Shallow oil appraisal with mineral coring rig

The year 2020 was truly challenging for everyone. In the oil and gas industry, it has caused companies to revisit their strategies and business plans in the light of the unknown future, which has been evolving under the pandemic and the various crises affecting the industry.

Major producing companies had the means and resources to “stop and think,” but for many smaller E&P operators stopping could mean losing their projects and completely disappearing from the market. Therefore, to continue operations they had to be agile, adaptive and creative.

MYANMAR LOCATION

Fig. 1. A map of the operating area.

Pacific Hunt Energy (PHE), a small privately-owned company registered in Singapore and operating two onshore blocks under the PSC model in Myanmar, was caught in the middle of its 3D seismic acquisition. The company also was planning for deeper gas drilling
in Block PSC C-1. This block is in northern Myanmar, Fig. 1. The block has three proven oil fields and a rich history of shallow oil production. The company’s present focus is in deeper high-pressure gas.

Myanmar (formerly Burma) was one of the world’s first producers of oil, the country having exported its first barrel of crude in 1853. There is still a vibrant, local, shallow oil industry, which is based on the age-old exploration method of drilling around surface seeps. This exploration approach allowed Indo Burma Petroleum Company (IBPC) to find and operate Indaw field in PSC C-1, where it was active from 1912 until the Japanese invasion of 1942, producing some 1.2 MMbbl of oil from 75 shallow wells. Modern drilling and other geological work have indicated the presence of deeper gas in the structure, which is the focus of PHE’s current work program.

SHALLOW OIL POTENTIAL

While studying the seismic and other data (which the IBPC workers would not have had), the geologists concluded that they have come across significant amounts of unproduced shallow oil, in and around the old Indaw field, to be produced from potential for oil field extension, completions in a deeper oil zone, and infill drilling. To evaluate this theory, a five-well appraisal program was proposed. However, the company has faced a challenge. Running some preliminary economics, it was shown that to be commercial, given low oil prices, the wells would have to be drilled and completed for <$150,000. Even at this relatively low cost, we could not afford disposable wells, so the final well design should be based around delivering producible oil wells. Unfortunately, such low well cost couldn’t be achieved by utilizing conventional oil and gas rigs and drilling technology. A preliminary budgetary estimate has shown that the oil well would cost around $800,000 to $1,000,000.

TECHNOLOGY/ECONOMICS

Despite the long history of petroleum operations, political turmoil and military rule caused Myanmar to be technologically and economically isolated from the outside world for over five decades until 2012, when the historical by-elections were held. There is virtually no Western-standard oil and gas infrastructure in Myanmar; for the proposed deep gas well, all the major services—wireline logging, mud logging, cementing, drilling fluids, etc.—are imported. Therefore, they would break the budget of our proposed shallow oil project. At our target cost for the oil campaign, we could drill five oil wells for the cost of logging the deeper gas one. This price disparity and oil economics led to a search for a suitable drilling system for our oil project, to meet our economic constraints but also our stringent HSE requirements.

As noted above, Myanmar has had an active oil drilling industry, exploiting these shallow pools, for well over a century. The local drillers routinely construct wells to as much as a 2,500-ft depth. Aware of this local industry, we scheduled several field trips to active areas around the country, to scout out the local operations and to check their suitability for our project.

HSE SHORTCOMINGS

Fig. 2. Myanmar’s local oil and gas industry: Primitive equipment (left) and flip-flop footwear (right).

Two conclusions were reached quickly. The economics worked; we could drill our wells at a fraction of our budgeted amount. However, the HSE standards presented a huge issue. By our standards, the equipment is primitive (Fig. 2), yet it has proven effective; hundreds of wells are drilled yearly with these systems. A small diesel engine drives a coupling to the rotary table and a winch, which raises and lowers the pipe. Make-up and break-out are by hand with wrenches; simple, but it demonstrably works.

The issue confronting us, though, was the lack of personal protective equipment (PPE) and environmental awareness. The rig crew tended to wear flip-flops (Fig. 2), and oil can be seen flowing over the ground in hand-dug earth trenches. Our HSE department concluded that we could not successfully effect the huge required cultural change in the time allotted.

CORING RIG OPTION

The other available option was to use diamond coring rigs that are more commonly utilized in the mineral exploration sector. The continuous coring process centers around a system in which the rig cores an interval (typically 3 m or 10 ft), retrieves the core via wireline without the drillstring leaving bottom, replaces an empty core inner tube, and resumes coring. Myanmar is a mineral-rich country, famous for its gems, such as rubies, sapphires and jade, as well as metals, such as gold, copper, nickel and tin. To support the local mining industry, several international-based mineral exploration drilling companies are resident in country. This industry generally is very well-established worldwide.

In South Africa, continuous coring proceeds to as deep as 10,000 ft (3,000 m). Their results provide the data for analysis and certification of reserves in gold and other mineral mining. Multi-million-dollar plans for shafts and open pits are based on coring results. Working as they do with established multi-national mining companies on high visibility projects, their HSE standards are as high as those on oil and gas operations.

IMPLEMENTATION

When the concept was presented to the geological staff, there was huge interest. The coring program would provide the most accurate and reliable data point from the field to date. It also would present significant cost-savings and risk reduction opportunities to Indaw oil and gas development.

Having gotten approval from HSE and the geological groups, a full tender was performed, requiring work history, HSE records and a technical proposal. Two acceptable bids were received, with one a clear commercial winner. The Myanmar regulatory group, MOGE (Myanma Oil and Gas Enterprise), was fully supportive and offered to provide personnel for geological support.

The next step was to merge the CC operation with the O&G requirements. The differences are shown in the deliverables for typical operations; diamond core drillers need to produce rock cores, with some specified percentage core recovery per meter drilled. Our deliverable was, in the geological success case, in addition to a complete core record of the prospective reservoir intervals, a producible oil well.

WELL DESIGN/EQUIPMENT

Fig. 3. PHE hybrid well design.

This produced somewhat of a hybrid well design (Fig. 3), with features from each technology (e.g. cored holes subsequently opened to accommodate casing to fit our wellheads). We chose a “Larkin”-type wellhead, in standard 7-in. by 4½-in. starting head and a 4½-in. by 2⅜-in. tubing head. Mineral drilling is generally performed with no pressure control considerations, but although our reservoirs were expected to be sub to normally pressured, we chose a HACV preventer to be installed after our 4½-in. string was set. This device, which was designed for coiled tubing operations, was fitted to our 3.5-in. OD coring string, for well control prudence.

The track-mounted (crawler) rig chosen is a very compact unit, measuring over-all length and width dimensions of 11.5 m by 2.2 m (37.7 ft X 7.2 ft) and a height of 2.6 m (8.5 ft) during transport, Fig. 4. Powered by an onboard 280-hp diesel engine, the rig is rated to 1,000 m (3,300 ft) with 3.5-in. HQ rods, and up to 1,800 m (5,900 ft) with 2.75-in. OD NQ rods.

The main drilling unit contains the tracked undercarriage with the rig’s power pack; mast with a 500-kg jib crane; top head; hydraulic unit; rig floor; 50-gpm triplex coring pump; working table; pipe handling; and pipe gripper system. Auxiliary equipment includes a 300-gpm mud pump; 7,000-litre mud mixing system (twin tanks); batch mixer; water pumps; cement pump; and one 11-in. BOP with a 5.5-in. hydraulic
annular. The top head feed system is driven by hydraulic cylinders and a heavy-duty chain, which can handle up to 6-m tubulars. The maximum pull-up capacity is 30 tons, and push-down capacity is 18 tons. Four hydraulic outriggers are fitted to the outer corners of the rig for easy and accurate raising and levelling of the rig.

Fig. 4. Rig prepared for loading on truck.

The rig and its associated equipment travel as a very compact unit. The hydraulic levelling jacks are integral to the loading process. In an operation similar to loading a jackup rig onto a heavy-lift vessel, the units extend the jacks; jack up; have the truck back its bed under the unit; lower the tracks onto the truck’s bed; secure the load, and it is ready to drive to the work site.

The unloading process is simply the reverse—the rig jacks up and the truck pulls away, and the jacks are lowered to place the tracks on the ground. Short moves between wells are accomplished by the tracks, with a speed of about 4 km/hr.

In addition to the rig, the operation is supported by the “support carrier” (Fig. 5), a tracked, all- purpose vehicle that carries the core rods and other material/equipment. Loaded weights of the two units are 17 tons and 15 tons, respectively. A third, 30-ft (9-m) bed truck completed the contractor-supplied mobilization and support vehicles for the project. As these locations were cut from virgin jungle, our construction equipment was active in the area for additional support, cutting roads, building the locations, and remediating them after drilling.

Fig. 5. Coring rig during operations (left) and support vehicle (right).

The compactness of the equipment spread allows for an environmentally friendly, small location footprint. A 760-m (2,500-ft) hole can be supported by a 20-m by 20-m (65 by 65 ft) location. Since we were adding a small mud logging unit, company office, and area for a swab tank, we settled on a 25-m by 25-m (82-ft by 82-ft) layout, Fig. 6.

CORE DRILLING SYSTEM

Fig. 6. Location layout/footprint.

The diamond core drilling system is built around a series of concentric flush joint smooth interior rods with buttress-style threads, Table 1. The first implication of this is small annular clearances between the side of the hole and the pipe; in our primary coring section, this is a 3.75-in. hole with 3.5-in. pipe. The containment provided by these slight clearances and their associated wellbore support allow tubular stability, despite the 600-800 rpm routinely used in the coring process.

Additionally, the wellbore support allows weight-on-bit to be applied by the rig’s pull-down capability; the pipe will not buckle with the weights applied to the bit while coring, eliminating the need for drill collars. Given the respective sizes, the drillstring could double as well casing in the event of stuck pipe; cement in place and proceed with the next smaller size core system. Typically though, the system provides a cheaper “casing” string (same dimensions with less torsion-resistant threads) for planned setting depths.

Table 1. Coring rod and core sizes and thread detail.

Fig. 7. PHE hybrid well design (left) and strict core hole design (right).

This system allows an extreme slim-hole well, compared to normal oil and gas drilling, as shown in Fig. 7. Both show three strings with an ID of 2 in. in the deepest string. As discussed, our well requirements necessitated the geometry on the left, while the ideal slimhole design is on the right.

Component function. The coring system (Fig. 8) consists of two main components: a three-part core barrel and a wireline retrieval system. The outer barrel, which has an OD that is flush with the core rods, has one or two reamer/stabilizers of hole gauge OD. The inner tube locks into a bearing assembly, which allows it to remain stationary relative to the rapidly rotating coring string. Within the inner tube is the split barrel, made of low-friction steel, which swallows the core with minimal drag forces that could deform or otherwise damage it.

Fig. 8. Coring assembly (courtesy of Boart Longyear).

When the interval has been cored (typically 3 m), rotation stops, the string is raised to break the core, and the retrieval system comes into play. The winch, mounted on the rig’s body, is equipped with 1,500 m of 7-mm braided wireline. The attached overshot is lowered on the wireline until it engages the spearhead at the top of the tube. Released with a straight pull, the wireline pulls the core barrel to surface, where it is laid out and the overshot released. A pre-prepared empty inner tube is connected to the overshot and placed in the core rod string.

Upon contacting the fluid level, the upward force pushes the barrel up relative to the wireline, releasing it from the overshot. The overshot is pulled back to surface, the top drive is connected to a new core rod, and the mud pump is started. The new inner tube is pumped to bottom, where it latches into the outer barrel, and coring resumes.

While coring proceeds downhole on the surface, the recently cut core is pumped out of the inner barrel, the split barrel is pried off, and the core is presented to the geologists for their examination. Note that the entire process, from pumps off with a full-core barrel to resumption of coring, takes about 10 to 15 min. from 500 m, and this retrieval time needs to be taken into account when calculating actual coring penetration rates.

Bits. Since much of the diamond coring industry’s work is associated with minerals, which are generally found in igneous and metamorphic rocks, bits have been designed for a whole range of hardness. The soft formation bits for our project are face discharge diamond impregnated bits, constructed of a tungsten carbide matrix in which small diamonds (300-500 diamond bits per carat) are embedded, which expose new diamonds as the surface is worn away. The bits are designed for a tight fit in the previous string ID, which, coupled with the small difference between the core rods’ OD and the hole, leads to small annuli. For example, drilling inside 4-in. ID PQ rods with an HQ coring system, the bit would have an OD of 3.75 in., the core rod has an OD of 3.5 in. and an ID of 3.06 in., and would be cutting a core of 2.375 in. This geometry has some implications for near-wellbore conditions.

The hole geometry of the concentric strings has implications during the coring process, and later in the well testing. Unlike oil and gas drilling, where most of the system pressure losses take place in the drillstring and the bit, in diamond core drilling, the majority of that pressure loss is in this tight annular space. The resulting high annular pressure losses can contribute to mud losses, but they can be offset by the plastering effect of the cuttings crushed against the wellbore.

This “plastering effect” is seen in oil well casing-while-drilling (CwD) operations. Well- documented in the literature, this smearing of the wellbore results from the narrow clearance between the OD of the casing and the hole where the cuttings are crushed and smeared into the permeability of the near-wellbore rock. This phenomenon effectively strengthens the hole, and, by plugging the exposed pore spaces, limits lost circulation. This is a beneficial effect while drilling (or by extension while coring), but it would certainly inhibit inflow in our low-pressure reservoirs, as discussed in the testing discussion below.

Mud systems. The mud systems used in drilling are simple. Two earth pits are constructed, 2 by 3 by 2 m (+/- 75 bbl, each), the mud returns overflow into the sump pit and then into the suction pit, therefore allowing solids to settle during the process. This settling process is basically the only means of solids control.

There are two additional steel mixing tanks (35 bbl, each), with a hopper and hydraulic agitator, for chemical additions and storage of sweeps. For “destructive drilling,” the industry term for what the oil industry simply calls “drilling,” a simple gel-and-water system is used, with high-viscosity sweeps pumped, as required, and with all circulated with the rig’s duplex pump. For continuous coring, the mud system is very intolerant of solids. This pump, which is used only for destructive drilling, has an output of up to 300 gpm. At the high rpm of the coring process (600 rpm), the solids can “centrifuge” out on the ID of the core rods, hindering the core retrieval and, as a worst case, requiring a trip out of the hole to clear out the obstructions.

The coring muds are then low-solids polymer systems. As almost half the hole volume is recovered as core, and the hole diameters are small, the low-solids requirement can be met with the settling system of the earth pits. The 50-gpm triplex is used for coring, with a maximum 25-gpm rate.

Cementing system. The very basic cementing system consists of a skid-mounted, 12-bbl circular tank, with a hydraulic paddle agitator. Sack cement is trickled into the tank to gradually build up to the required density. Once the correct density is achieved, then the cement is pumped downhole with the mounted progressive cavity (mono) pump. A rubber wiper plug is then dropped and displaced volumetrically to depth. Once the wiper plug has reached the appropriate depth, then the cementing head surface valve is closed to prevent backflow. The wiper plug and cement are easily removed via the core assembly, as coring proceeds.

Wireline logging was considered—tools that could be used to log the 3.75-in. hole were researched and found from the water well industry. Available were basic gamma ray and resistivity tools. Their use was determined to be minimal; the regional sands were “hot,” that is they had radioactive clays, which masked the sand content and made interpretation difficult. The formation water was known to be quite fresh, again making gas/oil/water determinations problematic. Instead, a surface evaluation system was devised, incorporating spectral gamma ray and magnetic susceptibility devices to evaluate the cores on surface. These “logs,” plus microscopic examinations, would provide sufficient on-location evaluation to determine which cores would be sent for laboratory analyses.

Although records from the IBPC operations are scant, anecdotal evidence suggested that they used “barefoot” open-hole (non-cased) completions. The local villagers are still bailing the IBPC wells today for production rates measured in gallons per day, further indicating that we could expect some wellbore stability with the fluid level lowered to reservoir level.

The discussion above, related to the plastering effect, leads us to expect severe near-wellbore damage. Near-wellbore damage is an everyday expectation in oil and gas wells. The solution is to cement a casing string in place and to jet-perforate past the damaged zone. However, in Myanmar, as with many developing countries, explosives are tightly controlled, requiring military and police permits for transport. Prior to transport, extensive permitting is required to import them in the first place. This process can easily take a year. These complications lead directly to high costs, which our low budget for the oil project could not support.

Underreamer acquisition. A solution was found in the central portion of the U.S., where low-capacity wells are the norm, and specialized slimhole tools can be found. An underreamer was located, which had a 3.75-in. OD which could open the hole to 6 in., which was thought to be past the damage zone. Although the drilling contractor had no experience swabbing, their experience running and retrieving their core barrel contained all the skills required to perform a swab test. The coring winch has a capacity of 12.6 kN (2,800 lbf) pull at 430 m (1,410 ft) per minute with a full drum, well within the required parameters for our swab test.

ACTUAL OPERATIONS

Confident with the planning for the shallow oil appraisal program, planning is already underway to work with the contractor for an upgraded pressure control system and a more sophisticated mud system, to look into the normally pressured gas zones thought to be just below this program’s shallow oil.

The drilling is taking place between March and May 2021, and the company is very excited to test on the ground this new (new for Myanmar, not for the global O&G industry) technology. If successful, continuous coring represents a huge opportunity to reach the production goals and low extraction costs while gathering more geological information.

 ACKNOWLEDGMENT

The author wishes to thank U Win Myint, Tamara Makaryan, Pyae Sone Thu, Arkar Wai Yan Maung, Thura Aung, Zwe Thurein, Ngwe Min Thein, Alan Gray, Jim Sanford, Kway Kyaw Naing, Zaw Ye Aung and Marcia Lattimore for their help in the project and in preparing this article. Additional thanks go to Geo-PSI and Valentis for sharing their expertise in diamond continuous coring, and to Boart Longyear for their technical assistance.

REFERENCES

1. Walker, S. H., and K. K. Millheim, “An innovative approach to exploration and exploitation drilling: The slim-hole high-speed drilling system,” SPE paper 19525-PA, published in Journal of Petroleum Technology, Sept. 1, 1990.

2. Karimi, M., T. E. Moellendick, and C. Holt, C., “Plastering effect of casing drilling: A qualitative analysis of pipe size contribution,” SPE paper 147102-MS, presented at the SPE ATCE, Denver, Colo., Oct. 30-Nov. 2, 2011.

3. Randolph, S.B., and A. P. Jourdan. “Slimhole Continuous Coring and Drilling in Tertiary Sediments,” SPE paper 21906-MS, presented at the SPE/IADC Drilling Conference, Amsterdam, the Netherlands, March 11, 1991.