Issue: October 2007

There’s been a not-so-quiet “revolution” going on in land-based seismic acquisition equipment over the past few years. It’s wireless acquisition. Actually, it’s been ongoing for about a decade in various ways. Fairfield’s “The Box” was one of the first to have some wireless aspects. Its primary use is for transition zones and it is still in use today. The term “wireless” can mean many things. As it implies, of course it means a reduction in wires. But power-supply methods and requirements, and data-transfer methods, speeds and protocols all vary considerably across the various technologies. A typical wireless unit has a battery pack, which may be of several types (e.g., alkaline, lithium ion, metal hydride), a non-volatile flash memory, a micro-processor, a GPS unit and a radio. A short wire connects the geophone sensor to the unit. Data transmission can occur at radio frequencies but often remains in storage within the field unit...

Well performance is extremely variable in the stacked sequence of tight Devonian and Mississippian carbonates in the northern part of the Waterton complex of Alberta, Canada, despite an extensive fracture system present in all the wells. To determine why some wells penetrated more permeable fractures than others, a full reinterpretation of the geophysical, structural, stress, matrix and dynamic data sets was carried out at West Carbondale field in the complex. Flow simulations at sector scales using discrete fracture network models and full-field continuum modeling were used to test a range of geological and dynamic scenarios. For this field, the best-fit dynamic models consist of a major fracture zone, corresponding to either a seismic scale lineament or zone of enhanced curvature, trending through the area of most prolific wells. Outside this zone, the vast majority of the fracture system makes little contribution to flow in the wells.

While overall increased drilling activities and challenging drilling applications are capturing the headlines, there is a quieter, but potentially more significant movement within the oil and gas industry. This new direction emphasizes using information to manage the reservoir for optimal reserves recovery over the full life cycle. Today, despite the many advances in reservoir characterization technologies and techniques, the recovery factor for oil reservoirs still averages less than 40%. It is estimated that in the US there are in excess of 374 billion bbl of stranded oil with almost 100 billion bbl recoverable. Extrapolated on a global basis, bypassed oil constitutes perhaps the final frontier for the industry, with well over 1 trillion bbl in play. With crude prices high, and new exploration involving significant expense and risk, there is a great deal more emphasis on optimizing the recovery rate from existing and new reservoirs.

In Lunnan field, an Ordovician carbonate buildup in the Tarim basin of western China, the reservoir was identified and characterized using a combination of seismic techniques and well logging methods. The seismic techniques included 3D seismic visualization and seismic attribute analyses such as coherence and root-mean-square amplitude. Well logging methods used were Formation Micro-Imaging (FMI), Electric Micro-Imaging (EMI) and Dipole Sonic Imaging (DSI). The research indicated that the Lunnan Ordovician buried hill is an oil-producing reservoir that developed under the unconformity, with a thickness of 0-150 m. The slope of the buried hill was determined to be the best location for development of the reservoir. Using the above methods, the exploration success rate was increased by 117%, and crude oil production increased to over 300 times its pre-characterization rate. The reservoir characterization also enabled a major upward re-evaluation of Lunnan field’s in situ resources.

A pilot study of 13 wells in Means oil field of the Permian basin, West Texas, established porosity-permeability relationships for the Permian Queen, Grayburg and San Andres formations. The optimized workflow used borehole image and conventional log processing with calibration to core data. This approach allowed the quantification of porosity and permeability heterogeneity in vuggy carbonate facies in the field. INTRODUCTION Means field was discovered in northeast Andrews County, West Texas, in 1934 with the Humble R. M. Means No. 1 well, Fig. 1. Oil production is from Permian strata, mainly the Guadalupian San Andres, Grayburg and Queen formations, with supporting production from Wolfcampian and Leonardian strata. These formations are predominantly dolomitized marine carbonate platform successions, with the exception of the lower Grayburg, which is a mixed carbonate-siliciclastic reservoir facies. Typical completion strategies are to fracture-stimulate the tighter Grayburg reservoirs and to perforate and acidize the better San Andres reservoirs.

Many base load gas liquefaction projects currently in planning are being hit by high upstream cost inflation, which has increased at unprecedented rates in the past two decades. Projects in Australia (e.g. Gorgon), Nigeria (e.g. OK LNG), Angola and Algeria (e.g. Gassi Touil) are all considering reconfigurations to deal with escalating budgets. They do not want to repeat the massive cost overrun experiences of Shell and partners at Sakhalin in Russia and Statoil and partners at Snohvit in Norway. Shell has also announced substantial cost escalation to its Qatargas 4 project, increasing its budget to $8 billion and its Pearl GTL project also in Qatar, increasing its budget above $14 billion. Equatorial Guinea LNG, onstream in May 2007, delivering its first cargo some six months ahead of schedule, is a rare exception. The completion of this $1.5 billion project is a great boost to Marathon, the operator and 60% equity holder...

Healthy industry conditions over the past few years have prompted additional owners and rigs to enter the drilling market. The rapid expansion of the rig fleet, especially due to newbuilds, continues to be noteworthy. This year however, as fleet capacity accelerates, utilization has fallen in many areas due to market softening and fleet expansion, according to the 54th annual ReedHycalog Rig Census. ReedHycalog continues to work closely with RigData, Nickle’s Rig Locator and ODS-Petrodata to summarize the US, Canadian and global offshore mobile rig fleets. The international land rig fleet has also been examined for the third consecutive year, as we compile an overall picture of the dynamic global rig market.

Water treatment and steam generation methods for heavy oil recovery processes have evolved rapidly. Traditionally, Once-Through Steam Generators (OTSGs), driven by natural gas, have been used to produce about 80% quality steam (80% vapor, 20% liquid) for injection into the well to fluidize the heavy oil, especially for cyclic steam operations. However, the more recent Steam-Assisted Gravity Drainage (SAGD) method requires 100% quality steam for injection. The use of OTSG for SAGD applications requires a series of vapor-liquid separators to produce the requisite steam quality. For both SAGD and non-SAGD applications, pre-treatment of the OTSG feed water has consisted of silica reduction in a hot or warm lime softener, filtration and hardness removal by Weak Acid Cation (WAC) ion exchange. In most cases, the OTSG blowdown is disposed by deep well injection. As the use of SAGD increased, the traditional produced water treatment and steam generation methods were re-evaluated...

Impression blocks, a.k.a. “confusion” blocks, have been around since people first started running any tool in a well. This simple device is designed to reveal the identity, size and shape of the top of a “fish,” any piece of equipment left in a hole that should be removed. These fish can range from pieces of broken pipe, to tools that have been dropped, to sand or scale fill in the bottom of the hole. The impression block has long been used to identify what the fish is and what needs to be done to remove it from the hole. Impression blocks are simple devices. A piece of a soft metal, usually lead, about ⅜-in. (10-mm) thick, is mounted on a steel carrier block. The lead or babbitt is generally melted, poured into a mold that includes the block and filed or polished until it is circular with the same OD as the block with a flat face.

There are more false, misleading, bogus, but well-sounding arguments that apply to the energy industry than to any other endeavor. Most of these specious arguments serve to preserve the status quo. I’ve attended conferences in our industry where “alternative energy” meant natural gas from shale instead of sandstone, or heavy oil instead of light oil. Real alternatives to oil and gas often become the object of ridicule and bogus scientific reasoning. Here are some of the techniques of energy propaganda. First, always use older data for comparison. With emerging technologies, the situation “on the ground” is changing so rapidly that data becomes old rather quickly. Of course, that’s the way it should be, but this rapid change also allows the use of outdated data. For example, wind resource assessment was estimated surprisingly low throughout the 1980s and ’90s, relative to what is known today.

Apache Corporation discovered gas with its Brunello-1 well in the Carnarvon basin on the Northwest Shelf of Australia. The well flowed 72.5 MMcfd of gas and 1,230 bopd of condensate from 121 ft of pay in the Triassic Mungaroo formation. Brunello-1 was drilled to a 12,027-ft depth in 508 ft of water, 99 mi from shore. Apache estimates recoverable resources in the range of 300 Bcf. BHP Billiton discovered gas in its Thebe-1 exploration well in Block WA-346-P, offshore Western Australia in the Exmouth Plateau of the Carnarvon basin. The well, 186 mi off the northwestern coast in water depths of 3,848 ft, found a 240-ft gas column. Teikoku Oil made an oil and gas discovery onshore on Japan’s Honshu Island about 150 mi northwest of Tokyo. The Minami Kuwayama TT-1 well flowed 500 bopd and 250 Mcfd of natural gas from the Shiiya Formation.

TEven if the North Sea is a mature petroleum province, with a declining output of crude oil, it’s gotten a boost from the recent oil price spike. Natural gas output could be most positively affected, and development will affect not only the European market, but also potential supplies to the US, as well as demand for Russian gas. Total North Sea gas output is flattening as UK levels are declining and only Norway’s output is still growing. According to Barclay’s Oil Data Review of Sept. 19, 2007, the combined oil production of Denmark, Norway and the United Kingdom is set to decline from 4.73 million bpd in 2006 to 3.99 million bpd in 2008, a loss of almost 16% over two years, further reducing Europe’s self-sufficiency in oil. Higher prices and eventually more lenient fiscal conditions might slow the decline of North Sea oil output, but hardly reverse the trend..

I expected strong reader response to my August column, “The Fayetteville Shale: An early evaluation,” and I got it. Most reactions were positive, but the negative comments are more interesting and revealing. Critics make some well-reasoned points and legitimate criticism of my analysis. Their comments also illustrate how the industry is divided in its opinion about the Fayetteville and Barnett Shale plays. Several important points emerged: Recently completed Fayetteville Shale wells that used slick-water fracture stimulation should be profitable. Apparently, most of the horizontal wells that I evaluated were completed using less effective stimulation techniques. The application of hyperbolic decline models to preliminary Fayetteville Shale production results in higher economic reserves and longer-lived production than I used in my analysis. Economic models used by some Fayetteville operators incorporate lower lease operating costs than I presented, and some companies do not charge certain overhead costs against production sales as I did.

A group of petroleum-producing and oilfield service companies have banded together with the University of Texas at Austin in a joint research venture to create and develop new oilfield nanotechnology. The Advanced Energy Consortium (AEC) plans to develop subsurface nanosensors that can be injected into oil and gas wells. These sensors would be forced through the existing pore space and into the surrounding rock formation. There, they would collect the reservoir’s physical characteristics. Exactly how this would be achieved is the focus of the consortium. This data could then be used for production optimization studies. Consortium members include BP America, ConocoPhillips, Marathon Oil, Occidental, Shell, Schlumberger Technology and Halliburton Energy Services. Project management will be provided by the University of Texas at Austin (UTA). Industry members will each contribute $1 million research funding per year for the first three years to underwrite the project.

Offshore Hydrocarbon Mapping (OHM) has completed the acquisition of the Houston-based Rock Solid Images (RSI). RSI integrates fundamental rock physics with well data and surface seismic to interpret geophysical signatures in terms of reservoir properties such as lithology, porosity and saturation, providing geologic insight and reservoir understanding at all stages of the oilfield life cycle. OHM provides controlled-source electromagnetic imaging (CSEM), an offshore geophysical technique to detect the presence and extent of hydrocarbon accumulations below the seabed. The two companies have been collaborating for over a year on initiatives to integrate CSEM data into RSI’s geologic models. This acquisition follows a strategic alliance with CGGVeritas to jointly develop the global market for CSEM. CGGVeritas has acquired 15% of the shares of OHM.

During its Sept. 11 meeting, OPEC agreed to a new production ceiling of 27.2 million bpd, this includes 500,000 barrels a day of fresh oil on the market, the first increase in over two years. OPEC’s decision reverses output cuts agreed to late last year that cumulatively removed about 1 million bpd off the global markets. The decision came about amid concerns about record high oil prices, which have reached yet another record level in September. World oil supply fell by 430,000 barrels a day to 84.6 million bpd in August and demand has been slightly revised down to 85.9 million bpd in 2007 and 88.0 million bpd in 2008. Downward revisions to the second half of 2007 reflect weaker-than anticipated data in June and July. OPEC crude production fell by 40,000 barrels per day in August; however, 10 members bound by production agreements boosted output by 80,000 barrels per day.

Remote inspection tool Integrity, inspection and corrosion specialist iicorr Ltd has launched its Magnetic Crawler tool, designed for inspecting inaccessible or difficult-to-access areas. Magnets enable the robot to attach itself, and it uses integrated video and UT capabilities to examine areas at risk of corrosion. The Magnetic Crawler evolved from the company’s Trac-scan Crawler system, and is designed to assure jacket leg, riser and caisson integrity. Although initially designed for inspection on large-bore jacket legs and areas underneath external clamps, it can also remotely inspect large tanks, pipe work and subsea structures. The system has real-time viewing as well as data recording functions, and can be run remotely up to 200 m from the access point. It is rated for use in up to 200 m of water, and can fit through access points as small as 200 mm x 150 mm.

Oil and gas design company Red Spider Technology has appointed Mike Salter as chairman. He has over 30 years of experience in the industry, for the last 12 years as COO of Aberdeen-based Abbot Group plc. Becky Byrd has been named VP, Corporate Marketing, for National Oilwell Varco. She joined National Oilwell in 2002 as marketing coordinator, and served most recently as director of corporate marketing following the Varco merger in 2005. Fulbright & Jaworski L.L.P. has named London partner David J. Howell as co-head of the firm’s International Arbitration and Alternative Dispute Resolution Practice Group. Also, Chris Warren-Smith, an international disputes lawyer, has joined the law firm as head the International Financial Services Disputes practice. Fulbright partner Randel Young, with over 25 years of experience in emerging markets, energy projects and transactional work, has relocated to Dubai. Another energy transaction lawyer, Richard Devine, recently joined Fulbright from Denton Wilde Sapte ...

Saudis form oilfield guard Saudi Arabia recently began devel-oping a specialized security force of 35,000 to protect its oil infrastructure from potential attacks. Recruitment began a few months ago and the force already has more than 5,000 personnel. The troops are being trained in the use of new surveillance equipment, crisis management and countermeasures in a program being managed by US defense firm Lockheed Martin, according to the Nicosia-based Middle East Economic Survey. Denmark plans meeting of arctic nations Danish Foreign Minister Per Stig Moller and Greenland’s Premier Hans Enoksen have invited foreign ministers from Canada, Norway, Russia and the United States to Greenland next May to discuss how borders in the region should be set. The invitation is the result of increasing interest in the region’s natural resources, resulting from receding ice cap which offers the potential for exploiting oil and other resources in previously unreachable locations.

Vol. 228 No. 10   LES SKINNER, PE, CONTRIBUTING EDITOR, LSKINNER@SBCGLOBAL.NET

Vol. 228 No. 10     TABLE 1. Changes in the

Vol. 228 No. 10     TABLE 4. US regional census

October 2007 Vol. 228 No. 10  

October 2007 Vol. 228 No.10  

October 2007 Vol. 228 No. 10  

October 2007 Vol. 228 No. 10  

October 2007 Vol. 228 No. 10  

October 2007 Vol. 228 No. 10  

October 2007 Vol. 228 No.10  

October 2007 Vol. 228 No. 10  

October 2007 Vol. 228 No. 10  

October 2007 Vol. 228 No. 10  

October 2007 Vol. 228 No.10  

October 2007 Vol. 228 No. 10  

Advanced Schedule of Articles Coming in November issue...   DRILLING TECHNOLOGY Remote real-time geosteering improves heavy oil reservoir exposure