SPE 107829 Defining and Implementing Functional Requirements of an Intelligent-Well Completion System

Arashi Ajayi, SPE, Michael Konopczynski, SPE, Victoria Jackson Nielsen, SPE, and Corrado Giuliani, SPE, WellDynamics Inc.

Copyright 2007, Society of Petroleum Engineers This paper was prepared for presentation at the 2007 SPE Latin American and Caribbean Petroleum Engineering Conference held in Buenos Aires, Argentina, 1518 April 2007. This paper was selected for presentation by an SPE Program Committee following review of information contained in an abstract submitted by the author(s). Contents of the paper, as presented, have not been reviewed by the Society of Petroleum Engineers and are subject to correction by the author(s). The material, as presented, does not necessarily reflect any position of the Society of Petroleum Engineers, its officers, or members. Papers presented at SPE meetings are subject to publication review by Editorial Committees of the Society of Petroleum Engineers. Electronic reproduction, distribution, or storage of any part of this paper for commercial purposes without the written consent of the Society of Petroleum Engineers is prohibited. Permission to reproduce in print is restricted to an abstract of not more than 300 words; illustrations may not be copied. The abstract must contain conspicuous acknowledgment of where and by whom the paper was presented. Write Librarian, SPE, P.O. Box 833836, Richardson, TX 75083-3836, U.S.A., fax 01-972-952-9435.

Abstract There are various challenges involved in the design and implementation of an intelligent well system for field development. Different challenges are encountered at different stages of the intelligent well project. In order to arrive at a fitfor-purpose system, each of the challenges will have to be addressed adequately. These challenges can be categorized under the following: value driver identification, well location, system selection, third party equipment integration, control and monitoring objectives, data management and project management. Addressing these challenges will highlight the relationship between project value drivers, functional well requirements and how these influence the selection of the final intelligent well completion. Provision of feasible solutions to the challenges also requires an integrated approach. This paper divides the intelligent well completion project into different stages and addresses issues specific to each stage. The authors provide recommendations that increase overall chances of project success and ensure that the promised values of the technology are delivered. Introduction Intelligent well technology has played important roles in the development of both mature and new fields since its introduction into the oil and gas industry in the mid 1990s. The ability of the technology to address multiple field/reservoir production and injection issues, while demonstrating robust reliability profiles, has led to its continuous use in field development activities. Over 450 systems have been deployed worldwide, which indicates that the technology has matured beyond the test or trial period Several authors1-5 have presented cases highlighting issues, challenges and benefits relating to the application of

intelligent well technology. In most of these cases, some common threads can be identified. These include selecting the right candidate for the right application, effective project planning and management, selecting a fit-for-purpose system, management of surface control and third party interface issues, proper field installation and concise post-installation activities. Though adequate understanding and management of these issues do not guarantee a successful intelligent well project, it would drastically increase its chances of success relative to an unmanaged project. This paper focuses on these major issues and identifies critical factors that could help manage them better. Candidate Identification Several applications of intelligent well technology in field developments have yielded tangible and measurable benefits. As encouraging as these benefits may look, selective application of the technology to critical candidate wells is still recommended. It is wise to note that not every well in a field development plan needs to be intelligent. One of the main challenges is to identify the critical candidates that will provide maximum benefits. Many authors6-11 have presented methodologies for identification and screening of potential candidates. These methods range from a simple analytical approach to complex reservoir simulation models. The main objectives of the candidate screening process are to identify critical value drivers and ways of quantifying potential benefits. Reservoir characteristics, produced fluid composition, well performance and hydrocarbon recovery efficiency inherent uncertainty are all parameters about which the development team is inherently uncertain, particularly early in the exploitation of an asset. In the screening process, to address these uncertainties, it is important that a stochastic rather than a deterministic approach is adopted12. This approach identifies multiple applications and realizations of the intelligent well technology that will maximize potential values while increasing the chances of success (Fig. 1). This evaluation process can also provide the economic justification of the technology when compared to the performance of developments with conventional completion systems. In essence, the screening process must incorporate the flexibility of the intelligent well technology to allow the operator to react to reservoir performance uncertainty. With conventional completions and development plans, reservoir and well performance uncertainties are often

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compensated by, or lead to the need to drill additional wells, which can result in significant additional capital expenditure. Also necessary in the evaluation process is the incorporation of reliability expectations for the intelligent completions and the conventional completions. Reliability can be addressed for all scenarios in a stochastic process which allows for various degrees of systemic and mission failure at a various times in the life of the well. Thus, the impact of uncertainty and reliability must be incorporated in the economic evaluation of both developments with conventional completions, and developments with intelligent completions. The timing of the screening process can impact the use of the technology in field development. Whenever possible, intelligent well technology should be considered in the conceptualization stage. This allows the operator to assess both the horizontal and vertical impact of the technology on other aspects of the field development activities. An application that comes later in the development framework runs the risk of functional compromise that could jeopardize realization of full value. Early consideration will ensure that critical interfaces are identified and potential functional customizations are implemented with minimal impact on project timing. In addition, it provides the opportunity to identify and address issues relating to long lead equipment. Once this first hurdle is crossed, the team can proceed with the process of conceiving completion designs that satisfy the needed functionality and identifying a fit-forpurpose system that meets development objectives. Project Planning and Management The project planning and management has a critical part to play in ensuring overall project and completion success1. A project engineer is usually responsible for the role of managing the intelligent well project and is assigned as the primary customer focal point for all technical and project related details up to and including installation and start-up. The project engineer coordinates a multi-disciplinary team that covers all technical and project related activities up to and including installation and start-up. When feasible, the project engineer will be on location during installation to provide a seamless interface to the customer including any postinstallation review and follow-up. A typical intelligent well project involves activities ranging from detailed downhole completion design to surface control specification and facilities integration. The project engineering team serves as the link that connects all the activities and provides essential interface management to ensure smooth and successful project implementation. Such interface management includes, but is not limited to, integration with sand control, artificial lift, tubing hanger, product engineering, re-engineering and integration to the field control strategy/operation philosophy. This role is even more critical in high profile projects1,2,4 where rig costs or the impact of curtailing and deferring production can greatly impact cost or economic performance. In-Well Design The in-well design is focused on selecting compatible completion hardware that meets the project objectives. The completion hardware includes the intelligent well equipment

and other third party accessories. The selection criteria are often dictated by the identified project value drivers (for new wells) and existing well architecture and downhole equipment (for re-completion projects). In most new well projects, engineers often have more flexibility adjusting completion hardware (within available choices) to align with project value drivers. This flexibility may not exist in workover projects where existing downhole hardware may create constraints on the choice of feasible intelligent well system. Such limitations should be considered during the candidate screening and identification stage in order to set feasible project objectives and deliverables. The size of the smallest inner diameter of the completion hardware and the smallest ID of the casing dictates the type and flow capacity of the intelligent well system that can be used. A design process workflow can be used to identify the constraining hardware and thereby select an appropriate intelligent well completion system. Once the right intelligent well completion system has been identified, it is then necessary to check the performance of the system against the reservoir dynamic performance. This ensures that the fit-for-purpose system satisfies both the hard and soft requirements, such as the capacity to handle maximum flow rates, the ability to withstand anticipated pressure differentials, and the functionality to restrict or shutoff zonal flow. During the reservoir dynamic requirements analysis, the major project objective or driver usually dictates the intelligent well completion system design parameters. The wellbore completion is analyzed as a complete system instead of the conventional individual zone analysis. This ensures that interactions between zones are captured. Consider a case where the main driver for the use of the intelligent well completion is to minimize or prevent future intervention. Intervention often implies that the system responds to an open or close command. Therefore, such applications will focus on selecting a simple, robust and reliable system. A direct hydraulic system with binary positions (on/off) will be a good candidate. The system can be further refined to incorporate additional drivers, assuming that such design refinements do not jeopardize the intervention objective. A multi-position system will be suitable for applications with the main objective of controlling, optimizing, commingling and regulating downhole fluid flow in a multi-zone environment. In such applications, it is essential that engineers understand and incorporate the subsurface dynamics into the system design process. This ensures that the intelligent well completion interval control valves (ICV) perform within the expectations of the set objectives. For example, a system designed to control excess water production might not perform well under excess gas production. Likewise, an ICV designed to regulate/optimize production/injection between zones might not provide satisfactory results in other applications. Though control valves can be designed for multiple applications, such designs require modification of standard systems. Methodologies for such custom modifications have been discussed13. Such customization forces the project team to integrate system hardware and reservoir dynamics. It is important that this process is conducted early in the project.

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This ensures that recommended changes in ICV trim designs are incorporated without adverse effects on project delivery. In addition, selection of the right flow control option may have an impact on the number of zones/intervals that can be realistically controlled in one well, and influence the overall reliability of the integrated system. It is also necessary to evaluate the monitoring requirements, both downhole and surface, of the candidate wells. This evaluation, based on the specific aspect of the well process be observed, will help the team to select appropriate and cost effective sensor options. Downhole monitoring involves provision of pressure and temperature data, and fluid flow rates to define downhole operating parameters. The data is analyzed to arrive at information that is used to make informed decisions on the well performance. The sensor selection process is tightly integrated with the surface control system14 and system control modes15. An application that is driven mainly by intervention may not require complex sensing options unless reservoir management requirements drive the sensing options. Applications that are driven by production optimization and frequent zonal control will benefit mostly from individual zonal sensors. Engineers will be required to balance system monitoring requirements with project economics in order to arrive at an acceptable level of intelligence that meets the well objectives over the required time frame. Dynamic reservoir modeling, integrating available monitoring options with intelligent well functionality, can assist in assessing the incremental economic benefit from each of the options16. Surface Systems Integration and Interface The surface control system is a key element to the overall success of the intelligent well system. It provides the platform for information exchange between the downhole equipment and surface decision making process7 as well as a means to implement actions to improve well performance. As with other intelligent well technology components, different surface control options are available in the market. Selection of the final system must satisfy a defined field operational philosophy. The lack of a clear operational philosophy could lead to an incorrect control system design, and ultimately to economic failure of the system. Selecting a surface system without considering the main project objective can result in the need for additional OPEX, and the potential inability to react to changing reservoir performance in a timely manner, which can lead to economic failure of the project. Surface control systems range from simple manual systems to advanced automated real time systems. An application that expects its benefits from real time monitoring and optimization will require an automated surface control system4. The surface system selection process also involves integration with other third party systems, especially in a subsea environment. The integration involves the interaction of the surface system with other accessories such as subsea control modules, communication protocols, hydraulic power units, multiple or single well applications, subsurface safety valve selection, data management and storage. Others factors are system ratings, hydraulic fluid compatibility, environmental requirements, power requirements and supplies.

This integration is a multi-disciplinary task that requires close cooperation and interaction between all concerned parties such as the operator, the intelligent well equipment, the wellhead supplier, and in some cases, the artificial lift, multi-lateral and sand control suppliers. Considerable effort has been put into the standardization of critical interface between subsea system and IWC through the IWIS (Intelligent Well Interface Standardization) industry panel. The required level of integration varies widely with the selected intelligent well system and the field operational philosophy. For example, an on/off direct hydraulic system deployed in an easily accessible location (e.g land) could be operated by means of portable hydraulic unit. On the other hand, integrating the same well into the field control and monitoring system will require an interface management process not dissimilar to a deepwater subsea application. It is critical, for a successful integration of a IWC control system, that all the interfaces are identified and clearly defined as early as possible in the project in order to arrive to a system design. Depending on the complexity of the project these interfaces may require modifications to existing systems to adequately accommodate the system design. Management of the integration process by a dedicated and experienced team can lead to significant savings in project cost, while providing speedy solutions to issues and challenges. Extensive system integration testing, where necessary, minimizes the risk of problems during deployment by ascertaining that all elements are working together. This test must be conducted well before field installation. It would be a mistake to assume that this system integration testing pertain only to subsea implementation as land or platform development do benefit from verifying system overall functionality prior to implementation. In addition, adequate time must be provided to propose and re-test proposed solutions to identified problems. Improper management of this process can threaten the added value of the intelligent well system and compromise the smooth delivery of the project. Field Installation The actual field installation is the most critical part of the overall project delivery. A critical set back in the installation phase could jeopardize the whole project if not properly managed. Just like the other phases of the project, the field installation must be well planned and managed by experienced personnel in light of the impact that it has on system reliability. Depending on the complexity of the project, all stakeholders must be involved prior to installation, to prepare and implement critical installation procedures and manuals. Most successful field installations have benefited greatly from advance rig visits and regular pre-installation meetings. This provides essential team building among personnel, allows sharing of information, knowledge and best practices. The preplanning actions will distribute responsibilities, identify competence and skill gaps, and identify potential training needs to fill the gaps. In some cases, pre-installation events could expose critical inadequacies in the installation equipment17. Such inadequacy may require modifications of the equipment where feasible or adjustments to the procedures. For example, some modifications may be required on selected

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rigs based to accommodate intelligent well equipment requirements. In addition, the intervention workover control system (IWOCS) may need to be modified. It is important to establish a system in which lessons learned can be captured, documented and communicated timely and efficiently. This promotes continuous improvements in the installation process in a simple, dynamic and easy to use manner. The system must be simple, dynamic and easy to use. It is also beneficial to maintain team continuity, especially in multi-well projects. This not only promotes better working relationships between team members, but also leads to cost savings and can minimize on the job training requirements. A potential pitfall that should be managed is when team members become overly familiar with the installation process, which can lead to the failure to notice small differences in completion, system integration and well conditions from project to project. To avoid this pitfall, refresher training, operations simulation, sharing best practices, and completing-the-well-on-paper exercises can keep the completion team sharp and performing at the highest level. Post Installation Activities The value of the intelligent well system can only be realized if the installed system is designed and used according to set objectives. To achieve this, there must be clear and concise plans to use the acquired data and system functionality18. The plan must be prepared to realize the full value of the system. The proper use of the information from the downhole components is a necessary condition for realizing the full benefits of the intelligent well system. The use of the information should be tied to the project objectives and incorporated in the well and field operating philosophy19. This assumes that the right system is in place to achieve the set objectives. A disconnect between the installed system functionality and field operating philosophy will compromise the ability to fully realize the benefits from the technology. This can discourage further use of the technology in extreme cases. The operating philosophy should address issues relating to automation, control and optimization processes. It should also address responsibilities, protocol, and the decision making process. Operating decisions are based on gathered downhole and production data, analyzed and interpreted by discipline experts to generate recommendations that are approved by management in the context of corporate safety and economic objectives. The operating philosophy should address how these decisions are communicated back to the system and implemented. Consideration of the data gathering, analysis and decision workflow will ensure that relevant hardware and software are available on the right communications and control platform to help in the decision making process. It is essential that the decisions are made with consistently and in a timely manner. Expert systems are available to handle the huge amount of data and provide valuable analysis tools to assist with decisions within a short time. Such tools must be identified early in the decision workflow design process to ensure that the tools have the right data available and compatible with the installed intelligent well system. The expert tool will usually have data management and optimization routines that allow

manipulation of the downhole control valves. It is important to match the control resolution of the expert tool with that of the downhole valve..If the expert tool assumes higher resolution of control than is practical, the control system may operate in an unstable or inefficient manner. For example, a simple on/off direct hydraulic system application installed to manage intervention does not require a high end expert decision making tool. However, a multi-position system installed to manage excess gas/water production and optimize zonal contributions will require a high end, high resolution expert decision tool. The decision tool will enable the field operator to integrate all components of the intelligent well reservoir management system to achieve pro-active reservoir management (Fig. 3). The process involves data collection, integrated asset/zonal management, and timely decisions to control injection and production process as required. The asset management objectives can focus on either short term optimization parameters, long term parameters or both. Similarly, spatial parameters play a part in the control and optimization philosophy. Short term (or fast loop) asset management addresses process parameters that respond in short periods of time, and are usually on a reservoir zone or wellbore dimension. Fast loop optimization often focuses on maximizing hydrocarbon production and short term profitability. Short term time frames can vary from minutes to days. Slow loop or long term reservoir optimization is characterized by process parameters that take weeks, months or years to respond to perturbations, and is usually on the spatial scale of patterns, regions or even whole reservoirs. As the name suggests, long term asset management focuses on the reservoir through maximizing hydrocarbon recoveries. Balancing short term objectives without jeopardizing long term gains is the key to effective reservoir management. The chosen decision tool must address this challenge without significant loss of time in the decision making process. Several solution options, including the close-loop initiatives, are available to adequately address this challenge. These options range from simple solutions utilizing single point data to complex solutions using artificial intelligence and neuro-network technology. In addition, information technology requirements for the selected solution option must be evaluated and understood. This includes, but is not limited to, platform architecture, bandwidth, data frequency, decision making speed, data ownership, data storage and system security. Once a fit-for-purpose expert tool has been identified, a relevant training program needs to be put in place to ensure that personnel take ownership and get familiar with the expectations. Finally, there must be a clear understanding of ownership of the decision making process and its implementation between the asset management team and the production engineers. This will minimize potential opportunity loss due to untimely implementation of process recommendation. Conclusions and Recommendations Designing and implementing an intelligent well system requires a broad understanding of the issues and challenges at

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each phase of the project. These challenges must be addressed in an integrated environment to ensure that proposed solutions are in alignment with overall project objectives. The challenges range from identification and screening of candidates to post installation and subsequent usage of the installed systems. From the analysis, the following recommendations are provided to increase the chances of project success and ensure the well delivers promised value. Intelligent well technology should be incorporated as early as possible in field development process. Adopt a stochastic approach to intelligent well candidate screening and identification process. Project engineers should be incorporated as early as possible and involved in the management and coordination of the project activities. The intelligent well system selection should be aligned with identified objectives and incorporate reservoir dynamics. System integration should be conducted early to identify interface issues and propose feasible and timely solutions. Selection of surface systems must consider control objectives and value realization process. Early formation and integration of field installation team should occur to ensure continuity and training opportunities. Preparation of clear and concise operating philosophy indicating personnel roles and responsibilities and installed system details should be completed to realize promised value. Adoption of a fit-for-purpose expert decision making tool. Training and empowerment of post installation personnel. Addressing these challenges will enhance a lateral understanding of the drivers and capabilities of the intelligent well system. This would in turn ensure that maximum value from the application of the technology is realized within the defined project boundaries. Acknowledgements The authors wish to thank the management of WellDynamics B.V. for their permission to publish this paper. Nomenclature ICV Interval Control Valve IWOCS Intervention and Workover Control System References 1. Jackson, V. B, and Tips, T. R.: Case Study: First Intelligent Completion System Installed in the Gulf of Mexico, paper OTC 11928, presented at 2000 Offshore Technology Conference, Houston, Texas, 1-4 May. 2. Stair, C. D, et. al.,:Na Kika Completions Overview: Challenges and Accomplishments, paper OTC 16228, presented at 2004 Offshore Technology Conference, Houston, Texas, 3-6 May. 3. Piedras, J, Stimatz, G. P, Jackson-Nielsen, V. B, and Watson, G. M,: Canyon Express: Design and Experience on

High-Rate Deepwater Gas Producers Using Frac-Pack and Intelligent Well Completions Systems, paper OTC 15094 presented at the 2003 Offshore Technology Conference, Houston, Texas, 5-8 May. 4. Bogaert, P. M et al.: Improving Oil Production Using Smart Fields Technology in the SF30 Satellite Oil Development Offshore Malaysia, paper OTC 16162, presented at 2004 Offshore Technology Conference, Houston, Texas, 3-6 May. 5. Brnak, J, Petrich, B, and Konopczynski, M.R: Application of SmartWell Technology to the SACROC CO2 EOR Project: A Case Study, paper SPE 100117, presented at the 2006 SPE/DOE Symposium on Improved Oil Recovery, Tulsa, Oklahoma, 22-26 April. 6. Yetan, B, Durlofsky, L. J., and Aziz, K.: Optimization of Smart Well Control, paper SPE 79031 presented at 2002 International Thermal Operations and Heavy Oil Symposium, Calgary, Alberta, 4-7 November. 7. Brouwer, D. R et al.: Recovery Increase through Water Flooding with Smart Well Technology, paper SPE 68979, presented at 2001 SPE European Formation Damage Conference, The Hague, The Netherlands, 21-22 May. 8. Gai, H.: Downhole Flow Control Optimization in the Worlds 1st Extended Reach Multilateral Well at Wyntch Farm, paper SPE 67728, presented at 2001 IADC/SPE Drilling Conference, Amsterdam, The Netherlands, 27 February 1 March. 9. Naus, M.M.J.J., Dolle, N., and Jansen, J. D. Optimization of Commingled Production using Infinitely Variable Inflow Control Valves, paper SPE 90059, presented at SPE ATCE 2004, Houston, Texas, 26-29 September. 10. Ajayi, A. and Konopczynski, M.R: Evaluating Intelligent-Well System Requirement for an Offshore Field Development, paper SPE 94851, presented at 2005 Latin American and Caribbean Petroleum Engineering Conference, Rio de Janeiro, Brazil, 20-23 June. 11. Ajayi, A. and Konopczynski, M.R: A Dynamic Optimization Technique for Simulation of Multi-Zone Intelligent Well Systems in a Reservoir Development, paper SPE 84192, presented at 2003 ATCE, Denver, Colorado, 5-8 October. 12. Sharma, A.K., Chorn, L.G.,Han, J. and Rajagopalan, S.:Quantifying Value Creation from Intelligent Completion Technology Implementation, paper SPE 78277 presented at the SPE 13th European Petroleum Conference, Aberdeen, October 29 31, 2002 13. Konopczynski, M.R and Ajayi, A. Design of Intelligent Well Downhole Valves for Adjustable Flow Control, paper SPE 90664, presented at 2004 ATCE, Houston, Texas, 26-29 September 14. Mathieson, D, Guiliani, G, Ajayi, A and Smithson, M,: Intelligent Well Automation Design and Practice, paper SPE 103082, presented at 2006 ATCE, San Antonio, Texas, 24-27 September. 15. Ebadi, F, and Davies D.: Should Proactive and Reactive Control Be Chosen for Intelligent Well Management? , paper SPE 99929, presented at the SPE IEC and Exhibition, Amsterdam, The Nederlands, 11-13 April. 16. Aggrey, G. H, Davies, D. R, Ajayi, A and Konopczynski, M. R,: Data richness and reliability in Smart

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fields management Is there value? , paper SPE 102867, presented at 2006 ATCE, San Antonio, Texas, 24-27 September. 17. Stair, C.D., Bruesewitz, E.R., Shivers, J.B., Rajasingam, D.T., Dawson, M.E.P.: Na Kika Completions Overview: Challenges and Accomplishments, paper OTC 16228, presented at 2004 Offshore Technology Conference, Houston, Texas, 3-6 May. 18. Martinez, J. K. and Konopczynski, M. R,: Integrated Reservoir Management in an Intelligent Well Environment, paper SPE 77853, presented at the SPE Asia Pacific Oil and Gas Conference and Exhibition, Melbourne, October 8-10. 19. Goggin, D.J., Ovuede, M.A., Liu, N., Ozdogan, U., Coleman, P.B., Meinert, D.P.: Maximizing Production Capacity Using Intelligent-Well Systems in a Deepwater, West Africa Field, paper SPE 103308, presented at 2006 ATCE, San Antonio, Texas, 24-27 September.

Understand Main Drivers

Prepare Operating Philosophy

Make Informed Decisions

Select Right System

Acquire Necessary Data

Fig. 2: Steps to Realizing Value of Intelligent Well System

Figures

Fig. 1: Stochastic Approach to Intelligent Well System Evaluation

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Wellhead Manifold

Well, Pipe Network, Facilities Well, Pipe Network, Facilities

Optimisation Optimisation

Intelligent Completion

Profit Optimizer Profit Optimizer Profit Controllers Profit Controllers Real Time Data Real Time Data Control / SCADA Control / SCADA

Process

Gas Oil Water

The Digital Oilfield

Fig. 3: Integration of Systems in the Intelligent Field Decision Process