operation also very unsafe as well as reaching TD a hard objective to accomplish. Two MPD packages, including two BTR RCD are going to be deployed and assigned for this scope.

Underbalanced Drilling
Weatherford will participate in the tender for providing UBD services and hydrocarbons processing facilities (in the same floating rig) with Petrobras. Operations planned for 2013. Weatherford is already involved in the conceptualization phase of the project and one full package (UBD + process plant) will be required.

Performance Drilling
The technical evaluation of Air/Nitrified Drilling application together with percussion hammer in San Francisco basin, onshore Brazil, with the objective of increasing a rate of penetration that currently is stable in 0.5-1.0 m/hr, was already performed for a national operator. Commercial discussions are in progress for one package initially as target, possibility to increase to four.

New R&D facility and base in Macae
Weatherford is currently in the planning stages of looking at placing an R&D engineering center in Rio to focus on R&D. In addition, the company recently purchased land (totaling 375,413 sq m) in Macae in which to build a new operating base which would include the testing facility for the R&D program. Weatherford made this decision due to the fact that all the R&Ds from other companies was being focused in Rio and therefore felt that there should be some part in Rio and the testing facility fit with its new base design.

New labs location in Rio de Janeiro
This probably will not be happening in the short term, however, Weatherford are looking at possible options. In the meantime, the company is continuing to operate from our current lab in Rio. They are great modern labs specialized in core and fluid analysis and storage.

Local content/manufacturing
WFT is fully committed with local content in Brazil with two plants in different cities. All of its manufacturing plants and three service bases have ISO 9001:2008-certidied quality management systems. In Caxias do Sul we manufacture completion equipment, liners and subsea equipment, with the possibility to do fishing tools, cementation systems, flow control components and safety valves. It has OHSAS 18001:2007 and also ISO 14001:2004 certifications. In São Leopoldo, the company does progressing cavity pumps and gas lift valves.

In Duque de Caxias, Westherford produces reciprocating rod lift pumps. All plants in addition to the Brazilian market also export to different countries in Latin America and abroad. In the beginning of 2010, Weatherford identified the need to create a group for local content in order to meet the needs of Brazilian market and ANP regulations. Toward that goal, today the company already has more than 100 local content certificates issued with a local content average percentage of 85%.

The high percentage of local content is justified considering the three factories, five operation bases and one laboratory located in Brazil that use almost all Brazilian employees. Besides the Brazilian labor, the factories use raw materials and components of national origin in manufacturing equipment to maximize local content.

Product lines in operations
Clearwell
Weatherford developed a unique technology that prevents scale formation by constant electronic physical water treatment. This technology, simple to install, prevents scale formation and eliminates the need of remedial work over treatments and production interruption. This technology has been tested in different parts of the world and being installed in a major deep water producing field in Brazil. The customer is preparing a large plan of implementation in all its producing platforms subjects to scale problems.

Control Systems
The application of these systems is covering the topside controls (on the FPSO, FSO, WHP) and subsea controls. The large demand of these systems in Brazil are mainly due to the Pre Salt projects where the subsea trees and manifolds will be installed with long step out from the Production Units and using multiplexed hydraulic systems (SCM, Top Side Controls, MCS, EPU, UTA, etc..).

WFT has an excellent reputation on this system based on the past projects with Petrobras and IOCs based on recent acquisition as EP-Solutions, BRISCO, SISCOM and CAC. Recently WFT has obtained from Petrobras the register on the Vendor List (CRCC) regarding Controls and Top Sides. This is the most important step to become a Controls supplier for Petrobras and their international partners on Pre Salt projects. In addition of this market development WFT is also supporting the EPCIs and SURF companies in Brazil with final projects with Controls Systems for Petrobras and their partners.

Drill pipe riser
The Weatherford DPR system is a well access system for workover / completion applications, operated by hydraulic direct and multiplexed functions. WFT is the leader in the Brazilian market with over 500 operations successfully performed for Petrobras on all type of trees and suppliers. WFT has available several complete strings of DPR and EPR (Early Production Riser, multiplexed used on long-term well testing) allocated on the Master Service Contract with Petrobras, but this population of system and the technicians qualified for the field service can be easily extended and customized for other projects and operators.

Plus all WFT portfolio
Weatherford can provide its full portfolio or products and services in Brazil. For drilling, the company has created a portfolio of drilling services and products that make well construction safer, reduce nonproductive time and enhance reservoir deliverability. For evaluation, it has an extensive portfolio of conveyance systems, coupled with industry-qualified measurements that are being applied to openhole and cased-hole wireline, slickline, LWD, well testing and geoscience services. For the completion stage, Weatherford provides everything from a comprehensive line of products for conventional completion in benign reservoir applications to engineered and integrated completion systems for complex and challenging environments.

For production Weatherford helps maximize reservoir recovery and optimize field production through artificial lift, well optimization services and products, and intelligent completion systems that remotely monitor and control well, facility or field production. And finally for intervention, the company helps remediate wells that have mechanical or formation problems. Weatherford helps prolong the life of these wells by providing systems to extend production or access and to retrieve remaining or “stranded” oil and natural gas reserves.

OTHER ACTIVITY IN SOUTH AMERICA

Operations in the Amazon jungle
In the Amazon we currently are performing Drilling Service (directional drilling, MWD, LWD) jobs for Petrobras and have recently begun a campaign for Wireline with HRT. In the Northeast, Weatherford provides traditional Weatherford well construction services and are strong with Artificial Lift with the plant for Pumping Units in Rio de Janeiro giving us a competitive advantage.

Integrated drilling and completions in Mexico
The beginning of Weatherford’s transition in Mexico from a minor to a major market player started with a dilapidated orange juice factory in Poza Rica. In less than six months, we transformed it into a major, modern operating base that became the nucleus for supporting t significant land-based integrated services contracts for Chicontepec, a heavy-oil exploitation project northeast of Mexico City. Our work at Chicontepec distinguished us as a project provider throughout Latin America.

The infrastructure we established also paved the way for new contracts in other areas and other applications. Weatherford also is increasing its presence and share in the offshore Mexico market, due to the successful introduction of our larger-diameter RSS. The company has built a center focused on RSS and logging while drilling in Ciudad del Carmen to support these growing offshore applications.

Nowadays Mexico is the largest country for Weatherford in Latin America as Weatherford is active in all areas where Pemex and other clients operate especially with our main projects being integrated drilling and completion contracts in the Burgos, Chicontepec, and Tabasco basins. In addition, the company has discrete service contracts with Pemex and has a very large presence with Artificial Lift both in the North and South Pemex regions. Weatherford is also working offshore in Cantarell and KMZ with fishing, rental and other services

Shale development in Argentina
The Neuquén basin shows promising signs for future development due to similarities to shale gas/oil basins in the USA. Weatherford is currently performing startup operations for our core analysis group (WFT Labs) and are in the process of mobilizing additional fracturing horsepower and coil tubing units to support future growth. This is in addition to the number of other WFT services that have been available in Argentina for many years.

Service offshore Peru and Ecuador
WFT Peru was recently awarded the majority percentage of work for an offshore project with an operator in Northern Peru in which all WFT services are being provided in an integrated manner. Ecuador recently began an integrated project with an operator to drill and complete 5 wells. Peru and Ecuador both are potentially large growth countries for Weatherford in the near term.