Issue: October 2008

Perhaps it is time to move on from differentiating NOCs and IOCs and start addressing them all simply as oil and gas companies?

Before selecting a completion method for a coalbed methane (CBM) well, nine factors should be considered: investment required; number of coal seams encountered by the borehole; expected production rate; reserves in the various coal intervals; coal-seam permeability and gas content; type of stimulation treatment expected, if any; wellbore stability problems; future workover requirements; and artificial lift requirements, if any. To establish a set of best practices for CBM production, relationships among the selection of drilling, completion and stimulation methods and geological characteristics of coalbeds were clarified. Pertinent literature was reviewed and industry experts were queried to assure that the latest engineering practices were incorporated in the study. Industry experts from operating, service and consulting companies were selected on the basis of their expertise and the CBM basins where they operated. A questionnaire was used to gather input from industry experts.

Floating gas liquefaction has progressed from a technology with future potential, where it has resided for more than 20 years, to one with viable commercial projects now under construction. For a technology that has had such a long development period, FLNG has recently moved up the development agenda. NEW FLOATING LNG SUPPLY CHAINS The initial breakthrough came from the independent sector, not from the major oil companies. In June 2008, Flex LNG confirmed with its partners, Mitsubishi and Peak Petroleum, its intention to jointly develop and market the world’s first floating gas liquefaction (FLNG) project off Nigeria. Flex LNG also announced a second FLNG project offshore Papua New Guinea to develop, in partnership with Rift Oil, remote gas reserves recently discovered onshore. By the standards of the baseload gas liquefaction plants being built around the world, the Flex LNG projects involving gas Floating Production Storage and Offloading (LNG FPSO) vessels.

The purpose of this article is to demonstrate how a multidisciplinary team integrates a variety of measured rock and fluid characteristics in order to interpret and map reservoir heterogeneities impacting SAGD operation. It also illustrates that data integration unavoidably leads to non-uniqueness of interpretation that requires evaluation of different geological concepts by active participation of many team members. A comprehensive integration of data is fundamental to achieve efficient development of a multibillion-dollar oil sands project. Nexen Inc. and OPTI Canada are joint-venture partners developing the $6.1-billion Long Lake Project in the Athabasca oil sands region of northern Alberta, 40 km southeast of Fort McMurray. The Long Lake Project will upgrade bitumen into a premium, sweet synthetic crude oil at a significant cost advantage over competitive technologies, by virtually eliminating the need for externally purchased natural gas. To upgrade the bitumen, the Long Lake Project will use a unique combination of established and proprietary technologies.

The giant Simian Field in the West Delta Deep Marine (WDDM) concession offshore Egypt is an area where good 3D seismic coverage, combined with exploration and data acquisition programs, provided the opportunity to investigate a giant Pliocene deep-marine channel complex. After the exploration and appraisal stages, development started quickly. Understanding the reservoir’s internal architecture was a major challenge, since the well logs had considerable heterogeneity. Essential details needed to be reflected in the 3D geological model. The knowledge gained from the data helped the modeling team create a depositional model of the area. This depositional model, was integrated with pre-stack inverted seismic data and early dynamic data from producing wells, to generate a computerized 3D geological model for the field. The model’s value is derived from integration of the different data types. Early history matching, together with later development wells, verified this work.

Tests were carried out by the Reservoir Characterization Project (RCP) of the Colorado School of Mines at Rulison Field, Colorado, to see if time-lapse (4D), multicomponent seismic data could aid in detecting pressure depletion in a tight gas field. Calibration occurred through zonal pressure testing, acquisition of three 9C seismic surveys, specialized image and cross-dipole logging, and microseismic monitoring. Calibration indicated that pressure drops of a few hundred psi could be detected and monitored from surface seismic data. By monitoring pressure depletion, drainage area or sweep can be assessed from 4D multicomponent seismic data, thereby enabling the technology to improve recovery efficiency in tight-gas development. In addition, time-lapse data can potentially be used to locate fractures and design frac jobs to provide greater wellbore deliverability, higher Expected Ultimate Recovery (EUR) and improved economic recovery. Rulison Field was chosen as the site for RCP’s Phases X and XI reservoir characterization research.

Nuclear Magnetic Resonance (NMR) logging measurements respond directly to pore fluids and their interaction with the rock surfaces. Thus, NMR does not suffer many of the drawbacks that affect interpretations of conventional logs, which respond primarily to the rock matrix properties. Conversely, general NMR rock-property interpretation models are explicitly or implicitly developed from clean clastics with single mineralogy and well-connected pore networks at 100% water saturation. When applying these models to interpret more complex lithology, including multi-mineral or carbonate formations, one sometimes faces challenges similar to those encountered when using Archie’s equation for interpreting non-Archie formations. With modifications to the existing interpretation models, and/or use of a more sophisticated pore-scale geometric model, we can take the lithology, mineralogy or pore-structural characteristics information into account to interpret complicated reservoir formations successfully. Essentially, NMR logging applications fall into two categories: those derived from fluid properties only, and those based on fluid and matrix interactions.

Surfactants have been facilitating oil-in-water measurements by fluorescence in California steamfloods for more than 10 years. Two main benefits have been realized. First, the selective amplification of dispersed oil fluorescence has made it possible to reliably monitor sub-ppm concentrations of dispersed oil in the presence of highly fluorescent Water-Soluble Organics (WSOs). Second, the cleaning action provided by continuous surfactant injection makes it practical to use flow-cell instruments in place of falling-stream instruments. The reduced water flow required by a flow cell reduces surfactant cost significantly. Recent field studies suggest that a surfactant modulation technique could allow one online fluorometer to monitor both dispersed oil and WSOs. This article proposes such a technique. Aromatic fractions of dispersed oil and WSOs in produced water can be stimulated to emit fluorescent light. Fluorescence is an extremely sensitive analytical technique, capable of monitoring most oils in produced water at concentrations less than 1 mg/L.

One of the largest operating costs, and often the largest, associated with sucker rod pumping is the expense of pulling and repairing the rods, pump and tubing. Many wells are pulled for repairs so often that they are marginally economic. This problem is made worse by the days of lost production associated with the downtime. Pumping slowly can resolve these difficulties, making marginal wells economic over a long period of time. CUSTOMARY PRACTICE As reservoirs deplete, there comes a time when a sucker rod pump installation can lift more liquid than the reservoir can deliver. Excess pumping capacity results in excessive wear from shock loads caused by fluid pound, unnecessary friction and stress fluctuations. The customary method of limiting this damage is to pump intermittently. This is done by placing the unit on a time clock or by installing a pump-off controller. Both methods have at least four drawbacks.

The drilling industry has experienced sustained growth during the past few years due to strong market conditions and a continued fleet expansion program. A favorable environment has allowed additional companies to enter the business and new rigs to be built. According to the 55th annual ReedHycalog Rig Census, fleet growth has slowed somewhat over the last year, but newly manufactured units are still coming online, and older rigs continue to be reactivated to meet increased demand. To assemble a complete picture of the global rig market, ReedHycalog works closely with RigData and ODS-Petrodata to summarize the US and global offshore mobile rig fleets. ReedHycalog personnel in Calgary gather the Canadian numbers. Estimates for the overall international land rig fleet are compiled by ReedHycalog regional managers and submitted for this report. The US rig fleet had a net gain of 259 rigs this year.

The benefits of hydrogen for generating power from fuel cells are well-documented, whether for vehicles or commercial electricity production. Hydrogen combines with atmospheric oxygen in an oxidation/reduction reaction to produce electricity, with water and heat as the only byproducts. This presumably avoids such nasty waste products as sulfur dioxide, carbon monoxide and, the worst of them all (gasp), carbon dioxide. However, most folks don’t have a clear understanding of the sources of hydrogen. Hydrogen, the most abundant of all elements, makes up more than 90% of all atoms. It is composed of one proton and one electron. Its atomic structure makes it attractive to electron-hungry molecules. So, free molecular hydrogen is not found in significant quantities in nature (less than 1 ppm in the atmosphere by volume). It is almost always atomically bound to something else, and to separate an appreciable volume of hydrogen gas these bonds must be severed.

I’m not sure whether Houston is the oil capital of the world-if not, then it’s close. But Hurricane Ike touched the lives of all who live here, and many oilfield operations far away as well. The death toll is unsettled, but including the Caribbean, it could get to 900; more than 50 deaths occurred in the US, and that number could easily go higher given that there are dozens of people missing from the barrier islands of Galveston and the Bolivar Peninsula. Our thoughts and prayers go out to those folks who suffered great loss. Everyone was affected, even agricultural crops, and some 4,000 cows were killed. Ike was a weird hurricane. Forecasters will be trying to learn what happened for years. Why was the storm surge so strong well ahead of the storm? Why was the eye of storm so continuously disorganized?

Americas. Petrobras’ Iara well discovered oil in Block BM-S-11 of the Santos Basin, offshore Brazil. Recoverable reserves are estimated at 3-4 billion bbl of 26-30°API light crude. The well was drilled to a 19,948-ft TD, 150 mi off the coast of Sao Paolo state in 7,316 ft of water. The Iara well is north of the Tupi discovery, which is also in Block BM-S-11. Petrobras is the operator with 65% interest in partnership with BG (25%) and Galp (10%). Gran Tierra Energy discovered oil with its Proa.x-1 exploration well in the Surubi Block, Noroeste Basin, Argentina. The well tested 2,324 bopd in two zones in the Lower Palmar Largo Formation, 12,649-12,661 ft and 12,620-12,641 ft. The well had a 12,920-ft TD. Gran Tierra Energy is the operator and has an 85% interest in the block, in partnership with REFSA, the provincial government company.

The recent conflict in the Caucasus between Georgia and Russia has highlighted the supply risks in the oil and gas markets. It indirectly highlights the salience of Norway as a natural gas supplier. Indeed, Georgia is the conduit for both oil and gas pipelines from the Caspian to world markets. The most important one is the Baku-Tbilisi-Ceyhan oil pipeline, whose flow of 800,000 bpd was interrupted last August due to sabotage, not by Russians, but by Kurds. The route from Baku to Ceyhan was chosen under US pressure to circumvent both Russian and Iranian territory, even if it was more costly. Obviously, the sponsors and the investors underrated the political risk involved in crossing Kurdish areas in Turkey. The conflict between Russia and Georgia as well as the pipeline blast put the plans for a new major gas pipeline, the Nabucco project to bring Caspian gas to Europe, in a less favorable light.

I have been critical of resource plays in this column, but not because I dislike the plays. What bothers me about resource plays is that many operators fail to use basic geology to improve their performance. The Austin Chalk play in two areas of the onshore Texas Gulf Coast is an example of an unconventional play in which geology and trap definition matter, and can be used to drill wells with better rates and reserves. The Austin Chalk was deposited across much of the Cretaceous Interior Seaway during the Coniacian and Santonian stages, from 89 to 84 Ma. It consists of chalk, marl, shale and volcanic ash beds, and is about 500-600 ft thick. The upper part of the interval is a pure chalk that is highly fractured but is not always charged with oil and gas. The lower part consists of organic-rich marls with high log resistivities that are charged in most areas of onshore Texas.

Before the financial meltdown monopolized the US government, there was a brief surge last month in congressional interest in the inner workings of the US Interior Department’s Royalty in Kind (RIK) program. The buzz centered around three reports issued by the department’s inspector general, detailing misconduct between 2002 and 2006 in the department’s Minerals Management Service (MMS), which administers the RIK program. These reports paint a lurid picture of an agency rife with promiscuous sex, both within the agency and between employees and industry representatives, rampant drug and alcohol abuse, and wild parties and extravagant gifts courtesy of oil and gas companies. Without dwelling on the most lurid stuff-the program’s manager snorting cocaine off the toaster of one of the two subordinates with whom he had intimate relations, an employee selling sex toys out of the office-the reports describe a broad web of conflicts of interest in RIK.

Weatherford International Ltd. has acquired International Logging Inc. (ILI), a world-class provider of mud logging, formation evaluation and drilling-related services. ILI has a team of more than 1,200 field geologists serving customers in more than 55 countries from more than 30 offices worldwide. In addition to operating a modern fleet of surface logging units, ILI provides technologies that are designed to improve operational efficiency by supplying more reliable and accurate geological and drilling engineering information at the wellsite. Mountwest Services of Scotland, a manufacturer of specialized drillstring equipment, has opened a new manufacturing and service facility in Dubai, UAE. Mountwest Gulf makes stabilizers, stabilizer sleeves, motor sleeves and other short drillstring products. The Dubai plant features a fully automated stub welding unit capable of stubbing all non-magnetic equipment, including MWD and LWD collars. In addition, the facility will provide sales and service support for the Scottish company.

In August, global oil supply fell by 1 million bpd to 86.36 million bpd. OPEC August crude production fell by 200,000 bpd, mainly due to decreased production in Saudi Arabia, Iran and Nigeria. Crude futures began to fall in August, approaching $90 per bbl in early September and remaining around $90 to $100 as of printing. Neither Hurricane Gustav nor Ike caused much fluctuation in the market. According to the IEA, recent hurricane activity in the US Gulf of Mexico resulted in a 1.4 million bpd downward revision to US refinery crude throughput in September, to an average of 13.9 million bpd. International geophysical activity is slightly down in September over August, but up 16% over last year. The largest increases seen in the Middle East, up 70% over last year and the Far East, up 55% over last year.

Christmas tree gauge Houston-based Winters Instruments has introduced a heavy-duty tree gauge. This 4-in. (100-mm) gauge is used in severe conditions where rugged construction is required. The gauge features ±1% ANSI/ASME Grade A full-scale accuracy and stainless steel composition for the case, ring, socket and Bourdon tube to withstand corrosive environments, and an adjustable aluminum micrometer pointer. A restrictor screw is standard. Ranges are from 1,000 to 20,000 psi. The Christmas tree gauge is available with optional safety glass, safety case, fill fluids and Winters Stabilizer pointer movement feature. Expandable reamer. The GaugePro XPR expandable reamer is a concentric hole enlargement tool for use in applications ranging from the simplest to the most complex deepwater project. The dependable ball-drop mechanism activates the cutter blades, which are deployed with fluid circulation and deactivated when circulation is stopped. This design eliminates premature triggering independent of WOB, flow or BHA pressure.

ASM International elected Sunniva R. Collins, senior research fellow at Swagelok Co., as a Fellow of the society. Joining an elite group of technical and professional leaders, she was selected for her contributions to the technical advances in stainless steels used in fluid systems. Collins joined Swagelok in 1995 as a research metallurgist. She served most recently as Technical Director for Swagelok Technology Services Co. Knight promoted Jerome Lane to Operations Manager for its Oil Tools operating company. Lane previously was a Quality Assurance/Quality Control Pressure Control Specialist with Knight, and has over 30 years of experience in blowout prevention and pressure control. Aberdeen-based Qserv, a specialist well, process and pipeline service company, announced two new appointments. Keith Drummond has been named Process Manager, while Malcolm Fox will take the position of Technical Lead for bolting and tensioning.

Serbia’s parliament ratified an ac-cord, signed in January in Moscow, for Russia’s Gazprom to build a pipeline in southern Serbia and an underground gas storage facility in northern Vojvdina province, and to buy the Serbian oil monopoly NIS. Gazprom offered to pay €400 million for 51% of NIS and to invest €500 million in the company. Gazprom also promised to ensure pasage via Serbia of the planned 560-mi South Stream pipeline to transport gas from Russia to southern Europe. Libya’s 45,000-bpd Al-Jurf Field will remain shut for another two months for repairs, longer than previously ex-pected. The field offshore Libya was shutin late April because of a damaged well, and production was expected to resume in a few weeks following repair work, but Shokri Ghanem, chairman of Libya’s National Oil Corporation, said the field would remain shutin for another two months.

Vol. 229 No. 10   COMPLETION  

Vol. 229 No. 10   COMPLETION   TABLE

October 2008 Vol. 229 No.10  

October 2008 Vol. 229 No. 10  

October 2008 Vol. 229 No. 10  

October 2008 Vol. 229 No. 10  

October 2008 Vol. 229 No. 10  

Vol. 229 No. 10   Special Focus: 55th REEDHYCALOG RIG CENSUS  

Vol. 229 No. 10   Special Focus: 55th REEDHYCALOG RIG CENSUS  

October 2008 Vol. 229 No. 10  

October 2008 Vol. 229 No.10  

October 2008 Vol. 229 No. 10  

October 2008 Vol. 229 No.10  

October 2008 Vol. 229 No. 10  

October 2008 Vol. 229 No.10  

October 2008 Vol. 229 No. 10  

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