Issue: October 2011

Special Focus

Coiled-tubing method drills radial laterals to improve oil production from a depleted reservoir

The North Urtabulak oil field in southern Uzbekistan was discovered in 1972, with 124.2 million bbl of calculated original oil in place. The field is a carbonate reef structure of Jurassic age, with average reservoir thickness of about 320 m (1,050 ft). To date, 119 wells have been drilled on the structure. A reservoir model in 2010 indicated significant volumes of oil in place, much of it trapped between existing wells. This situation was exacerbated by severe near-wellbore damage and pressure depletion in the reservoir. The operator, Tethys Petroleum, had previously implemented horizontal drilling, sidetracking and acid stimulation to access the remaining reserves, but these technologies were no longer considered cost-effective.

WEB EXCLUSIVE: Decision support system for the selection of drilling rigs

In selecting a drilling rig for the actual geological environment of well construction, a decision support system can reduce the cost per unit, construction time cycle and simplify the design complexity of the well.

Haynesville drilling challenges addressed through MPD

While the Haynesville shale play offers great potential, it also poses significant challenges. The play is characterized by a network of fractures and faults, as well as very low permeability and high porosity that often result in over-pressurized zones. With depths ranging from 10,000 ft to 14,000 ft, the play also features significant high-pressure, high-temperature (HPHT) conditions that pose obstacles to drilling. The high cost of drilling and completing wells in the Haynesville shale presents a particularly difficult challenge to total well economics. Marginal gas prices, drilling hazards, related non-productive time (NPT), and varying initial production rates and decline rates further challenge the economics faced by operators working in the region.

New drill bit technology: Designing the tool to suit the well

Advances in new drill bit technology moved at an accelerating pace in the past year, as engineers continued to design bits to drill larger, higher-quality holes with better rates of penetration and more control. Shale is still on operators’ minds, and PDC bits are still the tool of choice.

Fracture relative permeability revisited

Relative permeability is one of the most uncertain terms in multiphase flow through porous media. Therefore, such a basic parameter must be well uderstood to provide confidence in reservoir simulations. In a fractured reservoir, evaluation of relative permeability curves is complicated due to the nature of double porosity systems, where fractures develop a discontinuity in multiphase flow between adjacent matrix blocks. Fracture relative permeability is examined here with corresponding effects on fractured reservoir performance.

Haynesville leads the herd in shale gas production

There is no question that sustained low prices for natural gas have taken their toll on the Haynesville shale play of northwestern Louisiana and East Texas. The number of rigs working in the Haynesville has fallen steadily during the past 15 months, and there are reasons to be concerned that activity could continue falling off.

Is the oil and gas industry adequately handling exposure to extreme risks?

In the wake of tougher regulations, many oil and gas companies have established or expanded risk management systems integrated company-wide, or enterprise risk management (ERM). Do such systems necessarily make companies better prepared to deal with low-likelihood, high-impact events?

Multistage fracturing using plug-and-perf systems

The plug-and-perf system creates multiple hydraulic fractures in a horizontal well completed with a cemented casing/liner. This system combines elements of two common fracturing techniques: limited entry and segmented fracturing using bridge plugs. Commercially, these systems are offered and supported by several suppliers. System description. Fracturing operations begin from the toe of the well and proceed toward the heel, Fig. 1. Each pumping stage is used for fracturing multiple clusters of perforations designed based on the limited-entry technique. The number of clusters is based on the injection rate, with details discussed later. The sequence of operational steps consists of setting the plug in the desired location within the horizontal well, perforating the clusters and pumping the treatment according to the design. After all pumping stages are complete, all the plugs are milled out, and the well is cleaned and put on production. Depending on requirements, there are a variety of plug types used in these completions, but they are all drillable/millable and usually made of special composite material.

Industry Report: Novel ion-exchange system softens produced water for steam generation

As California entered a period of severe drought in 2008, the challenges of using thermal methods to extract heavy oil became compounded by the difficulty of securing freshwater sources from which to generate the high-quality steam that these methods require. In an effort to manage the crisis, then-Gov. Arnold Schwarzenegger proclaimed a state of emergency and enacted widespread water-conservation measures. The drought, which officially lasted until March 2011, impacted heavy oil fields in the state that rely on affordable fresh water to feed boilers in thermal techniques such as steamflooding and cyclic steam stimulation (CSS). Essentially, these thermal techniques involve the injection of steam into wells to heat the viscous oil to flowing temperatures. As the drought intensified in California, the prospect of feeding boilers with oilfield produced water instead was studied as an alternative.

Regional Report: Middle East-North Africa

The vast oil and gas reserves of the Middle East and North Africa (MENA) region have historically played a dominant role in the global economy, and today the region continues to be a primary exporter of oil and gas all over the world. The political turmoil of the past year has brought uncertain times to the region and fresh challenges to the oil and gas industry. Despite this, the MENA region has seen continued high levels of upstream activity, rewarded with discoveries being made and new fields coming onstream. Even with the emergence of new significant hydrocarbon plays in Brazil and Sub-Saharan Africa, the MENA region will continue playing a key role in world energy.

Show Preview: Shale development, safety standards drive flagship SPE conference

In its 87th year, the 2011 Annual Technical Conference and Exhibition (ATCE) of the Society of Petroleum Engineers (SPE) will focus on developing shale resources, particularly the special requirements in the Rocky Mountain Niobrara and Bakken shale formations.

Ultra-slim logging aids economic development of Ghawar field

To meet its production goals, including enhanced recovery from mature fields, Saudi Aramco has been dedicated to the development, support and early adoption of recovery- and economy-enhancing, risk-reducing technologies, including horizontal and multilateral drilling, smart completions and completions utilizing passive inflow-control devices. To drain new areas of producing reservoirs more economically, the company has joined other operators in drilling small-diameter, short-radius, lateral re-entries with maximum reservoir contact, as opposed to new wellbores.

Drilling advances

A few years ago, the service company where I was working tendered for a proposed multi-well geothermal drilling project in Hawaii. Needless to say, there was no shortage of wellsite engineers clamoring to be considered for the potential assignment, as well as one starry-eyed marketing communicator.

Editorial comment

When Edwin Drake drilled the first commercial oil well in the US in 1859, his drilling contractor was a saltwater driller using a steam-powered cable-tool rig, and his service company consisted of a blacksmith named Billy Smith and Billy’s son. Over 152 years, the oilfield services segment has grown to be a major part of the global oil and gas industry.

Energy Issues

It hardly seems possible, but 20 years ago, this month, the oil fires in Kuwait were still burning brightly. As we wade through the aftermath of Macondo and recent pipeline spills, it is worth remembering that the huge well control effort mounted by the international oil and gas community in Kuwait was one of our greatest achievements. For those of you who don’t remember (and there can’t be many), as Iraqi troops were withdrawing from Kuwait in front of the advancing coalition forces in 1991, special forces from Iraq torched some 750 Kuwaiti oil wells. The results were cataclysmic. The oil fires burned for more than eight months, consuming an estimated 5–6 million bpd of crude oil and 2.4–3.6 Bcfd of natural gas. More than a billion barrels of oil was eventually burned. The oil that did not ignite formed into more than 300 large lakes containing 22.5 million bbl of oil, cumulatively. An additional 10 million bbl of oil poured into the Persian Gulf, severely impacting marine life. Between late February, when the first fires were ignited, and Nov. 6, when the last fire was extinguished, smoke plumes containing a hazardous mixture of gaseous emissions and particulate matter engulfed a downwind area as large as 150,000 sq km, leaving many exposed to the plumes with lingering health issues.1

Innovative thinkers

The idea of robots has captured the modern imagination since Isaac Asimov. For Tyler Schilling, founder and CEO of Schilling Robotics, the world of subsea automation is a new frontier that is just now being explored. Working to automate equipment 10,000 ft below sea level, Schilling is developing subsea robotics in a way that science fiction writers 10 years ago could not have even conjured up.

Oil and Gas in the Capitals

Earlier this year, the treaty establishing the boundary between Norway and Russia in the Barents Sea and the Arctic Ocean was ratified by the two countries’ respective parliaments. In contrast with the 1965 treaty between Norway and the UK, which established the median line of the North Sea as their maritime border, the present treaty builds on a compromise between the median line, advocated by Norway, and the sectoral line claimed by Russia. By marking a border, the treaty brings to the area legal clarity and predictability, which are preconditions of a secure framework for oil and gas exploration.

What’s new in exploration

The oil and gas industry is invited to explore Jurassic and Cretaceous deepwater reservoirs off Nova Scotia, in what the government hopes will be a succession of successful wildcats. Only one well, Shelburne G-29, has thus far tested the Jurassic to mid-Cretaceous deepwater succession on the western Scotian margin. Although more than 120 wells have been drilled in the Scotian basin, they are concentrated in the productive Sable sub-basin, focused on rollover anticline plays. Several of the Sable Offshore Energy Project (SOEP) shallow-water fields-—Alma and North Triumph—are considered shelf margin delta complexes at the top of the Lower Cretaceous, with high in-place gas reserves (>500 Bcf) in excellent quality reservoirs with high flow rates. Regional specialists suspect that a continuation of this shelf margin delta play may exist in the deeper water of the Scotian slope.

What's new in production

The old Volkswagen Beetle had an oil-temperature light on the dash with a simple function. As a mechanic told me, “When the red light comes on, the situation is desperate. Shut off the engine and coast.” Today, there is a critical shortage of helium-3, regular helium’s lighter, more elusive cousin. The supply crunch was probably inevitable. The crisis, however, was entirely man-made, and somebody should have noticed before the red light came on.
News & Resources

Companies in the news

Industry at a glance

Crude oil supplies continued to fall in the US, as the economy softens and demand follows. From one year ago, production is off 5.5%, with the trend likely to continue. Worldwide, crude production gained slightly over the previous month. Prices have fallen with the gap between US WTI benchmark and Europe’s Brent Blend growing narrower. With both the availability of credit improving and companies’ balance sheets stronger than they were two years ago, the oil and gas industry is better prepared if a second global recession does develop. If average prices stay above $80/bbl, companies’ development plans are not likely to change, particularly in the liquids-rich onshore plays.

Meetings and Events

New products

People in industry

World of Oil and Gas

TGS has commenced a new 15,000-km multiclient 2D seismic survey offshore Namibia. The survey grid covers open acreage and images the main prospective plays due for drilling in 2011/2012. Offshore Namibia is significantly underexplored and has the potential to hold large oil and gas discoveries. The mix of play types in the TGS survey area include basin floor turbidites, slope fans and channels, significant syn-rift structures and plays similar to those offshore Angola. Recent studies have also shown additional strong hydrocarbon indicators in significant structures. The seismic data is being acquired by the M/V Northern Explorer.
Industry At A Glance

International Offshore Rigs

International Offshore Rigs            

International Rotary Rig Count

International Rotary Rig Count

International Rotary Drilling Rigs

 International Rotary Drilling Rigs Graph            

US Gas Prices ($/MCF) & Production (BCFD)

US Gas Prices ($/MCF) & Production (BCFD)

International Geophysical Activity

International Geophysical Activity                              

U.S. Geophysical Activity

U.S. Geophysical Activity                                 

Selected World Oil Prices

Selected World Oil Prices Graph ($/bbl)                           

U.S. Oil Production

U.S. Oil Production

U.S. Rotary Drilling Rigs Graph

US Rotary Drilling Rigs                                 

Rotary Rigs Running in US

Rotary Rigs Running in US                               

Workover Rig Count

Workover Rig Count

World Oil and NGL Production

World Oil and NGL Production                  

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