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CONTENTS
Volume 69 • Number 7

14 GUEST EDITORIAL • USHERING IN A NEW ERA OF

OILFIELD INNOVATION WITH THE INTERNET OF THINGS
As the industry slowly ramps up drilling and production activities
while adjusting to a new period of “lower for longer” prices, the time
is right for widespread adoption of the Internet of Things.
28 FOUR WAYS TO CUT DEEPWATER COST
With oil prices stuck in low, deepwater developers are still struggling
to slash costs to reach breakeven. Four stories show what they are
doing to get back into the black.
38 AFTER YEARS, ‘BIG CREW CHANGE’ HAS PASSED,
BUT LEARNING, TRAINING CHALLENGES REMAIN
The hump in the workforce age distribution, which has been on the
industry’s radar for at least 2 decades, has passed almost unnoticed.
Focusing on new technology and innovations in training courses could
smooth the demographic transition.
42 SLUG-SMOOTHING TECHNOLOGY SEES
OVER 200 SHALE INSTALLS, GETS BOOST Pushing for lower development
FROM SCHLUMBERGER JV and operating costs, offshore
A gas slug could represent the end of an artificial-lift system. A new operators look to collaboration,
technology aims to remove slugging by separating the horizontal and life extension, drilling perfection,
and facilities staff input to gain
vertical sections of the well and regulating the flow between them. efficiencies and increase profitability.
44 OTC FOCUSES ON DOWNTURN-LED INNOVATION Source: Getty Images.
AND THE BOTTOM LINE
Highlights from the 2017 Offshore Technology Conference held in
Houston include technical papers and panel presentations focused
on increased efficiency and how innovations and incremental
improvements in technology can help. DEPARTMENTS
48 REINVENTION, NEW REALITIES CENTRAL THEME 6 Performance Indices
OF OFFSHORE EUROPE 2017
The latest edition of the biennial conference will feature sessions 8 Regional Update
and presentations to address current topics such as the industry’s 10 President’s Column
changing landscape because of the downturn, the great crew change, 12 Comments
and cyber and physical attacks on the industry. 16 Technology Applications
50 TALENT & TECHNOLOGY • LEARNINGS FROM 18 Technology Update
THE EMERGING LEADERS ALLIANCE CONFERENCE 20 E&P Notes
Attendees of the 2016 conference share their learnings and discuss 89 People
the importance of leadership training in achieving career goals.
90 Professional Services
87 DISTINGUISHED LECTURER TOPICS SET 91 Advertisers’ Index
FOR 2017–2018 SEASON 92 SPE Events
With speakers from various disciplines and professions, the
2017–2018 SPE Distinguished Lecturer season focuses on industry
trends, challenges, and technology applications.

An Official Publication of the Society of Petroleum Engineers. Printed in US. Copyright 2017, Society of Petroleum Engineers.
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 SPE BOARD OF DIRECTORS
OFFICERS
2017 President
Janeen Judah, Chevron
2016 President
Nathan Meehan, Baker Hughes
2018 President
Darcy Spady, Broadview Energy
Vice President Finance
Roland Moreau, ExxonMobil Annuitant
REGIONAL DIRECTORS
AFRICA
Adeyemi Akinlawon, Adeb Konsult
CANADIAN
Cam Matthews, C-FER Technologies
EASTERN NORTH AMERICA
Joe Frantz Jr., Range Resources
GULF COAST NORTH AMERICA
J. Roger Hite, Inwood Solutions
MID-CONTINENT NORTH AMERICA
Chris Jenkins, Independent Energy Standards
MIDDLE EAST
Khalid Zainalabedin, Saudi Aramco
NORTH SEA
Karl Ludvig Heskestad, Aker BP
NORTHERN ASIA PACIFIC
Phongsthorn Thavisin, PTTEP
ROCKY MOUNTAIN NORTH AMERICA
Erin McEvers, Clearbrook Consulting
RUSSIA AND THE CASPIAN
Anton Ablaev, Schlumberger
JPT STAFF
Glenda Smith, Publisher
John Donnelly, Editor
Pam Boschee, Senior Manager Magazines
Chris Carpenter, Technology Editor
Trent Jacobs, Digital Editor
Anjana Sankara Narayanan, Editorial Manager
Joel Parshall, Features Editor
Stephen Rassenfoss, Emerging Technology Senior Editor
Stephen Whitfield, Senior Staff Writer
Adam Wilson, Special Publications Editor
Craig Moritz, Assistant Director Americas Sales & Exhibits
Mary Jane Touchstone, Print Publishing Manager
David Grant, Digital Publishing Manager
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Dennis Scharnberg, Proofreader
Moving Energy
SOUTH AMERICA AND CARIBBEAN
Anelise Quintao Lara, Petrobras
SOUTH, CENTRAL, AND EAST EUROPE
Matthias Meister, Baker Hughes
Forward
SOUTH ASIA AND THE PACIFIC
Salis Aprilian, PT Badak NGL
SOUTHWESTERN NORTH AMERICA
Libby Einhorn, Concho Oil & Gas
WESTERN NORTH AMERICA
Andrei Popa, Chevron
TECHNICAL DIRECTORS
DRILLING
Jeff Moss, ExxonMobil
HEALTH, SAFETY, SECURITY, ENVIRONMENT,
AND SOCIAL RESPONSIBILITY
Trey Shaffer, ERM
MANAGEMENT AND INFORMATION
J.C. Cunha
COMPLETIONS
Jennifer Miskimins, Colorado School of Mines
PRODUCTION AND FACILITIES Ideal solutions for upstream,
Hisham Saadawi, Ringstone Petroleum Consultants
midstream and downstream
RESERVOIR DESCRIPTION AND DYNAMICS
Tom Blasingame, Texas A&M University
DIRECTOR FOR ACADEMIA As an expert manufacturer of downhole
and surface pumps, we produce oilfield
Dan Hill, Texas A&M University
pump systems according to the highest
AT-LARGE DIRECTORS
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Khaled Al-Buraik, Saudi Aramco crude oil or its percentage of gas or sand
Helena Wu, Santos Ltd.
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 PERFORMANCE INDICES

WORLD CRUDE OIL PRODUCTION+‡ HENRY HUB GULF COAST NATURAL GAS SPOT PRICE‡

THOUSAND BOPD
6
2017
O PEC NOV DEC JAN FEB 5 USD/million Btu
Algeria 1350 1350 1340 1340 4
Angola 1698 1668 1658 1688
3
Ecuador 544 544 536 535
Gabon 220 220 200 185 2
Iran 4220 4280 4300 4300
1
Iraq 4645 4685 4565 4445

MAY

JUN

JUL

AUG

SEP

OCT

NOV

DEC

2017
JAN

FEB

MAR

APR
Kuwait1 2970 2970 2830 2770
Libya 580 620 680 690
Nigeria 1984 1684 1849 1869
Qatar 1527 1527 1487 1467
WORLD CRUDE OIL PRICES (USD/bbl)‡
Saudi Arabia1 10640 10540 10020 10040
UAE 3226 3226 3067 3047
Venezuela 2150 2150 2100 2090 2017
OCT NOV DEC JAN FEB MAR APR MAY
TOTAL 35784 35464 34632 34466
Brent 49.52 44.73 53.32 54.58 54.87 51.59 52.31 50.33

THOUSAND BOPD WTI 49.78 45.71 51.97 52.50 53.47 49.33 51.06 48.48

2017
NON-OPEC NOV DEC JAN FEB
Canada 4135 3968 3877 3840
WORLD ROTARY RIG COUNT†
China 3915 3949 3855 3929

Egypt 491 491 490 489

Mexico 2105 2067 2054 2051 2017

REGION NOV DEC JAN FEB MAR APR MAY
Norway 1785 1706 1660 1710
US 580 634 683 744 789 853 893
Russia 10832 10830 10733 10713
Canada 173 209 302 342 253 108 85
UK 948 961 970 944
USA 8863 8870 8838 9031 Latin America 181 184 176 179 185 182 190
Other2 13415 13447 13396 13404 Europe 97 99 98 107 94 91 95

TOTAL 46489 46289 45873 46111 Middle East 380 376 382 382 386 389 391

Africa 79 78 79 77 80 89 84
Total World 82273 81753 80505 80577
Asia Pacific 188 192 198 196 198 205 197

INDICES KEY
TOTAL 1678 1772 1918 2027 1985 1917 1935
Numbers revised by EIA are given in italics.
+
Figures do not include natural gas plant liquids.
1
Includes approximately one-half of Neutral Zone production.
2
Additional annual and monthly international crude oil production statistics WORLD OIL SUPPLY AND DEMAND‡
are available at http://www.eia.gov/beta/international/.
† Source: Baker Hughes.
‡ Source: EIA.
MILLION BOPD 2016 2017
Quarter 2nd 3rd 4th 1st

SUPPLY 96.36 97.01 98.33 96.81

DEMAND 96.30 97.79 97.87 96.82
Supply includes crude oil, lease condensates, natural gas plant liquids, biofuels, other liquids,
and refinery processing gains.

6 JPT • JULY 2017

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www.aramco.jobs/jpt
 REGIONAL UPDATE
AFRICA
Z BP and Kosmos Energy have made a
major deepwater natural gas discovery
offshore Senegal. The Yakaar-1 well on the
Cayar Offshore Profond Block encountered a
gross hydrocarbon column of 394 ft and net
pay of 148 ft. The well tested the basin floor
fan system outlying Kosmos’ 2015 Tortue
discovery in Senegal and Mauritania, which
is estimated to hold more than 15 Tcf of gas
resources and is slated to begin production
and liquefied natural gas (LNG) exports
in 2021. The reserves at Yakaar-1 and the
2016 Teranga-1 discovery could support a
second LNG hub, the companies said. BP
is buying out a minority interest holder
in Cayar Offshore Profond and another
block. When the deal is completed, BP will
hold an approximately 60% interest in the
Senegal blocks, with Kosmos and Petrosen
holding approximately 30% and 10%
stakes, respectively.
Z Tullow’s Emekuya-1 well in Block 13T
of northern Kenya has hit oil. The well
encountered approximately 245 ft of net pay
in two zones, the company said. Situated
1.5  miles north of the successful Etom-2 well,
Emekuya-1 drilled a fault block on the flank
of the Greater Etom structure and reached
a total measured depth of 4,448 ft. The
well penetrated reservoir-quality Miocene
sandstones that correlate to those in Etom-2,
Tullow said. The company operates and
holds a 50% interest in Blocks 13T and 10BB,
with Africa Oil and Maersk Oil each holding
25% stakes.
ASIA
Z Eni has started gas production from the
deepwater Jangkrik Development Project
offshore Indonesia ahead of schedule,
the company said on 15 May. Production
from 10 subsea wells, connected to the
newly built floating production unit (FPU)
Jangkrik, will gradually reach 450 MMscf/D
(83,000 BOE/D). Gas will be processed on
the FPU, flow through a dedicated 49-mile
pipeline to a company onshore receiving
facility, and be sent through the East
Kalimantan Transportation System to the
Bontang gas liquefaction plant.
AUSTRALIA/OCEANIA
Z ExxonMobil reported positive results
on the Muruk-1 sidetrack well in the Papua
8 JPT • JULY 2017
New Guinea (PNG) North Highlands,
13 miles northwest of the Hides gas field.
Drilled to a depth of 13,550 ft, the recent
well lies southwest of the late-2016 Muruk-1
natural gas discovery. The sidetrack well
success “confirms the extent of the Muruk
area and further establishes Muruk as a
potentially significant new discovery with
the same high-quality sandstone reservoirs
as the Hides field,” said Steve Greenlee,
president of ExxonMobil Exploration
Company. Hides is one of three fields that
supplies the company-operated PNG LNG
development. Oil Search is the operator of
the Muruk wells with a 37.5% interest, with
ExxonMobil (42.5%) and Santos (20%) the
other participants.
EUROPE
Z BP has produced first oil from the
redeveloped Schiehallion area, following the
completion of the Quad 204 project in the
west of Shetland region offshore the United
Kingdom. Schiehallion and the adjacent Loyal
field have produced almost 400 million bbl
of oil since startup in 1998. Redevelopment
through Quad 204 is expected to unlock
a further 450 million bbl of resources and
extend the fields’ lives beyond 2035. Oil
production will ramp up during 2017 to a
plateau level of 130,000 B/D. BP has a 36%
interest in the Glen Lyon harsh-water floating
production, storage, and offloading vessel,
which was installed in the project to produce
from the fields. Shell (54%) and Siccar
Point Energy (10%) hold the remaining
vessel interests. Field interest holders at
Schiehallion are Shell (55%), BP (33%), and
Siccar Point (12%), and at Loyal field are BP
(50%) and Shell (50%).
Z Repsol Sinopec Resources UK said that
first oil has flowed from the Shaw field,
which is part of the company-operated
Montrose Area Redevelopment (MAR)
project in the United Kingdom Central North
Sea. The Shaw, Cayley, and Godwin fields
are being brought on line as new fields in the
project, which is also extending the lives of
six existing fields. First output from Cayley
was expected at the end of the second
quarter, with gross incremental production
estimated to peak at up to 40,000 BOE/D.
The MAR project is intended to unlock up to
100 million BOE of additional reserves. The
project interest holders are Repsol Sinopec
(58.97%) and Marubeni Oil & Gas (41.03%).
Repsol Sinopec is a joint venture of Repsol
and Addax Petroleum UK, a subsidiary
of Sinopec.
MIDDLE EAST
Z Iraq has begun the third and final-phase
expansion at its southern Halfaya oil field
with the goal of doubling production
capacity to 400,000 B/D in 2018. The
expansion will include additional oil/gas
separation facilities, said Adnan Noshi,
director general of Maysan Oil Company,
recently. The company oversees oil fields
in Maysan province. Halfaya, operated by
PetroChina, is Maysan Oil’s largest field,
which produces 200,000 B/D of a total
output of 380,000 B/D. The expansion should
raise Maysan’s overall production to almost
600,000 B/D in 2018, Noshi said. Iraq plans to
increase production capacity to 5 million B/D
by year-end from a recently reported level of
approximately 4.7 million B/D.
NORTH AMERICA
Z Talos Energy spudded the Zama-1
exploration well in the Sureste Basin
offshore the state of Tabasco in Mexico on
23 May. The prospect is estimated to hold
from 100 million to 500 million bbl of oil,
according to project partner Premier Oil.
The drilling effort marks the first well to be
spudded on a block awarded in Mexico’s
first acreage tender in July 2015, following
the country’s historic energy reform that
opened oil and gas projects to foreign
investors. An offshore well operated by Eni—
which resulted in a discovery announced
on 23 March—was drilled before Zama-1 on
acreage awarded in the second tender in
September 2015. Talos, the operator, holds
a 35% interest in the Zama well, with the
remaining stakes held by Sierra Oil & Gas
(40%) and Premier (25%).
SOUTH AMERICA
Z Total said it will spend USD 500 million
over 3 to 4 years to develop a shale-gas
prospect in Argentina as the country’s
government has promised to set a minimum
price to attract investors. The company is
proceeding with the first-phase development
of the Aguada Pichana Este license in the
Vaca Muerta formation. Total plans to
increase its interest in the license, co-owned
by YPF, Wintershall, and Pan America
Energy, to 41% from about 27%, pending
local regulatory approval. JPT
 PP-17-008_SPE-AD.pdf 1 2017-06-12 8:38:48 PM

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 RISK AND REWARD
Going Deep: Is Deepwater Experiencing
a Resurgence?
Janeen Judah, 2017 SPE President
Across a single-week period this spring, I
spent time in three very different basins
and business environments: Saudi Ara-
bia, the Midland/Permian basin, and at
the Offshore Technology Conference.
What a difference you see among these
three areas, and each has a vastly differ-
ent future predicted.
Saudi Arabia and Aramco are operations unlike any other.
If “everything is bigger in Texas,” it is much bigger in Saudi
Arabia. Aramco approaches business differently from interna-
tional oil companies and independents—not always looking to
maximize net present value, but always taking the long-term
view. Reservoir management is key, and the most sophisti-
cated tools are used to maximize ultimate recovery from the
stunningly prolific reservoirs. Everything takes a long-term
view, from training and developing national staff to manag-
ing reservoirs to building infrastructure with future develop-
ment in mind.
While in Saudi Arabia, I was fortunate enough to get a brief
but memorable tour of Aramco’s Manifa field, which is locat-
ed both onshore and in very shallow water, roughly 15 m deep.
Perhaps most remarkable about Manifa is that Saudi Aram-
co created 27 artificial islands and 42 km of connecting cause-
ways. This infrastructure is used as shallow-water development
platforms, all while preserving the delicate coral reefs and fish-
eries in the shallow bay. It is a remarkable story of developing
a characteristically huge Arabian field. The Manifa Crude Oil
Increment has a capacity of 900,000 B/D, 90 million scf/D of
nonassociated gas, and 65,000 barrels of condensate per day.
Massive and massively remarkable.
The Permian Basin churns on and is the hottest area in the
world. A professor of mine at Texas A&M University (who also
taught at Texas Tech University in the 1970s), J.T. Rollins, told
his eager students, “The best place to find oil is in an oil field.”
The Permian Basin continues to prove that adage. Many times,
the Permian Basin has been written off, properties sold off, and
portfolios rebalanced. Then someone comes up with a new ap-
proach, and the race is on again.
As I flew to Midland on a perfectly clear day, I could easily see
the changes and activity in the oil fields below. I was reminded
of my first flight to Midland on long-gone Texas International
Airlines in the fall of 1980. I also remember looking down at
the “roads to nowhere” without realizing they were well loca-
To contact the SPE President, email president@spe.org.
10
tions. I had never seen Texas west of San Antonio; all of my oil-
field experience was in east or south Texas. I stepped out from
the airport that fall afternoon to see 360 degrees of horizon for
the first time. I went on to spend most of the 1980s in Midland,
learning the oil field from the bottom up. I still find the topog-
raphy of west Texas fascinating, where you can see the contours
from the air and the geology on the ground.
And now, the Permian Basin relishes another renaissance,
the second phase of the boom that started with the combination
of horizontal drilling and hydraulic fracturing in shales. The in-
dustry took a pause from 2014–2016, resetting the cost struc-
ture by pressuring contractors and laying off or retiring mas-
sive numbers of employees. Now with the stabilizing of the West
Texas Intermediate price in the USD 50-ish range, operators are
comfortable with spending again. Merger and acquisition activ-
ity is strong, with two significant multibillion-dollar Permian
Basin transactions in the first quarter of 2017: ExxonMobil’s
purchase of the Bass Brothers’ holdings and Noble Energy’s
purchase of Clayton Williams’ holdings.
The race is on again. The best place to find oil is in an oil
field, with new technologies and an ongoing focus on costs
and efficiency.
At OTC, the mood was cautious optimism and hopefulness.
The crowd generally hoped that the deepwater industry has
turned a corner; outside the show, however, many other people
believe that the offshore industry will continue to struggle until
at least 2020.
Operators need the big deepwater discoveries to replace de-
pleting reserves and continue to hunt elephants. According to
Wood MacKenzie, deepwater investment peaked at USD 78 bil-
lion in 2014, and the resulting production should peak at
7.4 million B/D in 2020. The sheer size of the risk in deep water
has thinned the herd of companies willing to invest at that scale.
More than 70% of pre-final investment decision (FID) deep-
water projects are operated by just eight companies: Petrobras
plus the seven majors, ExxonMobil, Chevron, Shell, BP, Total,
Eni and Statoil. However, in 2014, that group only held half of
the pre-FID portfolio; smaller companies have mostly given up
on operating in deep water and are refocusing their portfolios
on lower risk, shorter-cycle projects.
In this lower-for-longer price environment, operators want
fast cycle investments, low-oil breakeven points, and capital
discipline, all of which favor factory-style unconventional de-
velopments over offshore. At USD 60/bbl or less, very few of the
JPT • JULY 2017
LLOG Exploration’s Delta House floating production system came on line in April 2015. Its breakeven price from
inception was USD 27/bbl and is below USD 20/bbl going forward. Source: LLOG Exploration.
current deepwater projects in the global portfolio will be devel-
oped. There are some bright spots, such as BP’s Mad Dog 2 proj-
ect, where breakeven costs were reduced significantly over the
past few years, mostly due to swapping out a spar for a floating
production unit.
LLOG Exploration won the OTC 2017 Distinguished Achieve-
ment Award for its Delta House floating production system
development. The cost, time from discovery to first produc-
tion, safety performance, reliability, and regulatory compliance
were world-class. The breakeven price for Delta House from
inception was about USD 27/bbl; it is below USD 20/bbl going
forward. LLOG plans to repeat its low-cost development phi-
losophy at the financially challenged Buckskin project. LLOG is
the third operator of Buckskin, taking over from Repsol, which
became the operator following the 2015 exits of both Chevron
(former operator) and Maersk.
Operators have continued to trim deepwater project costs,
usually by a combination of contractor (especially drilling con-
tractor) concessions, smaller, lighter topsides, fewer wells,
and smaller reserve targets. The hottest action now is increas-
ing the efficiency of existing infrastructure through subsea tie-
backs. Smaller, more efficient projects mean fewer—but more
profitable—reserves.
Some exciting new developments have created optimism
about the future of deepwater exploration and development. Of
course, the Mexican side of the Gulf of Mexico is what every-
one is talking about as the winners of the recent lease sales
begin to develop new prospects. Large discoveries in Guyana
by ExxonMobil and Senegal by BP are scalable and develop-
able, bringing significant change to both countries if they can
be developed economically.
Along with the success stories you will find failures. The for-
merly bustling west Africa basins offshore Nigeria and Angola
are currently shut down. Operators are waiting for governmen-
JPT • JULY 2017
tal fiscal reform plus relief from persistent, very high costs and
local content requirements. Most analysts don’t predict a return
of activity anytime soon.
And then there are some who predict the end of not only the
offshore industry but also the oil industry in general. During
OTC, Houston Chronicle business columnist Chris Tomlinson
wrote that “deep water drilling’s best days are behind it.” Tom-
linson predicts a steep decline sooner rather than later because
of electrification of transportation and offshore’s inability to
compete with cheap, repeatable onshore developments. He is
definitely not optimistic about the oil industry in general and
offshore in particular.
So the deepwater industry continues to be threatened at
both ends of the price curve. No doubt about it, OPEC and Rus-
sia will likely continue to use their spare capacity overhang to
threaten the markets with another 2014-style price crash. This
threat will keep long-cycle investments such as deep water and
oil sands off the market. And on the high end of the price curve,
people tend to forget that high oil prices make renewables eco-
nomically viable. Growing interest, surging technology, govern-
ment subsidies, and public pull, especially in Europe, are driv-
ing investment in renewables and battery technologies. Once
the battery problem is solved, and it will be at some point, the
renewables game will change.
Is it time for a deepwater renaissance? I think it is too early
as the price forecasts are too unpredictable, and the profit mar-
gins at these prices are too narrow. It is all about Risk and Re-
ward, and the oil price, capital cost, and geopolitical risks are
just too much for pre-2014-style developments. It is too soon to
predict the end of the deepwater industry since deep water still
holds the most promise for large, world-class exploration dis-
coveries. The issue is developing them economically in a lower-
for-longer USD 50–60/bbl world, and it will be engineers who
solve that problem. JPT
11
 COMMENTS EDITORIAL COMMITTEE
Bernt Aadnøy, University of Stavanger

Syed Ali—Chairperson, Consultant

Tayfun Babadagli, University of Alberta

Hydraulic Fracturing Studies William Bailey, Schlumberger

Mike Berry, Mike Berry Consulting

John Donnelly, JPT Editor Maria Capello, Kuwait Oil Company

Frank Chang, Saudi Aramco

Simon Chipperfield, Santos

Several recent studies have shown that there is no evidence that Alex Crabtree, Hess Corporation

hydraulic fracturing in unconventional plays harms groundwa- Gunnar DeBruijn, Schlumberger

ter. These reports follow a very detailed 5-year study released Mark Egan, Retired
earlier this year by the US Environmental Protection Agency Mark Elkins, Retired
(EPA) that found no “widespread impact” but was cautious in
Alexandre Emerick,
its conclusions. Petrobras Research Center
In April, results from a 3-year study conducted by Duke Uni- Niall Fleming, Statoil
versity, Ohio State University, Penn State, Stanford University,
Ted Frankiewicz, SPEC Services
and the French Geological Survey concluded that unconventional oil and gas extrac-
tion using hydraulic fracturing and horizontal drilling caused no groundwater con- Stephen Goodyear, Shell

tamination in five Northern Appalachian Basin counties in West Virginia. The study Omer M. Gurpinar, Schlumberger
monitored water wells both before and after the installation of shale gas wells. The A.G. Guzman-Garcia, Retired
authors observed: “[Our report] provides a clear indication for the lack of groundwater Greg Horton, Retired
contamination and subsurface impact from shale gas drilling and hydraulic fracturing.
John Hudson, Shell
Saline groundwater was ubiquitous throughout the study area before and after shale
Morten Iversen, Karachaganak Petroleum
gas development, and the groundwater geochemistry in this study was consistent with
historical data reported in the 1980s.” Leonard Kalfayan, Hess Corporation

But the study also concluded that accidental spills of waste water from fracturing Thomas Knode, Athlon Solutions
could threaten surface water in the region. The peer-reviewed study, which was pub- Sunil Kokal, Saudi Aramco
lished in the European journal Geochimica et Cosmochimica Acta, showed that meth- Marc Kuck, Eni US Operating
ane and saline groundwater were found in some samples, but they occurred naturally
Jesse C. Lee, Schlumberger
in the region’s shallow aquifers and were not caused by shale activity.
Douglas Lehr, Baker Hughes
Similarly, in late May the US Geological Survey released its findings after study-
ing the impact of unconventional activity in parts of Louisiana, Arkansas, and Texas. Silviu Livescu, Baker Hughes

Included in the study were the prolific production areas covering the Eagle Ford, Shouxiang (Mark) Ma, Saudi Aramco
Haynesville, and Fayetteville formations. That study concluded that unconventional John Macpherson, Baker Hughes
oil and gas production in those areas is not a significant source of methane or benzene Stéphane Menand, DrillScan
in drinking water wells.
Graham Mensa-Wilmot, Chevron
This was the first study to determine the presence of those chemicals in drinking
Badrul H. Mohamed Jan, University of Malaya
water wells in relation to the age of the groundwater. “Understanding the occurrence
of methane and benzene in groundwater in the context of groundwater age is useful Zillur Rahim, Saudi Aramco

because it allows us to assess whether the hydrocarbons were from surface or sub- Eric Ringle, FMC Technologies
surface sources,” the study said. “The ages indicated groundwater moves relatively Martin Rylance, BP plc
slowly in these aquifers. Decades or longer may be needed to fully assess the effects of Robello Samuel, Halliburton
unconventional oil and gas production activities on the quality of groundwater used
Otto L. Santos, Retired
for drinking water.”
Luigi A. Saputelli, Frontender Corporation
The 5-year EPA study was an update of a 2015 study that concluded that no harm to
groundwater had been done by shale activity. The new study is more cautious, saying Sally A. Thomas, Retired

that hydraulic fracturing can contaminate water “under some circumstances.” But it Win Thornton, BP plc
said that the incidents that had occurred had been few, especially compared with the Xiuli Wang, Baker Hughes
number of wells it studied. Mike Weatherl, Well Integrity
Controversy surrounding these studies and their conclusions will continue. Addi-
Scott Wilson, Ryder Scott Company
tional studies are under way examining not only fracturing’s potential impact on
Jonathan Wylde, Clariant Oil Services
groundwater, but on methane releases and seismic activity. And the resiliency of
US  unconventional activity during the price downturn indicates that this sector is Robert Ziegler, Weatherford
here to stay. JPT

To contact JPT’s editor, email jdonnelly@spe.org.

12 JPT • JULY 2017

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 GUEST EDITORIAL

Ushering in a New Era of Oilfield Innovation

With the Internet of Things
Mehrzad Mahdavi, Vice President Digital Solutions, Weatherford

The Internet of Things (IoT)—the con-
nected network of Internet-enabled
physical devices that collect and
exchange information with each other—
is rapidly growing in both acceptance
and applicability across a number
of industries.
This trend shows no signs of slowing
down. Studies predict that by 2020, the
IoT will include nearly 50 billion devic-
es worldwide with 212 billion sensors
producing 44 zetabytes of data. These
devices, the “things” in the IoT, include
everything from smartphones and auto-
mobiles to valves and pumps in indus-
trial plants.
The growing momentum of IoT adop-
tion is mainly driven by the reduction
in cost of connectivity and computa-
tion. According to market studies, over
the past 10 years, the cost of sensors
has been cut in half, the cost of band-
width has dropped by a factor of 40,
and the cost of processing has decreased
by a factor of 60. Although further
efforts are required to lower the cost
of sensors, the number of new IoT use
cases has grown and a greater number
of technology companies are develop-
ing IoT-specific services and technolo-
gies ranging from sensors and chip sets
to platforms and software systems. The
main barriers to IoT adoption by indus-
tries—network security and scalabili-
ty—have also been addressed, with reli-
able and highly secure communication
systems and analytics.
What do these advances mean for the
oil field? The oil and gas industry finds
itself at the precipice of a new era of
innovation, spurred by a normalization
of oil prices over the past 2 years. Now, as
E&P companies slowly ramp up drilling
and production activities while adjust-
ing to a new period of “lower for longer”
prices, the time is right for widespread
adoption of the IoT.
Advancing the Digital
Transformation
While several operators and service
companies have begun implementing
the IoT in some parts of their daily
operations, the industry as a whole still
seems uncertain about how to integrate
it for optimal business impact. Fortu-
nately, the industry does not have to
start from first principles to implement
IoT technologies, thanks to an infra-
structure built in support of the first
iteration of the digital oil field more
than a decade ago.
The digital oil field has made strides
in certain areas, such as affording proj-
ect collaboration with colleagues locat-
ed across the globe via real-time oper-
ating centers. However, the concept
has not fulfilled its ultimate promise of
enabling information-based business
decisions that deliver end-to-end opti-
mized operations, increased uptime, and
new value creation.
A true digital transformation in the
oil and gas industry is now possible,
thanks to a confluence of events. First,
the successful adoption of IoT-enabled
analytics in the consumer space has cre-
ated an expectation of similar results
in the E&P arena, along with a strong
ecosystem capable of delivering those
results. Second, ongoing advances in
cloud-based storage, data transmission,
and computing power continue to drive
cost reductions in IoT infrastructure
and implementation. And third, oil and
gas companies have a growing inter-
est in using IoT strategies to transform
their business operations by fully inte-
grating equipment and systems—from
the sandface to their back-end IT and
financial systems.

Mehrzad Mahdavi, SPE, is vice president, digital solutions at
Weatherford, where he is responsible for enhancing product and
service offerings through automation and integration of services.
Mahdavi is a technology entrepreneur with focus on the Internet
of Things, cloud, predictive analytics, and their application to the
oil and gas industry. He previously served as the president and
CEO of CyberSafe id, a global firm providing cybersecurity
products and services. Prior to this position, he served as the
president and CEO of Dexa Systems. Mahdavi has served as chair of SPE’s Digital
Energy Technical Section, and is currently the technical section’s chair for strategy.
He holds a PhD degree in nuclear science and technology from the University of
Michigan and a BS degree in electrical and electronics engineering from the
University of Illinois at Urbana-Champaign.
Transforming Production Data
Into Asset Optimization
Production operations are a prime appli-
cation for IoT technology, which has the
potential to increase asset awareness,
appreciably lower the cost of automation,
and ultimately enable asset optimization
and control at much lower costs. Big-
data analytics have clear business cases
for field production. Real-time monitor-
ing and analysis related to failure pre-
dictions, for example, allow operators

14 JPT • JULY 2017

The Internet of Things provides a readily available framework for connecting surface and downhole equipment, SCADA
systems, cloud computing, and big-data analytics to enable greater optimization through automation.
to deploy field crews as needed, and to
only those wells requiring maintenance
or repair. This can significantly lower
field operating costs, while improving
safety by minimizing the number of trips
to and from different wellsites.
Today, many of the production assets
are either connected through proprietary
SCADA systems and expensive communi-
cation infrastructure, or not connected at
all. To achieve production optimization
at the field and asset levels, we need to
turn artificial lift systems into IoT devic-
es with sensors and an open communica-
tion infrastructure that connects across
wells and to the back-end applications.
With the right IoT infrastructure, we can
achieve integrated management of the
reservoir, well, and surface facilities—
enabling end-to-end optimization with
a much more economical value propo-
sition compared to the status quo. The
Industry 4.0 initiative is all about auton-
omous systems using the IoT, open archi-
tectures, and communication protocols.
A true digital transformation is now pos-
sible for the oil field.
Envisioning the Field Before
and After
Beyond production, the drilling opera-
tion can also be automated through the
use of new IoT-enabled software plat-
forms and infrastructure that fully inte-
grate drilling operations for all sections
of the well. The drilling rig is an inher-
JPT • JULY 2017
ently dangerous place for workers, and
a prime location for implementing IoT
technology to simultaneously lower safe-
ty risks and improve economics.
Having the right IoT infrastructure
in place makes many types of big-data
analytics possible. Data from one well,
or multiple wells, can be integrated and
analyzed all the way back to the enter-
prise resource planning system based at
the corporate office. This real-time and
historical analysis allows the operator to
compare initial projections with actual
data and then make corrections to opti-
mize the production process and bring
costs back in line with expectations.
How does the industry more fully
embrace and implement the IoT in its
daily activities, when all of the equip-
ment and services required to complete
a project typically come from multiple
service providers?
A typical production operation, for
example, includes a variety of lift sys-
tems, surface systems, and reser-
voir data. They are then connected
via SCADA systems that communicate
with back-end applications. Separate-
ly, maintenance crews execute regularly
scheduled activities in the field without
the benefit of real-time data. To opti-
mize the entire production operation,
these different systems and groups must
effectively talk to each other.
To truly advance the digital oil field,
the industry as a whole must develop
a consistent set of standards for IoT
and applications communications. Stan-
dardization around applications inter-
faces, protected communication proto-
cols, and data acquisition and storage
will afford an integration that promotes
compatibility and interoperability. By
standardizing the collected technical
and nontechnical data, and then run-
ning integrated analytics across all E&P
functions, the upstream community can
improve communication and gain new
operational insights.
In addition, IoT open-source commu-
nities are defining various standards,
inclusive of interoperable data models,
industrial architecture, security and
connectivity frameworks, and fog com-
puting platforms that are key elements
to the successful delivery of the new dig-
ital oil field. These new standards will
enable service providers to achieve their
ultimate goal: to help operators lower
costs and improve safety through end-
to-end automation.
These concepts are not years away
or on the distant horizon. The IoT can be
fully implemented in the oil field today,
with the equipment and systems we cur-
rently have available. All that is required
is a little self-reflection, discipline, and
cooperation. It is up to us as an indus-
try to come together, collaborate, put
these pieces together, and make the
vision of a fully optimized digital oil field
a reality. JPT
15
 TECHNOLOGY APPLICATIONS
Chris Carpenter, JPT Technology Editor
Gravel-Pack System
Weatherford introduced the WFX0
gravel-pack system, the industry’s
first fully integrated gravel-pack sys-
tem to achieve an American Petroleum
Institute/International Organization
for Standardization V0 rating, which
validates that it has been tested to the
industry’s highest standards with zero
gas leakage. By leveraging several V0-
rated Weatherford technologies, the sys-
tem enables gravel-pack completion of
multiple openhole zones in a single trip
(Fig. 1). The V0 rating makes the sys-
tem well suited for deepwater applica-
tions. By incorporating a deep-set bar-
rier run, the WFX0 system eliminates
the need for an intermediate comple-
tion, which can save approximately 2
to 3 days of rig time. Additionally, by
using the TerraForm packer, the system
achieves cased-hole functionality in an
openhole environment. The technology
offers users significant time and cost
savings, as well as enhanced reliability,
in deepwater operations.
◗ For additional information, visit
www.weatherford.com.
High-Durability Drill Bit
National Oilwell Varco (NOV) intro-
duced the ION application-specific
polycrystalline-diamond-compact (PDC)
cutter technology into its Tektonic drill-
bit line. ION cutters consist of a range of
PDC cutter technologies that are designed
to overcome critical failure modes within
specific applications globally. The cutters
use refined diamond feeds with increased
sintering pressures to provide denser dia-
mond with high toughness and high abra-
sion resistance (Fig. 2). Thermal stability
is enhanced, further using ReedHycalog’s
patented deep-leach technology. Includ-
ed in the range is the ION 3D-shaped cut-
ter technology, which features a durable
pointed cutting edge that increases drill-
ing efficiency and makes possible rate-
of-penetration (ROP) increases of great-
er than 20% for the same weight on bit.
Proprietary software is used for design-
16
Fig. 1—Weatherford’s WFX0 gravel-pack system enables multizone gravel-pack
completion in a single trip and provides reliable, gas-tight zonal isolation in
deepwater wells.
ing cutting structures that incorporate
placement and orientation of both ION
3D-shaped and ION round PDC-cutter
technology. The technology also incor-
porates a polished mirror finish that
reduces friction on the cutting face of the
cutter, which increases ROP, improves
Fig. 2—The ION 3D cutter from
NOV has been designed to provide
efficient point loading to the
formation while maintaining high
durability to complete the section.
efficiency, and reduces cutter tempera-
ture to avoid thermal degradation.
◗ For more information, visit
www.nov.com.
Downhole X-Ray
Diagnostic Service
One of the greatest challenges in planning
an efficient well intervention is accurate-
ly and reliably diagnosing the condition
of downhole equipment. Visuray’s VR90
downhole X-ray diagnostic service pro-
vides operators with clear answers by
using an X-ray imaging technique that
works in any production fluid, even the
most opaque. The tool produces X-rays
that scatter in the well fluid, creating
a reconstruction of the object’s surface.
This reconstruction can then be dis-
played as both a 2D surface map and a 3D
object with millimetric dimensional accu-
racy (Fig. 3). The VR90 service can be run
with any conveyance method to reach
the area of investigation, such as elec-
tric wireline, coiled tubing, or tractors.
The service has most recently been intro-
duced in North America, where a cus-
tomer needed to image the top of stuck
tubing to determine the best method of
JPT • JULY 2017

Fig. 3—3D reconstruction of tubing
top with Visuray’s VR90 downhole
X-ray diagnostic service.
fishing it. Despite the opaque well fluids,
the VR90 service’s results showed a tub-
ing top that had sustained milling dam-
age that significantly altered the fishable
dimensions on both the outer and inner
diameters. The results also provided the
relative location of the tubing inside the
surrounding casing. This information
gave the operator the possibility of mov-
ing forward with a targeted fishing plan.
◗ For additional information, visit
www.visuray.com.
Fig. 5—With ProOne’s artificial-lift downhole-treatment system, operators
experience higher production volumes, lower lifting costs, and extended
maintenance cycles.
JPT • JULY 2017
Fig. 4—Baker Hughes’ Dynamus PDC
drill bit.
Vibration-Reducing Drill Bit
Baker Hughes introduced the Dynamus
extended-life polycrystalline-diamond-
compact (PDC) drill bit, which can
reduce drilling costs by eliminating trips
to replace bits or bottomhole assem-
bly (BHA) tools that wear out in high-
horsepower drilling operations (Fig. 4).
The Dynamus bit incorporates stabiliz-
ing elements to prevent lateral vibra-
tions as well as proprietary cutters
engineered to minimize wear. Reduc-
ing vibrations not only extends bit life
but also helps extend the life of other
BHA tools and deliver smoother drill-
ing performance for improved borehole
quality. The Dynamus bit includes Stay-
True shaped-diamond-insert elements
that stabilize the bit to reduce lateral
vibrations by more than 90%, mitigat-
ing vibration-induced damage to both
the bit and highly sensitive BHA com-
ponents containing electronics. The
bit’s long-life cutters generate 30% less
heat than standard PDC cutters. This
reduces wear and premature weaken-
ing of the cutters that is often a result
of excessive heat generation. The bit’s
elements and cutters are incorporated
into a newly designed body comprising a
matrix material that resists cracking and
is capable of handling extreme operating
loads that would damage conventional
PDC bits.
◗ For additional information, visit
www.bakerhughes.com.
Artificial-Lift
Downhole-Treatment System
Artificial-lift systems (ALSs) have increas-
ingly needed a lubrication solution to
improve profitability on failing or under-
performing wells, solving the problems
of inefficient production or untime-
ly wear and tear. ProOne introduced a
cost-effective downhole treatment for
the complete ALS system. ProFlow pro-
duction fluid incorporates the company’s
XPL+ lubrication technology with posi-
tively charged molecular properties to
bond to all metal downhole components,
reducing friction, torque, and drag by as
much as 80% (Fig. 5). With significantly
lower friction in the system, operators
experience higher production volumes,
lower lifting costs, and extended main-
tenance cycles. For progressing-cavity
pumps, the major benefits include high-
er production speeds, increased revo-
lutions per minute, reduced electrical
load on the system, and additional net
oil per day; for rod pumps, the benefits
include less torque and friction, extend-
ed lifespan of moving parts, and less
well servicing. Field ProFlow has con-
sistently reduced failures and increased
efficiency in all types of ALS pumps,
especially those with highly deviated
deep-well systems. JPT
◗ For additional information, visit
pro1energy.com.
17
 TECHNOLOGY UPDATE
System Adds Reliability, Efficiency to Attaching
Well Construction and Completion Tools
Mike Moffitt, SPE, Ace Oil Tools
The secure placement of tools and acces-
sories along well construction and com-
pletion strings is essential to executing
downhole applications.
In wellbore cementing, for example,
job success depends on efficient mud
removal and cement displacement
around the tubular. Both of these objec-
tives may be compromised if channel-
ing occurs, where the cement does not
spread evenly in all directions. Preven-
tion of channeling depends on design-
ing the right cementing program, which
includes achieving the optimal standoff
between the string being cemented and
the open hole.
Selecting the right centralizers and
planning their location along the string
are critical to achieving standoff. And
securing the centralizers to keep them
from sliding along the pipe is also essen-
tial to prevent damage to the string and the
risk of leaving junk in the hole if the string
must be removed from the wellbore.
Fig. 1—Slim-profile ARCs and centralizers are shown installed on joints.
Source: Ace Oil Tools.
18
A new attachment system designed for
simplicity, reliability, and ease of installa-
tion has been developed by Ace Oil Tools
to overcome the limitations of traditional
methods used to secure tools and acces-
sories to drilling and completion strings.
The patented design includes slim-
profile male and female collars that are
slid onto API casing joints and pressed
together with a lightweight machine. As
they are pressed together, corresponding
ramps work to engage slip wickers to the
joint to produce a very high holding force
while maintaining a slim profile. The col-
lars also feature a ratchet mechanism to
prevent them from coming apart, form-
ing a permanent lock to the joint.
Current Industry Practices
Historically, the most common method
for holding casing equipment in place has
been to use stop collars that are secured
to the liner with set screws. These simple,
inexpensive tools are used when only a
low holding force is needed and their rel-
atively high profile does not prevent the
string from passing through restrictions.
This type of stop collar is not typical-
ly suitable for critical wells or in drilling
programs that use semi-flush or flush-
joint connections. If the collar fails, there
are no couplings within the string to
push accessories past restrictions, pos-
sibly preventing the string from reaching
total depth. Collar failure can also result
in suboptimal standoff, pipe damage, and
junk left in the hole.
As the offshore drilling industry
evolved, centralizer subs were developed
as a more reliable solution. These short
tubulars are threaded into the string
between joints. Subs contain machined
profiles to interface with the centralizers
to prevent them from sliding along the
string as they are run into the wellbore.
Because the profiles are integral to the
sub, they will not fail under high loads.
Some of the issues with centralizer
subs are their high expense and the lim-
itations they impose on string design.
Only one centralizer per joint can be run,
and it can only be placed in a suboptimal
location between the joints.
The application-specific design of each
sub based on string size, weight, grade,
and thread means that subs are cus-
tom-built and limited to specific string
designs. For this reason subs are very
expensive, not only on an up-front basis
but in the costs of inventory management
and scrapping unused product. Addition-
ally, procurement usually requires long
lead times.
Recently, direct-application materials
have entered the marketplace. They are
applied to the pipe to perform as either
a solid-body centralizer or a stop collar.
Because they are directly applied, their
JPT • JULY 2017
performance relies on variables such as
satisfactory surface preparation, atmo-
spheric conditions, and the installation
team’s adherence to correct application
procedures. Limitations on bottomhole
temperature and temperature fluctua-
tions during run-in operations may also
restrict their use.
Centralizers that are crimped onto the
pipe are also available. While installa-
tion is easy, the centralizers only come
in solid-body form. Their placement is
typically close to the end of the joint
so the crimped area can be gauged to
ensure the crimp has not created an
internal restriction.
New Attachment System
To date, the new attachment system is
featured on three types of tools that have
been designed for use on all joint sizes
and grades.
The Ace Ratchet Collar (ARC), shown
in Fig. 1, performs as a stop collar to hold
both solid-body and bow-spring central-
izers or other accessories on the liner.
The Ace Drilling Centralizer (ADC) is a
rotating, solid-body centralizer for use in
casing and liner drilling. The Ace Tracer
Carrier (ATC) houses and protects tracer
elements conveyed into the wellbore on
the production string.
The simple design of the ARC, ADC,
and ATC does not affect the inside diam-
eter of the liner during installation and
does not require added connections
that pose potential leak paths. The tool
designs provide enough clearance to be
used in close-tolerance wells. Each col-
lar’s one-piece design completely encir-
cles the joint, having no welds or seams
that could break and lead to stuck pipe
and/or junk in the hole.
All three tools mount to the outside of
the casing or liner, allowing the opera-
tor to plan accessory locations anywhere
along the joint and run multiple accesso-
ries per joint where needed.
Because each tool is fully independent
of weight, grade, and thread, they are
versatile. Thus, a large range of applica-
tions can be met from a small inventory,
reducing the burden of inventory man-
agement and the risk of having to scrap
unused hardware. Furthermore, the tools
can be installed with a few hours’ notice.
JPT • JULY 2017
Fig. 2—The lightweight installation tool presses collars together to form a tight
grip on the casing. Source: Ace Oil Tools.
An operator can make final decisions on
a centralizer program within days of a
planned string deployment.
There are additional tools into which
the attachment design can be incorpo-
rated. The system can be used on tools
or accessories for virtually any drilling or
completion application.
The installation kit consists of a hand-
held press (Fig. 2) and a small hydrau-
lic power unit. The lightweight installa-
tion tool can be handled by a two-person
team, allowing installation to be car-
ried out at virtually any location without
mobilizing the pipe.
Case Studies
ARC. A major operator drilling an explo-
ration well at 11,250-ft water depth in a
remote South American location planned
a 13⅝-in. casing string through 17⅞-in.
casing with a 16-in. open hole below.
With poor wellbore conditions, there
were contingency plans to run a 16-in.
liner. Normally, hardware for two sepa-
rate centralization regimens would have
been necessary to optimize the standoff
of the 13⅝-in. string, depending on the
presence of the contingency liner.
Upon determining that the contingen-
cy liner was not needed, a two-person
crew was sent to the pipe yard to install
the ARCs and centralizers in an 8-hour
shift. The 13⅝-in. pipe was delivered
to the rig, run to total depth of almost
16,000 ft, and cemented without issues.
This flexibility saved the operator the
cost of having two sets of centralizer subs
on hand and led to savings of well costs
into six figures.
ADC. The solid-body rotating central-
izer, the most recently developed of the
three tools, provides an internal bearing
to eliminate wear on the liner and reduce
downhole torque, helping to ensure that
the liner can be drilled successfully to
planned depth. The tool’s use was proven
in a 7-in. liner-drilling application by an
operator that drilled a 900-ft directional
interval while rotating the pipe between
30 rev/min and 80  rev/min. A total of
54,000 rotations on the string and ADCs
was recorded.
After the interval was drilled, the liner
string was pulled for evaluation. Very
little wear (<0.004 in.) was recorded
on the centralizer/ARC interface and no
issues were found with the ADC. The
operator has since elected to use this
technology on multiple liner-drilling
applications in the North Sea. JPT
19
 E&P NOTES
First Offshore Drilling Merger:
Ensco Buys Atwood Oceanics
Trent Jacobs, JPT Digital Editor
Offshore drilling contractor Ensco
is set to buy smaller rival Atwood
Oceanics in an all-stock transaction
valued at USD  850  million. The deal
marks the first such corporate acqui-
sition in the offshore drilling sector
since the onset of the oil and gas indus-
try downturn.
The merged enterprise will be the
world’s largest owner of a mixed-
offshore drilling fleet with 63 rigs—
26 deepwater floating rigs and 37
jackups. The breakdown of the addi-
tions coming from Atwood Ocean-
ics include four deepwater drillships,
two semisubmersibles, and five jack-
ups. Pending regulatory approval,
the deal is expected to close later
this year.
Carl Trowell, chief executive officer of
London-headquartered Ensco, empha-
sized in a press statement that acqui-
sition bolsters the company’s “high-
specification” fleet of drilling assets
Wild Well Control Aims To Tame Leaky Wells
Trent Jacobs, JPT Digital Editor
As blowouts become a less frequent
event in the US, specialty-outfit Wild
Well Control is eyeing the market poten-
tial of the less severe, but more com-
mon, issue of sustained casing pressure
in shut-in wells.
“We used to say that the rule of thumb
in the US was one blowout per 1,000
wells drilled,” said Bill Mahler, execu-
tive vice president at Wild Well. “Today,
it’s more like one blowout for 1,600
wells drilled.”
That dropoff is thanks to the devel-
opment of shale fields, he added,
20
and positions it for an anticipated
offshore recovery.
“We will remain one of our indus-
try’s best-capitalized companies,” said
Trowell, adding that, “Our combined
financial strength, diverse custom-
er base and larger scale should lead
to greater strategic and competitive
advantages as well as cost efficiencies,
allowing for opportunistic investments
through the market cycle.”
Liz Tysall, a senior offshore rig ana-
lyst at Rystad Energy, explained that
Atwood Oceanics is an attractive pur-
chase for Ensco because it helps fill
out the company’s global footprint
and comes with a smaller debt burden
than most of the other small-sized con-
tractors that may be potential acquisi-
tion targets.
“I think Ensco is taking advantage
of market timing. There is a sense out
there that we’re coming close to the bot-
tom after being in a really long trough,”
explaining that similar horizontal well
profiles and downhole-pressure condi-
tions have led to a more predictable
drilling environment.
However, while drilling has become
safer, Wild Well believes the occur-
rence of formation gas leaking up
the cemented annular spaces of shut-
in horizontal wells remains prevalent
and largely unaddressed. The com-
pany cited a recent analysis of a US
shale play where 86% of surveyed
wells were found to have sustained
casing pressure.
said Tysall, who sees the merger as a
positive move for the fragmented off-
shore drilling business.
Rystad noted that this deal follows
other smaller offshore rig transactions
made in recent months including Shelf
Drilling’s acquisition of 3 jackups from
Seadrill for USD 225 million. In March,
Transocean made itself a pure-play
operator of deepwater rigs with the sell-
ing of its fleet of 15 jackups to Borr Drill-
ing for USD 1.35 billion.
But to correct the global oversup-
ply of offshore rigs, which contin-
ues to hold negative pressure on day
rates, Tysall said more dealmaking will
be needed.
“I don’t think it signals a return for
offshore drillers just yet,” she cau-
tioned. “Not only do the drilling con-
tractors need to get rid of their older
and less capable units, in order to
help themselves out more, they need
to consolidate.”
Wild Well is raising the issue because
its onshore well control and sub-
sea intervention services are trying to
boost sales of an epoxy resin that it
says offers a stronger seal for abandon-
ment operations.
After being sent downhole in its liq-
uid state, a day or two later the resin will
form into a solid seal around leaky pack-
ers, cracked cement jobs, or it can block
off the area of gas intrusion from inside
the formation rock. The resin was first
introduced by CSI Technologies in 2005,
a Houston-based cement service com-
JPT • JULY 2017

After a 3-month bath in calcium bromide, a common oilfield fluid, Wild Well
Control’s epoxy resin (left), marketed as ControlSeal, held up without any
degradation. Testing on the cement sample ended when it could no longer
be contained inside the wire netting. Source: Wild Well Control.
pany owned by Wild Well’s parent com-
pany, Superior Energy Services.
Speaking during a media event at Wild
Well’s headquarters in Houston, Mahler
characterized sustained casing pres-
sure as a “major problem” and is telling
operators that in cases of abandonment,
resin offers a reliable, permanent barrier
whereas cement is more likely to fail and
require remedial work.
“If you do your primary plug and aban-
donment with resin, you can eliminate all
the sustained casing pressure going for-
ward because you can push it back into
the formation, especially after they’ve
been fracked,” he said.
Acceptance First,
Lower Cost Next
Wild Well says that laboratory tests have
shown that the CSI brand of resin has
five times the tensile strength and more
than double the compressive strength of
cement. It is further distinguished from
cement because the resin is adhesive to
rock and metal, solids-free, chemically
inert, and does not mix with water. And
its rheology characteristics and controlla-
ble reaction time allow for small volumes
to be placed where a seal is most needed.
These selling points may be several
rungs above the key performance indi-
JPT • JULY 2017
Superior
Service and
Custom
Chemistry
MAXIMIZE PRODUCTION AND
PROTECT THE INTEGRITY
OF YOUR ASSETS
cators of cement, but with a price tag of
Multi-Chem® has the local
USD 4,000–6,000/bbl, the resin is also
service and technical support
far more expensive. Typical well cement
may run USD 150/bbl. That difference to help get the most out of your
has long been the chief obstacle to uptake well and pipeline assets. Great
for the product. chemistry starts with great
Mahler said the company is hoping people. Learn how we can help
new validation studies will help gain you increase production and
wider industry acceptance. If demand maximize results.
for the resin were to increase to volumes
comparable to cement production, then
“the cost will come down tremendously, halliburton.com/production
but right now it’s cost-prohibitive” for
the onshore market, he said.
Offshore applications have been
an easier sell recently, in part because
extremely low rig day rates of around
USD  130,000 have made the resin
a more palatable option for plug-and-
abandonment services, said Mahler.
Though the offshore track record
remains limited, it has led to one impor-
tant milestone: a qualification of the resin
by Shell through its laboratories in the
Netherlands. With that seal of approval,
the hope is the international major will
soon become a regular user.
And last year, the resin was used in
the first lower-well abandonment that
did not require a cement cap in the Gulf
of Mexico. Oceaneering partnered with
CSI for the work, which was granted a
Multi-Chem
 special waiver from US regulators to use of Arkansas. CSI led the study, which
the resin on a high-risk well that had was sponsored by the Research Part-
1,300 psi in sustained casing pressure. nership to Secure Energy for America
(RPSEA). Data shared by shale gas pro-
Onshore Market Dormant, ducer Southwestern Energy showed that
for Now of 100 wells it drilled in the second half
US regulators have also helped the cause of 2013, 86% experienced sustained
of the resin suppliers and offshore ser- casing pressure.
vice providers by requiring that sub- “That’s a very big number,” empha-
sea wells with sustained casing pressure sized James, who explained that there
be dealt with as soon as the problem are two main reasons so many wells suf-
is discovered. fer from the issue. The first is that cement
“Those same regulations are not in can crack along any point in the annu-
place on land,” pointed out Tyler James, lus as it dries or due to subsurface vibra-
a technical sales lead at Wild Well. “They tions, creating potential pathways for
are probably coming, but right now methane migration.
[onshore operators] are still allowed to The other factor is that cement does
shut in and say that they are going to fix not form a true bond with the steel walls
them later.” of the casing, leaving tiny gaps called
If the onshore regulatory driver does micro-annuluses that, while too tight for
come, it may be based on findings such solids and liquids to move through, are
as those from the recent survey of hori- wide enough for the ultra-small methane
zontal gas wells in the Fayetteville Shale molecules to traverse.
Permian Production Boom To Continue, Says Laredo CEO
Joel Parshall, JPT Features Editor
Production in the Permian Basin will by the Independent Petroleum Associa-
continue to boom and grow by more than tion of America (IPAA) and the Texas
25% by next year, said Randy Foutch, Independent Producers and Royalty
CEO of Laredo Petroleum, in a talk held Owners (TIPRO).
Wells utilizing the Earth Model and optimized completions have
performed at an average of ~136% of 1.3 MMBOE Type Curve*
400
Average Cumulative Production (MBOE)
~
~36% Uplift through Earth
300 lls M
Model and Optimized
we
m 65 C
Completions
fro
rage 1.3 MMBOE
Ave
200
100
Cumulative production
1.3 MMBOE type curve
0 downturn, Permian Basin operators
0 90 180 270 360 450 540 630 720
Producing Days
*Average cumulative production data through 4/26/17. This includes 65 Hz UWC/MWC wells have utilized
both the Earth Model and optimized completions with average and optimized completions with ~1,900 lb/ft sand.
Note: Production has been scaled to 10,000’ EUR type curves and non-producing days (for shut-ins) have been removed.
Recently drilled wells that have incorporated enhanced multivariate earth
modeling and optimized completions have beat their type curve by 36%.
Source: Laredo Petroleum.
22
When oil and gas operators seek to stop
gas from migrating up through a cement-
ed well, the standard industry fix has
always been to push more cement down-
hole. These squeeze jobs were described
by James as a “Band-Aid” because they
often fail to solve the root cause.
When cement is pushed into the tight
openings of a leaky pathway, the result
is often a porous filter cake rather than a
gas-tight seal. As cement is placed under
pressure, the water phase of the cement
can be pressed out into an opening, leav-
ing behind an accumulation of dehydrat-
ed solid material.
“So what is water going to do to actu-
ally fix your micro-annulus? What is
the water from the filtrate going to do
to consolidate your formation? Abso-
lutely nothing,” said James before re-
emphasizing that in the same scenario
resin will stay bonded to the casing and
to the formation rock.
Speaking at the IPAA/TIPRO Lead-
ers in Industry luncheon, Foutch said
that the 395 drilling rigs operating
in the Permian region are as produc-
tive as the 641 rigs that were operating
there before the collapse in oil prices
in late 2014.
“This is very pivotal and we’re not
done,” Foutch said. “We’re still making
improvements. There are a lot of people
in the Permian making money at today’s
price, and they’re making money at less
price. I think a lot of people miss how
good the Permian Basin and other shale
basins are.”
While the US rig count dropped
sharply as expected with the fall in
prices, Foutch said that production
dropped less than expected. Since the
have reduced their breakeven point to
USD 40/bbl, he noted.
In a New Game
“We’re in a new game now,” Foutch said.
“You know, it’s a different world, we’re
going to grow production very, very effi-
JPT • JULY 2017
ciently. Shale now represents half of the
US production. It’s going to grow anoth-
er 27% in the Permian by 2018.”
He contrasted the comments by Saudi
Arabia’s oil minister Ali Al-Naimi, at the
2016 CERAWeek conference in Houston
with those by the country’s new oil min-
ister, Khalid al-Falih, at the same con-
ference in 2017.
With oil prices barely above
USD 30/bbl in 2016, Al-Naimi’s message
to oil producers was “lower costs, bor-
row, or liquidate.”
A year later, with prices above
USD  50/bbl, Al-Falih noted the staying
power and resurgence of the US shale
producers, saying, “We welcome the
return of investors to US shale, regard-
less of what you hear.”
“We heard the same thing from the
CEO of [Saudi] Aramco; we heard the
same thing from the general secretary
of OPEC,” Foutch said. “They all three
mentioned the Permian by name. And
they basically were saying, “We recog-
nize that you’re there. We recognize that
you’re part of this. I think they real-
ly are surprised with the strength of
what happened.”
Building Acreage Blocks
Laredo began building acreage blocks
in the Permian’s Midland Basin in 2009
but quit buying land leases when the
price reached USD 1,000/acre. “We had
all we wanted, but I thought prices were
getting a little high,” Foutch said and
drew laughter from the audience when
he added, “I wish I had rethought that.”
The company focused on obtaining
contiguous acreage and made substan-
tial investments in well coring, data
acquisition, and infrastructure, which
included crude oil and water gathering
systems and water recycling and stor-
age facilities.
“So we went through a period of about
3 years where we were really spend-
ing money on data, spending money on
infrastructure, went public, so it made it
look like we were a high-cost operator,”
Foutch said. While Laredo was build-
ing a very efficient operation through
the process, he acknowledged that the
narrative was “a hard sell” for investors
to accept.
JPT • JULY 2017
Today, Laredo has more than 2,000
locations drillable for 10,000-ft later-
als. The company has drilled 12 lat-
erals of at least 13,000 ft, including
some extending almost 16,000 ft,
Foutch said. Most of its acreage is held
by production.
Four Rigs Do Work of Nine
Laredo’s four rigs operating in the basin
are collectively drilling about 700,000 ft
of lateral hole per year, which Foutch
noted was a major efficiency gain from
Maximize
the just less than 800,000 ft drilled by
nine rigs in 2014.
An enhanced multivariate earth
Uptime and
model has enabled Laredo to select the
best well landing points and custom-
Throughput
ize completions after drilling. Through
the modeling and company infrastruc- OF YOUR PIPELINE
ture investment, Laredo has lowered AND PROCESS ASSETS
its finding and development cost for
proved development to USD 5.12/BOE, Our unique diagnostics,
Foutch said. engineered solutions,
At the beginning of the year, the com- and standardized project
pany established a new type curve for its management help you
planned wells, with an estimated ulti- get the most out of your
mate recovery (EUR) factor increased
pipeline and process assets.
to 1.3 million BOE. Foutch said that
wells drilled since then, incorporating Learn how we can help you
earth modeling and optimized comple- minimize downtime and
tions, have been exceeding that EUR maximize results.
factor by 36%.
halliburton.com/production
Gathering Systems Bring
Benefits
He also stressed the benefit to Laredo
of having its own crude and water
gathering systems. In its 2016 basin
operations, 73% of the company’s oil
production and 65% its water produc-
tion, on a gross-operated basis, “never
saw a truck, it went straight to pipe,”
Foutch said. “That’s a huge savings we
can keep.”
The gathering operations eliminat-
ed road transport needs estimated at
95,000 truckloads for water and 41,000
truckloads for crude, he said. At the
end of last year, Laredo had reduced
lease operating expense by 53% from
the first quarter of 2015.
Concluding his talk, Foutch said, “I
think, OPEC and others missed the resil-
iency of the US oil and gas industry.
They missed how proficient we can be.”
 These are the Forks in the Road to Drilling Automation
Trent Jacobs, JPT Digital Editor
The low price of crude may have slowed
the advance of drilling automation tech-
nology, but it clearly has not stopped
it. Uptake is rising, chiefly in the US
onshore market, where contractors
including Nabors and Precision Drilling
have recently rolled out their first batch
of “closed-loop” automated rigs that take
key pieces of the well construction pro-
cess out of human hands.
Service giant Schlumberger is doing
the same after it acquired a number of
drilling technology firms in recent years,
including one that developed rig control
systems for the competition—a factor
that has been seen as incentivizing other
drilling contractors to accelerate their
automated ambitions.
The introduction of these new rig sys-
tems comes at an opportune time for
contractors because US demand for high-
performance rigs is rising at its fastest
clip since the downturn began. The swell-
ing rig count is being met with a short-
age of qualified hands, another factor
adding momentum to the adoption of
rig automation.
“I do not think that the traditional
means of training lots and lots of people
will fly anymore because you get a vari-
able output, and it costs a lot of money,”
said John de Wardt of the current drilling
environment. “If you can buy an auto-
mated drilling system, then you save a lot
of money on people and training—and
you know it will do what you want to do.”
De Wardt, a Colorado-based oil and gas
consultant, is the program manager for
the Drilling Systems Automation (DSA)
roadmap initiative that was created to
guide the industry’s technology develop-
ment strategy through 2025. Launched
in 2013 as an all-volunteer initiative,
the DSA has since become a 10-member
joint industry project formed by a dif-
ferent group of companies than those
mentioned above, including Shell, Saudi
Aramco, National Oilwell Varco (NOV),
and Halliburton.
As the various players in the auto-
mation arena ramp up their develop-
24
ment work and early-commercialization
efforts, the DSA roadmap shows that
the industry is still a ways off from the
final destination of fully autonomous
rigs—the nuanced view would describe
today’s newest advanced drilling assets
as semi-autonomous.
To get to greater autonomy, the indus-
try must decide which way to go on what
de Wardt refers to as “the forks in the
road.” These are the key technological
decisions that he said will determine
what form drilling automation takes
going forward.
A few of the most important include
whether companies should invest in
interoperable systems or proprietary
ones; open software or black box pro-
gramming; low-rate mud-pulse data
communications or high-speed hard-
wired pipe; keep retrofitting or begin
designing purpose-built automated rigs.
Forks in the Software Road
From the view of the roadmap, one of
the shortest routes to full automation
can be taken if equipment manufacturers
embrace interoperability so their vari-
ous hardware and software products can
work and communicate together. This
would encourage uptake by giving end-
users more flexibility in the integration
of an automated solution.
This is also easier said than done
because, “Our industry has fostered
100% competitiveness,” de Wardt said
in explaining that the challenge of imple-
menting interoperability is not technical,
it is managerial.
Drawing on the experience of the
industrial automation sector, he told how
a similar tug-of-war played out between
companies who sought to secure market
share with proprietary systems and those
that assumed an agnostic approach to
data communication.
“In the end, the open system people
won,” de Wardt said. Companies that
placed the right bet, such as Fortune
500-listed Emerson Electric, became
leaders in the sector while proprietary-
system makers faded out of the pic-
ture. This question over interoperability
also reshaped the auto-industry whose
biggest firms decided to agree on key
standards and compete on their ability
to innovate.
“As an industry, we’re still trying to get
our heads around what is the collabo-
ration piece, and what is the competi-
tion piece,” said de Wardt. “If we get that
right, then we will progress far faster
than we are today.”
In a similar vein, automation devel-
opers must decide if their software will
be open for customers to validate and
integrate with add-on programing. The
alternative is black box software that
does not show its math. To create some
middle ground on this issue, the DSA
roadmap’s recommendation is to create
a noncompeting certification body that
can sign off on such software products.
“What we are saying is that if peo-
ple have black boxes that give outputs
that can improve the performance of the
human on the rig or goes into the rig’s
control system, a validation methodol-
ogy would allow them to tell customers
that an authority has confirmed its reli-
ability,” said de Wardt. “It will need some
description around what its limitations
are, and overviews of how it does it, with-
out giving away proprietary information,
and today, that is not done.”
The Hardware Decisions
Another bellwether to watch in the auto-
mation race is which telemetry and
data communication systems will win
out. For example, NOV’s wired drillpipe
has a data rate of 50,000 bps, but the
downside of the technology is that it
has been cost-prohibitive for many. The
company is working to bring the price
down by stepping up its manufacturing,
while others are trying to push the lim-
its of low-bandwidth mud-pulse, electro-
magnetic, and acoustic telemetry sys-
tems that transmit data at 40–80 bps.
De Wardt said developers are quiet-
ly working on “clever ways” to improve
JPT • JULY 2017
mud-pulse telemetry systems to a point
where they can be used to expand down-
hole automation capabilities, as opposed
to surface-controlled automation via
wired pipe.
“The question is, which of these sys-
tems will predominate and what is their
price point. That will determine how the
automation map looks,” in the years to
come, said de Wardt.
As the timeline expands, the drilling
sector will be contemplating whether to
redesign the drilling rig from the bot-
tom up as a natively automated system—
effectively, to make it a drilling robot.
While the DSA does not see retrofit-
ting existing rigs as the most valuable
option, it is the most attractive for now.
Rig demand in the US is far from recover-
ing to 2014 levels, and may never do so,
but de Wardt reminded that the industry
has a long tradition of avoiding the obso-
leting of such capital-intensive assets.
What these companies and their cus-
tomers are weighing is the known value
of the current top-tier rig inventory
against the potential value of a purpose-
built automated fleet.
Data and Digital Hold E&P’s Future,
Says New Century CEO
Joel Parshall, JPT Features Editor
Phil Martin, CEO of New Century Explora-
tion, urged US E&P companies to leverage
data and rapidly adopt digital technology
in a talk at the Leaders in Industry lun-
cheon held by the Independent Petroleum
Association of America and the Texas
Independent Producers and Royalty Own-
ers Association recently in Houston.
Titling his presentation “Hope is not
a Strategy,” Martin urged companies to
move quickly to take advantage of data-
driven opportunities.
“If you look to the data and allow the
lessons that you learn to guide your
decisions, you will be golden,” he said.
“You’ve got to let the real numbers play a
big role in your guidance.”
Continuing improvements in technol-
ogy in recent years have led to “incred-
ible” productivity gains in the industry,
Martin said, citing an average 25% annu-
JPT • JULY 2017
“In the US drilling market, with its very
high performance, that gap is small,” de
Wardt said, highlighting the point that
in recent years human drillers have real-
ized major gains in efficiencies, signifi-
cantly raising the bar on what the next
level of automated rigs must offer to jus-
tify investment.
The DSA Roadmap Initiative held its most
recent workshop in April where a 250-page
draft report produced by industry experts was
presented to members. It highlights the size
and scope of the work involved. An industry
Increase
workshop organized by the International
Association of Drilling Contractors (IADC) Production.
will be held in Houston in January 2018 to
add input to the draft report, which will
guide companies through the next 8 years of Maximize
technology development and implementation.
The DSA has also launched a second round
of project funding and is seeking new
Results.
members to join and share access to the
current report rather than wait until next year.
THROUGHOUT THE
Moving forward, the DSA roadmap initiative
LIFE OF YOUR ASSETS
will include the workshop organized by the
IADC while the SPE DSATS group will be
Whatever your production
the key body charged with maintaining and
distributing the technical reports produced challenge, Halliburton offers
through the workshops. a full range of engineered
solutions. From real-time
diagnostic well interventions
to customized specialty
chemicals, reliable artificial
lift systems, and pipeline and
process pre-commissioning
al improvement in the barrels of oil pro- and maintenance solutions,
duced per rig over the past 6 years. “What we’re ready to help keep your
we’re doing is unbelievable, I mean it’s production high and costs low.
amazing. And this is all driven by drilling Contact us to learn more.
technology and production, and it’s not
over yet. The winners are those who can
best leverage the data.” halliburton.com/production
Fishing in a Giant Data Lake
“We’re all fishing in a giant data lake,”
Martin continued. “A lot of information
has always been there, but the amount
and the varieties are growing and the
abilities to analyze it are becoming much,
much better. Technology keeps grow-
ing, and the ability to mine the data is
getting better.”
US shale basins are mostly well delin-
eated, and plays in core areas are costli-
er to enter, he said. “The more develop-
ment takes place, then you’re going to be
 moving out into noncore areas, and those
results are not going to be as good as they
are right now because you’re dealing with
lesser rock,” Martin said. “So most of the
low-hanging fruit has been plucked, and
we’re going to have to climb further up in
that data tree.”
He noted the ability to get detailed well
reports on one’s mobile phone, which can
be downloaded into a spreadsheet and
moved into data visualization and ana-
lytics software to enable a comparison of
“every nuance as you’re drilling that well.
You can look at it and really see how the
data moves,” he said. “And if you can save
a day or two of drilling time, bravo.”
A Different Team Required
Following a well’s progress this way “can
really be fun, once you get into it,” Martin
said, “but it does require a different team
than in the past. It includes IT people,
statistical skills, math, logs, manuals.”
He said that “only a small fraction” of
today’s oil field has been digitized. Much
of the digital data obtained are filed and
never examined, he said, noting that his
own company has been guilty of this
as well.
“The point is you have to open those
files, look at them, run them through
something like Spotfire (data visualiza-
tion and analytics software) and just see
what you can find,” Martin said. When
potentially useful information arises,
team members should measure it against
their existing suppositions. “Don’t just
proceed along the course you’ve already
set out,” he said.
Evaluating Acquisitions
New Century has a major position in the
eastern Eagle Ford Shale, where it was
one of the original players, and is evalu-
ating acquisition opportunities through-
out the Eagle Ford trend, he said. The
company has “a huge body of data” from
the FracFocus database, and Martin said
that companies could similarly use sourc-
es such as IHS Markit or Drillinginfo to
build their data supply.
“You put that [data] in Spotfire and my
gosh, it’s unbelievable what you can see
if you can get to those acquisition oppor-
tunities or drilling ideas,” he said. “The
trick is you want to be there before any-
body else, you want to get started.”
Martin said that permit activity in the
Eagle Ford is picking up and that transac-
tions in the eastern part of the play alone
totaled more than USD 900 million over
the past 6 months.
Discoveries Lowest Since 1940s
On a global basis, he pointed out, the
International Energy Agency reported
in April that oil discoveries are at their
lowest levels since the 1940s. While the
media have given great attention to the
rise of unconventional [shale] produc-
tion, 94% of worldwide production is
conventional, Martin said.
Focusing on the low level of global dis-
coveries and the continuing growth of
world oil demand—which is at a record
high—“can be an eye opener,” he said.
“Higher oil prices might be here soon-
er than you think they’re going to be,”
Martin concluded. “So don’t just sit back
and wait. Go ahead and make your move
based on current economics.” JPT

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 Deepwater Cost Cutting

It is Hard A fter oil prices plunged in 2014, the Libra discov-

ery, which could be the largest in Brazil’s prolific
pre-salt offshore play, looked like an iffy proposition.

To Make Money “We worried at that time: Do we have a future for a

deepwater project?” said He Baosheng, deputy gen-
eral manager for subsea wells and facilities for the

in Deep Water Libra project, during a panel discussion at the 2017

Even With Billions of
Barrels To Produce
Stephen Rassenfoss, JPT Emerging Technology Senior Editor
At a time of massive delays in offshore exploration
and production, here are four examples of what
companies are doing to get to breakeven.
Salt
Reservoir
There are major barriers to entry to developing the Libra
field. Source: Petrobras/Bruno Moczydlower.
Offshore Technology Conference (OTC).
Petrobras’ chief executive officer (CEO) back then,
Oswaldo Pedrosa, said the break-even price was
greater than USD 55/bbl, but added that he expect-
ed oil prices would rise, making Libra profitable by
2019, when commercial production was expected
to begin.
Since then the thinking has flipped. With the price
of oil stuck around USD  50/bbl, now the goal for
Petrobras and its four partners on Libra is to lower
the break-even price to USD 35/bbl, said Fernando
Borges, executive manager for the Libra project, add-
ing “it is very important to have a low breakeven.”
“The goal is the ability to live with prices that
are there now, and be happier if the price rises,”
said He, who works for China National Offshore Oil
Corp.  (CNOOC).
They made those comments at a panel session
where Petrobras and its partners rapidly ran through
the many things they are working on to reach that
2.000 to break-even target. So far they are about three-
2.500 m quarters of the way to that goal, if their projected
savings are realized when built.
At the top of Borges’ short list for reducing the
breakeven are reducing capital expenditures and
increasing production.
1000 to
The break-even improvement from a 5% reduction
1.500 m in capital expenditures is larger, and provides much
needed cash flow during development. But it is in the
same neighborhood as a 1% increase in the ultimate
recovery factor for oil and gas, he said.
Money-saving engineering ideas range from
Up to
shrinking the size of water- and gas-processing units
2.500 m and reducing the number of subsea flowlines, to
incorporating more kinds of data into subsurface
studies aimed at minimizing the number of appraisal
wells required.
The potential savings are in the billions, magni-
Up to
fied by Libra’s huge scale. The initial plan requires
1000 m more than four floating, production, storage, and
offloading (FPSO) vessels to develop one-quarter of
the field. Borges said, “Further drilling could jus-
tify more. But the scale also magnifies the potential
pain if it becomes another megaproject plagued by
cost overruns.”
It is also a complex project, from the processing
challenges posed by the high carbon dioxide (CO2)
content in the gas to the number of companies work-
ing on in the project. Petrobras is in its normal spot

28 JPT • JULY 2017


in Brazil as operator of Libra with 40%,
along with partners Shell and Total, each
with 20%, and China National Petro-
leum Corp. (CNPC) and CNOOC, each
with 10%.
While the partners can offer a wealth
of knowledge, it will require creating a
corporate culture where experts from
companies used to making the calls work
to collaborate.
And there is the third big item on
Borges’ list, obtaining a waiver on Bra-
zil’s strict local content rules that require
a high percentage of expenditures
inside Brazil.
Reaching the USD 35/bbl goal will
require buying goods and services at the
low prices found on global markets. To
do that, Petrobras must convince Bra-
zil’s National Petroleum Agency that the
Libra project deserves a waiver of the
local content rule that requires buying a
large share of their goods in Brazil, where
Petrobras says prices are far higher.
Suppliers do not agree. In January, a
Brazilian court suspended bidding for a
lease of an FPSO for future Libra devel-
opment that was challenged by the Bra-
zilian shipbuilders association, Sina-
val. Reuters reported the judge issued
an injunction on the round, which was
open to international bidders. Petrobras
has appealed.
Previously the court had accepted
Petrobras’ argument that it deserved a
waiver because local bids it received were
40% higher than its benchmark price
based on global prices.
When asked about the status of local
content rules during an OTC session,
Fernando Coelho Filho, the minister of
mines and energy, described the issue as
a “sensitive point.”
While he recognizes the political down-
side of rolling back a rule passed during
boom times to promote growth of Bra-
Waiver of Local Content
Rule is Applicable When:
◗ There is no Brazilian supplier
◗ Excessive duration
◗ Excessive price
◗ New technology
Source: Petrobras.
JPT • JULY 2017
Deepwater Cost Cutting
6943
6400
6300
6200
6100
6000
5900
5800
5700
5600
5500
4717
10 km
This structural map shows the footprint of the Libra field. The initial
development is in the northwest area, near the location of the discovery
well, 2-ANP-2A. Source: Petrobras/Bruno Moczydlower.
zil’s oilfield service sector, he said things
“are very different than when oil  was
going at USD 100–110/bbl and every-
thing was possible.”
Diverse Brains
The five-company Libra consortium is the
first of its kind in Brazil, bringing in cor-
porate rivals such as Shell and Total that
are leaders in deepwater development.
“The presence of the partners on the
project teams is unprecedented in Bra-
zil. They bring in new points of view,”
Borges said.
It is a rich potential resource, but the
value will depend on the companies’
ability to solve complex problems by
working as a joint industry project.
“This has been a challenging opportuni-
ty to integrate our work with partners,”
Borges said.
At the OTC session, a slide summariz-
ing the organization showed the 36 faces
of those leading four major functional
groups, plus a fifth area described as
“cross-functional.”
Connections across disciplines are
essential because revamping one aspect
of the project will affect others, which
may also be in flux.
One of the projects with that promise
is the gathering of large amounts of data,
including extra testing using downhole
sensors and tracers tracking flow, to fig-
ure out how to drill the minimum number
of appraisal wells in the most productive
locations. This is expected to eliminate
460 days of drilling time and lower the
break-even cost by USD 1.31/bbl.
The expectations created by this data-
driven effort will define aspects of the
development, from the design of the sub-
sea production systems to the capacity of
the processing lines.
The partners generated 243 ideas to
reduce the breakeven and decided to
pursue 49 of them, he said.
But there is a limit to the time allowed
for a carefully staged process. Driving
down the break-even cost will require
compressing the period from discovery
to production.
Time is valuable because a dollar
earned sooner is worth more than one
later; the partners want to begin gener-
ating cash flow early on to cover devel-
opment spending, and low services
and supply costs can be locked in now,
if the designers have specified what
is needed.
To keep things moving, changes will be
phased in as the next three FPSOs come
on line.
Early Involvement
Service companies often point out that
their ability to significantly improve the
design or execution of a project is limit-
ed because they are brought in too late to
make significant changes.
29
 Deepwater Cost Cutting
The Libra Pioneer FPSO is expected to begin producing oil and injecting water and gas into the Libra field later this
year. The long-term production test will guide future development. Source: Petrobras.
Libra at a Glance
Area: Pre-salt project in the Santos
Basin
Distance from shore: 200 km
Water depth: 2100 m
Area: 1550 km2, roughly the size of
Sao Paulo or Houston
Reserve estimate: 8–12 billion bbl of oil
and in energy equivalent of gas
Recovery rate goal: 35%
Oil quality: 27 °API
The Libra project wants to the test the
notion that if “vendors are involved early
enough in the process they can optimize
the design for better use of equipment
and vessels,” said Orlando Ribeiro, Petro-
bras general manager of services and
special operations for Libra. “We believe
in those guys.”
Early involvement with subsea com-
panies in the conceptual stage of the
project would seek to reduce the cost of
subsea work by 30% in capital spend-
ing, which could save USD 480 million,
according to the OTC presentation.
“The ongoing engagement with tech-
nology providers will be intensified to
30
Other gases: CO2, 45%; hydrogen
sulfide (H2S), 170 ppmv
Drilling: 9 of 11 appraisal wells drilled
with two rigs working
Testing: Libra Pioneer FPSO is being
tested and installed. A 50,000 B/D
extended well test starts later in
2017
Phase one: Four FPSOs equipped
to do water and gas injection in
northwest Libra field
get even more savings for projects,”
Ribeiro said.
Establishing collaborative business
relationships with firms doing engineer-
ing, manufacturing, and installation
requires adapting the bidding process
to comply with a law passed as part of
Brazil’s crackdown on corruption, which
complicates things.
Transparent bidding processes award-
ing work to the lowest bidder is a good
choice if there is a defined job to do.
But if the goal is finding a partner capa-
ble of changing the cost structure of a
project, it is harder to create objective
bidding criteria.
Seismic: Advanced seismic imaging
(4D) to see under salt and track
production over time
Partners:
◗ Petrobras (40%), operator
◗ Shell (20%),
◗ Total (20%),
◗ CNPC (10%)
◗ CNOOC (10%)
“We have had to do it competitively,”
Ribeiro said, “It is very difficult to do.”
Gas Ideas
The number used to define the poten-
tial of the Libra field is the billions
of barrels of light crude oil it is likely
to produce.
The number to use when describing
the engineering challenges is the high
gas/oil ratio (440 m3/m3 oil) and the fact
that about 45% of it is in the form of
CO2, which cannot be emitted because
of environmental concerns, and there is
some highly corrosive and deadly H2S
in the mix.
JPT • JULY 2017
 Deepwater Cost Cutting

While the Libra Pioneer was built to Injection well Production well
Distance
handle 50,000 B/D of oil, its deck space is
crammed with equipment to process up
to 43 MMcf/D of gas (4 million std m3/d).
Gas processing equipment “rep-
resents 70% of the topside weight,
and area, and likely the cost as well,”
Ribeiro said.
Routinely flaring or venting natural
Morrow Water CO2 Water CO2 Miscible Oil Oil/gas
gas is not allowed, and there is no plan to Formation zone bank recovery
build a pipeline 200 km to shore, so all
natural gas not used to power the opera-
tion will be injected back into the field
along with the CO2.
While that requirement adds cost Libra’s gas output has spawned projects to reduce the weight, footprint,
and complexity, there is a big poten- energy consumption, and cost of the separators.
tial upside as well. Gas injection may
enhance the ultimate production signifi- Gas Plant Power Consumption—45% CO2
80
cantly because CO2 can free oil normally
70 –17 MW
left behind on reservoir rock.
60
Libra presents a first test of using CO2
Power Consumption

injection offshore for enhanced oil recov- 50

ery, and it is rarely used in a new field. 40
Normally alternating injections of CO2 30
and water are used to extend the life of 20
old depleted reservoirs.
10
Subsurface experts are working on
0
projects to maximize the benefits of the 25 30 35 40 45 50 55 60 65 70 75 80 85 90 95 100
alternating injections. Pressure of the First Separator
Facility engineers are considering two 25 bar 65 bar
new ways to remove the remaining water Higher-pressure separation makes it possible to eliminate a compressor from
in the processed gas before reinjection. the gas separator design, significantly reducing the electric power required.
By allowing more water to remain in the Source: Petrobras.
gas that will be injected, they are able
Single-line WAG injection
to consider new ways to dehydrate it,
(Two Christmas trees connected subsea by service hub)
which could reduce the weight of the
units by 1,500 tons and save 210 m2 of
deck space. Those methods are:
◗ Membrane separation using a
molecular sieve WAG (6 in.) LWR WAG (6 in.) LWR
◗ Chemical removal using the
triethylene glycol process.
Injecting both water and gas using
the same line, rather than through sepa-
rate lines, and eliminating one umbili-
Jumper (6 in.)
cal for every two wells, is expected to
save about USD 300 million. Each well
will have one line alternating between
One line per well sends water and gas for injection. The wells are connected
injecting water and gas, with well pairs by a jumper allowing pigging to ensure flow. WAG-water alternating gas;
connected by a jumper that allows a pig- LWR-lazy wave riser. Source: Petrobras.
ging device to run through both of them
to maintain the flow. ing power consumption by 17 MW when “The weight reduction of 1,500 tons
More than doubling of the pres- processing the high-CO2 gas stream. This is very important to use on a fully loaded
sure in the initial gas separation unit to allows smaller electric generators, sav- FPSO,” Ribeiro said. The greater efficien-
55–65 bar, from 25 bar, reduces the num- ing 1,500 tons in weight and reducing cy may well be used to increase the pro-
ber of processing modules by one, lower- its footprint. cessing capacity.

JPT • JULY 2017 31

 Deepwater Cost Cutting

Two Ways To Stretch the Lives of Risers

and Mooring Lines
Stephen Rassenfoss, JPT Emerging Technology Senior Editor

T he future of many offshore develop-

ments hangs on extending the lives
of mooring lines and risers.
With oil at USD 50/bbl, only the big-
gest deepwater discoveries can justify the
cost of a new production platform, and
even those projects demand an intense
focus on shaving every possible cost to
allow profitable development.
The few projects going forward now
are generally sending the oil and gas to a
platform built for an older field.
The need to tie back production
to aging facilities puts a premium on
extending the life of critical components
offshore, including the chains and lines
that anchor floating structures and the
risers providing a conduit for the pipes
and lines running to subsea systems and
210 ft
export pipelines.
Two ideas for addressing those chal-
lenges were offered by papers pre-
sented at the 2017 Offshore Technol-
ogy Conference (OTC).
Adding buoyancy modules to lift an export riser can extend its life, according
One option literally would take a load
to a study that considered how many modules offered the most benefit. The
off old risers, lifting a section of those image on top used 22 modules compared with 54 on the lower one, both at
long pipes near the ocean floor. The goal 325 ft from the nominal touchdown point. Source: OTC 27597.
is to move the point of highest stress,
the touchdown point (TDP), several hun- money and reach an acceptable life” for change extends the life of the riser, but
dred feet, which the paper by Chevron deepwater equipment. costs more.
(OTC 27597) said could double the riser’s The paper (OTC 27889) used the data The Chevron project is adding buoy-
fatigue life. It analyzed the effect of doing to show how more realistic estimates ancy modules later in the life of a riser
that by lifting it using buoyancy devic- could be used to shave the cost of a new to get the benefits of a lazy wave design.
es or shortening the tube by removing a platform by reducing the cost of moor- The Houston Offshore Engineering paper
pipe segment near the top. ings a bit, and the riser by a lot. Changing uses new data on VIM to make the case
Another paper extended the expected assumptions allows a plan that would use for using a lower-cost SCR rather than a
life on those components by changing a a less expensive steel catenary riser (SCR) lazy wave riser.
key assumption used to calculate it. Lon- rather than a lazy wave design, which Petrobras, which uses lazy wave ris-
ger lifespans can be expected based on would be required if traditional calcula- ers in its many ultradeep fields, report-
a multiyear study that concluded that tions for VIM were used. ed that it is working to reduce the high
the method widely used to estimate the And he said the same methodology cost of buoyancy by working on designs
fatigue caused by passing currents— could be used to see if older hardware that use a minimum number of modules
vortex-induced motion (VIM)—exagger- has more years of life than expected in as part of its Subsea Cost Reduction Plan
ates the effect. it, but he is not aware of anyone who (OTC 27833).
“Traditional prediction methods over- has done so. Rethinking the need for buoyan-
predict vortex-induced motion,” said Both papers have a connection with cy allowed Petrobras and its partners
Arun Antony of Houston Offshore Engi- lazy wave riser designs, which lift a sec- developing the huge Libra field offshore
neering, which is part of Atkins. “By real- tion of the riser in the water by wrapping to switch to SCRs, saving on buoyancy
istically estimating the life, you can save buoyancy modules around the pipe. That modules and installation expenses, said

32 JPT • JULY 2017


700
Elevation Above Seabed (ft)
600 Buoyancy
Modules
500
400
300
200
100
0 “When you try to move a riser in the
–1,800 –1,600 –1,400 –1,200 –1,000 –800
Horizontal Distance from Nominal TDP (ft)
Original Configuration
14 Modules (100 ft TDP Shift)
32 Modules (200 ft TDP Shift)
Different combinations of buoyancy modules were studied to see how they
alter the point of maximum stress, the touchdown point (TDP).
Orlando Ribeiro, Libra project general
managers for subsea wells and facilities,
during an OTC panel.
Zone Fatigue
When determining the life of an SCR,
close attention is paid to the TDP, the
point of maximum stress, where the
steel tube that is a mile or longer and
moved around by waves, currents, and
the motion of the platform, is connected
to the subsea production system.
A paper by Chevron and 2H Offshore
(OTC 27597), an engineering firm spe-
cializing in risers, offers two ways to
alter the path of the pipe to move the TDP
away from a spot which has been subject-
ed to years of stress:
◗ Lifting a section of the riser using
buoyancy modules that moves the
TDP, delaying the day of reckoning
◗ Shortening the riser, by removing
a joint or joints near its top, which
also shifts the TDP
To realistically test these ideas, they
used data from two risers on a deep-
water platform in the Gulf of Mexico,
one for production and the second for
export. This allowed full fatigue analysis
based on actual conditions at the plat-
form and seafloor, from the local ocean
conditions to soil conditions around the
anchoring point.
JPT • JULY 2017
Nominal TDP
Location
775 ft
–600 –400 –200 0 200 400
7 Modules (50 ft TDP Shift)
22 Modules (150 ft TDP Shift)
54 Modules (300 ft TDP Shift)
Both methods change the path of the
riser by lifting it. One approach adds
buoyancy modules near the bottom.
Another does so by removing one or
more 40-ft sections of riser at the top.
While both methods could significant-
ly extend the riser’s life, the paper said
that adding “a large number of buoyancy
elements close to the TDP led to the over-
all greatest benefit in fatigue life.”
While removing joints can be nearly
as effective, it may reduce the strength
of the riser. In one of the cases stud-
ied, removing only one joint “did not
pass the preliminary strength case.” In
another instance, the strength margin
was reduced, but still acceptable.
Vortex Adjustment
The cost of the mooring lines and ris-
ers for an offshore platform can be sig-
nificantly reduced, according to another
paper based on a study that concluded
that the effect of VIM on them is 10% to
20% less than widely assumed.
The OTC paper by Houston Offshore
Engineering estimated that by using
those VIM estimates and prices it gath-
ered from suppliers, it would be possible
to reduce the cost of moorings and risers
for a semisubmersible platform produc-
ing 80,000 B/D in the Gulf of Mexico by
about 18%, or USD 25 million.
Deepwater Cost Cutting
The starting point of the VIM study
funded by RPSEA (RPSEA A 5404)—a
federally backed research group that
partners with industry—was a common
observation: “The motion predicted by
engineering projections exceed the actual
motion,” said Antony, who was the prin-
cipal investigator on the project.
That work concluded the VIM was less
than expected because earlier tests failed
to consider that the motion was damp-
ened by the resistance of water.
water it will have friction in the water,”
Antony said. That effect increases as
more risers and lines are added.
Reduced motion means less fatigue
and a longer expected lifespan. How
much depends on the interaction of the
sea conditions with the structure’s size
and design.
By assuming a 10% reduction in VIM,
it was possible within the specifications,
which required a 25-year design life, to
switch to a smaller-diameter chain con-
necting the polyester line to the platform
and the anchor, saving USD 2 million, or
6% of the total mooring system cost.
The big saving was in the riser. By
assuming less motion, it was possible to
use an SCR rather than a more expen-
sive lazy wave design, which would have
150
148.1
4.6
6.0
125.0
4.6
10.0
66.9
Cost (USD million)
100
53.3
50
70.6
57.1
0
Base Case Improved
Engineering Installation
Material and Equipment and
Fabrication Fabrication
Qualification
Riser system cost comparison.
33
 Deepwater Cost Cutting
A scale model of a semisubmersible was tested in a setup that introduced
various levels of dampening, reflecting the fact that the motion caused by
the current is lessened by water resistance. Source: RPSEA A 5404.
The Big Payoff for Drilling the Perfect Well
Stephen Rassenfoss, JPT Emerging Technology Senior Editor
S tatoil has reported that it is possi-
ble, with the right organization and
incentives, to drill the “perfect” well.
And when that happened, it was time
to redefine perfect.
In this case, perfect was defined as
the most ambitious target time for drill-
ing eight wells in Statoil’s Johan Sver-
drup field.
While that discovery was one of the
largest ever in the Norwegian North
Sea, with oil prices around USD 50/bbl
the Norwegian national oil company
still needed to significantly reduce the
cost of drilling to profitably develop
the field.
The perfect well was one of the bench-
marks set by a project that set out to
redefine the working relationship
between the operating company, the
34
driller, and service providers to achieve
“radical efficiency improvements from
its own employees and from contrac-
tors,” according to a paper (OTC 27592)
presented at the 2017 Offshore Technol-
ogy Conference.
During the planning process, the
paper said there were workers from
all the partners who said the goals
were “too ambitious” and “far be-
yond reach.”
“Our actual delivery beat our initial
perfect well,” said Jákup Øregaard, a
drilling manager for Statoil, who pre-
sented the paper at OTC. So the company
developed a new perfect line.
Team-Building
By rethinking the way drilling is orga-
nized and paid for, with an eye toward
been the choice if a standard motion
estimate was used. That change saved
USD 23 million. The savings were evenly
split between the hardware and installa-
tion cost reductions.
By assuming a 10% reduction, the
SCR design life was extended to near the
25-year goal. To reach, and exceed that
level, the paper specified thick pipe to
fortify the ends of the risers to mitigate
fatigue at the TDP.
Data that account for dampening could
also be used to recalculate the lifespans
of cables and risers on older platforms to
see if they really need to be replaced, he
said. But that will require a willingness to
recognize the old estimates were wrong.
While the RPSEA report has been well
received—Antony said they are drafting
a summary of it to add to the American
Petroleum Institute recommendations
for Design and Analysis of Stationkeep-
ing Systems for Floating Structures (API
RP 2SK)—there has been “some initial
friction.” Methods that do not account
for dampening have been around for a
long time and it is “always easy to be on
the conservative side.”
creating a team with shared goals that
is highly motivated, Statoil was able to
deliver “twice as many wells as we had
budgeted for,” Øregaard said.
At the time it embarked on the experi-
ment in 2015, all the parties involved had
reason to embrace change.
Oil prices had dropped 50%, and
were well below Statoil’s average break-
even costs for offshore projects, and
Johan Sverdrup was a critical one. The
price crash led to massive offshore proj-
ect delays and cancellations, leaving
drillers and service companies hungry
for work.
The perfect well was the simple tip
of complex changes in the contractu-
al and working relationship among
Statoil and the two main service pro-
viders—Odfjell, the drilling contractor,
JPT • JULY 2017
 Deepwater Cost Cutting

and Baker Hughes, which coordinated Main Sea Level

other services.
The goal was to pay for work done Subsea Wellhead Wellhead Cap
rather than based on day rates. While the Seabed
days of work still figured in, the bonus
36-in.
system was part of a compensation pro- Conductor Shoe 13⅜-in. GTV
gram designed to pay for “services actu- Rig Floor (RKB)
ally delivered.”
Incentive payments are not new. Also,
rather than payments awarded based on 20-in. Casing Shoe
the work of the individual service pro-
vider, these required coordinated efforts
Top of 13⅜-in. Cement
among multiple companies. Middle Completion Packer
“The offshore day rate is paid only Remote Operated Plug, FBIV
when in operation,” the paper said. Ser- 13⅜-in. Casing Shoe Lower Completion/Gravel Pack Packer
Fluid Loss Valve—Flapper
vices are compensated based on how Top of 9⅝-in. Cement
Gravel Pack 6⅝-in. screens
much is accomplished. This could be
payment based on meters drilled or
cementing completed. In all cases, qual- 9⅝-in. Liner Shoe
8½-in. Horizontal OH
ity standards and safe operations re-
To lower costs, the well designs for Statoil’s Johan Sverdrup field focused on
mained essential.
simplicity and standard parts. Source: OTC 27592.
Since workers play a critical role in
change, the incentive payments were even-
ly split between companies and employ- could “jump to the next well in a sit- The method is now being used to
ees. Workers were reminded of their role uation where instability occurred, and drill wells at Johan Sverdrup, and will
with signs stating: “Know your numbers.” not spend valuable time troubleshooting be used when the fixed drilling plat-
These contracts addressed common with the drilling rig on location.” form is installed at the multiplat-
complaints from operators and the About half the saving came from stan- form development. At that point, the
service companies. It de-emphasized dardization and integration, he said. For paper said “a challenge will then be to
day rates, which are often criticized example, well designs emphasized sim- transfer the operating model over to a
by operators because working slower plicity and standard elements. new organization.”
pays more. And it gave service provid-
ers, who say they have limited influence Days
because they are not involved in key 0 50 100 150 200 250 300 350 400 450 500
decisions, particularly those made early 0

on, a greater role.

The “integrated service con- 5000

tracts” were designed to ensure that

10000
the many service providers were coor-
Total Depth (m MD)

dinated under the leadership of the

15000
lead drilling and services contrac-
tors. The key people working offshore
20000
and onshore were represented each
day in a morning meeting led by the 25000
drilling superintendent.
Experts from the project partners 30000
staffed a joint operations center in
Stavanger with a video connection to off- 35000
shore facilities. It allowed experts from
the project partners to keep up with the Actual Budget Moving Perfect
work and quickly address problems as Preliminary Perfect—at project start
they came up.
For example, when drilling was halt-
The actual drilling rate (black) far exceeded the pace in the budget (blue)
ed by an unstable wellbore that would and the perfect level (pink), matching the fastest pace on sections of
require stopping and the planning of comparable wells, leading to the creation of a new perfect line (brown).
a sidetrack around the problem, they Source: OTC 27592.

JPT • JULY 2017 35

 Deepwater Cost Cutting

Want To Make Deepwater More Profitable?

Shell Says Listen to the Facility Staff
Trent Jacobs, JPT Digital Editor

O ver the course of this downturn,

Shell devised a new playbook
that has made one of its oldest deepwa-
sented at the Offshore Technology Con-
ference. From the podium, he described
the project’s implementation as a “3-year
major cost reductions in facility and
well maintenance.
What the paper does offer is a strong
ter facilities a profit leader. Spanning journey,” one that required significant argument for why operational excellence
a period from 2014–2016, when crude changes in how the individuals working should be a major priority for deepwater
prices would drop from highs around onshore and offshore thought about each operators constrained by today’s price
USD  100/bbl to below USD 30/bbl, the other and their work. regime. It tells of how allowing facil-
Shell-operated Ursa tension-leg platform The most critical aspect of this was ity staff to direct individual improve-
managed a 27% increase in oil produc- said to be leadership’s willingness to ment projects can raise the uptime of a
tion while operating costs fell by 40%. begin listening more to its facility staff. waterflooding system from 64% to 87%,
The financial feat answered a “cost “We had to really focus on getting the which is Ursa’s highest level of reliability
emergency” brought on by the down- people that were the closest to the work ever seen since water injections began in
turn while also boosting Shell’s view of to identify the gaps in the performance,” 2008. Its overall production systems now
the asset as a good performer to best-in- explained Fairburn, adding, “They know have an availability of 96%, a benchmark
class. The company has since adopted the what the real issue is.” rate Shell is comparing to that of a down-
strategy as its operational model for sev- In addition to gaining trust and com- stream facility.
eral other floating platforms. pliance by giving facility staff more influ-
Though Shell is known in the deep- ence, Shell found that engaging with Don’t Sound the Alarm
water arena for being a first mover of them also generated ideas that were cited With the adoption of a bottom-up man-
emerging technologies, there are none as critical to the achieved cost reduc- agement ethos, Shell’s onshore staff
to speak of with respect to this project. tions. Absent from the paper and the began letting offshore teams take the
Instead, the general strategy was to cir- presentation, though, are detailed pro- lead on deciding which improvement
cumvent the factors that lead to people duction data, financial metrics, or spe- projects were worth spending valuable
resisting change, even when change is cifics on the measures taken to achieve time and energy on. That helped secure
most needed.
Ursa floats in water depths of about
3,800 ft in the Gulf of Mexico where
it  was installed in 1999, placing it
amongst the longest operating deep-
water facilities in the region. As such, it
has been the subject of many improve-
ment plans before.
However, in the past Shell found that
when technical experts would introduce
new processes meant to drive efficien-
cy, the most efficient thing happening to
them was the speed at which they were
“put on the shelf” without being fully
implemented by offshore staff.
“What we learned at Ursa was that in
order to have sustainable results over
time, we needed be able to connect pro-
cesses to something much deeper—we
had to go deeper into the organization,”
said Michael Fairburn, the former opera-
tions manager of Ursa and current gener-
al manager of regulatory affairs at Shell.
Fairburn coauthored a paper cover- A worker descends a staircase on one of Shell’s tension-leg platforms in the
ing the project (OTC 27771) that was pre- Gulf of Mexico. Source: Shell.

36 JPT • JULY 2017

 OIL & GAS
buy-in from the offshore staff to implement changes while mak-
ing it easier for them to accept that the status quo was no lon-
ger good enough.
Troy Henson, a process implementation expert with
Houston-based Evolve Partners and coauthor of the OTC paper,
said this represented the greater challenge: to get people to
view Ursa’s potential as something more than simply an above-
average producer.
“It was easy to say, ‘Yeah, we’re doing well so why rock the
platform,’” he related, adding that the level of comfort people
had with Ursa, both onshore and offshore, meant that the bar
had to be set at a higher level than ever before. New benchmarks
were ultimately achieved on multiple fronts, but during his talk
Henson chose to highlight one area that may not be obviously
important to most—a reduction in alarm frequency.
By listening to the chief operations staff, who were listening
to alarms going off every 5 minutes on average, Henson said
management realized how much time was being spent away
from production-related tasks. Typically, each alarm required
about 10 minutes to rectify, during which time another one was
likely to be triggered.
“It turned out that a lot of the alarms were not really mean-
ingful,” explained Henson. “Something would bump into a lim-
it-per-second that didn’t really matter, an alarm would go off,
and they’d have to address it.”
After reviewing the parameters and thresholds, the alarm
rate has been cut by half to an average of six per hour. “For off-
shore folks, that’s an unbelievably low rate. We’ve never seen this CUSTOM-DESIGNED
before,” emphasized Henson, adding that on a good day less than
one alarm goes off per hour.
SENSOR SOLUTIONS.
Fix Small, Gain Big
PROVEN RELIABILITY.
Ursa staff also adopted a “find small, fix small” approach to
their day-to-day operations and other technical benefits soon At Pyromation, we’re dedicated to serving
followed. The biggest impact was felt by the waterflooding sys- the Oil & Gas industry with a comprehensive
tem which is critical to the platform’s ability to pull oil from the line of RTDs, thermocouples and thermowell
aged reservoir. assemblies. Our highly engineered,
Though it had been believed to be working fine prior to the custom-designed solutions meet industry
improvement project, a review showed the waterflood system
certifications and provide superior quality
had an uptime of only 64% and was not delivering enough pres-
sure to keep some wells flowing. control. Find out how we can meet your
This realization prompted significant alterations to how the temperature sensor needs.
waterflooding system was operated and monitored. Shell even
moved the waterflood staff out of Ursa’s main control room and
into a dedicated space where their focus would be undivided. GET A QUOTE!
The system now has an uptime of 87%. The improved pyromation.com/oilandgas
waterflooding operation has increased the reservoir pres-
sure which allowed Shell to open shut-in wells and the pro-
260.209.6341
duction achieved was higher than what the company
had expected.
Shell’s confidence in Ursa’s enhanced money-making abilities
was underscored earlier this year when the major announced
plans for a three-well development of a satellite field. The proj-
ect is notable because it is the first deepwater work Shell has
approved since 2015 and is expected to have a break-even price
below USD 40/ bbl. JPT NEC Rated · FM/CSA Approved

JPT • JULY 2017

 After Years, ‘Big Crew Change’ Has Passed,
But Learning, Training Challenges Remain
A s the exploration and production
(E&P) industry continues to face
the challenges of the collapse in oil pric-
es and the disruptions it has wrought,
one long-awaited milestone has passed
almost unnoticed. For all practical pur-
poses, the “big crew change” has hap-
pened. In the global E&P professional
workforce, the high concentration of
individuals in mid- to late-career stage
has all but disappeared.
The proverbial hump in the workforce
age distribution, which resulted from
waves of retirements after the last major
price collapse in the mid-1980s and a
long subsequent period of low hiring, has
been on the industry’s radar for at least
2 decades.
Concern arose in the late 1990s, as the
workforce reflected a preponderance of
experienced professionals ages roughly
40 to 50 and a dearth of younger indi-
viduals ready to replace them when they
14,000
Number of SPE Professional Members
12,000
10,000
8,000
6,000
4,000
2,000
0 I have talked to has no desire to return
20–24 25–29
The shift in the age distribution of SPE’s professional membership between
2006 and 2016, which is shown in the graph, closely tracks the shift in the
same span among professionals in the E&P industry as a whole.
38
Joel Parshall, JPT Features Editor
retired. The industry used the term “big
crew change” to characterize the demo-
graphic challenge and began to prepare,
focusing on new technology and other
innovations in training resources that
could smooth the transition.
Change Clearly Evident
Visually, the crew change is clearly
evident in the accompanying age-
distribution graph of SPE professional
membership, a close proxy for global E&P
professional employment.
In a comparison of 2006 and 2016
membership by age, the 2006 curve dis-
plays an obvious hump in the mid-40s to
mid-50s ages with a peak age between
45  and 49.
The 2016 curve displays a smaller
hump in the late-20s and 30s age range,
with a peak age between 30 and 34, and
a modest decline into the mid-40s range.
Additionally, the number of profession-
SPE Professional Members by Age
2016 2006
30–34 35–39 40–44 45–49 50–54 55–59 60–64 65+
Age (Years)
als in the 55–59 group has barely declined
from the 2006 curve, when they were 45
to 49. This suggests that individuals who
have left companies are remaining in the
industry, whether working as consultants
or making job transitions.
From 2006 to 2014, the crew change
continued to proceed gradually, with the
industry tracking the change and focus-
ing on technology innovations in learn-
ing and training that could more rapidly
prepare younger professionals and new
hires for larger responsibilities. But when
oil prices began a precipitous downfall in
late 2014, a steady outflow of older pro-
fessionals became a wave as job losses
and retirements multiplied over the fol-
lowing 2 years.
Far Fewer Gray Heads
In her March JPT column, 2017 SPE Pres-
ident Janeen Judah wrote: “The ‘big crew
change’ has happened. We’ve been talk-
ing about it for years and, in my view, it
is mostly over. People who, like me, came
into the oil industry during the boom
years of the late 1970s and early 1980s
retired in droves over the past 2 years.
I see it when I talk to companies, when
I walk around the halls at Chevron, and
when I walk around downtown Houston
at lunch—there are far fewer gray heads
in our business.”
“Management may think that the aged
55-plus workforce will come back in
an upturn,” she continued. “I disagree.
They’ve been through five downturns and
worked especially hard over the past 10
years of frenzied activity. They are enjoy-
ing their time off, and nearly everyone
to full-time employment. A minority is
interested in part-time or project work,
but only on their own terms.”
However, if the crew change has hap-
pened, the experience of the past 2 years
JPT • JULY 2017
delivered anything but the steady, effi- and training can proceed with greater work. So there are hardware experiences
cient transition—with all the learning speed and efficiency. that people used to have a lot more of.”
and training goals achieved—that the “I think the time to competency is Nonetheless, while competency gaps
industry had envisioned. lower than it was in the past,” Brett said. remain, “you don’t have to be 50 to do
“If it takes no time to train anybody, “But there are different things in the this work,” he said. “I don’t think we have
then the crew change is over, but I don’t way the industry has worked that lead to worry about the industry being at risk
believe that’s the case personally,” said to different competency gaps. You still from a bunch of kids that don’t know
Ford Brett, CEO of PetroSkills, a major have to have a real piece of hardware, a what they’re talking about. I mean I can
provider of competency-based training real thing. Because if you’re with a pump only imagine what people were talking
for the industry. “We’ve finished the somewhere, it’s really going to have to about when I was 26.”
head count, so we have to make sure we
finish the head content. The first one is
easy, the second one is hard.”
Brett, a past SPE Technical Director
for Drilling and Completions, believes
it takes  3 to 8 years for a company
to turn a new employee into a petro-
leum professional.

Roles for Consultants

However, companies also have signifi-
cant opportunities to look outside their
own ranks to fill knowledge and experi-
ence gaps and develop expertise within
their organizations.
“In some cases, they are turning to
independent consultants to provide peer
reviews, knowledge transfer, mentoring,
coaching, and quality assurance,” said
Susan Howes, vice president of engineer-
ing at Subsurface Consultants and Asso-
ciates. “This is often the case when the
project team does not include members
who have experience in executing a spe-
cific type of project—perhaps due to the SCALE
‘big crew change.’ ”
Consultants experienced with similar WORKOVERS FOR
technology on analog fields “can share NEARLY 2 YEARS
lessons learned and best practices that
may save the project team time and
resources,” said Howes, who is a for- A single application of SCALEGUARD proppant-delivered
mer SPE Regional Director for Gulf Coast scale-inhibiting technology has maintained production
North America and past chair of the SPE rates and eliminated costly workovers for nearly two years in
Soft Skills Committee. previously scale-prone wells in Manitoba, Canada. Similarly
impressive results have been achieved in over 200 wells
Today’s Tools across North America.
The industry has embraced and expand-
The numbers speak for themselves
ed the use of learning-, competency-,
For more production enhancing technologies that improve
and knowledge-management tools to
your initial production, EUR and ROI numbers, talk to CARBO.
enhance and expedite training. Employ-
ees in their 20s and early 30s are the
most digitally savvy members of the
workforce and an ideal fit for learning Read the full story
and training programs that incorporate carboceramics.com/manitoba
all variety of online tools. Thus, there is
sound reason for believing that learning

JPT • JULY 2017 39

 Blended Learning
While online programs and self-directed
learning are understandably playing a
major role in workforce development,
they may not meet every need. “I think
the most effective tool is blended learn-
ing,” said Birol Dindoruk, principal tech-
nical expert and team leader in inter-
national reservoir engineering at Shell
and SPE Technical Director for Manage-
ment and Information. “Some individu-
als do very well using Internet tools, but
others do better with face-to-face learn-
ing. Probably we need to strike a bal-
ance between various methods, while
the weighting will depend on the subject
and the intended depth to be acquired.”
An adjunct faculty member at the Uni-
versity of Houston and a consulting pro-
fessor at Stanford University, Dindoruk
said, “When people do web training,
you don’t know who’s doing what at the
other end, and as a matter of fact, some
people are multitasking. So the focus
element isn’t always there with some of
these newer tools. So how do you design
the tools and programs in a way that will
keep people on their toes?
“Current tools tend to have more
standard questions for assessment,” he
continued. “But in real life, we don’t
have structured questions like that.
And you’ve often got to ask questions
to figure out what problem you need
to address.”
Ideally, learning from online tools
should be “reinforced by participation in
classes, workshops, conferences, men-
toring relationships, peer reviews, busi-
ness simulations, and on-the-job appli-
cation of the newly gained skills,” said
Howes. “These face-to-face opportuni-
ties to build relationships and exchange
ideas enhance the critical thinking skills
for professionals to enable them to solve
industry’s most challenging problems.”
More Age Balance
While periodic upheavals have been a
feature, not a bug, in the industry work-
force over the long term, the current age
distribution is more balanced than in the
decade following the mid-1980s price
collapse. As was true then, professionals
in their late 20s to late 30s are the larg-
est segment of the workforce. “But this is
40
less of a peak than in the past; in 1994 it
was bigger,” Brett said.
He also notes a slight increase in the
55 to 60 age group in the current work-
force, which he expects will disappear
with retirements in the next 5 years. One
other development in today’s age distri-
bution is the relative decrease in employ-
ees in the 40 to 50 range.
“If you happen to be 40, there is a lot
of opportunity for you because the line is
short now,” Brett said.
Great Advances
Mohab Kassem, senior human resourc-
es development manager in learn-
ing and development at Halliburton,
believes the great advances in online
learning and training tools can offset at
least much of the impact that the depar-
ture of the most-experienced profes-
sionals has had on the workforce. “We
have evolved on the systems side tre-
mendously,” he said, citing the develop-
ment and enhancement of learning- and
competency-management systems.
In the earlier phase of the crew change,
“we worked with learning-management
systems, but what you could do with
them was very limited in scope,” Kassem
said. “And the concept of competency-
management systems was barely starting.”
While online learning and competency
systems existed or were created, “they
were not evolved up to the level where
you could apply them and make sure you
were having a very effective knowledge
capture and transfer,” he said. That has
changed with the advances in these sys-
tems and the industry’s increased reli-
ance on them, although Kassem believes
there is scope to better leverage some of
the additional systems in these areas.
There are also SPE resources avail-
able. The SPE Competency Management
Tool is a free online member benefit that
allows members to assess their current
professional capabilities. Online knowl-
edge repositories, such as SPE’s PetroWiki
and the OnePetro library of technical
papers, can provide members with “just
in time” answers to technical questions.
Capturing Knowledge
In addition to enhancing learning and
ensuring competency, there has been a
focus at Halliburton and other companies
on capturing the experiential knowledge
of senior professionals before they leave
the company workforce. “That experi-
ence has been captured through [online]
knowledge portals and communities that
we’ve been using since the early 2000s,”
Kassem said.
Looking ahead, challenges remain in
the learning and training areas, with the
large number of professionals who have
left the industry in the past 3 years.
“Whenever activity picks up, I think
there will be potential for rehiring some
of them,” Kassem said. “The challenge
for us will be how we can fit them back
into the industry in the shortest time pos-
sible and in the most economical way. We
will have to be extremely selective in the
training and development we provide.”
Microlearning
“We talk all the time about ‘microlearn-
ing’, the smaller chunks of training,” he
continued. “But have we really done all
we can do in this space? Probably not.”
Shorter bursts of training—typically
using online resources and mainly pro-
vided on an as-needed basis—are like-
ly to become the norm throughout the
workforce, with lengthier formal train-
ing programs the exception. “This is
what really makes sense for the young-
er generations and also what will make
sense from a business perspective;
the challenge however, will be making
sure that every employee has access to
that learning right when they need it,”
Kassem said.
“Efficiency and cost control can be
achieved by planning and coordination
for professional learning, training, and
competency-building for the skill pool,”
said Howes. “Functional leaders should
annually assess the highest priority gaps
in workforce competency in alignment
with the goals of the department and the
business unit.”
Howes also noted that many options
for affordable continuing education,
forums, symposiums, and conferenc-
es are available through SPE. “Writing a
technical paper for an SPE conference,”
she said, “can be an excellent learning
experience to develop both technical and
communication skills.” JPT
JPT • JULY 2017
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 Slug-Smoothing Technology
Sees Over 200 Shale Installs,
Gets Boost From Schlumberger JV
The undulating trajectories common to
horizontal wells are the source of one
of their greatest pain points—gas slugs.
When these fast-moving accumulations
reach the internals of an artificial lift
system, a best case result may be a
momentary pause in production. On the
other hand, a gas slug could represent the
bitter end for a lift system that may have
cost six figures.
The problem has been serious enough
to drive operators in the Permian Basin
to adopt an artificial lift strategy not his-
torically used there. Manufacturers have
responded to the challenge by trying to
make pumps more slug-tolerant, while
others are marketing automatic shut-
down systems for asset protection.
HEAL Systems has taken a differ-
ent tact with a technology that it says
removes slugging from the production
The downhole separator component
uses cyclonic flow channels to
separate oil and water from gas.
Source: HEAL Systems.
42
Trent Jacobs, JPT Digital Editor
equation by separating the horizontal
from the vertical well sections and regu-
lating the flow between them. The emerg-
ing innovation is called a horizontal-
enhanced artificial lift (HEAL) system. It
has no moving parts, and can be connect-
ed to any variant of lift system.
In May, the company gained commer-
cial steam through a joint venture with
Schlumberger. Partnering with the ser-
vice company will give HEAL Systems
(formerly known as Production Plus
Energy Services) manufacturing support
and elevate its visibility in key markets
such as the Middle East.
“We’ve recognized that as a small com-
pany, scaling up is a challenge,” said Jeff
Saponja, the chief executive officer of
HEAL Systems, adding that the goal of
the joint venture “is to get this technol-
ogy out there, grow the company faster,
The side-by-side comparison of well data shows the relatively smooth gas flow
achieved with the downhole regulator system. Source: HEAL Systems.
and have access to an incredible research
capability to develop it to the fullest.”
Production Plus shareholders retain
the majority share of the joint ven-
ture, allowing it to continue to market
HEAL units to other service outfits and
pump manufacturers.
Based on its more than 200 installa-
tions in the US and Canada, the company
is touting data that show its product has
extended the run life of pumps in shale
wells by months and sometimes years.
Highlighted case studies of multiple wells
in different formations claim this longev-
ity has generated production improve-
ments of 40–100% above prior baselines.
How To Smooth a Slug
Saponja said the reason shale producers
are plagued with constant slug-induced
problems is that horizontal wells are
JPT • JULY 2017

The diagram detail shows how the vortex separator allows a regulated gas
stream to flow up, while fluids discharge near the pump. An added benefit
of arresting slug flow is that the system reduces the amount of solids able to
reach and potentially damage an artificial lift system. Source: Production Plus
Energy Services.
incapable of a consistent flow profile.
Instead, they behave like geysers. “You
will get a bunch of liquids for a little bit,
you get a bunch of gas for a bit, you get a
bunch of nothing for a bit, and then the
whole cycle repeats itself,” he said.
When the cycle eventually results in
the formation of a gas slug, there is a real
risk of it bringing a pump to a full stop.
This issue, called gas-locking, may last
for hours and if downhole pump motors
are left running, they will burn out and
may cause other components to melt.
The HEAL is designed to circumvent
these potentials through its three main
elements: an intake seal in the lateral
section, a sized regulating string that
extends several hundred feet up the
curve, and a vortex separator that stands
upright in the vertical well section. The
latter two components take advantage
of long-established industry lessons
learned in controlling multiphase flow.
The regulating string is partly based on
the systems developed in the 1990s by the
underbalanced drilling sector for damp-
ening gas influxes incurred while making
drillstring connections. The vortex sepa-
rator takes a page from surface separation
technologies which use the same tech-
nique to remove liquids from gas.
JPT • JULY 2017
And for the first time last year in North
Dakota, HEAL Systems used its technol-
ogy to protect producing wells from frac
hits, an interwell communication event
that is common to the shale sector.
With the alternative, operators can
be spared some of the costly work
involved with a strategy known as a full
de-completion where lift systems and
production tubing are removed prior
to an offset hydraulic fracturing opera-
tion. The company says its technology
eliminates the need to remove tubing
and provides wellbore pressure isola-
tion for a cost of USD 12,500 compared
with the USD  150,000 cost involved
with de-completions. JPT
For Further Reading
SPE 185128 Breaking the 800 Psi
ESP PIP Barrier: How A Proven
Flow-Conditioning Technology
can Dramatically Improve ESP
Performance in Horizontal Wells,
by D.W. Kimery, Production Plus
At the start of the process inside the Energy Services, et al.
lateral, the mixed flow of oil, gas, and
water enters the intake seal where it is
forced to conform to the narrow diame-
ter of the regulating string. Saponja com-
pared the regulator string to a garden
hose: “There’s only so much flow that
The JPT
can get through there,” he explained. “It website has
tempers and tames the slug—smoothing
it right out.” been updated
The dampened flow then rises up the
well’s curve until it passes through the
to include these
separator which uses channels to cre- new features
ate a centrifugal effect to separate the oil
and gas. As the free gas exits the sepa-
rator, slug flow has been eliminated and • Exclusive Online-Only
replaced with a regulated stream. Oil and Content
water are discharged from the separa-
tor and into the annulus where they are • Mobile Friendly
then pumped up the well under more
steady conditions. • Improved Navigation
Most installations of the technology
have been in wells facing lift issues but
the company is eager to see its use grow Check it out and sign
for initial completions. HEAL Systems up for the eNewsletter
says that with a slight modification, oper-
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the separator is added and connected to
a lift system.
43
 OTC Focuses
on Downturn-Led
Innovation and
the Bottom Line
T
echnical papers and panel pre-
sentations at this year’s Off-
shore Technology Conference
(OTC) reflected the times, with a clear
focus on doing things more efficiently
and cheaply and how innovation and
incremental improvements in technol-
ogy can help. The annual conference,
held in early May in Houston, attract-
ed just under 65,000 attendees from
more than 100 countries. Below are
highlights from this year’s conference.
More extensive coverage can be found at
www.spe.org/jpt.
Thinking Like Shale
One of the most important questions
asked at this year’s conference was how
deepwater projects can compete with
shale developments. The answer, accord-
ing to at least one executive, is for the
deepwater sector to become more like
the shale business.
Roger Jenkins, chief executive officer
(CEO) of independent producer Murphy
Oil, said it is not necessarily about tech-
nology transfer. “It’s an attitude around
needing to have continuous improvement,
and that is what onshore has brought to
44
the table,” he explained. “Every day, you
have to improve and go faster.”
Jenkins stressed that more synergies
are needed between these two arenas,
not so much to benefit shale production,
but to protect the investment viability of
deep water, which he said needs higher
margins of returns than shale due to the
risk factor.
Murphy Oil is one of the few US inde-
pendents that maintains a balanced port-
folio of shale fields in North America and
deepwater operations offshore southeast
Asia and in the US Gulf of Mexico.
Roger Jenkins, CEO, Murphy Oil
Jenkins said the company’s hybrid
model has helped the “unconvention-
al mindset” migrate into its deepwater
operations. However, he pointed out a
number of areas where this attitude has
yet to take form. The list of shale sector
attributes that need to cross over includ-
ed: shorter production cycle times, a
trend of lowering costs, greater field
efficiencies, and the use of commonly
available types of equipment.
There has been one critical area
where both the unconventional and
offshore sector have recently become
similar: drilling times. Jenkins shared
that benchmark offshore drilling
times have improved from 8 days per
1,000  ft drilled a few years ago to just
over 4  days per 1,000 ft today. “The
percent of improvement that is taking
place onshore, is taking place offshore
as well,” he said.
Fresh off being awarded an explor-
atory block in the Mexican Gulf of Mex-
ico late last year, Jenkins said Murphy
Oil is just beginning to get back into
deepwater work. He emphasized that it
is time for others to do the same. Jen-
kins said operators should start by con-
JPT • JULY 2017
tracting more underutilized offshore
rigs so they can take advantage of low
day rates, but more importantly, so they
can achieve new efficiencies. His point
being that working more rigs while pric-
es are depressed will help operators
make better use of them when prices
go up again.
Zinke Pushes for Review
of Interior and Regulations
US Secretary of the Interior Ryan Zinke
praised America’s resource potential and
regulatory framework during a session
at the conference and signed two secre-
tarial orders.
Zinke pointed to the quality of regula-
tion in the US. “The United States has the
most stringent, toughest, best regulatory
framework for safety and environment
for extraction of our resources in the
world. Undisputed.”
At the end of his speech, Zinke was
joined on stage by a group of hardhat-
clad workers to sign two secretarial
orders. The first order directs the Bureau
of Ocean Energy Management (BOEM)
to develop a 5-year plan. In addition to
JPT • JULY 2017
ordering BOEM to quickly consider leases
in the Outer Continental Shelf, it directs
the bureau to work with the Department
of Commerce’s National Marine Fisheries
Service to consider requests for seismic
surveys quickly.
The order also directs BOEM and the
Bureau of Safety and Environmental
Enforcement (BSEE) to review a host
of other rules. “We’re going to look at
everything. We have to look at infra-
structure. How is it we extract wealth
from our public lands in a meaningful,
responsible way?”
Zinke added that the resources in North
America put the US in a special position.
“How do we incentivize American energy
dominance?” he said, adding, “I choose
my words carefully: dominance.”
“There’s a difference between energy
independence and energy dominance,”
he said. “We’re in a position to be dom-
inant. If we, as a country, want to have
national security, an economy which we
all desperately need, then dominance is
what America needs.”
The second order Zinke signed on
stage created the position of counselor
US Secretary of the Interior Ryan Zinke signs
secretarial orders on stage at the Offshore
Technology Conference.
to the secretary for energy policy, which
is designed to coordinate the Interior
Department’s energy portfolio.
For Pemex, Partnerships
and Profitability are Key
The new head of Mexican state oil
company Pemex explained his plan to
reverse the direction of the company’s
financial and production situation.
Appointed a little more than a year ago,
Pemex CEO Jose Gonzalez-Anaya told
how the historic energy reforms of 2013
have freed his company to implement an
“aggressive farmout strategy” with oil
companies from around the world. The
aim is to boost Mexico’s oil production
from 1.95 million B/D to 2.2 million B/D
by offering these firms a piece of the
upside, something that was previous-
ly unconstitutional.
“That’s the way all the oil companies
in the world do it—and that’s the way
we’re going to do it,” Anaya said, not-
ing that the first Pemex farm out to
Australian-based BHP Billiton for a sub-
sea field in the Gulf of Mexico had no
other way of being developed.
45
 “We could not finance it on our own,
we don’t have the technology to do it on
our own,” he added. “With our new part-
ner we have the finances and the tech-
nology, and that’s the way we’re going to
move forward.”
When asked about his plans for Mexi-
co’s unconventional prospects, which are
largely unexplored but thought to have
significant potential, Anaya said that
farm outs will also be used to get shale
and tight-rock projects running.
In addition to farm outs, Pemex
is looking at new types of contracting
schemes for service companies to drill
and perform other operations that will
include risk- and profit-sharing terms,
options also not allowed under the previ-
ous energy law.
Private Equity Firms
Remain Cautious
On the face of it, the offshore oil business
and private equity investors have needs
that should bring them together.
“This is a business that needs money
and there are people who have money; the
world is awash in capital,” said Dan Pick-
ering, chief investment officer for Tudor,
Pickering & Holt, during a lunchtime
speech. “There is room for an intersection
if like-minded people can get together.”
The degree of intersection has been
limited to date due to the differences
between those doing deepwater explo-
ration and production (E&P) and those
running investment funds that put up
large sums of money to start businesses,
do buyouts, or play a major role in proj-
ect financing.
Private equity firms are looking for
sure things, while Tudor Pickering esti-
mates that only 15% of the offshore wells
drilled produce enough to be commer-
cial. Investors are looking for a return
level that is higher than E&P operators
generally get, want to be able to ensure
that the companies they invest in follow
a strategy compatible with their profit
maximization target, and would like to
see that return with a set time frame.
With oil prices in the USD 50/bbl
range, there are tempting offshore proj-
ects, but even the best prospects will not
generate the cash flow needed to pay
for the project using more traditional
46
financial options if that venture is not a
major company.
Private equity companies have the
money to invest. As of last fall, invest-
ment firms followed by Tudor Pickering
were capable of raising USD 150 billion
for energy investments.
“At the end of the day, someone will
come up with a unique structure and
figure out innovative ways to do this,”
Pickering said.
There are examples of private equity
money put to work in offshore explora-
tion, such as Talos Energy, an indepen-
dent with holdings in both the US and
Mexican sides of the Gulf of Mexico. It
was founded with backing from two big
private equity firms, Apollo Global Man-
agement and Riverstone Holdings.
During a later panel discussion on off-
shore development, Tim Duncan, the
founder and CEO of Talos, said that it is
important to go into such a deal with an
understanding of the realities of private
equity financing. Those include being
aware that the money invested plus a
significant return is expected with a few
years, which often requires selling the
company or going public.
Risk-Based Cybersecurity
Critical for Offshore Automation
Automation is playing an increasingly
vital role in oil and gas operations, includ-
ing offshore assets. Operating companies
can use automated systems to augment
and replace human effort in dangerous
locations, increasing on-site safety. How-
ever, an expert said that automated sys-
tems bring additional vulnerabilities with
potential safety impacts, thus requiring
John Jorgensen, director of cybersecurity
and software, ABS
an updated risk-handling approach that
allows companies to better understand
these risks.
At a presentation, John Jorgensen dis-
cussed the merits of risk-based securi-
ty. Jorgensen is director of cybersecuri-
ty and software at the American Bureau
of Shipping.
A risk-based approach is one where
companies make a conscious effort to
understand the variables that could affect
assets, people, and outcomes. It involves
a risk assessment that provides the basis
for the prioritized application of cyber
protective applications and measures.
When performing a risk assessment,
Jorgensen said companies should deter-
mine which functions of an asset are
mission-critical (essential to the oper-
ational performance of the asset),
business-critical (essential to the finan-
cial performance), and safety-critical.
This requires an understanding of the
collective requirements that link systems
together into the process flows that pro-
vide input and output.
Managing assets in a risk-based securi-
ty system requires a catalogue that exam-
ines the cyber complexity and business
attributes of each asset along with rel-
evant cybersecurity documentation. Jor-
gensen said some of the biggest vulner-
abilities can be found in the interfaces
between one system and another.
“We have to look very carefully to
understand where those interfaces are
so that we know what happens between
the two,” he said. “Performance monitor-
ing that we put on individual systems is
valuable, but that only tells us so much.
We learn much more when we look at
the interfaces between systems and then
monitor the traffic that goes between and
among systems as they operate.”
Risk-based security often involves the
installation of automated systems that
can interface with safety-critical manual
systems. Jorgensen said these converged
systems present new challenges for com-
panies to consider beyond the basic pri-
orities—confidentiality, integrity, and
availability—associated with informa-
tion technology (IT). He said that, in
many cases, process control systems
have confidentiality as a lower priority
than an IT system.
JPT • JULY 2017
 Industry Not Yet Using Digital
for Disruptive Change
The digital disruption is here, or is sup-
posed to be. Panelists at a session dis-
cussing digital disruption related var-
ious ways the oil and gas industry is
using digital technology and expects to
be using it in the future. However, the
panelists were largely unconvinced that
the industry is thinking of how it can
use the disruption in full to achieve a
fundamental transformation.
Eric Abecassis, chief information offi-
cer (CIO) at Schlumberger, said that the
industry has “the opportunity to rethink
and take advantage of the digital trans-
formation that is happening everywhere.
And this is the opportunity not only to
work on efficiency, but from making the
work more efficient to transform the
work itself. That, I think, is the challenge
we have before us.”
The industrial revolution focused
on how to amplify the human muscle
through automation, and this has been
extended by robotics. “My central vision
is that what will be happening in the
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next few years is that we amplify the
human brain,” Abecassis said. I think
that machine learning and artificial intel-
ligence will be the most disruptive of
the technologies.”
Machines are now learning by them-
selves and can have an advantage over
humans in some types of decision mak-
ing because humans think by analogy,
but a machine that gathers and processes
information is free of that influence and
may be able to find a more efficient solu-
tion, he said.
As an example of how Schlumberger is
applying digital technology to transform
the services it provides, Abecassis point-
ed to seismic surveying. Advanced com-
puter capability and cloud computing are
enabling the future development of seis-
mic processing that will occur in close to
real time while surveys are in progress.
Archana (Archie) Deskus, vice presi-
dent and CIO at Baker Hughes, asked,
“Are we using digital to digitize our com-
panies or are we using digital to bring
about a disruption in our companies and
our industry?”
Old fractures isolated
New fractures through ESeal RF Liner
Digital, she said, is the main reason
that more than half of the companies
on the Fortune 500 have disappeared
since 2000. Disruptive companies such
as Uber, Netflix, Amazon, Apple, and
Google have some common trends.
“They create incredible value for individ-
uals, enormous leaps in efficiency, they
all have value chain vision, and in many
cases they operate with minimal physical
assets,” Deskus said.
Companies become disruptive by
thinking about their end consumer and
about whole businesses, new value that
they can create in the market, she said,
adding that she struggles to name com-
panies in the oil industry that fit that
description. Having started late as an
industry, “we are doing lots of different
things within our own organizations,”
Deskus said, “but I don’t think they’ve
become true disruptiveness yet.” JPT
JPT Editors Trent Jacobs, Stephen
Rassenfoss, Joel Parshall, Stephen
Whitfield, and Adam Wilson
contributed to this report.
Old fractures isolated
 Reinvention, New Realities Central
Theme of Offshore Europe 2017
Stephen Whitfield, Senior Staff Writer
The latest edition of the biennial SPE Off-
shore Europe conference and exhibition
will once again bring together top indus-
try professionals, engineers, educators,
and students for a week of discussion on
the pressing topics facing offshore explo-
ration and production (E&P).
Under the banner of this year’s theme,
Embracing New Realities: Reinventing
Our Industry, Offshore Europe 2017 will
feature several sessions and presenta-
tions aimed at helping attendees bet-
ter understand the changing landscape
surrounding the industry in the wake of
the oil price downturn, increased focus
on renewable energy sources, the Great
Crew Change, and more.
The conference will be held at the
Aberdeen Exhibition and Conference
Centre in Aberdeen from 5–8 Septem-
ber. Here is a look at some of the events
scheduled to take place.
Opening Plenary Session
The first day of the conference will fea-
ture a group of chief executives shar-
ing insights on the oil and gas indus-
try’s changing landscape. Petrobras chief
executive officer (CEO) Pedro Parente,
Wood Group CEO Robin Watson, Royal
Dutch Shell CEO Ben van Beurden, and
BP Group CEO Bob Dudley are scheduled
to speak at the opening plenary session
on 5 September.
Dudley will underline the value of the
UK North Sea in BP’s portfolio at the ses-
sion. BP expects to bring two of the larg-
est new developments in the area—the
Quad 204 redevelopment and the Clair
Ridge project—into production over the
next year while continuing to invest in
other North Sea assets. Over the same
period, the company will participate in
48
five exploration wells in the area and in
around 50 new development wells over
the next 3 years.
BP’s production output in the North Sea
is expected to increase to 200,000 BOPD
by 2020, approximately double its out-
put in 2015. Dudley referred to the com-
pany’s North Sea business as one of its
“crown jewels.” Shell has an extensive
North Sea portfolio, and Wood Group
provides services for several fields in the
region, including the Balmoral floating
production vessel in the central North
Sea and the Solan field.
Conference chair Catherine MacGregor
said the plenary session speak-
ers will be valuable for setting the
conference’s agenda.
“It is testimony to the relevance of the
North Sea that these industry-leading
CEOs with global portfolios have agreed
to speak at the opening plenary session,”
said MacGregor, president of the drilling
group at Schlumberger. “Their insights
will set the stage for the largest and most
topical technical conference and exhibi-
tion in Europe, reflecting the strategic,
commercial, behavioral, and technology
challenges that will shape the future of
the industry.”
Keynote Sessions
On 6 September, a keynote panel ses-
sion will address cyber and physical
attacks on the industry to help delegates
Dudley Parente
understand the risks, manage detection
of threats, and defend their companies
against malicious actions.
Deirdre Michie, CEO of Oil & Gas UK,
will chair the session. David Stupples,
director of electronic warfare systems
research at the University of London, will
discuss his cybersecurity research, focus-
ing on cyberattacks on supervisory con-
trol and data acquisition (SCADA) sys-
tems. BBC security correspondent Frank
Gardner is scheduled to participate in the
panel along with Dominic Armstrong,
president of the risk management and
intelligence consultancy Herminius.
“The cyber threat is no longer an
emerging risk but one that is forcibly
having a severe and hazardous impact
on day-to-day operations,” said Sue Frye,
director of Europe, Caspian, and Sub-
Saharan Africa events for SPE. “Under-
standing and managing the risks is the
responsibility of everyone in the sector,
from rig workers to investors.”
The cybersecurity session is one of
several keynotes that will be presented
during the conference. Another keynote
on 6 September (“It’s All About Us—
the Human Factors Behind Safety Statis-
tics”) will focus on the increase in indus-
try-related fatalities from 2015 to 2016
as reported by the International Asso-
ciation of Oil and Gas Producers (IOGP).
Panelists will discuss the issues behind
this increase, ranging from squeezed
van Beurden Watson
JPT • JULY 2017
margins to job uncertainty to other envi-
ronmental factors. IOGP director Gor-
don Ballard is scheduled to moderate
this discussion, and panelists will include
Lee Stockwell, general manager of deep-
water safety and environment at Royal
Dutch Shell; Dik Gregory, director of the
GS Partnership; and Rhona Flin, profes-
sor of industrial psychology at Aberdeen
Business School.
On 7 September, a keynote panel will
be devoted to the Great Crew Change and
the digital era. The session (“A Sustain-
able Future? Finding, Developing, and
Retaining Tomorrow’s Talent”) will look
at the level of attraction the oil and gas
industry has for future generations join-
ing the workforce, as well as the challeng-
es the increased focus on renewables will
have on talent attraction and retention.
David Clark, regional president of the UK
and Africa at Aker Solutions, will mod-
erate the panel. Panelists include Won-
uola Scott, principal data transforma-
tion analyst at IHS Rushmore Reviews;
Huda Al Ghoson, executive director of
human resources at Saudi Aramco, and
Vera Kirikova, human resources director
at Rio Tinto.
Decommissioning Zone
This free-to-attend exhibition will in-
clude more than 20 decommissioning
technology and service providers as well
as a conference theater programmed in
association with the industry’s key asso-
ciations, including Decom North Sea, the
Industry Technology Facilitator (ITF),
iMechE, and the Society for Underwater
Technology (SUT).
The Decommissioning Zone is a fea-
tured project from Fairfield Energy, an
independent North Sea operator that is
in the process of decommissioning its
Greater Dunlin assets and transitioning
from an oil and gas producer to being
a decommissioning-focused operator.
Fairfield will share insights and lessons
learned since it stopped production
at the Dunlin field and the Merlin and
Osprey subsea satellite fields in 2015.
This presentation will include updates on
the following:
◗ Fairfield’s 45-well platform plug-
and-abandon program and the
techniques applied
JPT • JULY 2017
◗ a 16-well subsea plug-and-abandon
program
◗ infrastructure decommissioning
options and next steps
◗ consultations of stakeholders and
regulators
◗ Fairfield’s future plans beyond
Dunlin through its parent company,
Decom Energy
The Decommissioning Zone will also
be the main base for the OETV film crew
where many interviews with speakers,
exhibitors, and visitors will take place.
Inspire Programme
SPE’s Inspire Programme is a series
of activities, workshops, and lectures
specifically focused on supporting and
informing young people who are inter-
ested in joining the oil and gas indus-
try or just beginning their careers. By
engaging with local schools, univer-
sities, and young professionals, these
programs aim to encourage interest in
the industry and other STEM topics.
Developed by the Inspire Program Com-
mittee with support from the Young
Member Engagement Committee, the
program will have a visible presence at
Offshore Europe
◗ School Engagement Program.
The School Engagement
Program will bring students
from around Scotland in contact
with experienced and young
professionals who will share their
insights on various engineering
topics while also highlighting the
importance of focusing on science
and engineering during their school
years. Students will have the chance
to meet with various companies,
ask questions, and tour the
exhibition hall. The program will
take place on 6–7 September and
is invitation only.
◗ Young Member Programs.
University-level students and young
professionals will attend a series
of activities addressing skills and
concerns for those starting their
careers in the oil and gas industry.
Events include one-to-one meetings
with experienced professionals,
communication skills and CV
writing workshops, and keynote
lectures covering how the industry
will change and develop in the
years ahead. 2017 SPE President
Janeen Judah is also scheduled to
give a presentation on the future for
women in the industry.
◗ SPE Cares—Beach Cleaning at
the River Don. SPE Cares will
work with the Marine Conservation
Society, a UK-based environmental
protection charity, to arrange a
beach cleanup on the north side of
the River Don on 8 September.
◗ OPITO School Tour. Industry
leaders will discuss opportunities
in oil and gas with local school
pupils at an invitation-only event
on 8 September.
A full program is available at http://
www.offshore-europe.co.uk/.
Technology Zone/TechTrek
The Oil & Gas Technology Centre’s Tech-
nology Zone will present a series of tech-
nologies used in alternative sectors to
encourage industry adoption of new
products and processes such as robots,
composite materials, additive manufac-
turing, and augmented reality.
The Technology Zone will bring
together startup companies with small-
and medium-sized enterprises to show-
case their ideas and solutions. There will
be a series of short presentations fol-
lowed by a question-and-answer ses-
sion with the Technology Centre’s board
and leadership team on its priorities and
ways to get involved.
“Technology transfer from other
industries can offer major benefits to
the oil and gas energy, but they require
encouragement,” said Gareth Rapley,
SPE Offshore Europe exhibition direc-
tor. “The Technology Zone will ask ques-
tions of the way industry does things and
how new technology can be used to lower
costs, increase efficiency, and improve
recovery in this new reality for the oil and
gas sector.”
In addition, TechTrek will highlight
new technologies, productions, and
industry solutions launched within the
past year. Exhibitors at the event are invit-
ed to submit up to three products for con-
sideration with the final selection made
at the discretion of the organizers. JPT
49
 TALENT & TECHNOLOGY

Learnings From the Emerging Leaders

Alliance Conference
Yogashri Pradhan, Texas Oil and Gas Institute; Amber Sturrock, Chevron; and Maxim Kotenev, Sasol

SPE has actively participated in the al in a technical position, and an experi- Evaluators should take into account
Emerging Leaders Alliance (ELA) since enced professional in a management posi- the reviewee’s background and experi-
its inception. The alliance allows part- tion. Each illustrates the relevance and ence when conducting formal perfor-
nering societies to nominate delegates application of the event’s chosen leader- mance reviews. This can help customize
who come together to expand their lead- ship topics despite one’s career path. appraisals to the reviewee’s needs.
ership skills through a multiday event Susan Howes, vice president of SCA
using direct teaching, group work, and Performance Management Consulting, who has been involved with
self-study exercises. Attendees are pri- The performance management discus- recruiting petrotechnical talent and per-
marily early career professional society sions emphasized the importance of formance management of industry pro-
leaders from the eight engineering part- communication, active listening, and fessionals throughout her career, said
ner societies who are currently interest- observation to optimize performance “Based on the principle that every indi-
ed in improving their management skills. management. Industry professionals vidual is responsible for their own career
More than 80 SPE young professional should actively participate in performance management, a personalized view is
members have had the opportunity to management to enhance employee pro- best. However, it is important that your
attend the event so far. ductivity, placement, morale, and evalu- SMART [specific, measurable, attainable,
The 2016 ELA conference focused on a ations, whether they are providing eval- relevant, and time-limited] goals should
variety of topics, including performance uations or receiving them. When team be aligned with the annual goals of your
management, emotional quotient, and members provide their inputs on whether department and your business unit.
technical-to-management transitions. the appraisal steps accurately reflect their Applying a similar approach or stream-
The interviewees featured in this article periodic performance, both parties estab- lined workflow will provide consisten-
span a range of experience levels: a young lish a necessary discourse that ultimately cy for supervisors with multiple direct
professional, an experienced profession- improves their organization. reports, but each individual contributor
should set their own goals and measure
their progress toward achieving them.”
Yogashri Pradhan is a production engineer for the Texas Oil and ELA attendees engaged in sever-
Gas Institute, where she oversees various production and comple-
al exercises to learn how to make per-
tions engineering projects in the Permian Basin. She is the
formance management a success-
cofounder of SPE Cares, a global community service initiative
aimed to unite SPE members around the world through volun- ful endeavor for professionals with
teering. She holds a BS degree in petroleum engineering from the various experience levels—new hires,
University of Texas. experienced young professionals, and
experienced professionals.
Amber Sturrock, Chevron, has focused on subsea operations and ◗ New Hires. Being a relatively fresh
subsea brownfield expansion projects for almost a decade. She is
set of eyes and through their recent
managing editor of The Way Ahead, chair of the Offshore Tech-
nology Conference Networking Committee, and provides adjunct
education, new hires can provide
support of the Women In Energy initiative. Amber received the SPE valuable feedback to organizations.
International Young Member Outstanding Service Award in 2014 and Motivated new hires could bring
holds a BS in petroleum engineering from Louisiana State University. new ideas to organizations
and evaluate the most recent
Maxim Kotenev is a senior reservoir geoscientist with Sasol in
performance of recruiting talent.
London. He previously worked at Rosneft and Robertson CGG.
◗ Young professionals, or mid-
Kotenev is the coauthor of 15 technical papers. He holds a BSc
and  PhD in petroleum engineering (Ufa Petroleum University, career professionals, could obtain
Russia) and MSc in petroleum geoscience (University of Man- their management and leadership
chester, UK). skills when conducting formal
employee reviews and are typically

50 JPT • JULY 2017

 in positions of influence to improve
teams. They can also obtain a wealth
of information from experienced
professionals’ and peers’ experiences
within their organizations.
◗ Experienced professionals have
immense influence to foster growth
in companies due to their seasoned
leadership, whether in technical
or managerial roles. They have
the opportunity to synthesize
inputs from young professionals
and new hires while directing
them to optimize their value to the
organization.
“As a working professional, you should
begin each year with a performance man-
agement agreement with your supervisor
about what your key job responsibilities
will be for the year,” said Howes, adding
that “a performance management plan
should follow the SMART goal format
that is aligned with the annual goals of
your department and your business unit.”
Emotional Quotient
Having the awareness to gauge one’s
own emotions as well as those of others,
known as emotional quotient, provides
value not only in all aspects of life, but
especially in the workplace. Profession-
als will frequently work in teams, and
perceiving and responding to other team
members’ reactions are essential skills
to achieve team objectives and maintain
morale. Developing this emotional quo-
tient could come from professional train-
ing or experiences outside the workplace
cross-applied at work.
“I learned about the value of emotional
quotient in my college days as a math and
engineering tutor,” said Simeon Eburi, a
petroleum engineer at Chevron. “Students
would come for help with different states
of mind and I learned the importance of
understanding my emotions and others’
emotions for the overall success of the
tutoring session. Once I understood stu-
dents’ struggles with the subject, and their
mental and emotional states, I was able to
have more effective tutoring sessions. …
Connecting with others on a personal level
first before getting into problem solving
made me a more effective tutor.”
That experience has helped Eburi
connect with colleagues at work. “Col-
JPT • JULY 2017
leagues have found me to be person-
able, approachable, and easy to work
with because I could connect with others
on different levels and bring people’s best
qualities to the table,” Eburi said.
Emotional quotient is important even
in a technical sector. “Usually it is due
to a gap in emotional intelligence that a
professional’s progress is stymied, rather
than a shortfall in their technical ability,”
said Howes. “Professionals who dem-
onstrate a balance in the components
of emotional quotient are usually more
successful in organizations.”
Developing such soft skills as active
listening and learning about other per-
spectives could open opportunities at all
experience levels.
Technical to Management
Transition
The world of work is changing, resulting
in a much more fluid workplace. Oppor-
tunities for technical professionals to get
assignments as managers are abundant
and many are promoted because they are
recognized experts in their field and do
their jobs well. At the same time, this is
a career change that requires a different
skill set for the new assignment. Transi-
tion from technical expert to manager
could be challenging, especially without
prior management experience.
Technical experts are recognized as
problem solvers and intelligent. Orien-
tation necessary for effective manage-
ment is usually new to a technical pro-
fessional. Technical experts are usually
more involved in focused well-by-well
operation as opposed to more broad ini-
tiatives. Good managers are creative,
people-oriented, balanced, and good
team-workers. Professionals should seek
opportunities to balance technical and
managerial skills to favorably position
themselves for the transition.
“I was ready for the managerial role
the day when I joined the industry as a
young engineer,” said Robello Samuel,
chief technical advisor for Halliburton.
“I was very successful in managing rigs
and drilling operations. The technical
intricacies in the drilling operation and
quest to study more on the downhole
drilling tools moved my needle toward
research and development. Also, I want-
ed to translate my knowledge and experi-
ence to students who are ready to join at a
time when our knowledge base was erod-
ing and that made me switch to teaching
concurrently advanced drilling classes at
various universities.”
When moving from a technical to man-
agement role, professionals should com-
pile a list of skills to improve to be a bet-
ter manager for a team. New skills to
add will include delegation and moti-
vation. Discipline in the team is equally
vital. Professionals ought to find peer
mentors who made similar transitions
recently who could offer advice on how
to succeed in the new roles. New manag-
ers could have a steep learning curve to
earn rapport and motivate their teams
while understanding that they will be
judged on how well the team performs.
They must remember that their support
could improve the team’s performance
and develop relationships. Communica-
tion and conflict resolution are transfer-
rable skills from the technical to manage-
rial role, and will be integral and defining
for the new role.
Professionals must manage their
career paths and understand all the ben-
efits and difficulties of a managerial tran-
sition. Samuel shared his thoughts on
the decision-making process: “The best
course of action is to plan ahead early in
your career where you would like to be
and develop the required skills and traits
over the course of your career. Don’t get
hobbled by someone else’s recipe for
success; you need to have your own lock-
step regimented principles to achieve
your own objectives.” JPT
Acknowledgements
The authors would like to thank Susan
Howes, Robello Samuel, and Simeon
Eburi for their willingness to discuss
the chosen ELA topics. The authors
also acknowledge the help of Nii Ahele
Nunoo, drilling optimization engineer
for National Oilwell Varco and one of
the SPE ELA 2016 attendees, and James
Whitaker, SPE’s Young Member Pro-
grams Specialist.
For more information on the Emerging
Leaders Alliance program, go to
emergingleadersalliance.org.
51
 TECHNOLOGY FOCUS

Reservoir Simulation
William Bailey, SPE, Principal, Schlumberger

Benchmark cases are a good thing. They The gauntlet has been
provide a systematic means to compare
processes, technologies, and perfor- thrown down, and I know
mance that benefits companies, industry, that we, as an industry, have
and research organizations. One notable
benchmark was deliberated at a 2008
the wherewithal to pick it up.
SPE Applied Technology Workshop in the
picturesque Belgium town of Bruges. This
particular challenge involved history Petrobras as industrial partners. For this,
matching followed by forecast optimiza- we owe a debt of thanks. Issues identi-
tion. The goal was to maximize a 20-year fied in the original Bruges exercise have
net present value (NPV). The results were been addressed, and a more stream-
published as SPE-119094-PA in 2010. The lined benchmarking procedure has been
Bruges study has since become the basis defined. The ambition is no less broad
of numerous articles and simulation- and can be concisely stated as “field-
based studies and continues to be influ- development optimization under uncer-
ential to this day. tainty.” While Olympus has no history-
Now, almost 10 years later, a new matching component (which formed part
benchmark challenge has been set: Olym- of the Bruges challenge), we are now
pus. This has different, but no less chal- faced with geological uncertainties relat-
lenging, objectives, and the goal is, once ed to faulting, fault throws, barriers, and
again, to maximize a 20-year NPV subject channeling. The ensemble of 50 Olympus
to some stated constraints. reservoir models provides such geologi-
Olympus has been set by Integrated cal uncertainties that we must face when
System Approaches for Petroleum Pro- dealing with real field-development plan-
duction 2 (ISAPP-2), a research partner- ning studies.
ship between Delft University of Technol- The participant must decide how
ogy and the Netherlands Organization many producers and injectors to drill
for Applied Scientific Research (TNO), and where to drill them, along with
who originated the original Bruges their operational management during a
challenge, along with Eni, Statoil, and 20-year production forecast. All this, of
William Bailey, SPE, is a principal at Schlumberger-Doll Research
in Cambridge, Massachusetts. His primary technical interests lie
in reservoir engineering, multiphase flow in conduits, and opti-
mization of expensive functions. Bailey has contributed to 56
articles (27 of which are peer reviewed) and holds 10 patents. He
holds MEng and PhD degrees in petroleum engineering and an
MBA degree. Bailey has held various positions in SPE, including
as technical reviewer for various SPE journals and as a member
of the Reservoir Description and Dynamics Committee, and is the chair of the SPE
Books Development Committee. He is a member of the JPT Editorial Committee and
can be reached at wbailey@slb.com.
course, is addressed in the presence of
geological uncertainty.
One can imagine the results will vary
considerably in formulation, ambition,
and approach. I hope that this will not
be considered a winner-take-all competi-
tion because that goes against the spirit of
such a benchmark. The reward will ulti-
mately turn out to be increased insight
and appreciation of new approaches and
techniques that will be shared through-
out the industry.
So, I humbly request that you consid-
er participating in this challenge. Clear
and concise online material is available
from the ISAPP-2 website (www.isapp2.
com/optimization-challenge), which also
instructs you on how to download model
files. The gauntlet has been thrown down,
and I know that we, as an industry, have
the wherewithal to pick it up. JPT
Recommended additional reading
at OnePetro: www.onepetro.org.
SPE 182637 Probabilistic Uncertainty
Quantification of a Complex Field Using
Advanced Proxy-Based Methods and GPU-
Based Reservoir Simulation by N. Goodwin,
Essence Products and Services, et al.
SPE 181686 Effects of Confined Space on
Production From Tight Reservoirs by Brian
C. Stimpson, Texas A&M University, et al.
SPE 182636 Dynamic Mesh Adaptivity for
Immiscible Viscous Fingering by A. Adam,
Imperial College London, et al.
SPE 182718 A Massively Parallel
Semicoarsening Multigrid Linear Solver
on Multicore and Multi-GPU Architectures
by A.M. Manea, Stanford University, et al.
IPTC 18955 Building More-Realistic 3D
Facies-Indicator Models by Thomas Le
Blévec, Imperial College, et al.

52 JPT • JULY 2017

Numerical Modeling of Unstable Waterfloods
and Tertiary Polymer Floods for Viscous Oils

T he saturation distribution after

unstable waterflooding for highly
viscous oil may have a decisive effect
0.8

on the efficiency of tertiary polymer

0.7
flooding, in particular because of
hysteresis effects associated with oil
banking. This paper addresses the 0.6
PVI=0.19
challenges in modeling highly unstable
waterflooding, using both a conventional PVI=0.58 0.5
Darcy-type simulator and an adaptive
dynamic prenetwork model, by
comparing the simulated results with 0.4
experimental data including saturation
maps. It also highlights the important
0.3
role of relative permeability hysteresis
(a) (b) (c)
in the tertiary recovery of viscous oils
by polymer injection. Fig. 1—Simulated oil-saturation maps without hysteresis (a) and with hysteresis
(b) and experimental X-ray oil-saturation maps (c). PVI=pore volumes injected.
Introduction
Waterflooding into viscous oils can lead namic instabilities, polymer flooding can and 2,000 cp) and different flow patterns
to severe viscous fingering of the injected be implemented as a secondary or tertia- (linear and quarter five-spot). A first at-
water—a well-known type of instability ry recovery mechanism. tempt is made to reproduce qualitative-
in porous-media flow that is intrinsically This work considers three waterflood ly the waterflood X-ray images before
related to the viscosity contrast between and tertiary-polymer-flood experiments breakthrough time by use of 2D high-
the displaced fluid (oil) and the displac- conducted on Bentheimer sandstone resolution Darcy-type simulations with
ing fluid (water). A direct consequence of slabs with heavy oils with viscosity of ap- capillary pressure and relative permeabil-
this phenomenon is a significant bypass- proximately 2,000 and 7,000 cp, under ity curves inferred from a 3D quasistatic
ing of the oil in place and a low recovery nonwater-wet conditions. These experi- pore-network model. A second attempt
factor, as observed at both laboratory ments belong to a series of heavy-oil- uses an adaptive dynamic pore-network
scale and field scale. Viscous instabilities displacement experiments whose objec- model that is based on a 2D pore network
between two immiscible fluids are de- tive was to investigate the effect on oil constructed from the statistics of the 3D
pendent not only on the viscosity ratio recovery of various parameters, such as network. Finally, a simultaneous history
but also on the capillary number and oil viscosity, slab length, and injection matching of the tertiary polymer floods is
rock wettability. In particular, experi- pattern. Besides standard measurements conducted with a Darcy-type simulation
mental studies have shown that the effect of fluid production and differential pres- model initialized at the end of the water-
of viscous fingering strongly increases sures, an X-ray scanner was used to visu- flood. Results show that relative perme-
when the displacing fluid gets less wet- alize the spatial distribution of the fluids ability hysteresis during oil banking al-
ting than the displaced fluid (i.e., when as a function of time. lows a rapid propagation of the oil bank
going from imbibition to drainage). In A set of three experiments is consid- while the high incremental oil recovery at
order to reduce or eliminate hydrody- ered with different oil viscosities (7,000 the end of polymer injection is mostly be-
cause of the favorable mobility ratio.
The comparison of X-ray data and sim-
This article, written by Special Publications Editor Adam Wilson, contains highlights
ulated saturation maps (Fig. 1), consis-
of paper SPE 182638, “Numerical Modeling of Unstable Waterfloods and Tertiary tent with previous observations, shows
Polymer Floods For Highly Viscous Oils,” by R. de Loubens, SPE, G. Vaillant, that the characteristics of the oil bank
M.  Regaieg, J. Yang, A. Moncorgé, SPE, C. Fabbri, and G. Darche, SPE, Total, (saturation, velocity) are reproduced bet-
prepared for the 2017 SPE Reservoir Simulation Conference, Montgomery, Texas, USA, ter by the hysteresis model. The propa-
20–22 February. The paper has not been peer reviewed. gation of the polymer front is quite well-

For a limited time, the complete paper is free to SPE members at www.spe.org/jpt.

JPT • JULY 2017 53

 predicted by both models, although the
irregular shape is not reproduced. When
subtracting the X-ray image at the end
of waterflooding from the X-ray images
acquired during polymer flooding, it is
clear that a significant amount of oil is
driven into previously established water
channels. In the simulation model that
does not account for hysteresis, oil inva-
sion into water channels is clearly over-
estimated, notably before the arrival of
the oil bank, and the oil-bank saturation
is almost uniform. With the hysteresis
model, oil invasion remains limited and
the memory effects observed experimen-
tally are reproduced qualitatively. How-
ever, the saturation contrasts along pre-
viously established water channels after
propagation of the oil bank are not cap-
tured correctly.
By simply reducing the water mobility
during oil banking, the hysteresis model
allows the rapid propagation of the oil
bank observed experimentally and ac-
counts reasonably well for the oil in-
vasion into previously established water
channels. Hysteresis has a strong effect
on the oil-recovery profile, notably in
terms of breakthrough time for the oil
SPE Liquids-Rich Basins
Conference—North America
New Technology for Old Plays
13–14 September 2017
The Petroleum Club
Midland, Texas USA
54
bank. However, it should be noted that
the incremental oil recovery after poly-
mer breakthrough and stabilization of
the water cut, reaching approximately
40% of the original oil in place in both
cases, is mostly governed by the mo-
bility ratio and the shape of the rela-
tive permeability curves close to residual
oil saturation.
The numerical modeling of the un-
stable waterfloods was first attempted
with a conventional Darcy-type simula-
tor, using capillary pressure and rela-
tive permeability curves inferred from a
3D quasistatic pore-network model. On
the basis of realistic hypotheses concern-
ing the system wettability, a screening
study was performed to generate a large
set of relative permeability and oil/water
capillary pressure curves that were all
tested against experimental data by run-
ning 2D high-resolution Darcy-type sim-
ulations. Those were initialized using an
early-time X-ray image, thus imposing a
strongly favorable perturbation to trigger
the viscous fingers. Nevertheless, none of
the tested relative permeability and oil/
water capillary pressure functions could
match the measured waterflood data; in
particular, the water-breakthrough time
was strongly overestimated and the den-
dritic structure of the viscous fingers ob-
served qualitatively in the X-ray images
was not reproduced. Several hypotheses
can be formulated to explain the fail-
ure of the multiphase extension of Dar-
cy’s law in the present case, the most
convincing one being a violation of the
continuum and local capillary equilibri-
um assumptions upon which the concept
of a representative elementary volume
for the definition of relative permeabil-
ity and oil/water capillary pressure func-
tions is based.
In a second attempt, the unstable-
waterflood experiments were simulated
with an adaptive dynamic pore-network
model code on a representative 2D pore
network. In order to simulate the full-
scale geometry efficiently, the algorithm
adaptively chooses regions that require
a fully dynamic treatment, while treating
other regions as quasistatic. The simu-
lated saturation maps were found to be
in very good qualitative agreement with
the experimental data, although water-
breakthrough times were still overesti-
mated. This mismatch can be attributed
Register
Now!
www.spe.org/go/LRBC2017
The event will feature a mix of
presentations and formal papers and
focus on current operations practices
and development of tactics which
are driving today’s exploitation of
liquids-rich reservoirs. We encourage
engineers of all disciplines, operations
and management personnel, and all
within the geological fields to attend.
JPT • JULY 2017
to the limitations of 2D modeling in the accounting for a dependency upon local with oil banking may have a strong ef-
sense that, by allowing an additional di- capillary number), or inclusion of oil rel- fect on the breakthrough time of the oil
mension for the propagation of viscous ative permeability hysteresis, could be bank. Such a phenomenon is likely to
fingers, 3D modeling should lead to fast- used to improve the match. play an important role at larger scales,
er water breakthrough. If the limitations This history-matching exercise has and the interaction with heterogeneities
of the continuum Darcy-type formula- shown that the proposed hysteresis also could be investigated by 3D sector-
tion might be overcome by the use of model is quite robust with respect to flow model simulations with different perme-
an adaptive pore-network model, further pattern—here, linear vs. quarter five- ability distributions. Further work is re-
improvements of the computational per- spot—which represents a novel contri- quired to investigate the effect of the fluid
formance are still required to tackle real- bution compared with previous work. As distribution after unstable waterflood-
istic 3D networks within reasonable com- suggested by this laboratory-scale study, ing on the performance of tertiary poly-
putation time. the hysteresis phenomenon associated mer flooding. JPT
The history matching of the tertiary
polymer floods was conducted from the
end of the waterfloods; however, here,
only the two experiments with identical
oil viscosity but different flow patterns
were considered. In both experiments,
the mobility ratio was improved signifi-
cantly, leading to a quasistable polymer
front. The conventional polymer-flood
model based on a simple generalization of
Darcy’s law was applied to verify wheth-
er a multiexperiment history match
Fast, Flexible, Forward-Thinking
could be obtained. The first history-
matching strategy was simply based on
The Future of History Matching
the unsteady-state relative permeabili-
ties inferred from a 1D interpretation of
the waterflood experiment conducted in
a linear-flow configuration. The second
strategy used the same set of relative
permeabilities for increasing water sat-
urations, but hysteresis scanning curves
were added to the water relative perme-
ability to account for a reduction of water
mobility during oil banking.
As indicated by the history-matching
results, the oil-bank characteristics can
be reproduced correctly only by the hys-
teresis model. In this case, the overall
agreement with production and pressure
data is quite good, although certain as-
pects are not reproduced correctly, such
as the strong effect of chase water fin-
gering in the long-slab experiment. The
agreement with X-ray data is qualitatively
acceptable in terms of average front posi-
tions; however, certain features are not
captured well, such as the irregular shape
of the polymer front or the saturation
contrasts along previously established
water channels after propagation of the
oil bank. Nevertheless, it is quite remark-
able that a simultaneous history match of
this quality could be obtained with only
SenEx – Sensitivity Explorer
a small number of tuning parameters
(four in total). The authors suggest that HOT Reservoir Solutions • hotrs@reservoirsolutions.com • hoteng.com
a more-advanced hysteresis model (e.g.,

JPT • JULY 2017 55

 Method Addresses Difficulty of Modeling
Heterogeneous Carbonate Bimodal Rocks

B ecause of their heterogeneity,

carbonate reservoirs are
more difficult to model than clastic
erning parameters. Throughout this
work, a Brooks-Corey function is used
because it was found to describe uni-
Permeability Modeling
The measured permeability as a function
of porosity does not appear to follow a
reservoirs. The main difficulty comes modal mercury-injection capillary pres- clear trend, making permeability predic-
from the number of different pore sures (MICPs) satisfactorily. tion from porosity a challenging task.
types, compared with the typical For the examples discussed in this Instead of looking at the total poros-
interparticle pore type in clastics. By contribution (Fig. 1), microporosity ity, looking at the porosity connected
using saturation-height models (SHMs) (corresponding to the pore system ac- by pore throats of at least 2 µm allows
in combination with conventional cessible beyond pore throats of 2 µm a clear trend to emerge for both rock
permeability measurements, a new or less) forms between 40 and 70% of types.  The permeability appears to be
approach attempts to extract the the pore volume and is mostly located correlated to the large pores irrespective
fundamental properties of individual within the micritic grains. A significant of the rock type.
pore systems. The key idea centers difference between the two examples Following a binning exercise, two types
on identifying the governing pore shown in Figs.  1a and 1d is the relative of transforms can be fitted to the data.
systems from capillary pressure curves contribution of microporosity on aver- Both models describe the covered range
and permeability measurements. age equaling 0.53 for Rock Type 1 (RT1) satisfactorily. The difference between the
The approach results in the ability to and 0.75 for Rock Type 2 (RT2). For two approaches becomes significant out-
predict permeability continuously as a RT2, microporosity can be located in side of the sampled porosity range.
function of pore-system mixing ratios. the mud between the grains. A somewhat different approach can
be taken to predict permeability. Ear-
Introduction Capillary Pressure Curve Data lier work proposed that an SHM can be
Because of the presence of multiple pore Analysis and Modeling converted into permeability for multi-
types, carbonate rocks are difficult to The MICP modeling strategy relies on modal rocks. So, using the derived bi-
model. To account for their heteroge- treating the two pore systems as inde- modal SHM, the permeability of the
neity, carbonate rocks are often mod- pendent, fitting each one of the pore pore-systems microporosity and total-
eled using rock-typing schemes. Two systems first then looking for the best porosity mixture can be derived as a func-
particularly challenging properties are correlation to predict the Brooks- tion of total porosity or ratio of micro-
permeability and saturation. Although Corey parameters. porosity. Using this method ensures that
these properties have been recognized On the basis of the measured both pore systems add up to permeability
as being closely connected, little infor- individual-core-plug properties, the contribution in contrast to the approach
mation is available on how to handle standard deviation for both plug po- in which the microporosity is assumed to
them consistently. rosity and the relative ratio of micropo- be insignificant irrespective of the mix-
Even when permeability and SHMs rosity to total porosity was derived. By ture ratio. For the measured RT1 and RT2
satisfactorily describe the core mea- making the plots with the same funda- ranges, the microporosity influence on
surements, it is not trivial to ensure mental inputs (SHM, porosity, perme- permeability appears insignificant. So, at
their consistency in 3D models. One ability transform), the properties pre- what point does microporosity begin to
possible situation is building SHMs that dicted by the models can be highlighted affect flow?
impose consistency through the gov- and contrasted.
Discussion
This article, written by Special Publications Editor Adam Wilson, contains In the case of a bimodal rock as analyzed
in this paper (RT1 and RT2), a small per-
highlights of paper IPTC 18587, “Heterogeneous Carbonates: A Modeling Method
meability effect from microporosity is
Ensuring Consistency Between the Saturation-Height and Permeability Models
assessed. This conclusion has a signifi-
for Bimodal Rocks,” by Iulian N. Hulea, Harm Dijk, SPE, Danila Karnaukh, cant effect on the SHM modeling strat-
and Mirano Spalburg, Shell, prepared for the 2016 International Petroleum egy where the larger pores are modeled
Technology Conference, Bangkok, Thailand, 14–16 November. The paper has not as a function of total (plug) permeabil-
been peer reviewed. Copyright 2016 International Petroleum Technology Conference. ity, with the smaller pores following a
Reproduced by permission. porosity-only approach. The validity of

For a limited time, the complete paper is free to SPE members at www.spe.org/jpt.

56 JPT • JULY 2017


(a)
Pc _IFT1 [bar/(dynes/cm)]
500 µm
Pc _IFT1 [bar/(dynes/cm)]
(d)
500 µm
Fig. 1—Examples of the bimodal rock type analyzed composed of two slightly different entities shown in thin section—
RT1 (a) and RT2 (d)—mercury capillary pressures (b and e), and porosity/permeability (c and f). Air permeability for
RT2 is between 10 and 100 md, while air permeability for RT1 is from approximately 100 md to more than 1 darcy for
a porosity of approximately 30%. Pc=capillary pressure; Sw=water saturation.
the approach is confirmed by RT3 prop-
erties that are used as a blind test. The
limit separating the two pore systems
corresponds to 2 µm and is applied con-
sistently between permeability predic-
tion and SHM modeling.
At a fundamental level, this work sug-
gests that, on the basis of MICPs and
porosity/permeability data characteriz-
ing a bimodal rock,
◗ Fundamental pore-systems
properties can be extracted.
◗ Permeability can be predicted
on the basis of continuous pore-
systems mixing independent of
rock type.
An advantage of such an approach is
that the permeability is calculated as a
continuous function of constituents; it
not only allows the two systems to have
different porosities but also allows con-
tinuous variations in relative ratio of
microporosity to total porosity beyond
measured ranges. The relative ratio of
microporosity to total porosity can be
seen as a proxy for the connectivity of
the total-porosity pore system; the con-
nectivity of the pore system has already
been recognized as the main permeabil-
ity control factor. While the connectiv-
JPT • JULY 2017
10
(b)
1
0.1
0.01
0.001
0
10
(e)
1
0.1
0.01
0.001
0
0.5
Sw (vol/vol)
ity is the main controller, the pore sizes
(as suggested by the thin-section images
shown in Fig. 1) are not different enough
to explain the contrasting properties of
RT1 vs. RT2.
The modeling approach in this paper
might be a convenient route to include in
the model’s diagenetic overprints, such
as leaching, for example. Although the
effect of these diagenetic overprints on
permeability enhancement is obvious,
the effect on porosity is subtle. While
the maximum porosity sampled in RT1 is
32%, the corresponding number for RT3
is 2.5% lower at 29.5%. This observation
justifies the possible use of a permeability
multiplier in order to mimic this diage-
netic effect while the porosity is left basi-
cally unchanged.
Conclusions
Extracting fundamental pore-systems
properties can be achieved by combin-
ing capillary pressures and porosity/
permeability data. Treating RT2 in iso-
lation from RT1 is difficult to model
given the fact that the two modes are
not clearly separated. Bringing RT1 and
RT2 into the same model produces a ro-
bust SHM and permeability model. The
(c)
1,000
Air Permeability (md)
100
10
1,000 (f)
Air Permeability (md)
100
10
1 0.1 0.2 0.3
Core Porosity (vol/vol)
models will cover a wider range of sam-
pled properties compared with individu-
al rock types.
The traditional permeability vs. po-
rosity transforms are vulnerable to lim-
ited porosity ranges and predefined rock
types, for example; however, the perme-
ability from SHMs allows a continuous
modeling strategy without the artificial
breaking down of the data cloud into
rock types.
The key idea involves identifying the
governing pore systems from MICP and
permeability. This paper shows that a
body of rock that required two SHMs for
each pore system for each of the two rock
types can be simplified to just one SHM
per pore system (hence just two SHMs)
in a consistent manner between perme-
ability and the SHM. The fundamental
control in the approach is relative ratio
of microporosity to total porosity—the
amount of microporosity. This provides
the flexibility to model complex diage-
netic effects in three dimensions.
Finally, this paper shows that, by de-
coupling the two pore systems’ porosi-
ties, the permeability heterogeneity can
be explained as a function of both poros-
ity and microporosity content. JPT
57
 Transient Coupled Wellbore/Reservoir Model
Using a Dynamic IPR Function

C onventional inflow-performance-
relationship (IPR) models are used
in coupled wellbore/reservoir transient
consuming, and it is not always successful
or accurate. On the other hand, coupled
models developed for special cases, while
and steady state. Please see the complete
paper for the relevant equations.
The main assumption in these mod-
simulations, even if bottomhole-pressure still relying upon simulations, are faster els is that the bottomhole flowing pres-
conditions are assumed to be constant and provide reliable results but have no sure is constant; therefore, it is common
on the derivation of such IPR models. general application. practice in the oil industry to use these
The dynamic IPR model proposed in This paper introduces a new technique equations in classical nodal analysis, for
this paper not only captures the relevant of coupling wellbore and reservoir mod- example. However, it is equally common
reservoir dynamics from the well els where the simulation of the reservoir to use these IPRs to generate the reser-
perspective but also is computationally response to changes in the bottomhole voir response in time-dependent well-
more efficient than discretized models flowing pressure is obtained not by nu- bore models, where the bottomhole flow-
using hundreds of gridblocks to simulate merical methods but rather by solving ing pressure will vary significantly with
the near-wellbore region. the diffusivity equation using the Fourier time. In this scenario, most IPR models
transform. This mathematical tool gen- are no longer valid and generate unre-
Introduction erates time-dependent equations—the alistic reservoir responses to changes in
Traditionally, well deliverability is ob- dynamic IPR—which are able to provide wellbore conditions. Currently, coupling
tained by combining IPR and vertical- the reservoir response to any pressure reservoir and wellbore simulations is the
flow-performance (VFP) curves. This variation, regardless of how fast or slow only alternative to account for transient
method was first discussed in 1954 this change might be. effects in both the reservoir and the well-
and provides snapshots of the average- bore, but this can be computationally
bottomhole-flowing-pressure (Pwf) and Methods costly and can have limited application
average-oil-flow-rate (qo) relationships Conventional IPR models are algebra- in the lifetime of a well. This paper intro-
at given times in the life of the well. It ic equations correlating the bottom- duces a new alternative, the dynamic IPR.
fails, however, in accurately portraying hole flowing pressure and the flow rate
the transient behavior of these variables. through the production-zone completion. Dynamic IPR
Transient relationships are important Because most of these models rely on IPR models give flow rates for a fixed bot-
in the design and analysis of pressure- correlations and experimental-data fit, tomhole pressure, or vice versa, and are
transient tests, design of production tub- it is common practice in the industry to not able to capture reservoir dynamics
ing and artificial-lift systems, reservoir perform well tests periodically to correct (i.e., the interactions between Pwf and qo).
management, and estimating flow rates the IPR models according to the most- This paper postulates that it is pos-
from multiple producing zones. updated information on the fluids and sible to represent the dynamic relation-
Capturing the real behavior of these reservoir parameters. ship between Pwf and qo by taking into
variables requires coupling the reservoir The focus of this work is on homo- account their time derivatives.
model and wellbore model. General-use geneous, isotropic, circular-shaped, un- Contrary to the conventional IPR mod-
coupled models rely on running reservoir dersaturated oil reservoirs with a finite- els that rely on algebraic expressions,
simulations (accounting for near-wellbore diameter vertical well in the center. Thus, the dynamic IPR is a linear ordinary-
effects) and using the output of that run as the authors considered IPRs that corre- differential equation designed to capture
the input to the wellbore model, which, in spond to these same conditions. These all aspects of the reservoir behavior.
turn, will retrofit the reservoir simulator IPRs are defined for three different flow- In addition, as opposed to conventional
for a new run. This can be costly and time ing times: transient, pseudosteady state, reservoir-simulation systems, the dynam-
ic IPR is not a partial-differential equation
(no explicit spatial dependence); hence, it
This article, written by Special Publications Editor Adam Wilson, contains highlights
is less expensive computationally than the
of paper SPE 181691, “A Transient Coupled Wellbore/Reservoir Model Using a discretization of the hydraulic diffusivity
Dynamic IPR Function,” by A. Posenato Garcia, The University of Texas at Austin; equation in both time and space. Never-
P.  Cavalcanti de Sousa, Texas A&M University; and P.J. Waltrich, SPE, Louisiana theless, the information required to deter-
State University, prepared for the 2017 SPE Reservoir Simulation Conference, mine the parameters of the dynamic IPR
Montgomery, Texas, USA, 20–22 February. The paper has not been peer reviewed. still lies within the hydraulic diffusivity.

For a limited time, the complete paper is free to SPE members at www.spe.org/jpt.

58 JPT • JULY 2017

Case Studies
The complete paper presents four case
studies to illustrate the versatility of the
dynamic IPR. The idea behind this pro-
cedure is to prove that, once the dynamic
IPR for a particular reservoir is obtained,
it can be used to determine flow-rate
and bottomhole-flowing-pressure re-
lationships in any scenario as long as
fluid and reservoir properties remain the
same. The cases presented are for ho-
mogeneous, isotropic, circular-shaped,
undersaturated-oil reservoirs with a
finite-diameter vertical well in the center.
Cases 1 and 2 correspond to a simple
drawdown and a drawdown and build-
up, respectively. These two cases involve
nonperiodic functions and have sim-
ple analytical solutions—at least before
the pressure drop reaches the external
boundaries of the reservoir. These two
cases show that, even though periodic
functions were used to determine the co-
efficients of the dynamic IPR, it can by
equally applied to conditions in which
nonperiodic dynamics are observed.
Case 3 consists of a casing-heading
scenario. Here, the superposition of the
sinusoidal solutions at different fre-
quencies yields the analytical solution;
however, the input bottomhole flow-
ing pressure first has to be decomposed
into a sum of sinusoidal functions. The
results of this approach are compared
with the results from conventional finite-
difference calculations.
Finally, Case 4 couples the dynam-
ic IPR with a simple transient wellbore
model to evaluate the effect of the res-
ervoir dynamics in terms of measurable
quantities such as production flow rate
and wellbore and wellhead pressures.
This case study is presented to show that
the dynamic IPR is able to characterize
the wellbore/reservoir dynamics correct-
ly with minimal computational effort and
that the steady-state IPR presents impre-
cise results.
Conclusion
This work presents classic transient so-
lutions to the hydraulic diffusivity equa-
tions that are also relevant to transient
simulations of wells. The use of conven-
tional steady-state IPR models is demon-
strated to be inadequate in these cases. By
implicitly assuming an infinite transmis-
sibility, the steady-state IPR models sim-
JPT • JULY 2017
ply cannot capture the transient behavior
of the reservoir. Even though it is a com-
mon practice in the industry, the use of
a simplified reservoir model in transient
well simulations using commercial simu-
lators can have a significant influence on
the reliability of the estimated results.
An alternative to the conventional IPRs
is the direct coupling of a transient res-
ervoir model with a transient wellbore
model. This approach likely is more pre-
cise, but it is computationally more ex-
pensive and it increases the license cost
of the software. This work presents an
alternative approach through a dynam-
ic correlation that can capture any tran-
sient behavior of the reservoir.
The case studies show that the dynam-
ic IPR is able to estimate the reservoir re-
sponse reliably in classical cases such as
buildup and drawdown, where the maxi-
mum relative error was lower than 0.5%.
It is also applied in cases of practical rele-
vance to transient simulations such as se-
vere slugging and casing heading, where
the amplitude of the flow-rate oscillation
predicted by the conventional IPR was
almost 50% lower than the actual ampli-
tude of oscillation.
This paper also showed that the dy-
namic IPR can be coupled easily with
transient wellbore models and give reli-
able results, especially when compared
with results obtained through the ap-
plication of conventional steady-state
IPR models. A case study shows that the
casing-heading period increased by 40%
when the reservoir dynamics were incor-
porated into the transient simulation of
wells. More important than that, another
case showed that neglecting the reservoir
dynamics can lead one to conclude that
an oscillatory well is actually stable.
Another possible application of the
dynamic IPR is to antislugging-control-
system design. A simplified well model
is usually used in calculation of the con-
stants of the controller. The dynamic
IPR is already generated in a format suit-
able for control-system applications—
the transfer function. On the other hand,
there are more-complex situations that
were not addressed in this work, such
as multiphase flow within the reser-
voir and the dynamic formation of gas
and water cones. At least in principle, a
generic dynamic IPR could be applied in
those cases. JPT
59
 TECHNOLOGY FOCUS

Artificial Lift
Mike Berry, SPE, Independent Artificial-Lift Consultant

Two things stood out when I looked at As much as it pains me
this year’s abstracts. First, well over half
of the abstracts were related to electri- to admit it, by the book,
cal submersible pumps (ESPs). This is a gas lift should be the default
significant increase from the last cou-
ple of years. Second, there was a clutch
lift method for shale wells.
of artificial-lift-method-selection papers.
I have not seen many of those recent-
ly. Because this appears to be a topic of out. SPE 185128 discusses ways to oper-
interest at the moment, I chose papers ate an ESP below 800 psi. This has been
from that topic. They are good papers, a problem in multifractured horizontal
and it is a good general-interest topic, but wells. SPE 184216 discusses the effect of
selecting them meant that I had to leave horizontal-well multiphase-flow behav-
out more-specialized papers. ior on ESP operations. Long gas/liquid
I am primarily an ESP guy, so I have slugs are another problem I have been
to be cautious about bias when look- seeing. SPE 172736 discusses casing cor-
ing at papers. Biased or not, I thought rosion induced by stray currents from
several of the ESP-related papers stood weakened ESP-power-cable insulation.
Mike Berry, SPE, is an independent artificial-lift consultant. Now
approaching 40 years in the petroleum industry, he has worked
as a roustabout standing knee deep in crude and as a research
scientist testing state-of-the-art equipment in what was one of
the world’s premier multiphase-flow test loops. Berry has served
on numerous SPE committees and occasionally serves as a
PetroSkills instructor. He holds a BS degree in petroleum engi-
neering from the University of Oklahoma and is a licensed pro-
fessional engineer. Berry serves on the JPT Editorial Committee and can be reached
at michaelrberry@sbcglobal.net.
This is a topic of interest in the Middle
East but is largely ignored in the US.
I also admit to having a biased interest
in multifractured horizontal shale wells. I
thought SPE 180833 might be of interest
because it discusses optimization of oil-
well plunger lift. I have been wondering if
plunger lift might be a viable late-life lift
method for these wells. Last, SPE 180470
seemed like a solid gas lift optimization
paper. As much as it pains me to admit it,
by the book, gas lift should be the default
lift method for shale wells. JPT
Recommended additional reading
at OnePetro: www.onepetro.org.
SPE 184134 Feasibility Study of Artificial-
Lift Modes for a Deep Heavy-Oil Reservoir
by Prasanna Mali, KOC, et al.
SPE 185128 Breaking the 800-psi ESP PIP
Barrier: How a Proven Flow-Conditioning
Technology Can Dramatically Improve
ESP Performance in Horizontal Wells
by D.W. Kimery, Production Plus Energy
Services, et al.
SPE 184216 How To Diagnose and Solve
a Tripping ESP Caused by Multiphase-
Flow Behavior in a Horizontal Well
by P.M. Bruijnen, TAQA Energy, et al.

60 JPT • JULY 2017

Artificial-Lift-System Selection Guidelines
for Horizontal Gas Wells

M any different artificial-lift

systems (ALSs) are used in
horizontal gas wells. Basically, most
of them were adopted and evolved
from those used in oil wells. This
study presents a methodology to
define the most-adequate artificial-lift
technique on the basis of technical
limitations, a suitability coefficient
(based on an attributes table), and
economic analysis toward horizontal
well configuration.
Introduction
The objective of the ALS in gas wells
is to remove liquid from the wellbore,
which is referred to as deliquification.
The ALSs or deliquification techniques
can be categorized into two groups, pas-
sive systems and active systems. Pas-
sive systems take advantage of reser-
voir energy. These ALSs include velocity
strings, plunger lift, and foam lift. These
methods are used when the gas veloc-
ity is insufficient to carry liquid natu-
rally from the wellbore but sufficient
energy remains in the reservoir to op-
erate the method. The active systems
include sucker-rod pump, progressing-
cavity pump, electrical submersible
pump, jet pump, and wellhead compres-
sors. These methods add energy to the
system and are generally used when the
reservoir is depleted.
Recommended Guidelines
The development of the recommended
guidelines is based on physical limita-
tions of each ALS, well and field con-
straints, and a quantitative assessment
This article, written by Special Publications Editor Adam Wilson, contains highlights
of paper SPE 181229, “Defining the Artificial-Lift-System Selection Guidelines for
Horizontal Wells,” by J. Valbuena, E. Pereyra, SPE, and C. Sarica, SPE, The
University of Tulsa, prepared for the 2016 SPE North American Artificial Lift
Conference and Exhibition, The Woodlands, Texas, USA, 25–27 October. The paper
has not been peer reviewed.
of the attributes involved in the selec-
tion processes. Three main screenings
are performed in the decision-making
process. The first screening is based on
the ALS’s limitations, including depth,
flow-rate constraints, gas requirements,
pressure requirements, well-integrity
issues, and field conditions. The first
screening rules out the unsuitable meth-
ods and leaves possible methods. The
second screening is based on an attri-
bute table that assigns a score for each
attribute considered. In this screening,
an average suitability factor is calcu-
lated for each feasible artificial-lift op-
tion, and the artificial-lift methods are
ranked. The third screening is an eco-
nomic assessment of the methods being
evaluated. The net present value (NPV)
and other economic parameters are cal-
culated in this screening.
Technical Limitations of Methods.
Several parameters affect the ALS selec-
tion process, and they need to be con-
sidered to accomplish the main goal
of the first screening, which is to rule
out the unsuitable choices and provide
a list of remaining methods that can
be candidates for implementation. The
strategy is based on defining simple
rules to conduct the elimination pro-
cess. These rules include limitations
listed in typical-attribute tables, quick
calculations, common reasoning when
selecting an ALS, and typical “rules of
thumb” based on experience for specific
field conditions.
The processing module is based on a
collection of logic rules in the form of if/
then/else statements, such that the “if ”
part is referred to as the “condition” and
the “then” part is referred to as the fea-
sibility of an ALS. In this case, it will in-
dicate if the ALS is suitable for the con-
dition being evaluated.
Attribute Table. The main process in
the second screening is based on an
attribute table. The quantitative and
qualitative attributes are assessed by
assigning a suitability score to each, de-
pending on the effect they have on the
ALS performance. This process includes
identifying key attributes, building an
attribute matrix for technical compari-
son, defining simple attribute scoring
and weighting factors, assigning attri-
bute scoring, and ranking the ALSs by
calculating a suitability factor.
Attribute Identification. The key
attributes that influence ALS selection
for horizontal gas wells are identified
as follows.
For well conditions and geometry,
◗ Well depth—shallow (<7,500 ft)
or deep (≥7,500 ft)
◗ Wellbore deviation angle
◗ Lateral orientation
(toe up, toe down, and
hybrid or undulations)
◗ Presence of sump
◗ Maximum dogleg severity
◗ Casing size
◗ Dual completion
For production conditions,
◗ Liquid production—
high (≥200 B/D) or
low (<200 B/D)
◗ Bottomhole pressure (BHP)—
high (≥3,000 psi), medium
(2,000 psi<BHP<1,000 psi),
low (BHP≤1,000 psi)
◗ Gas/liquid ratio (GLR)—
high (GLR≥5,000 scf/STB)
or low (GLR<5,000 scf/STB)
◗ Fluid characteristic—high-
viscosity fluid

For a limited time, the complete paper is free to SPE members at www.spe.org/jpt.

JPT • JULY 2017 61

 ◗ Fluid characteristic—
sour (presence of H2S)
◗ Production-problem handling—
solids
◗ Production-problem handling—
corrosion
◗ Production-problem handling—
paraffin
◗ Production-problem handling—
scale
◗ Intermittent-flow handling
◗ Adaptability to reservoir depletion
For field conditions,
◗ Developed
◗ Remote
◗ Power condition (poor or good)
For cost and performance,
◗ Reliability
◗ Installation cost
◗ Operating cost
Twenty-four attributes were defined
in accordance with the most-influential
parameters and the reasoning of an
engineer when selecting the ALS.
Defining the Attribute Scoring and
Weighting Factors. A suitability coef-
ficient was assigned to each of the at-
tributes to build the base score. More-
over, a weighting factor was assigned
to each attribute. Both parameters are
then used to calculate the weighted geo-
metric mean. The weighting factors are
estimated values, indicating the rela-
tive importance or effect of each at-
tribute in the group compared with
the other attributes in the group. The
purpose of using weighting factors
is to establish priorities in the most-
influential factors in the overall perfor-
mance rating.
On the basis of published data of field
practices and ALS limitations assessed
through different literature sources, a
matrix with scores assigned to each of
the attributes has been proposed. The
weighting factors are assigned following
these guidelines:
◗ For all attributes, a value from
1 through 10 is assigned, which
provides the significance of the
attribute. A rating of 1 indicates
“not important at all in the
selection process,” 5 represents
that it is important, and 10
62
means it is “very important in the
selection process.”
◗ If an attribute should not be
considered, it is rated 0.
◗ Normalization to 100% shows the
contribution of the factor in the
overall average.
Suitability Factor. The weighted
geometric mean is proposed to calculate
the suitability factor. This has not been
used before in ALS selection processes.
The use of the weighted geometric
mean provides the following advantages:
◗ Increasing or decreasing the
relative importance of the
attributes introduces flexibility
in customizing the selection
process according to company
strategies and priorities.
◗ Increased sensitivity in ranking
of the options better reflects the
case when one attribute score is
equal to a very small value and
cannot be compensated for by
the other attributes. This gives
significance to small score values
in the overall rating.
Economic Analysis. The economic
analysis is a systematic approach with
the goal of identifying the most profit-
able ALS. This involves comparison of
the suitable options. There are many
economic indicators used to measure
the economic performance of a proj-
ect. The main economic-analysis tech-
niques considered for the evaluation are
monthly value, NPV, and payback pe-
riod. The artificial-lift methods in un-
conventional plays usually have short
life spans; therefore, the annual value
analysis is converted to a monthly analy-
sis to consider a more-appropriate time
scale. The cost, production, and eco-
nomic parameters are necessary input
for economic comparison. The evalu-
ation considers uncertainty through
range or scenario analysis: pessimistic,
most likely, and optimistic. The param-
eters with uncertainty include gas price,
natural-gas-liquids price, oil price, pro-
duction data, and cost data. The eco-
nomic analysis is fundamental in any
decision-making process, in which
the project profitability plays an im-
portant role.
After reviewing the feasibility and
functionality of the different ALSs, an
evaluation of the cost (capital and oper-
ational expenditures) and profitability
needs to be performed before selecting
the method.
Conclusions
The methodology presented here in-
corporates three stages to arrive at the
final ALS recommendation. The first
stage consists of the logical rules that
are based on field experience, engi-
neer’s expertise, and ALS limitations.
The second stage consists of attributes
affecting the ALS, with the correspond-
ing score and weight in an attribute
table. The final stage consists of an
economic evaluation.
The proposed methodology provides
the following benefits when screening for
the different deliquification techniques:
◗ A list of suitable ALS options that
can be used is created.
◗ Tracking and reporting
unsuitable options and reasons
for elimination allow the engineer
to analyze the current constraints
in the unsuitable methods and
modify the limits if necessary.
Additionally, new emerging
technologies may arise to extend
the current operating envelope
of the existing ALSs.
◗ Comparison and ranking among
the suitable methods can be
achieved through the attribute
technical matrix.
◗ The score assigned indicating
the applicability of the method
under the specific attribute can
be modified according to the
experience of the engineers. Also,
the relative importance of the
attributes can be modified by
providing weighting factors.
◗ Well profitability is one of the
major factors when selecting the
ALS. The economic comparison
is performed to provide insights
into which method would be
economically favorable. JPT
JPT • JULY 2017
Maximize long-term
production.
Our breakthrough innovations in hydraulic rod pumping systems, progressing
cavity pump systems, and automation controls/monitoring are changing the
way operators view their long-term production. Our artificial lift professionals
collaborate with you to properly evaluate well conditions and provide customized
solutions, helping you to optimize your production for the life of your wells.

Learn more about our packaged solutions at nov.com/artificiallift

© 2017 National Oilwell Varco | All Rights Reserved

 Artificial-Lift Selection Strategy To Maximize
Value of Unconventional Oil and Gas Assets

T he challenges of producing and

lifting unconventional oil and gas
economically is probably the most
daunting phase of unconventional oil
and gas development. The traditional
approach of lift selection is no longer
sufficient to manage unconventional
wells effectively, with high decline
rates between 40 and 80% in the first
year. This paper presents an artificial-
lift selection process to maximize
the value of unconventional oil and
gas assets.
Introduction
As the industry began developing un-
conventional oil and gas, the only op-
tions available for lift were the traditional
artificial-lift systems that were developed
for conventional oil and gas applications.
These were adopted and applied to un-
conventional wells without major chang-
es in technology or application. The re-
sult was obvious; lift systems that had
performed efficiently in various environ-
ments and well conditions for decades
struggled to work well in this new uncon-
ventional application.
This paper presents some of the les-
sons learned and a holistic approach to
artificial-lift selection strategy. The pre-
sentation includes a case study from the
Permian Delaware Basin unconvention-
al formations. The lift-evaluation pro-
cess, which considers a combination of
reservoir-fluid properties and well per-
formance, was used to analyze the effect
of various artificial-lift selection options
on well value.
The paper describes the three distinct
and important periods of unconventional-
This article, written by Special Publications Editor Adam Wilson, contains highlights
of paper SPE 181233, “Artificial-Lift Selection Strategy To Maximize Unconventional
Oil and Gas Assets Value,” by Peter Oyewole, SPE, BOPCO, prepared for the 2016 SPE
North American Artificial Lift Conference and Exhibition, The Woodlands, Texas,
USA, 25–27 October. The paper has not been peer reviewed.
well life and the effective artificial-lift sys-
tems applicable during each period. An
artificial-lift system is phased over the life
of the well on the basis of current and ex-
pected production-rate requirements and
lift-method capability.
Artificial-Lift Systems
in Permian Delaware Basin
Electrical Submersible Pumps (ESPs).
An industrial reward structure based
heavily on initial production rate and
cumulative production of the first 90
and 180 days, together with record
high oil prices, made ESP systems the
most favorable lift system in the basin.
ESP systems, with their ability to draw
down the well and deliver record pro-
duction rates, became the first lift sys-
tem installed in wells after the initial
well completion.
Fracturing sand and gas handling be-
came the primary root cause of most
ESP failures. The 3- to 6-month run
life was considered an acceptable fail-
ure frequency in the basin. The indus-
try responded with improved tech-
nology to mitigate both sand and
high-gas-production problems, which re-
sulted in some measurable success.
Rod-and-Beam Pump. The rod-and-
beam pump is the Greater Permian Ba-
sin’s most popular artificial-lift system.
The low normal lease operating expense
(NLOE), because of low failure costs
and low failure frequency, led to sever-
al beam-pump installations in the Dela-
ware Basin.
The common practice in the Delaware
Basin is to install beam pumps through a
lift conversion from another form of ar-
tificial lift that was initially installed as
part of the well completion. Intermittent
beam pumping is becoming a common
practice among some operators seeking
to save money by using beam pumps
from the beginning of the well life to the
end of the well life.
While beam pumps cannot han-
dle significant amounts of free gas like
other lift systems such as progressing-
cavity pumps and ESPs, the effect of
gas- and solid-related failure on NLOE
is not as significant as it is with other
lift systems.
The capability to produce at a high rate
at depth and depth limitations based on
the structural load of the system remain
the biggest constraints on beam-pump
application in the Delaware Basin.
Gas Lift. Gas lift is now the fastest-
growing lift system in the basin. This
is mainly because of the drive for lower
operational expenditures (OPEX) and
lease operating expense and because of
a better understanding of formation/
fluid behavior.
Initial reluctance to use gas lift was
driven by a lack of gas lift experience
in the basin. Additional concerns about
the capability of gas lift to provide the
desired drawdown and production rate,
coupled with the high initial cost of in-
frastructure, made gas lift the least favor-
able option during the earlier field devel-
opment in the basin.
Jet Pumps. Jet pumps were introduced
into the basin as a fracture-sand-clean-
out pump before the installation of a
longer artificial-lift system. The ability
of jet pumps to handle solids, their flex-
ible production rates, and their ease of
use and low-to-nonexistent cost of re-
placement made them an attractive lift
option for many operators in the basin.
As may be expected, the low OPEX and

For a limited time, the complete paper is free to SPE members at www.spe.org/jpt.

64 JPT • JULY 2017

 TM

Bigger, faster pinpoint completions: more stages,

more sand, higher rates—and no runaway fracs.
Multistage Unlimited® pinpoint fracturing delivers maximum SRV with far less risk of frac hits and
well bashing during infill and high-density field development, compared with plug-and-perf. You put
fracs where you want them, and you control how much sand you pump into each one, preventing
“super clusters” that can hurt production from offset wells. With repeatable frac placement from
well to well plus recorded downhole pressure/temperature data, you can truly optimize stage count
and spacing in a given formation with just a few wells.

More stages per well

NCS pinpoint fracturing delivers more individual entry points with far higher frac efficiency than
plug-and-perf. For example:
• 147 stages (Permian)
• 134 stages (Montney)
• 125 stages (Duvernay)
• 116 stages (Marcellus)
More sand per well
More intensity means pumping a lot more sand, and NCS Multistage pinpoint fracturing handles it:
• 15 million lb @1,711 lb/lateral ft (Duvernay)
• 14.9 million lb @1,825 lb/lateral ft (Montney)
• 14.2 million lb @1,973 lb/lateral ft (Permian)
Faster execution
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Technical Considerations
• Well Construction (Deviation,
Dogleg Severity, Direction, Size)
Surface
• Maximum and Minimum Fluid Considerations
Production at Normalized
• Drilling Islands
Depth (Depth vs. Rate) and Pads Relative
• Maximum Temperature Limit to Battery Relations
• Solid/Scale/Corrosion/ • Visibility/Noise
Paraffin Handling and
• Environmental Risk
Management
• Future Development
• Gas Handling Plan
• Power Fluid/Gas Lift • Operations/Operators
Availability and Battery
Handling
Fig. 1—Consideration categories for artificial-lift elimination and selection.
low-commodity-price environment are
expanding the use of jet pumps as a
longer-period lift choice in the basin.
The biggest setback for jet pumps is
their well-drawdown capability be-
cause of their high net positive suction
head requirement.
The current trend of using centrifugal
horizontal surface pumps with jet pumps,
rather than the traditional duplex/triplex
positive-displacement pumps, will im-
prove operational efficiency and assist in
optimizing jet-pump performance.
Plunger Lift. Plunger lift is not tradi-
tionally considered a feasible option for
high-volume oil wells, mainly because
plunger lift depends entirely on the nat-
ural reservoir energy of the formation.
Plunger lift is now becoming one of
the more economically viable options for
certain formations and certain periods of
the well life.
Artificial-Lift Elimination
and Selection
A wide range of artificial-lift systems are
available for unconventional oil and gas
application. The importance of select-
ing the best artificial-lift method and
strategy for the life of the well cannot
be overemphasized.
This paper groups all major factors to
consider in artificial-lift elimination and
selection into four main considerations,
for better understanding (Fig. 1),
◗ Technical
◗ Surface and infrastructure
◗ Drilling/reservoir/geological
and geophysical
◗ Economic
66
Drilling/Reservoir/
Geological and Geophysical
Considerations
• Toe Up/Down
• Drilling and Completion Economic
Considerations
• Reservoir Pressure
and Well Deliverability • Capital
• Fairway/Sweet Spots Expenditures
• Lease Boundaries • Operational
Expenditures
• Pressure/Volume/
• Internal Rate
Temperature—
Fluid Characteristics of Return/Net
Present Value
• Rock Properties
• Depletion Plan
Reservoir Characteristics
and Fluid Phase Behavior
This paper demonstrates how reservoir
and fluid properties are valuable data for
artificial-lift selection.
In the Delaware Basin, the geologi-
cal depositional environment and reser-
voir and fluid properties not only vary
by formation with depth, but strong re-
gional variation also is observed with
distance in the same formation. This pro-
vides an additional layer of complexi-
ty for artificial-lift strategy to maximize
the asset value. This is the main reason
that a single artificial-lift strategy is not
always effective.
Gas Lift Application
for Volatile Oil
Depending on the well completion,
volatile-oil shale and tight sands can flow
with both natural flow and with a high-
volume plunger lift for extended periods.
The only lift that is required to take the
well to its economic limit is gas lift.
Depletion Period
Maximum reservoir drawdown does not
necessarily lead to maximum oil pro-
duction. Free-gas production increases
significantly with reduced bottomhole
flowing pressure (BHFP). This results in
reduced oil production. This invariably
affects the asset estimated ultimate re-
covery (EUR).
The following three periods were de-
fined for shale and tight-sand volatile-oil
well life:
◗ Managed flowback—This is when
producers strive to avoid severe
drawdown during flowback and
load recovery that appears to impart
damage to the proppant pack. It is
driven mainly by rock properties
and proppant.
◗ Managed production (managed
drawdown)—This is when
producers strive to avoid severe
drawdown during production to
avoid gas damage. Large drawdown
during the production phase
subjects the near-wellbore region
to pressure drops that move the
near-wellbore region through the
bubblepoint. Loss of reserves is
a concern because of high gas/oil
ratio and a loss of drive energy.
Monitoring and controlling the
BHFP minimize the detrimental
effects of gas damage.
◗ Managed depletion—This is when
producers strive to deplete the
reservoir to maximize production.
It is a post-managed-production
phase, when the BHFP is low enough
and there is little risk of gas damage
in the reservoir.
Economic Consideration
Economics is a major factor in an
artificial-lift selection strategy that is fo-
cused on maximizing unconventional-
oil-and-gas-asset value. Lowering the
NLOE is extremely important during
periods of low commodity price. At high
oil prices, a high ESP NLOE, driven main-
ly by incorrect artificial-lift selection
strategy, can be easily masked.
Conclusion
This paper presents an artificial-lift se-
lection strategy that is concerned with
maximizing unconventional-oil-and-gas-
asset value in the prolific and varied for-
mations of the Permian Delaware Basin.
Traditional practice, where maximum
drawdown always equals maximum pro-
duction, is no longer true for all types of
formations. This does have a profound
and direct effect on the artificial-lift se-
lection strategy.
The EUR is now path-dependent in
volatile-oil production. No doubt, the
management and control of volatile-
oil production during the managed-
drawdown period is a major factor in the
artificial-lift selection strategy and in the
economic value of the life of the uncon-
ventional well. JPT
JPT • JULY 2017
Well-Performance Calculations
for Artificial-Lift Screening

H aving the means to evaluate

different forms of artificial lift
efficiently early in the planning cycle
significantly improves the ability to
influence other planning decisions
such as well count, well design, and
facility capacities and to realize the
potential benefits made available by
new artificial-lift technologies. This
paper focuses on a fit-for-purpose
methodology to evaluate well-
production performance for a wide
range of artificial-lift techniques.
Introduction
In a typical artificial-lift selection pro-
cess, the first stage, screening, involves
considering a wide range of artificial-
lift techniques and their suitability re-
garding fluid types, reservoir properties,
and operating environment. Once a short
list of feasible lift techniques is deter-
mined, a more-in-depth comparison of
these options is undertaken by forecast-
ing the performance over the life of the
field. Options for generating such fore-
casts range from simple spreadsheet cal-
culations to fully integrated asset models
coupling detailed reservoir, well, and fa-
cilities models. The choice of forecasting
technology depends largely on the field
size and complexity. The next step is to
perform an economic analysis to guide
the ultimate selection of the preferred lift
techniques. The economic analysis ac-
counts for the capital and operational ex-
penditure associated with each lift tech-
nique and uses the production profile to
generate net-present-value estimates.
The initial screening of artificial-lift
technologies involves consideration of
This article, written by Special Publications Editor Adam Wilson, contains highlights
of paper SPE 181344, “Well-Performance Calculations for Artificial-Lift Screening,”
by  P.A. Kefford, SPE, and M. Gaurav, Integrated Production Technologies,
prepared for the 2016 SPE Annual Technical Conference and Exhibition, Dubai,
26–28 September. The paper has not been peer reviewed.
multiple criteria that will have varying
degrees of significance depending on the
specific reservoir properties and operat-
ing environment. Common artificial-lift
screening criteria are
◗ Well productivity
◗ Operability
◗ Environmental effects
◗ Solids handling
◗ Well-design compatibility
◗ Flow assurance
◗ Reliability
◗ Gas handling
◗ Facilities requirements
◗ Power requirements
◗ Temperature limits
◗ Reservoir access
◗ Local knowledge/support
◗ New-technology risk
◗ Workover cost
This paper focuses on the screen-
ing criteria related to a well’s hydrau-
lic performance—namely, well produc-
tivity, gas-handling ability, and power
requirements. Understanding what pro-
duction rates are achievable with each
lift technique in a particular environ-
ment, and knowing the interdependency
these have with well count, well design,
and facility capacities, is key to maximiz-
ing asset value. Equally important, quan-
tifying how the free-gas volume enter-
ing artificial-lift equipment varies with
drawdown and depth, and how this re-
lates to the gas-handling capacity of the
artificial-lift equipment, is necessary to
ensure reliable operations without un-
duly constraining production. Finally,
the power requirements have a direct
effect on operational expenditures and,
therefore, are important to quantify.
Historically, two approaches have been
used to consider well hydraulic perfor-
mance in artificial-lift screening, each at
opposite ends of the technical-rigor/rule-
of-thumb spectrum.
◗ Depth-vs.-rate charts show how
the capacities of different lift
methods vary with depth. While
recognized as being intended for
guidance only, the use of such
charts and other rules of thumb can
become misleading, particularly
when considering operating
environments such as deepwater
subsea, heavy oil, gassy wells, or
slimhole completions.
◗ Commercially available hydraulic
modeling software can predict
well performance under artificial
lift and incorporate actual fluid
properties, completion design,
and operating environment.
However, the majority of such
software packages are intended
for detailed design of new
equipment or detailed analysis
and troubleshooting of existing
installations. To use such software
packages for screening purposes
requires the user first to design
and select the specific equipment,
particularly for the pumped
artificial-lift techniques. Given
the large number of sensitivities
typically required in artificial-lift
screening, having to perform a
detailed equipment design each
time is a burdensome distraction.
The method presented in this paper
uses hydraulic modeling software to
generate basic reservoir inflow curves,
tubing performance curves, and tables
of fluid properties. Then, using a fun-
damental understanding of the oper-
ating principles of each lift technique,
the flow capacity, head, power, and
gas-handling requirements are deter-
mined. These results are compared

For a limited time, the complete paper is free to SPE members at www.spe.org/jpt.

JPT • JULY 2017 67

 with the current capacities of avail-
able artificial-lift technology to deter-
mine the maximum well productivity in
each case.
Methodology
The two key steps for performing the
calculations are
◗ Understand the artificial-lift-
equipment capabilities.
◗ Calculate the well’s artificial-lift
requirements.
Artificial-Lift-Equipment Capabili-
ties. When considering the hydraulic
performance of an artificial-lift tech-
nique, it is important to understand
what the capabilities of the particular lift
technique are. For each lift technique,
the following metrics are important:
◗ Fluid-flow-rate capacity
◗ Gas-handling capacity
◗ Net positive suction head
◗ Head capacity
◗ Setting depth and dogleg severity
◗ Power capacity
◗ Efficiency
Fluid-Flow-Rate Capacity. For the
majority of lift techniques, the flow ca-
pacity is defined in terms of the total vol-
umetric fluid-flow rate at pump-suction
conditions. This maximum flow capacity
is related to the diameter of the pumping
equipment and, therefore, to the casing
or tubing size being proposed.
Gas-Handling Capacity. Typically,
the gas-handling capacity is defined
as the maximum free-gas fraction or
vapor/liquid ratio at pump-suction con-
ditions. Different artificial-lift tech-
niques have varying tolerances to free
gas. Gas separation, whereby free gas
is separated from the fluid at the pump
suction and takes an alternative flow
path to surface, might be an option for
certain lift techniques depending on the
well completion.
Net Positive Suction Head Required
(NPSHR). In wells with low bottom-
hole pressure, the NPSHR is an im-
portant consideration. As fluid moves
through a pump, there is typically an
initial drop in pressure as fluid is accel-
erated through the eye of an impeller,
across an inlet valve, or into the throat
of a jet pump, for example. If the fluid
falls below the vapor pressure, then cav-
itation can occur whereby small vapor
68
bubbles are formed that rapidly col-
lapse when the pressure increases again.
This collapse causes a shock wave that
can damage the internals of the pump-
ing equipment. The minimum pressure
difference required between the pump
inlet and the vapor pressure to prevent
cavitation is the NPSHR.
Head Capacity. The head rating of a
piece of lift equipment is directly relat-
ed to the maximum pressure differential
(discharge pressure minus suction pres-
sure) that it can achieve. Pump manufac-
turers typically include the head ratings
in their equipment catalogues.
Setting Depth and Dogleg Severity.
Generally speaking, from a hydraulic-
performance perspective, it is prefer-
able to position artificial-lift equipment
as close as possible to the reservoir be-
cause there the fluid will be at a higher
pressure, reducing the risk of gas inter-
ference. This also makes it possible to
achieve higher drawdown.
The casing scheme and the trajectory
of the well will influence the maximum
depth at which artificial-lift equipment
can be installed. Different lift tech-
niques have different clearance require-
ments and are able to pass through vary-
ing degrees of dogleg severity.
Power Capacity. For the electrical
downhole-motor-driven lift techniques,
the maximum shaft power that the motor
can supply is considered. The maximum
power rating of the motor is related to
the casing size and can become a con-
straint, particularly when dealing with
slimhole casing designs. Motor manu-
facturers provide catalogue data show-
ing what nameplate powers are available
for given housing diameters.
Surface-motor-driven lift techniques
have fewer space restrictions, so the
maximum horsepower requirement is
not a technological constraint in itself.
For the hydraulically driven lift tech-
niques, while the surface power require-
ments may be high, they are generally
not a constraint from a technological
point of view. What can cause a limita-
tion is the frictional pressure losses in-
volved in transferring the power fluid
from surface to the downhole location
and, for certain lift techniques, inef-
ficiencies involved in transferring en-
ergy from the power fluid to the reser-
voir fluid.
Efficiency. Calculating the power re-
quired by each lift technique requires
an understanding of the efficiency with
which the power supplied at surface is
converted to useful work in boosting the
pressure of the produced fluids. In order
to make a meaningful comparison be-
tween the power requirements of differ-
ent lift techniques, a common reference
point, at which the power is supplied,
must be considered. The efficiencies
used should incorporate estimates of
all losses from this common reference
point to the point at which the hydraulic
power is supplied to the reservoir fluid.
Well Artificial-Lift Requirements.
Once the capabilities of each lift tech-
nique are understood, the next step is
to determine what the actual well condi-
tions will be and what requirements will
be placed on the artificial-lift equipment.
These calculations can be approached
in two ways, although the underlying
methodology is the same in both cases.
◗ Maximum rate—Early in the
field- or well-planning cycle, it is
useful to understand the maximum
production rate achievable with
each lift technique.
◗ Target rate—During the various
planning phases, expected or
target rates are often considered
for the wells. In this situation, it
is more useful to determine if the
artificial-lift technique can achieve
that rate and what the associated
power requirements would be. This
also allows for a direct comparison
of the power requirements and
running costs.
In reality, some combination of the
maximum-rate and target-rate cal-
culations will be required during the
screening process. It is also important to
consider the anticipated life of well op-
erating conditions when determining lift
requirements. Forecast reservoir pres-
sure, inflow performance, water cut, and
gas/oil ratio should be used to determine
early-, mid-, and late-life operating con-
ditions as a minimum. This is considered
sufficient for screening purposes. Once a
short list of preferred lift techniques is
established, more-in-depth analysis is
recommended using coupled reservoir,
well, and facilities modeling to generate
production forecasts. JPT
JPT • JULY 2017
TECHNOLOGY FOCUS

New-Frontier Reservoirs I
Simon Chipperfield, SPE, Chief Production Engineer, Santos

Congratulations! You are one of a select
group to open your JPT and find this page!
For your effort, you deserve something
special, and I know what you want. In 5
minutes or less, you want to know how to
immediately make a step change in your
business and improve your own promo-
tion prospects in the process. You want
to know the key technologies you should
be implementing now. To develop your
longer-term strategy, you want an aware-
ness of future trends now. You don’t want
just anyone to tell you these answers; you
want it to come from the very best people
in the industry.
Consider your wish granted.
According to a poll of leaders with
more than 220 years of collective experi-
ence (see JPT online for names), the top
theme to have affected our industry in
the past 2 years is
◗ Fracture-Stimulation
Optimization—Given the high
cost, fracture design has gained
its fair share of scrutiny in the
Fracture-design
optimization, drilling
analytics to improve
rate of penetration, and
optimized operator vehicle
routing for field-staff and
plant optimization are just
a few areas that will be
transformed.
downturn. The results of statistical
production analysis have varied
by play. Fluid types and chemical
additives have been removed or
modified. Alternative proppants
have been evaluated and, in some
cases, trialed successfully outside
their previously specified safe-
performance ranges. Nothing
is sacred.
The top theme to affect our industry in
the next 2 years is predicted to be
◗ Intelligent Operations—The
industry is moving toward
increasing the level of automation
in all activities. All areas from
exploration to shipping will be
touched by these technologies.
This includes drones for safer,
demanned operations as well
as robotics on drilling rigs. The
other key area of automation
is predictive analytics, which
allows us to analyze multivariant
problems like never before.
Fracture-design optimization,
drilling analytics to improve rate
of penetration, and optimized
operator vehicle routing for
field-staff and plant optimization
are just a few areas that will
be transformed.
Now, wasn’t it worth the effort to
read this? JPT

Simon Chipperfield, SPE, is chief production engineer at Santos.
During the past 20 years, he has held positions in petroleum
engineering (drilling, completions, and stimulation), production
engineering, and reservoir engineering. Chipperfield previously
worked for Shell International Exploration and Production. He
was awarded the 2007 SPE Cedric K. Ferguson Medal.
Chipperfield has held a number of leadership positions and has
authored or coauthored more than 20 technical publications in
the areas of hydraulic fracturing, reservoir engineering, completion technology, and
sand control. He holds a petroleum engineering degree with honors from the
University of New South Wales. Chipperfield serves on the JPT Editorial Committee,
having served as the Hydraulic Fracturing feature editor from 2006 to 2011, and on
the SPE International Awards Committee, and he has served as a reviewer for SPE
Production & Operations. He can be reached at simon.chipperfield@santos.com.
Recommended additional reading
at OnePetro: www.onepetro.org.
SPE 182230 Issues and Challenges With
Controlling Large Drawdown in the First
Offshore Methane-Hydrate Production Test
by S. Sakurai, Japan Oil, Gas, and Metals
National Corporation, et al.
SPE 180399 Petrophysical Evaluation of
Natural-Gas Hydrates—North Slope, Alaska
by Douglas Hupp, Schlumberger, et al.
SPE 180818 Proppant Management: A
New Challenge To Develop Unconventional
Reservoirs in Argentina by J.C. Bonapace,
Halliburton

JPT • JULY 2017 69

 Enhancing Well Performance by
In-Stage Diversion in Unconventional Wells

D evelopments in nondamaging,
degradable diverters with
outstanding plugging efficiency
20,000
18,000 Test 24: Diverting Agent 1, 100 mL/min at 0.5 lbm/gal
Test 25: Diverting Agent 2, 100 mL/min at 0.5 lbm/gal
have opened new opportunities for 16,000

Pressure Drop (mbar)

protecting existing fractures by 14,000
plugging them and then fracturing
12,000
zones that were previously bypassed
because of inefficient zone coverage 10,000
or refracturing zones that were 8,000
inefficiently fractured initially. With
6,000
multistage operations becoming the
industry norm, operators need easily 4,000
deployable diversion technologies 2,000
that will protect previously stimulated 0
perforations and enable addition of 0 200 400 600 800 1000 1200 1400
new ones. This paper reviews several Volume (mL)
aspects of the use of in-stage diversion.
Fig. 1—Laboratory pressure-differential chart for diversion experiments with
Introduction 5-mm slot opening.
to Degradable Diverters
Polymer-based degradable diverters are The suite of degradable diverter prod- that can withstand differential pressures
temporary materials that are useful in ucts consists of polymers of varying up to and exceeding 8,000 psi and yet
some oil and gas operations, primarily chemistries that provide good block- can completely degrade in a controlled
to enable fluids to flow into areas of the ing and sealing when applied to the amount of time after the completion of
reservoir where fluid dynamics would well but that can also degrade across the intervention.
normally exclude them. While standard a wide temperature range to monomer Two major mechanisms control the
mechanical diverters work well for zonal species that will be nondamaging to success of the diversion process: jam-
isolation, they must be physically re- hydrocarbon-bearing formations. Diver- ming and plugging. In the first step of
moved from the well after the workover sion applications with degradation times the diversion process, a stable jammed
job has been completed. between a few hours and a few days in structure should be formed that is main-
Degradable diverters have performed temperatures from 80 to 325°F can be ly controlled by larger particles. This
an important role for many decades, but achieved by the selection of appropriate structure will form the base for an ef-
they cannot meet operational require- polymer chemistry. fective plugging mechanism. During
ments to stay intact for weeks or even Despite the unique design of these plugging, the remaining flow paths in
hours. Perforation balls or degradable various polymers, the success of apply- the jammed structure are minimized by
ball sealers will fall away from perfora- ing this technology in the field for use as smaller particles for efficient pressure
tions without continuous application of a temporary diverter is heavily depen- buildup and fluid diversion. A strong di-
pressure. Rock salt and flakes will dis- dent on sound engineering and geome- version plug can be created with the ma-
solve after a few hours. High tempera- chanical design that enables the creation terials at openings larger than the larg-
tures degrade the material faster. of a seal over existing flow pathways est particles. By use of modeling engines
and experimental and field verification,
different scenarios have been investi-
This article, written by JPT Technology Editor Chris Carpenter, contains highlights
gated and modeled to optimize factors
of paper SPE 180985, “Enhancing Well Performance by In-Stage Diversion in affecting diversion efficiency. The work
Unconventional Wells: Physics and Case Studies,” by F.E. Fragachán, M. Pordel flow optimizes engineering-design pa-
Shahri, D.M. Arnold, A.G. Babey, and C.S. Smith, Weatherford, prepared for rameters with data unique to each shale
the 2016 SPE Argentina Exploration and Production of Unconventional Resources play (e.g., depth, mechanical proper-
Symposium, Buenos Aires, 1–3 June. The paper has not been peer reviewed. ties, and fracture-breakdown pressures)

For a limited time, the complete paper is free to SPE members at www.spe.org/jpt.

70 JPT • JULY 2017

to provide robust plugging and jamming
guidelines for field operations.
Fig. 1 shows the relative differential
pressures that can be achieved in the
laboratory by use of a simple pressure
cell containing carbonate slots and a
high-performance liquid chromatogra-
phy pump. While flowing at a constant
rate of 100 mL/min with a loading of
only 0.5 lbm/gal of diverter, high differ-
entials across the diverter plug could be
achieved by use of a core with a 5-mm
opening. The figure also shows that the
differential-pressure response varies on
the basis of diverting-agent properties,
so it is imperative that good engineering
design be used to achieve the diversion
efficiency needed.
Successful diversion can be created by
understanding the jamming and plugging
mechanisms that occur at the entrance of
the flow path. The understanding of the
physics of this operation enables mod-
eling the system so as to use the mini-
mal amount of material to create a seal
that can withstand high pressure differ-
entials even at flow-path openings that
are three to five times the mean particle
size of the larger particles. Many com-
plex factors affect the efficiency of di-
version, and they can all be adjusted to
achieve minimal flow into highly conduc-
tive flow paths.
Different parameters affect the sta-
bility and success of the jamming pro-
cess. One of the approaches used to
optimize these parameters is investi-
gation of the probability of creating a
stable jammed structure. By use of cou-
pled computational-fluid-dynamics/
discrete-element-method (CFD/DEM)
simulations, the effect of different pa-
rameters on the probability of jamming
can be quantified, depending on spe-
cific job requirements. The probabil-
can be enhanced significantly by bet- simulations enable thorough assessment
ter understanding the underlying mech- and evaluation of diversion effectiveness.
anisms and optimizing the parameters
affecting the jamming stability and ef- Well-Performance
ficiency. This example shows that, on Optimization
the basis of engineered design, maxi- The candidate-selection process starts
mum pluggable perforation size can be with data collection, including wellbore-
increased to five times the mean parti- integrity information; well production
cle size. histories; completion details; drilling re-
Once the successful jammed structure ports; and geological, geomechanical,
is in place, it should be plugged for effi- and petrophysical logs. Data are then
cient pressure buildup and fluid diver- validated and quality checked, which
sion. On the basis of data specific to the could include a 60-day flow metering.
fracturing job, engineering-design pa- Next is the multistage screening pro-
rameters (e.g., particle concentration, cess, which checks a large number of
size distribution, mechanical properties, fractured wells for optimal operational
and fluid rheological properties) can be conditions and performance diagnostic
optimized to reach the pressure buildup plots. This initial, basic-diagnostic stage
required to effectively divert and create provides a qualitative assessment for po-
new fractures. This can be achieved by tential productivity increase and ensures
running coupled CFD/DEM simulations that the wells selected are in a condition
for actual-case scenarios or by use of to withstand the stage-isolation process.
operational guidelines generated on the In-treatment diversion, in which the
basis of different approaches. treatment design is divided into sched-
Simulations can capture particle/ uled portions, has become fundamen-
particle interaction and particle trans- tal for effective zone coverage and in-
port as well as fluid diversion and pres- creasing production. Plug-and-perforate
sure buildup required to design a suc- treatments are geared toward optimal
cessful diversion process; therefore, operational efficiency, but improper
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ity of jamming is calculated by use of
x +DYHPLQLPXPILIWHHQUHVHDUFKSXEOLFDWLRQVLQMRXUQDOVRILQWHUQDWLRQDOUHSXWH
the developed algorithm based on cou-
pled CFD/DEM simulations under differ-
ent scenarios. Different properties (e.g.,
particle shape, mechanical properties,
frictional properties, size distribution,
and flow rate) can be optimized to en-
hance the jamming probability for high-
er diversion efficiency.
Under nonoptimized design, success-
ful jamming can be achieved for an open-
ing size (i.e., perforation size) up to two
,PSDFWIDFWRU+(&7KRPDV5HXWHUUHFRJQL]HGLQ3HWUROHXP(QJLQHHULQJ)RUHLJQ
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times the mean particle size. Jamming 7HOHSKRQH)D[(PDLOGLULSQJ#DGPLQPXHWHGXSN

JPT • JULY 2017 71

 zonal coverage during treatment can lead
to a reduced per-perforation contribu-
tion to overall production.
With advancements in horizontal
drilling, there has been a dramatic shift
in the industry to an increased focus on
optimizing both operational and reser-
voir production efficiency. Although op-
erational efficiency has been improving
continually through the use of multiple
well pads and zipper-fracturing oper-
ations, production efficiency can still
be improved. In conventional vertical
wells, the entire stimulation treatment
often focuses on one interval, whereas
geometric planning of horizontal wells
often implements multiple perforation
clusters over a length of wellbore. Re-
search has shown that in all major US
shale basins, perforation has contribut-
ed between 60 and 80% to production,
meaning that there are understimulated
perforation clusters. Several studies in-
dicate that, within the major US shale
basins, 10 to 35% of clusters may be un-
productive. The reasons for this can in-
clude inadequate treatment design, im-
proper perforation scheme, excessive
interval length, or use of a geometric
perforation scheme rather than an en-
gineered approach. Increasing proppant
volume, shrinking the interval, or add-
ing more stages can increase costs or re-
duce efficiency, but degradable mechan-
ical diverters can maintain the current
design while increasing zonal coverage.
The success of a hydraulic-fracturing
operation depends on maximizing the
contact between the fracturing fluid and
intact rocks. To achieve this goal, existing
fluid paths must be efficiently plugged to
divert the fluid toward intact rock with
sufficient energy to create new fractures.
In addition, the plugging agent should
degrade over time from a solid state into
a clear, nondamaging liquid, which elim-
inates the need for mechanical remov-
al after intervention. Traditionally, fluid
diversion has been used to plug existing
perforations. This methodology also can
be applied to the fracturing operation,
to plug existing natural fluid paths, such
as fissures and natural fractures, and to
maximize fracturing-fluid contact with
the target rock.
A diversion case study in the Eagle
Ford shale is provided in the com-
plete paper.
Conclusions
The diverter materials and technol-
ogy described in the complete paper
are designed to achieve the highest di-
version efficiency and pressure build-
up. State-of-the-art numerical simula-
tions are used to better understand the
process controlling fluid diversion and
pressure buildup. These models are cal-
ibrated against experimental data and
field data to improve the design of diver-
sion jobs. The major mechanisms con-
trolling the success of the diversion pro-
cess are jamming and plugging. In the
first step of the diversion process, a sta-
ble jammed structure should be formed.
This structure will form the base for an
effective plugging mechanism. During
plugging, the existing flow paths in the
jammed structure are minimized for an
efficient fluid diversion. Use of modeling
engines enables investigating different
scenarios to optimize factors affecting
diversion efficiency. The work flow de-
scribed in the complete paper optimiz-
es engineering-design parameters with
data unique to each shale play, to provide
robust plugging and jamming guidelines
for field operations. JPT

SPE Artificial Lift Conference and

Exhibition—Americas
28–30 August 2018
The Waterway Marriott and Convention Center
The Woodlands, Texas, USA
www.spe.org/go/shareartificial-lift

Call for Papers is Now Open!

Submit your proposal by 24 October 2017

“Share your technical advancements and

gain exposure for your work among key
players in the E&P industry.”

Greg Stephenson, ConocoPhillips

Program Committee Chairperson

72 JPT • JULY 2017

Production Metrics To Predict Long-Term
Performance of Unconventional Wells

I n unconventional plays, comparing

the effect of different completion
designs or well-management strategies
5,000,000

4,500,000
R2=0.99

on well performance remains a

challenge because of the relatively 4,000,000

720-Day Gas Production (Mcf)

brief production history and lack
3,500,000
of long-term field analogs of these
plays. This study examines various 3,000,000
production durations as potential
candidates for reliable indicators of 2,500,000
well quality. The results show that
2,000,000
predictions of midterm performance
begin to be reliable only near 180 days 1,500,000
of cumulative well production. This
study used actual daily production data 1,000,000
to confirm that 30- and 90-day initial
500,000
production are not correlated strongly
to well actual performance in the 0
2-year range. 0 500,000 1,000,000 1,500,000 2,000,000 2,500,000 3,000,000

360-Day Gas Production (Mcf)

Introduction
It has been a common practice to quan-
Fig. 1—360-day production data plotted against 720-day gas production.
tify performance of unconventional
wells through their 30-day initial pro-
duction for purposes of information for volume of the first 30 days of nonzero this data set to test the accuracy of their
the media and in investor presentations. wellhead gas production for the well, assumptions, which were as follows:
The authors’ experience has been that whereas “condensate IP-90” refers to ◗ 30-day wellhead gas production
the 30-day initial production often does the total volume of the first 90 days is a poor predictor of long-term
not necessarily quantify a well’s poten- of nonzero condensate production for gas production.
tial. The goal of this study is to compare the well. ◗ 90-day wellhead gas
various production-duration periods to production is a more-accurate
identify which can most accurately fore- Study Description predictor of long-term
cast longer-term production. This study and Assumptions production than is 30-day
tests different production durations by A data set of 676 unconventional pro- gas production.
use of actual well-production history ducing wells for the Utica play was ◗ 180-day gas production is not
from the Utica play in Ohio, USA. The used to conduct this study. The authors significantly better than 90-day
term “IP-nnn” in the paper refers to began the study with several assump- gas production as a predictor of
a specific number of days of nonzero tions based on anecdotal observations long-term gas.
production for the well; for example, from the early days of production in the ◗ 360-day gas production and
“wellhead gas IP-30” refers to the total play, with the goal of eventually using 720-day gas production are
equivalent as gas-production-
quality indicators.
This article, written by JPT Technology Editor Chris Carpenter, contains highlights
◗ Correlations of 30-, 90-, and
of paper SPE 184817, “Optimal Production Metric To Predict Unconventional Wells’ 180-day condensate production
Long-Term Performance,” by Edward Ifejika, Bertrand De Cumont, and Nommie to long-term condensate
Kashani, Total, prepared for the 2017 SPE Hydraulic Fracturing Technology production are significantly
Conference and Exhibition, The Woodlands, Texas, USA, 24–26 January. The paper poorer than the equivalent for
has not been peer reviewed. gas production.

For a limited time, the complete paper is free to SPE members at www.spe.org/jpt.

JPT • JULY 2017 73

REGISTER NOW!
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Fig. 2—180-day production data plotted against 360- and 720-day condensate
production.
Methodology efficient (R2) for each comparison.
All 676 wells have at least 30 days of The process was carried out for both
production history; 669 have 90 days wellhead gas production and conden-
of production history, 628 have 180 sate production.
days of production history, 537 have
360 days of production history, and Results
247 have 720 days of production histo- As described in a series of figures includ-
ry. To test the previously described as- ed in the complete paper, it was dem-
sumptions, the authors applied a basic onstrated that 30 days is not a strong
regression-line technique to the pro- predictor for longer-term wellhead gas
duction data, testing each production- production (360 and 720 days). One-
interval predictive capacity against all hundred-and-eighty days is a significant-
longer intervals and plotting the re- ly better predictor of longer-term pro-
sults and generating a correlation co- duction than the 30- or the 90-day value.

#OTCBrasil
JPT • JULY 2017
 Fig. 1 shows an R2 value of 0.99, indicating that 360-day
gas production and 720-day gas production are essentially
equivalent as gas-production-quality indicators. Next, the
authors repeated this process with wellhead condensate pro-
duction in place of gas, starting with 30-day wellhead con-
densate plotted against 90-, 180-, 360-, and 720-day con-
densate production. They observed 30 vs. 90 days, 30 vs. 180
days, 30 vs. 360 days, and 30 vs. 720 days, providing respec-
tive R2 values of 0.93, 0.88, 0.87, and 0.86, which is a sub-
stantially better correlation than that observed for wellhead
gas at 30 days.
Further work revealed that, as before, the 90-day conden-
sate production is a better predictor of long-term condensate
production then the equivalent period is for wellhead gas.
Fig. 2 shows that 180 vs. 360 days provides an R2 value of
0.99, while 180 vs. 720 days provides a 0.98 correlation, in-
dicating that 180-day condensate production and 720-day
condensate production are essentially equivalent as conden-
sate production-quality indicators.
Furthermore, it was discovered that 360-day and
720-day condensate production are essentially equivalent as
condensate-production-quality indicators.

Summary
1. 30-day wellhead gas production is a poor predictor of
long-term gas production. Confirmed R2 coefficient is
very low for 360- and 720-day production.
2. 90-day wellhead gas production does not yield a
significantly higher R2 coefficient.
3. 180-day gas production is actually significantly
better than 90-day gas production as a predictor of
long-term gas.
4. 360-day gas production predicts 720-day gas
production effectively; a year of production gives a
reliable forecast of the midterm behavior of the well.
5. 30-, 90-, and 180-day condensate production correlate
better to longer-term condensate production than does
equivalent gas production for the same interval, an
unexpected result.

Conclusion
The industry widely uses IP-30 as an indicator of well per-
formance, for shale gas and tight oil wells. This study shows
that on Utica, 180-day wellhead gas production would be
recommended as a minimum interval for a reliable well-
performance assessment. The authors also believed that, be-
cause of the physical phenomena affecting condensate pro-
duction in the first 6 months of a well’s life on Utica (from
crossing dewpoint pressure to variable unchoking practices),
wellhead condensate production would be harder to predict
than wellhead gas. This was revealed to be untrue: 180-day
cumulative production is a reliable indicator of well perfor-
mance for both gas and condensate wellhead production
on Utica. JPT

JPT • JULY 2017

 Northern Territory Unconventional Resources:
A Regulatory Perspective

T he production of conventional
onshore oil and gas in Australia’s
Northern Territory began in 1983
from the Palm Valley Field (gas) in
the Amadeus Basin. Until 2010, the Potable Freshwater Aquifer
industry relied on conventional oil and
gas development technology, but, in Well Casing Strings and Cement
recent years, the focus of the industry
has shifted to unconventional-resource
exploration. This paper outlines the
key issues that must be addressed from
a regulatory perspective in regard
to the development of an onshore
Vertical Well Section
unconventional-gas industry in the Stratigraphical Layers
Northern Territory.

Introduction
In the Northern Territory, the Depart-
ment of Mines and Energy (DME) is the
agency responsible for regulating the Openhole Section
exploration and production of oil and Horizontal With Perforations for
Well Section Fracture Stimulation
gas and the administration of petroleum
tenures and petroleum pipelines on-
Hydrocarbon Zone
shore and in designated coastal waters
up to 3 nautical miles seaward from the
Territorial Sea Baseline of the Northern
Territory. The DME’s role is to ensure
that best-practice regulatory principles
are applied for the sustainable and safe Fig. 1—Profile of a typical horizontal hydraulically fractured well.
exploration and production of natural
resources in the Northern Territory. only in producing fields in the Amadeus the Dingo Field began producing gas. In
In the Northern Territory, hydraulic Basin. In the McArthur, Bonaparte, South 2015, 3,703 MMscf of gas was produced
fracturing has taken place since 1967, Georgina, and Pedirka Basins, explora- from the three fields.
mainly as a process to enhance hydrocar- tion activities are ongoing.
bon production from conventional res- Onshore Northern Territory oil pro- Current Northern Territory
ervoirs with vertical wells. Since 2011, duction comes from the Mereenie and Onshore Petroleum
however, hydraulic fracturing has been Surprise Fields. Until November 2015, Regulatory Framework
carried out during exploration for un- onshore gas production in the Northern The Northern Territory Petroleum Act
conventional hydrocarbons. Until now, Territory came from the Mereenie and is the principal existing legislation regu-
developmental drilling has taken place Palm Valley Fields. In December 2015, lating oil and gas exploration and pro-
duction. The DME currently uses the
Schedule of Onshore Petroleum Explora-
This article, written by JPT Technology Editor Chris Carpenter, contains highlights of
tion and Production Requirements (re-
paper SPE 182404, “Unconventional-Resources Exploration and Development in the ferred to here as the Schedule) to regu-
Northern Territory—Challenges From a Regulator’s Perspective,” by M. Rezazadeh, late petroleum activities; this guideline is
J. van Hattum, and D. Marozzi, Northern Territory Department of Mines and similar to that which Western Australia
Energy, prepared for the 2016 SPE Asia Pacific Oil and Gas Conference and Exhibition, previously used. In 2015, Western Aus-
Perth, Australia, 25–27 October. The paper has not been peer reviewed. tralia replaced the Schedule with its

For a limited time, the complete paper is free to SPE members at www.spe.org/jpt.

76 JPT • JULY 2017

Petroleum Resource Management and Administration Regula-
tions. The Schedule is used to provide requirements to regulate HOST
and audit all petroleum activities.
Before granting approval for specific activities, DME re-
fers all activities that trigger certain criteria to the Northern
Territory Environmental Protection Agency (NTEPA) for as-
sessment. At the same time, the operator needs to determine
whether a self-referral to the federal government for assess-
ment under the Environment Protection and Biodiversity Con-
servation Act is required.
Supported By
The operator must submit an Environment Management Plan
(EMP) and a technical work program. The DME’s assessment
and approval process includes assessment of the EMP and the
technical work program. The assessment of the EMPs is focused
on the comprehensive risk assessments and implementation of
management plans to mitigate the risks to “as low as reasonably
ONE GLOBAL INDUSTRY. ONE CITY.
practical” (ALARP). ONE MEETING PLACE.
Concurrent with the DME’s assessment of the technical work
program, the EMP and all other supporting documents are re-
ferred to the NTEPA for consideration. The NTEPA may deter-
mine that there is sufficient environmental risk and require the
lodgment of a notice of intent under the Environment Assess-
ment Act, thereby triggering a formal environmental-impact-
PROJECTED FOR ADIPEC 2017
assessment process.
Where project approval is granted to an operator, an EMP
summary must be lodged for public disclosure on DME’s web- 135,000 100,000+
site. Recently enacted Petroleum (Environment) Regulations Gross sqm Attendees
require the full EMP to be published.
After granting the exploration permit to the proponent, the 180+ 900+
proponent needs to perform several studies and activities to
Conference Sessions Speakers
explore the petroleum leads and prospects and prove the re-
sources within that permit.
28 2,200+
Seismic Surveys Country Pavilions Exhibiting Companies
2D- and 3D-seismic acquisitions are required to identify the
leads and prospects within the exploration permit. Proponents
are required to seek approval before conducting seismic sur- 10,000+ 22 15
veys. To obtain the approval, the proponent must provide rel- Conference Delegates NOCs IOCs
evant documents to the DME (these are outlined in the com-
plete paper).
WHY ADIPEC?
Well Construction
Purchasing Power - Over US $9 billion of contracts were
The integrity of wells is a primary focus of the DME’s assess-
signed during the 4 days of ADIPEC. With 81% of attendees
ment and compliance. The Schedule addresses well design, either a decision maker, purchaser or influencer, ADIPEC delivers
construction, standards and controls, and operational-safety real business opportunities.
and well-integrity requirements.
Knowledge Exchange - With over 900 speakers from around
As part of its formal assessment process, and before grant- the world and over 180 sessions, ADIPEC provides one of the
ing approval, the DME requires particular operational docu- most comprehensive conference programmes in the world.
ments to be submitted. These documents include the work
International Perspective - 22 NOCs, 15 IOCs and
program and several management plans including details re-
28 international country pavilions along with 2,200+ exhibiting
lating specifically to well designs, standards, control, and op- companies make ADIPEC unrivalled.
erational safety. The assessment process, which includes “re-
fusal triggers,” ensures that the operator addresses a number
of critical operational and well-integrity issues described in BOOK YOUR STAND NOW
the complete paper. adipec.com/bookastand
Fig. 1 is a typical illustration of a well drilled horizontally
into a shale formation; multiple stages of hydraulic fractur-
ing have been conducted through the horizontal section of the Host City Official Media Technical Conference ADIPEC
Partner Organiser Organised By

JPT • JULY 2017

 well. In accordance with DME require-
ments, the aquifers have to be isolated
by a minimum of three casing strings
cemented to surface where possible.
In some cases, operators then need to
gather geomechanical data in order to
have a better understanding of the res-
ervoir’s geomechanical behavior during
hydraulic-fracturing operations.
Hydraulic Fracturing
After completion of the well construc-
tion, the proponent may decide to stimu-
late the formation by conducting hydrau-
lic fracturing for the purpose of appraisal
of the target reservoir or for the en-
hancement of production. Proponents
must provide a series of requirements
when seeking approval for hydraulic-
fracturing operations; these require-
ments are detailed in the complete paper.
Well Suspensions,
Decommissioning,
and Rehabilitation
Proponents cannot commence suspen-
sion or decommissioning without an ap-
proval. The Schedule does not allow for
Technical Papers
The complete SPE technical
papers synopsized in this
issue are available free to
SPE members for 2 months
at www.spe.org/jpt.
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Subscriptions are USD 15
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78
temporary suspensions, and all suspen-
sions are to include the installation and
validation of a minimum of two perma-
nent barriers. Suspension applications
are categorized as either drilling sus-
pensions or production suspensions. A
drilling suspension is one in which the
well is to be suspended without a down-
hole completion installed; a production
suspension is one in which the well is to
be suspended with a downhole comple-
tion installed.
For decommissioning of a well, pro-
ponents must comply with established
requirements, including the installation
and validation of a minimum of two per-
manent downhole barriers.
Challenges From
a Regulator’s Perspective
In March 2016, the DME released a
draft  of its Petroleum (Environment)
Regulations. In keeping with the recom-
mendations and findings from a pre-
ceding study intended to inform the
draft, the new regulations embrace
a number of key principles that will
enable a sustainable unconventional-
resource industry in the Northern Ter-
ritory. First, all petroleum activities
must meet the principles of ecologi-
cally sustainable development. Second,
all risks and effects must be reduced to
a level that is ALARP and acceptable.
Finally, the proponent of the activity
must be able to demonstrate that effec-
tive engagement has taken place with
affected stakeholders.
While the principles and regulations
now provide a robust framework, there
remain a number of challenges to be
overcome to ensure that the framework
can deliver on its promise to regulate a
sustainable onshore oil and gas sector in
the Northern Territory.
The Evolution of Regulatory Systems.
A variety of problems can occur in the
evolution of regulatory practice. Some
jurisdictions may restrict or prohibit
unconventional-resource exploration
before the industry has a chance to de-
velop and the public has a chance to be-
come familiar with the industry. Con-
versely, unsustainable rapid expansion
of unconventional development may
overwhelm the applicable regulatory
system. When development of the reg-
ulatory system is too slow, the public
(and investors) may lose confidence in
the regulator’s ability to manage risks
and effects.
The experience in the Northern Ter-
ritory has seen considerable optimism
about resource potential. However, the
growth in exploration activity has not
been sustained because of the dramatic
decline in oil prices. The threat of a mor-
atorium on hydraulic fracturing has an-
ecdotally caused several explorationists
to curtail exploration programs or defer
them until further clarity is established
on the practice of hydraulic fracturing.
While a moratorium provides an op-
portunity to develop regulatory systems
and legislation, this can be successful
only if there is a driving vision support-
ed with the required resources to imple-
ment the necessary changes to sustain-
ably accommodate the new industry in
the future.
Implementing a Robust and Flexi-
ble Regulatory Framework That Pro-
vides Certainty. The Northern Terri-
tory has embarked on transforming
its petroleum legislation from pre-
scriptive rule-based regulation to risk-
based and outcome-focused regula-
tion. Objective-based regulation is
preferred over “prescriptive” regula-
tion because the focus is on outcomes
and understanding of risks, rather than
the specific process or approach taken
to achieve the outcome. Objective-
based regulation allows interest holders
to  adopt environmental-management
practices and technologies best suited
to individual-company circumstances,
activities, and locations, subject to dem-
onstrating that all environmental risks
and effects are reduced to a level that is
ALARP and acceptable.
Unconventional-resource develop-
ment has seen some very diverse poli-
cy approaches within different Austra-
lian states and the Northern Territory.
An attempt at harmonization was made
with the National Harmonized Regula-
tory Framework for Natural Gas for Coal
Seams by the Standing Council on Ener-
gy and Resources. However, the frame-
work adopts high-level principles that
would need to be adopted into legisla-
tion for each of the respective states to
become enforceable. JPT
JPT • JULY 2017
TECHNOLOGY FOCUS

CO2 Applications
Sunil Kokal, SPE, Principal Professional, Saudi Aramco

Carbon dioxide (CO2) continues to gar- Sequestration of CO2 poses ◗ Biological-activity enhancement
ner a lot of media and technical atten- ◗ Mineralization or permanent
tion—both good and bad. I want to look significant challenges. Each sequestration in cements
at the global big picture of CO2, more and every one of us How much of the emitted man-made
specifically its uses and applications. CO2 can be used with these applications?
Global emissions of CO2 result-
is obligated to do our small It is only a very small fraction—by some
ing from the use of fossil fuels amount part in ensuring that we estimates less than 1%.
to approximately 35 billion tons per address these challenges Another point to note is that, among
year. How much of this can we cap- these highlighted uses, CO2 enhanced
ture? How much can we store or seques- to the benefit of mankind. oil recovery (EOR) is by far the most
ter? And, perhaps the most important dominant application. We should all
question: How much will it cost and play our part in addressing and reduc-
who will pay? has to be CCUS where the “U” stands ing the challenges associated with the
It is the last question that needs some for “usage.” current applications and, most impor-
attention and discussion. Anyone con- So what are some of the current uses tantly, in developing cost-effective
versant with CO2 will quickly tell you of CO2? They include new CO2 use and sequestration tech-
that pure sequestration will be diffi- ◗ CO2 for enhanced oil and gas nologies. Sequestration of CO2 poses
cult and challenging because there recovery significant challenges. Each and every
are no revenues. It is an area that all ◗ Commercial use in the fertilizer, one of us is obligated to do our small
mankind should work on. In the short polymer, beverage, and liquid-fuel part in ensuring that we address these
term, carbon capture and storage (CCS) industries challenges to the benefit of mankind.
Some of the papers that follow address
these challenges through demonstra-
Sunil Kokal, SPE, is a principal professional (senior adviser) and a
tion projects. SPE is perfectly placed
focus-area champion of enhanced oil recovery on the Reservoir
Engineering Technology team at the EXPEC/Advanced Research
in terms of providing best practices
Center at Saudi Aramco in Dhahran, Saudi Arabia. Since joining and a platform for sharing the develop-
Aramco in 1993, he has been involved in applied research projects ment and deployment of these innova-
on enhanced/improved oil recovery, reservoir fluids, hydrocarbon tive technologies. JPT
phase behavior, crude-oil emulsions, and production-related chal-
lenges. Currently, Kokal is leading a group of scientists, engineers,
and technicians to develop a program for CO2 EOR and to conduct appropriate studies
and field demonstration projects. He has authored or coauthored more than 100 techni-
Recommended additional reading
cal papers and authored the chapters on Crude Oil Emulsions and Reservoir Fluid at OnePetro: www.onepetro.org.
Sampling for the revised edition of the SPE Petroleum Engineering Handbook (2006). IPTC 18843 Galvanizing Stakeholder
Kokal has served as associate editor for the Journal of Petroleum Science and Support for CSS by W. Maas, Shell, et al.
Engineering and SPE Reservoir Evaluation & Engineering. Earlier, he served on the SPE 185033 Permanently Sequester
Editorial Review Board of the Journal of Canadian Petroleum Technology. Kokal received Anthropogenic CO2—Through Hydraulic
the 2012 SPE DeGolyer Distinguished Service Medal, the 2011 SPE Distinguished Service Fracturing by M.M. Reynolds, Ferus,
Award, and the 2010 SPE Regional Technical Award for Reservoir Description and et al.
Dynamics, and he attained SPE Distinguished Member status in 2008 for his services to SPE/AFRC 2572863 Innovations in
the Society. He also served as an SPE Distinguished Lecturer during 2007–08. Kokal Carbon Dioxide Capture and Sequestration
holds a PhD degree in chemical engineering from the University of Calgary and a BS for Operations, Engineering, and
degree in chemical engineering from the Indian Institute of Technology. He is a member Technology by Simiyu E. Lilian, Kenyatta
of the JPT Editorial Committee and can be reached at sunil.kokal@aramco.com. University, et al.

JPT • JULY 2017 79

 Integrating Enhanced Oil Recovery and
Carbon Capture and Storage: Farnsworth Field

T he Southwest Partnership on
Carbon Sequestration (SWP) is
one of seven large-scale demonstration
projects sponsored by the US
Department of Energy. The SWP has a
goal of permanently sequestering more
than 1 million t of carbon dioxide (CO2)
in an active enhanced-oil-recovery
(EOR) project in a mature waterflood
in the Anadarko Basin. Goals of the
project include optimizing the balance
between EOR and storage, ensuring
storage permanence, and developing
best practices for carbon storage using
man-made CO2.
Introduction
The goal of the project is to inject at least
1 million t of CO2 into an active oil field
undergoing EOR over a 4- to 5-year peri-
od. All CO2 used in the project is anthro-
pogenic and would otherwise be vented
to the atmosphere. Much of this inject-
ed CO2 will be trapped permanently in
the subsurface. A primary objective is to
quantify CO2 storage and better under-
stand conditions and characteristics that
promote such storage.
Background. The project site is located
in the Anadarko Basin, a deep structural
basin approximately 70,000 sq miles in
size and primarily located in the north-
ern Texas panhandle and western Okla-
homa and extending into eastern Colo-
rado and western Kansas. The basin is a
mature oil-and-gas-production province
but without access to natural CO2 sourc-
es. These factors combine to make the
Anadarko an excellent region for com-
This article, written by JPT Technology Editor Chris Carpenter, contains highlights of
paper SPE 180408, “Integrating Enhanced-Oil-Recovery and Carbon-Capture-and-
Storage Projects: A Case Study From Farnsworth Field, Texas,” by Robert Balch, New
Mexico Institute of Mining and Technology, and Brian McPherson, University of
Utah, prepared for the 2016 SPE Western Regional Meeting, Anchorage, 23–26 May.
The paper has not been peer reviewed.
bined EOR and carbon-storage projects
using anthropogenic CO2.
The target formation for the CO2-
storage study addressed by this paper is
the oil-bearing upper Morrow sandstone,
informally designated the Morrow  B.
The Morrow Formation at Farnsworth
is an incised valley filled with coarse
sandstone that has produced more than
19  million bbl of oil and 44 Bcf of gas.
The formation lies at an average depth
of 7,750 ft and contains rock with per-
meability ranging from 10 to 500 md,
placing it well within the range needed
for CO2 injection and storage. Prelimi-
nary estimates of CO2-storage capacity of
the Morrow within the Farnsworth Unit
(FWU) exceed 25 million t.
To date, all CO2 has been delivered
from two anthropogenic sources. Much
of this injected CO2 is being trapped per-
manently in the subsurface in the Mor-
row B formation. The site operator is
injecting CO2 in the center well of five-
spot well patterns. The project started
with three initial patterns in December
2010, and more patterns are to be added
as CO2 is purchased and more recycled
CO2 becomes available. As of May 2015,
there were 13 operating patterns. The
plan is to have approximately 25 patterns
in operation.
Project Description. The project was
designed to cover three distinct phases
of research: preinjection, injection, and
post-injection. The preinjection study
compiled and analyzed existing data to
determine what additional data needed
to be collected and to establish baseline
data for monitoring injected-CO2 move-
ment in the subsurface and verifying
storage security at the surface.
During the injection period, primary
goals are data interpretation, quantifi-
cation, and evaluation of potential risks;
design and development of monitoring,
verification, and accounting (MVA) plans;
injection of approximately 190,000 t of
net CO2 each year until at least 1 million t
of net CO2 has been stored; and a contin-
uous evaluation of characterization and
production data to build and evolve de-
tailed geologic models to facilitate res-
ervoir simulation and reactive-transport
modeling and to evaluate caprock integ-
rity and security.
The post-injection period for the SWP
FWU project will commence after at least
1 million t of CO2 has been stored. Dur-
ing this period, SWP will continue to per-
form MVA activities and track CO2-plume
movement using in-place facilities and
wells; conduct simulation analysis and
risk-assessment activities; and make im-
provements to area and regional models,
as well as CO2-storage estimates.
The injection process being used by
the operator is referred to as a hybrid
water alternating with CO2-gas injection
(WAG). An initial “dry” slug (CO2 only) is
injected during the process followed by
a “wetter” combination of an increasing
ratio of water-to-CO2 WAG cycles as the
flood matures. The slug size may vary,
depending on breakthrough time and
gas production.
Methods
The SWP work plan was designed
to  establish surface- and subsurface-
monitoring baseline data in FWU pat-
terns that have not seen CO2, while
concurrently studying already-active
patterns to aid in tool calibration. Two
patterns in the west region and one in
the east region of FWU were selected
as focal points of the study. The SWP

For a limited time, the complete paper is free to SPE members at www.spe.org/jpt.

80 JPT • JULY 2017

 Fluid
Chemistry
Soil/
Eddy Flux Tracers H2O
Tracers Chemistry
Microseismic
Fig. 1—Direct monitoring strategy at the FWU, incorporating numerous surface
and subsurface approaches. USDW=underground source of drinking water.
has participated in drilling, logging, and
coring of three FWU wells and has fo-
cused on refining geologic interpreta-
tions from logs and core tests.
One ultimate goal of subsurface char-
acterization and interpretation is the de-
velopment of a 3D, fully coupled process
model of the injection site.
Monitoring, Verification, and Ac-
counting. The SWP designed a rigor-
ous direct monitoring strategy to track
both the injection operations and the be-
havior of the CO2 in the subsurface. The
MVA program is planned to provide data
needed to characterize injected CO2 and
existing reservoir fluids, including vol-
umes of CO2 injected, produced, and re-
cycled; to characterize fluid migration;
and to identify and quantify any poten-
tial release of CO2 or fluids from the res-
JPT • JULY 2017
CO2 Injection
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Potential
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Logging
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ervoir (Fig. 1). Deep monitoring efforts through SPE Speaker Source.
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Modeling and Simulation. The SWP
uses a suite of numerical simulators to
understand the complex coupled sub-
surface processes associated with inject-
ing CO2 and water into the FWU for EOR
and storage of CO2 but is also develop-
ing a scientific numerical simulator with
fully coupled multifluid hydrologic, heat-
transport, reactive-transport, and geo-
mechanics capabilities.

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Three simple steps will get
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Risk. The risk-management plan for the
Farnsworth deployment focuses on two
primary aspects: (1) programmatic risks,
including resource and management
risks that may impede project progress
or increase cost; and (2) sequestration
(technical) risks inherent to the scien-
tific and engineering objectives of moni-
toring storage in an active EOR project.
A detailed risk-management plan was
developed, including an effective work-
flow process. The initial risk registry is
updated continually to include poten-
tial risks for all major activities of the
FWU project.
Discussion
Early project goals included develop-
ing a basic understanding of site and re-
gional geology, establishing fluid chem-
istries, and determining the best sites
for surface-monitoring activities. Addi-
tional preinjection planning determined
upon which future CO2-injection pat-
terns the project would focus. In sup-
port of these goals, 98 surface CO2-flux
locations were selected and had baseline
data collected. The SWP drilled three
characterization wells and established
optimal locations for monitoring wells
in which to install a passive borehole-
seismic array, distributed-temperature
arrays, and downhole pressure and tem-
perature sensors.
An initial reservoir model was devel-
oped from existing log and core data
and was used to perform preliminary
flow simulations for the EOR compo-
nent of the project and to allow for an
initial estimate of technical risk. Legacy
core and log data for the FWU were eval-
uated for the textural, sedimentological,
and fracture-related features in the unit.
In total, three wells were drilled and
more than 750 total ft of core was col-
lected from the Morrow B, its primary
seal, and overlying secondary reservoir
and seal units.
Wells 13-10A, 13-14, and 32-08
were selected for detailed studies.
Well 13-10A was drilled as a new in-
jector, leaving Well 13-10 to be repur-
posed as a dedicated monitoring well
with a 16-level microseismic array, and a
distributed-temperature survey (DTS)
for real-time temperature surveys from
surface to reservoir. Bottomhole sen-
sors for temperature and pressure were
installed in the monitoring well below
a packer and in the reservoir interval,
only 500  ft from the new 13-10A injec-
tion well. Additional DTS and downhole
sensors were installed in injector Well
13-10A, for the initial CO2 WAG cycle.
Surface monitoring for CO2 seepage
was implemented by establishing 15
groundwater sampling sites in and sur-
rounding FWU, and soil CO2-flux mea-
surements were made at 98 sites. Data
from both site types were collected
monthly during the first year and quar-
terly after that.
SWP has tracked fluid injection and
production for active injectors and pro-
ducers in the FWU since the inception of
CO2 injection. As of 31 December 2015,
415 053 t of CO2 had been purchased and
injected, with 294 532 t of CO2 produced
since 1 October 2013 in the FWU. Of the
produced CO2, 266 127 t have been re-
injected, for a net storage since 1 Octo-
ber 2013 of 386 695 t of CO2.
Collected core and sampled reser-
voir fluids were used to perform two-
phase relative permeability studies for
water/CO2, water/brine, and brine/
CO2 systems.
Each project year, a new iteration of
the  geologic model is made and then
subsequently used for a variety of
simulation studies. Primary and sec-
ondary production has been history
matched at FWU using a black-oil simu-
lator, and a history match of the first 4
years of CO2 injection/production was
also accomplished.
A new risk-assessment methodol-
ogy for subsurface carbon storage—
combining polynomial-chaos-expansion
with response-surface methods to
quantify uncertainty and generate
probability-density forecasts for risks
specific to carbon sequestration—was
generated specifically for FWU.
A key component of the overall study
is to account for the ultimate fate of in-
jected CO2, because the goal is to se-
quester carbon permanently during the
EOR process. Overall, more than 93%
of purchased CO2 has been stored. More
than 894 231 t of CO2 injected as part
of the EOR effort in the FWU has been
monitored and tracked. Of the volume
injected, a total of 827 211 t remains in
the formation as stored CO2, through
December 2015. JPT
JPT • JULY 2017
First CO2-Enhanced-Oil-Recovery
Demonstration Project in Saudi Arabia

A n operator has designed a

demonstration project for carbon
dioxide (CO2) enhanced oil recovery
imum miscibility pressure of the crude
with CO2, swelling and fluid properties of
CO2/oil mixtures, asphaltene precipitation
Area 1 Area 2

(EOR) and has implemented it in one
of its fields. The main objectives of the
demonstration project are estimation
of sequestered CO2, determination of
incremental oil recovery, and evaluating
onset and bulk asphaltene deposition, and
oil-recovery potential by use of coreflood-
ing studies. It must be emphasized that
these experiments need to be conducted
at reservoir conditions with live reservoir Area 3

the risks and uncertainties involved, fluids and supercritical CO2; otherwise,
including migration of CO2 within the the data have limited value at best.
reservoir and operational concerns. It
Fig. 1—Streamline pattern in the field
is estimated that approximately 40% Simulation Studies. The reservoir se-
selected for pilot location.
of the injected CO2 will be sequestered lected for CO2 injection is a Jurassic car-
permanently in the reservoir. bonate reservoir, and the area selected is A 17-layer, dual-porosity, dual-
in a downflank, flooded part of the field. permeability (DPDP) black-oil dynam-
Project Design The selected area has been on peripheral ic-simulation model was used initially.
Conceptual Road Map and Screening water injection for more than 50 years The black-oil dynamic model had been
Studies. Given the relatively light nature and has been well-waterflooded because history matched to past performance of
of crude oils and generally high reservoir of its proximity to the peripheral injec- the waterflood. Because CO2-flood pre-
pressures in Saudi Arabia, CO2 injection tors. Approximately 40 MMscf/D of rela- dictions require compositional simula-
is a viable recovery method, especially in tively pure CO2 was available from a gas tions, the black-oil model was convert-
flooded reservoirs. An initial screening plant approximately 85 km from the pilot ed to its DPDP-compositional-model
highlighted several good candidates for site. The slimtube data show that the equivalent. A refinement in the vertical
CO2 injection. A mature, waterflooded minimum miscibility pressure is lower layers was necessary to better describe
part of a large oil field with a carbonate than the reservoir pressure, indicating CO2 performance in the reservoir. The
reservoir was selected as a candidate for that the CO2 will develop a miscible dis- 17-layer model, therefore, was refined
CO2 injection. Further studies were con- placement in the reservoir at current res- to a 37-layer model and, ultimately, to a
ducted for the candidate reservoir that ervoir pressures. The main objectives of 289-layer model.
included laboratory, feasibility, and de- the simulation study were as follows: Potential areas for a CO2-flood pilot test
tailed reservoir-simulation studies. This ◗ Carry out screening and mechanistic were selected from a streamline pattern of
reservoir has been flooded for decades in studies and find areas suitable for a the current waterflood for the entire field.
a peripheral water-injection mode, and CO2-injection pilot. From the streamline pattern, three ma-
considerable reservoir and production ◗ Assess the amount of CO2 sequestered ture waterflooded areas were selected for
data were available. over the period of the pilot testing. CO2-flood evaluation and consideration
◗ Assess incremental oil recoveries as potential pilot-test sites. The stream-
Laboratory Studies. Two sets of experi- associated with different modes of line pattern and the three areas selected
mental studies must be conducted for any CO2 injection. are shown in Fig. 1. Area  1 appeared to
given CO2-EOR prospect: fluid/fluid and ◗ Optimize the pilot design within be influenced very little by fractures. Area
fluid/rock interactions. The important the reservoir and operational 2 seemed to be influenced moderately by
laboratory experiments include the min- constraints. fractures, and Area 3 appeared to be influ-
enced significantly by fractures.
A large number of simulation runs
This article, written by JPT Technology Editor Chris Carpenter, contains highlights
were performed to understand the fac-
of paper SPE 181729, “Design and Implementation of the First CO2-Enhanced-Oil- tors influencing the amount of CO2 that
Recovery Demonstration Project in Saudi Arabia,” by Sunil Kokal, SPE, Modiu could be stored, the magnitude of incre-
Sanni, SPE, and Almohannad Alhashboul, SPE, Saudi Aramco, prepared for the mental oil recovery, and the timing of the
2016 SPE Annual Technical Conference and Exhibition, Dubai, 26–28 September. The incremental recovery. Simulations were
paper has not been peer reviewed. also run to examine the potential for im-

For a limited time, the complete paper is free to SPE members at www.spe.org/jpt.

JPT • JULY 2017 83

 proved waterflooding through infill drill-
ing. All simulations assumed that a max-
imum of 40 MMscf/D of CO2 would be
available. The simulations showed that
the amount of CO2 sequestered and a
reasonable expectation for incremental
oil recovery for an expanded CO2 flood
would be best in Area 1.
Pilot Design. On the basis of the simula-
tion sensitivity study, a single large CO2-
injection pilot was recommended to be
located downdip in Area 1. This test is de-
signed to obtain definitive results within
1 to 3 years, demonstrating the amount of
CO2 sequestered and the amount of mis-
cible oil recovery by CO2 injection. There
are four injectors, with four producers
placed updip approximately 2,000 ft
from the injectors. A line-drive injection
pattern was selected because the water
injection in the field has been peripher-
al. CO2 would be injected at a maximum
total rate of 40 MMscf/D by two of the
injectors, while water was to be injected
by the other two wells. After 1 month,
the injection would be alternated. In ad-
dition, two observation wells were lo-
cated between the second injector and its
corresponding producer.
This pilot was designed to address
the following risks as identified in the
project-risk register:
◗ The CO2-plume movement within
the reservoir and its containment
◗ The amount of CO2 that will be
stored in the reservoir
◗ The extent to which gravity
segregation will occur in a line-
drive flood
◗ The volume of oil that can be
contacted, displaced, and produced
◗ Well injectivity of CO2 and water
during water-alternating-gas
(WAG) injection
Produced-Fluids Handling. The CO2
is injected by four new injectors in a
WAG mode: two wells on water injection
and two wells on CO2 injection. The pro-
duced fluids from the four new producers
are routed to a gas/oil-separation plant
through a common trunk line. To keep
the CO2-produced fluids separate from
the wider-field produced oil and water,
a standalone high-pressure production
trap was designed specifically for the
project and installed.
84
Injectors and Producers. The four injec-
tors and four producers were designed
as fit-for-purpose wells for the project.
The carbon-steel and cased-hole injec-
tors were perforated at the bottom of
the reservoir. The carbon-steel produc-
ers were epoxy coated for corrosion pro-
tection, and they were perforated at the
top of the formation. Of the two observa-
tion wells, the first was open hole and the
second was completely cased with non-
metallic completions. Each of the injec-
tors was installed with a Coriolis meter,
and the producers were fitted with a mul-
tiphase flowmeter at the wellhead.
Monitoring and Surveillance
The main objectives of the monitoring-
and-surveillance (M&S) program are to
obtain requisite data to evaluate the per-
formance of the pilot project and sat-
isfy project key objectives, measure the
amount of CO2 sequestered, monitor pre-
and post-CO2 remaining-oil saturations,
understand the recovery mechanisms,
track the CO2 plume, monitor inadver-
tent out-of-zone CO2 leakage and well-
integrity problems, and understand op-
erational challenges.
The data-acquisition plan consists of
◗ Base logs for initial reservoir
characterization
◗ Routine M&S tools and tests for
time-lapse monitoring (discussed
in detail in the complete paper)
◗ Emerging tools and methods
Base Logs for Reservoir Characteriza-
tion. Base logs for optimal preinjection
reservoir characterization were acquired
in all the wells. Triple-combination (re-
sistivity, density, and neutron) logs,
image logs, formation-pressure data,
and cement-bond logs were acquired in
all the wells. Formation samples and
nuclear-magnetic-resonance and dielec-
tric logs were acquired in all producers
and observation wells. Full-wave sonic
data, vertical seismic profiles, and cored
data were acquired in selected wells.
Emerging M&S Tools and Methods.
Most routine M&S tools provide infor-
mation from the wellbore region, but,
to understand reservoir-property chang-
es between wells, it is pertinent to de-
ploy emerging tools, technologies, or
methods. At the same time, some long-
established methods need to be recon-
figured to suit project objectives. All of
these techniques are discussed in detail
in the complete paper, and they include
the following:
◗ 4D seismic (time-lapse 3D seismic)
◗ Interwell chemical-tracer tests
◗ Interwell gas-tracer tests
◗ Single-well chemical-tracer tests
◗ Surface gravity measurement
◗ Borehole gravity measurement
◗ Interwell partitioning chemical-
tracer test for remaining-oil
saturation
◗ Fiber-optic sensors
◗ Electromagnetic measurement
Implementation
and Early Observations
The key milestones that must be achieved
during the implementation and early
observation stages include
◗ Determination of project objectives
◗ Determination of the availability
of CO2
◗ Selection of a candidate reservoir
◗ Selection of a multidisciplinary team
of engineers, geoscientists, project
managers, and other professionals
◗ Completion of a scoping study to
estimate project economics
◗ Completion of front-end-
engineering studies to design the
surface and subsurface facilities,
including the capture plant, wells
infrastructure, and methods of
produced-fluid gathering
Once design and engineering work has
been completed and funding has been
approved, the construction phase be-
gins. During this stage of the project,
a standalone capture plant, processing
facilities, and wells infrastructure were
pursued in parallel. Because the con-
struction of surface facilities involves
long-lead-time activities, the wells were
drilled ahead of the completion of the
plants. Once the injectors were drilled,
water injection commenced in those
wells to keep the reservoir pressure
high. Subsequently, when the producers
were drilled, they were put on produc-
tion with water continuing to be injected
by the new injectors, in order to obtain
baseline data for oil production before
CO2 injection. The M&S program was im-
plemented, and baseline data from the
reservoir were acquired. JPT
JPT • JULY 2017
Approaches for CO2 Capture and
Sequestration Inspired by Biological Systems

I n this study, several process

alternatives for the permanent
sequestration of carbon dioxide (CO2)
as solid carbonates are evaluated.
Although the formation of mineral
carbonates is thermodynamically
favorable, it does not occur significantly
because of kinetic limitations and
the formation of products that
hinder the evolution of the process.
In the complete paper, the authors
propose biomimicking approaches
to precipitate solid carbonates while
limiting the amount of energy required
or using the byproducts to generate
valuable materials.
Introduction
Permanent sequestration of CO2 as solid
carbonates is a feasible solution to the
increased levels of CO2 in the atmo-
sphere. Mineral carbonation—the pro-
cess of capturing CO2 in the atmosphere
in the form of solid carbonates through
the reaction of CO2 with silicates—is a
spontaneous, thermodynamically favor-
able process. Unfortunately, the kinetics
of natural mineral carbonation is very
slow and the process is only significant
over geological time periods (millions
of years).
Accelerated formation of solid car-
bonates is, nonetheless, widely observed
in biological systems, particularly in
corals, bivalve molluscs, echinoderms,
and foraminifera. These organisms have
developed mechanisms to induce and
accelerate the precipitation of carbon-
ates, required for their skeletons, in
natural saline waters.
This article, written by JPT Technology Editor Chris Carpenter, contains highlights
of paper SPE 180718, “Approaches for CO2 Capture and Sequestration Inspired
by Biological Systems,” by Z. Ouled Ameur and S. Gupta, Cenovus Energy, and
Hector De La Hoz Siegler, University of Calgary, prepared for the 2016 Canada
Heavy Oil Technical Conference, Calgary, 7–9 June. The paper has not been
peer reviewed.
Biomimicking is the imitation of bio-
logical processes in other contexts for
achieving a result not originally pres-
ent in the mimicked biological systems.
While corals need to precipitate car-
bonate to build their exoskeletons, they
do not significantly modify the concen-
tration of CO2 in the atmosphere. The
authors propose use of the mechanisms
for carbonate precipitation relied upon
by corals and other organisms to devel-
op a large-scale process for accelerating
the sequestration of CO2 in the form of
stable mineral rock.
Process Alternatives
The conversion of CO2 into a miner-
al form involves the transformation of
gaseous CO2 into ionic form and the
further reaction of the carbonate ions
(CO32−) with divalent cations [e.g., cal-
cium (Ca2+) and magnesium (Mg2+)]
to form an insoluble precipitate (e.g.,
CaCO3). Because the reaction system
must maintain electroneutrality, an
exchange of ions is usually required.
In the case of corals, the carbonate-
precipitation reaction occurs in the
presence of seawater, which natural-
ly contains Ca2+ and chlorine (Cl−)
ions. The Ca2+ ions react with CO32−
ions, which are present because of the
reaction of CO2 with water. The pro-
cess results in the reduction of one
mole of Ca2+ ions per mole of CO2 re-
moved, and the production of 2 moles
of hydrogen ions (H+), thus main-
taining electroneutrality. To preserve
a favorable pH, however, corals cou-
ple the production of H+ with photo-
synthesis, which provides a net sink
of H+ ions.
In a large-scale industrial setting, a
source of divalent cations (i.e., Ca2+,
Mg2+) is required, as well as a mecha-
nism to preserve the electroneutrality
in the process. Seawater contains large
concentrations of divalent ions with a
potential to capture all global CO2 emis-
sions for extended periods of time with
minimal effects on the global concen-
tration of calcium or magnesium ions
in the oceans. Saline aquifers could also
act as sources of divalent ions, as well
as  silicate minerals.
Seawater-Sourced Ca2+/Mg2+ for
CO2 Sequestration. Formation of solid
mineral carbonates using seawater as
the primary source of divalent ions, as
in the case of corals, results in an in-
crease in the acidity of the water. Con-
sequently, the process must be designed
to mitigate this increased acidity. Be-
cause Cl− ions are also naturally pres-
ent in seawater, removing them either
as hydrochloric acid (HCl) or as Cl2 will
mitigate acidification.
Carbonate precipitation can be cou-
pled with the electrochemical produc-
tion of chlorine gas. Industrial produc-
tion of chlorine is an energy-intensive
process that produces caustic soda (so-
dium hydroxide) as a byproduct. In
some areas, the produced soda does not
have a local market and consequently
must be transported over long distanc-
es, adding to the total cost. In these lo-
cations, the proposed process might be
more attractive because only chlorine,
and not caustic soda, is produced as a
byproduct of carbon capture.
Land-Based Sourcing of Ca2+/Mg2+
for CO2 Sequestration. Calcium and
magnesium cations can be obtained
from land-based rocks. Mineral car-
bonation is a natural process in which

For a limited time, the complete paper is free to SPE members at www.spe.org/jpt.

JPT • JULY 2017 85

 calcium and magnesium silicates react
with atmospheric CO2 or CO2 dissolved
in groundwater to yield calcium car-
bonate or magnesium carbonate and
silica (SiO2). Mining, grinding, and dis-
persion of silicates have been proposed
as ways to accelerate mineral carbon-
ation. These operations, however, re-
quire significant energy consumption.
Leaching of silicates with HCl has the
potential to reduce energy require-
ments significantly.
HCl, working in a closed-loop man-
ner, can be used to accelerate the in-
situ  underground conversion of sili-
cates into silica, and the produced
calcium or magnesium brine can then
be used for the production of calcium
carbonate or magnesium carbonate
at the surface. Dissolution of silicates
with HCl is an exothermic spontane-
ous process. Because the silicate dis-
solution reaction will occur under-
ground, however, it is unlikely that the
heat of reaction could be harvested.
Also, because there is no net produc-
tion of chlorine, the economics of chlo-
rine markets does not have any effect on
process viability.
Seawater-Based Sequestration
There is a growing interest in the use of
water (particularly seawater) as a me-
dium for capturing and sequestering
CO2. Seawater is desirable because of
its supply of cations that are needed for
carbonate precipitation. The dissolution
of CO2 in water is generally assumed
to follow mechanisms provided in the
complete paper.
The Chemistry of Mineralization of
CO2 With Seawater. The current un-
derstanding of carbonate precipita-
tion in seawater suggests that solid-
carbonate formation is mediated by the
presence of living organisms that either
change the redox potential of the water
or raise the local concentration of re-
quired ions through the use of biolog-
ical membranes. The precipitation of
calcium carbonate and magnesium car-
bonate in seawater (pH=8.2) is cat-
alyzed by several life forms that use
those carbonates to build their skel-
86
etons. These organisms use different
strategies to carry out and accelerate
carbonate precipitation. In the case of
corals, calcium transporters are respon-
sible for pumping calcium ions against
their concentration potential, causing
a significant increase in the oversatu-
ration of calcium. The energy to drive
the calcium transporters is provided
by photosynthesis.
The hydration of CO2 is normally con-
sidered the rate-limiting step in the dis-
solution of CO2 and formation of car-
bonate ion. In living organisms, the
carbonic anhydrase enzyme catalyzes
the hydration reaction, increasing the
reaction rate 70-fold.
The use of a catalyst is a key to reduc-
ing the size of the CO2-absorption equip-
ment (and associated capital costs) as
well as reducing total operating costs.
The carbonic anhydrase enzyme is the
most efficient catalyst known for the
CO2 hydration reaction in terms of ac-
tivity, but the stability of the enzyme
under industrial operating conditions
and the associated costs of the enzyme
are unknown. As an alternative, nickel
nanoparticles have been shown capable
of catalyzing the hydration reaction, but
the activity level of the nanoparticles is
several times lower than that of the car-
bonic anhydrase enzyme.
Electroneutrality of the Seawater.
When a gas with a high concentration
of CO2 (e.g., flue gas) is put into con-
tact with seawater, CO2 will solubilize
in the water, increasing the concentra-
tion of soluble carbon species, and the
concentration of protons (H+). The in-
creased acidity, however, impedes the
precipitation of solid carbonates. In
fact, the solubility of carbonates in-
creases as pH decreases. Once the acidi-
fied water re-enters the environment
and reaches equilibrium with the pre-
dominant CO2 concentration in the at-
mosphere, most of the solubilized CO2
will come out of solution. This behavior
results in a zero net carbon sequestra-
tion, so carbon sequestration cannot be
achieved in this way. To achieve a posi-
tive net carbon sequestration using sea-
water, solid carbonates must be formed
and removed before returning the water
to the sea.
A prerequisite for precipitating car-
bonates out of seawater is to counter
the excess of hydronium cations (H+).
In the complete paper, the authors con-
sider and describe three alternatives to
accomplish this goal: by use of a strong
base, by use of a weak base, and with the
help of an electrochemical cell.
Effect of Liquid-Rate/Gas-Rate
Ratio on the Energy Requirements.
Modifying the liquid-rate/gas-rate ratio
affects both the relative amount of sea-
water required and the energy require-
ment for pumping, as well as the final
equilibrium points and the net ener-
gy required for electrolysis. It is clear
that decreasing the ratio of acidified
seawater mass-flow rate (L1) to flue-
gas flow rate (at final conditions) (G1)
improves the overall performance of
the operation, because less energy per
ton of CO2 is required to carry out the
electrolysis. Moreover, the amount
of seawater required to be transport-
ed also decreases by decreasing the
L1/G1 ratio, which will reduce the as-
sociated pumping costs (both capital
and operational).
As the L1/G1 ratio decreases, the
amount of CO2 mineralized decreases
as a fraction of the total amount of CO2
captured. This decrease is caused by the
fact that the seawater is originally satu-
rated in CO2 and carbonates, and chang-
ing the final concentration of calcium
and magnesium ions (through precipita-
tion) shifts the saturation levels of car-
bonated ions and the solubility of CO2.
At high L1/G1 ratios (greater than 70),
more CO2 is precipitated as carbonate
than has been effectively removed from
the flue gas, indicating that part of the
CO2 originally in the seawater is copre-
cipitated. At low L1/G1 ratios (less than
60), more CO2 is removed from the flue
gas than is precipitated as solid carbon-
ate, which indicates that the seawater
has been enriched in carbonate ions and
solubilized CO2.
The complete paper also explores
land-based mineral options, including
ammonia-assisted precipitation with
ammonia regeneration. JPT
JPT • JULY 2017
DISTINGUISHED LECTURERS
Distinguished Lecturer Topics
Set for 2017–2018 Season
With speakers from various disciplines and professions, the program focuses on industry trends,
challenges, and technology applications. During the 2017–2018 Distinguished Lecturer season, the
following topics, speakers, and technical discipline areas will be presented. For a complete topic
description and author bios, please visit http://www.spe.org/dl/schedule.php.
Integrated Historical Data
Workflow: Maximizing the Value
of a Mature Asset
Anne Valentine, Schlumberger—
Production and Operations
Robust Kick Detection:
First Step on Our Well Control
Automation Journey
Brian Tarr, Shell—Drilling
Improved Oil Recovery
of Mature Water Floods:
Can We Have a Sizeable Impact?
Carlos Glandt—Production and
Operations
Creating Geologically Realistic
Models Used for Reservoir
Management
Dave Stern, ExxonMobil—Reservoir
Description and Dynamics
Illuminating Insights Into
Well and Reservoir Optimization
Using Fiber-Optic Distributed
Acoustic Sensing
David Hill, OptaSense—Reservoir
Description and Dynamics
Oil and Gas Operations—
Integrating the Realities
of the Social License
Fernando L. Benalcazar, APD
Proyectos—Projects, Facilities,
and Construction
Wellbore Integrity Restoration:
New Life for Old Wells
Greg Galloway, Weatherford—
Production and Operations
JPT • JULY 2017
Isotropy: A Fatal Assumption
in Shale Geomechanics
Hamed Soroush, Dong Energy—
Reservoir Description and Dynamics
The Future Role of Oil
Iskander Diyashev, PetroSkills—
Management and Information
Measuring Land Drilling
Performance
John B. Willis, Occidental—Drilling
Developments in Heavy-Oil EOR
for the Era of Low Oil Pricing
Jose Gonzalo Flores, Consultant—
Projects, Facilities, and Construction
Surfactant Chemistry and Its
Impact on Oil and Gas Recovery
From Shale Plays
Liang Xu, Halliburton—Completions
Operational Decision Making:
What Makes a Decision ‘Good’?
Margaret Crichton, People Factor
Consultants—Health, Safety, Security,
Environment, and Social Responsibility
Moving Beyond Stereotypes and
Bias: Multiculturalism Starts Within
Maria Angela Capello, Kuwait
Oil Company—Management and
Information
Minimizing Environmental and
Safety Risks To Sustain Resource
Recovery—A Case Study
Marina Voskanian, California State
Lands Commission—Health, Safety,
Security, Environment, and Social
Responsibility
Automated Interpretation of
Wireline and LWD Formation
Testing Dynamic Data
Mark Proett, Aramco Services
Company—Reservoir Description
and Dynamics
Petrophysical Rock Typing—
A Solution for Modeling
Heterogeneous Reservoirs
Mark Skalinski, Chevron—Reservoir
Description and Dynamics
Optimizing Liquid Recoveries
From Shales Through
Geologic, Geomechanical,
Fluid, and Operating
Considerations
Milind Deo, University of Utah—
Reservoir Description and Dynamics
Adopting New Technologies
To Enhance Stimulation
Efficiency: Biodegradable
Diverters
Mojtaba Pordel Shahri,
Weatherford—Completions
Essential Prerequisites for
Maximizing Success From
Big Data
Muhammad Khakwani, Saudi
Aramco—Management and
Information
Breaking Down Conventional
Barriers With Managed
Pressure Drilling
Patrick Brand, Blade Energy
Partners—Drilling
87
 Ethane-Based EOR:
An Innovative and Profitable
Opportunity for a Low Oil-Price
Environment
Patrick L. McGuire, International
Reservoir Technologies—Reservoir
Description and Dynamics
Coiled Tubing Real-Time
Monitoring: A New Era of Well
Intervention and Workover
Optimization
Pierre Ramondenc, Schlumberger—
Production and Operations
Waterflood Design and
Operational Best Practices
R. Scot Buell, Chevron—Production
and Operations
The Intersection of Environment
and EOR: How Carbon Capture
is Changing Tertiary Recovery
Robert Balch, New Mexico Institute
of Mining and Technology—Health,
Safety, Security, Environment,
and Social Responsibility
Fracturing Without a Drop
of Water—Lessons Learned
Fracturing With LPG
Robert Lestz, eCorp
International—Completions
Lost Circulation—
A Challenge We Must Address
Salim Taoutaou,
Schlumberger—Drilling
Evaluating the Selection and Use
of Polymers in Environmentally
Conscious Areas
Samuel Lewis, Halliburton—
Health, Safety, Security, Environment,
and Social Responsibility
Integrating Geomechanics With
Operational Practices Improves
Extended-Reach Drilling
Performance
See Hong Ong, Baker Hughes—Drilling
Deepwater Cementing—From
Challenges to Zonal Isolation
Shailesh Dighe, Baker Hughes—Drilling
Using Fractals To Determine
a Reservoir’s Hydrocarbon
Distribution
Steve Cuddy, Baker Hughes—
Reservoir Description and Dynamics
Estimation of Shale Gas
and Oil Properties Based
on Field Data
Tao Yang, Statoil—Reservoir
Description and Dynamics
The Importance of Contact,
Conductivity, and Connectivity
in Multifractured Horizontal Wells
Wadhah Al-Tailji,
StrataGen—Completions
Shale Development—
Does Cheap Energy Really
Mean Flaming Tap Water?
William Fleckenstein, Colorado
School of Mines—Health, Safety,
Security, Environment, and Social
Responsibility

Purchase Your Copy Today

Introduction to Petroleum Economics

by Chris Hinkin

Introduction to Petroleum Economics explains the process

of gathering data, calculating whether a project should
proceed, and delivering recommendations. It discusses the
science of petroleum economics, the tools of the trade, and its
applications.

The author shares some helpful and informative anecdotes

based on his career as a petroleum economist.

SPE is the recognized leader for publications in the upstream oil and gas industry, and
the SPE Bookstore is your source for the books that set the standards for excellence.

www.spe.org/go/IntrotoPetro

88 JPT • JULY 2017

PEOPLE

Baker Hughes and General Electric (GE)
announced the executive team that will
lead Baker Hughes, a GE Company, upon
closing of their proposed transaction
to combine GE’s Oil and Gas business
with Baker Hughes. The executive team
will consist of LORENZO SIMONELLI,
president and CEO; MARIA CLAUDIA
BORRAS, SPE, president and CEO, oil-
field services; BELGACEM CHARIAG,
chief global operations officer; ROD
CHRISTIE, president and CEO, turbo-
machinery and process solutions; HARRY
ELSINGA, chief human resources officer;
JENNIFER HARTSOCK, CIO; MATTHIAS
HEILMANN, president and CEO, digi-
tal solutions; JACK HINTON, SPE, chief
health, safety, and environment officer;
NICOLA JANNIS, chief business develop-
ment officer; DEREK MATHIESON, chief
marketing and technology officer; JODY
MARKOPOULOS, chief engineering and
supply chain officer; WILL MARSH, chief
legal officer; NEIL SAUNDERS, presi-
dent and CEO, oilfield equipment; UWEM
UKPONG, chief integration officer; and
BRIAN WORRELL, CFO. GE CEO JEFF
IMMELT, will serve as chairman of the
board of directors, and MARTIN CRAIG-
HEAD, SPE, currently chairman and CEO
at Baker Hughes will serve as vice chair-
man of the board.
JEFF MILLER, SPE,
was elected Hallibur-
ton’s president and
CEO by the com-
pany’s Board of
Directors, effective
1  June. He replaced
Dave Lesar, the company’s chairman and
CEO since 2000. Lesar will continue
serving the company as executive chair-
man. Miller will provide the day-to-day
leadership and management and will be
responsible for planning the company’s
strategic direction, financial objectives,
and technology development along with
the management team that will report to
him. Lesar entered a new executive em-
ployment agreement that provides that
he will continue as executive chairman
through mandatory retirement on 31 De-
cember, and contains a 4-year noncom-
pete clause. Miller joined Halliburton in
1997 and has served in several leader-
ship roles, including COO until 2014
when he was named president and was
appointed to the Board of Directors. He
holds a BS degree in agriculture and
business from McNeese State University
in Louisiana, and an MBA from Texas
A&M University.

In Memoriam
This section lists with regret SPE members who recently
passed away. If you would like to report the passing of a
family member who was an SPE member, please write to
service@spe.org.
Paul S. Ache Jr., Houston, Texas, USA
John W. Coolidge, Houston, Texas, USA
Gilman A. Hill, Centennial, Colorado, USA
Richard D. Hudson, Lafayette, Louisiana, USA
Clyde Munson, Lafayette, Louisiana, USA
Robert F. Ogata, Kennewick, Washington, USA
Roy T. Pitcock, Graham, Texas, USA
Thomas B. Smith, Lakeway, Texas, USA
Thomas A. Sullivan, Thermopolis, Wyoming, USA
William G. Volz, Houston, Texas, USA
Thomas E. Watkins, Dallas, Texas, USA
Glenn E. Wood, Broken Arrow, Oklahoma, USA
CHRIS NUSSBAUM, SPE, died 5 May. He
was the chairman of the SPE Aberdeen
Section from 2009 to 2011. Nussbaum
was interpretation development advisor
at Archer UK, where he provided expert
technical support in log processing and
interpretation services for the global
wireline division. He joined Archer in 2011 as data services
manager. Nussbaum was the chief executive of TecWel from
2008 to 2010, when the company became part of Seawell
UK. At Seawell, he was the wireline operations manager for
the UK/Africa regions.
Nussbaum had more than 30 years of experience in the oil
industry. After graduation, he started his career as a wire-
line logging engineer at Dresser Europe. As a logging engi-
neer for Geoservices he worked on projects in Africa and the
Middle East, on rotation from the UK. He joined Read Well
Services in 1993 and was seconded to Elf Enterprise Caledo-
nia until 1995 to manage a dedicated in-house wireline inter-
vention team on three offshore fields. He was then seconded
to work at BP as part of an integrated well services team for
the Magnus platform. He later became the sales and market-
ing manager for Read Well Services, responsible for develop-
ing the company’s global business in cased-hole technology.
An active member of SPE, Nussbaum was a past chair-
man of the SPE Aberdeen Section. “During his chairman-
ship, the section grew to promote itself to the wider Aber-
deen and Scottish communities, embraced the emerging
world of social media, and rebuilt our website to ensure that
we could more effectively communicate our achievements
and events. Under his enthusiastic leadership the SPE Aber-
deen Section began its run of seven SPE President’s Awards
for Section Excellence [starting in 2010],” said Ian Phillips,
current Aberdeen Section chairman. Nussbaum was a men-
tor to many in the section, including several recent section
chairs. He authored technical papers, attended SPE events,
and was a member of several SPE committees. He was recog-
nized with the Past Chairman Award by the section in 2014
and the SPE Regional Service Award for North Sea region in
2012. Nussbaum held a BS degree in physics from the Uni-
versity of York.

JPT • JULY 2017 89

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JPT • JULY 2017 91

 SPE EVENTS
WORKSHOPS
11–13 July ◗ Cairo—SPE Optimisations and
Economics
26–28 July ◗ Xi’an—SPE Effective and
Efficient Development of Fractured
Carbonate Reservoirs
31 July–1 August ◗ Kuala Lumpur—SPE
Sand Management—Holistic Strategy
Implementation to Maximize Business
Value
7–8 August ◗ Kuala Lumpur—SPE The
Internet of Oilfield Things—Creating New
Value in Information from Upstream to
Downstream
14–15 August ◗ Kuala Lumpur—SPE Making
Extended Reach Drilling and Multilateral
Viable in a Low Cost Environment through
Collaboration and Technology
29–31 August ◗ Denver—SPE Distributed
Fiber-Optic Sensing for Well, Reservoir,
and Facilities Management
11–12 September ◗ Kuala Lumpur—SPE
Data Science and Analytics for E&P
Projects
14–15 September ◗ Santa Cruz, Bolivia—
SPE HSE and Sustainability—The
Cornerstone for Efficient E&P Operations
19–21 September ◗ Moscow—SPE
Horizontal, Multilateral and ERD Wells
Drilling and Completion
25–26 September ◗ Kuala Lumpur—SPE
SPS and SURF—How to Maximise the Total
Life of Field Value
26–27 September ◗ Abu Dhabi—SPE Asset
Integrity Management—How to Improve
Profitability, Performance, Efficiency,
and People
26–27 September ◗ Calgary—SPE
Production Forecasting for Heavy Oil and
Unconventional Resources
18 October ◗ Calgary—SPE The Duvernay
Liquids Rich Shale—What makes it
Different and How Do We Optimize It?
Find complete listings of upcoming SPE workshops, conferences, symposiums, and forums at www.spe.org/events.
92
24–25 October ◗ St. John’s, Newfoundland
and Labrador—SPE Well Integrity Life
Cycle Management for Subsea Field
Development
30–31 October ◗ Kuala Lumpur—
SPE/NACE Corrosion Management for
Upstream Oil & Gas Production Assets
7–8 November ◗ The Hague—SPE North
Sea & Europe Area Stimulation
CONFERENCES
17–20 July ◗ Houston —Carbon
Management Technology Conference
24–26 July ◗ Austin—SPE/AAPG/SEG
Unconventional Resources Technical
Conference (URTeC)
5–8 September ◗ Aberdeen—SPE Offshore
Europe Conference & Exhibition
13–14 September ◗ Midland—SPE Liquids-
Rich Basins Conference–North America
9–11 October ◗ San Antonio—SPE Annual
Technical Conference & Exhibition
15–18 October ◗ Kuwait City—SPE Kuwait
Oil and Gas Show & Conference
16–18 October ◗ Moscow—SPE Russian
Petroleum Technology Conference
17–19 October ◗ Bali—SPE/IATMI Asia
Pacific Oil & Gas Conference and Exhibition
24–26 October ◗ Rio de Janeiro—
OTC Brasil
1–3 November ◗ Baku—SPE Annual
Caspian Technical Conference and
Exhibition
13–16 November ◗ Abu Dhabi—The Abu
Dhabi International Petroleum Exhibition
& Conference (ADIPEC)
23–25 January 2018 ◗ The Woodlands—
SPE Hydraulic Fracturing Technology
Conference
29–31 January 2018 ◗ Abu Dhabi—SPE/
IADC Middle East Drilling Technology
Conference and Exhibition
6–8 March 2018 ◗ Fort Worth—IADC/SPE
Drilling Conference and Exhibition
13–14 March 2018 ◗ Calgary—SPE Canada
Heavy Oil Technical Conference
13–14 March 2018 ◗ Calgary—SPE Canada
Unconventional Resources Conference
20–23 March 2018 ◗ Kuala Lumpur—
OTC Asia
SYMPOSIUMS
4–6 October ◗ Lexington—SPE Eastern
Regional Meeting
7–8 November ◗ Kuala Lumpur—SPE Asia
Pacific Production Enhancement and Cost
Optimization
28–30 November ◗ Banff—SPE Thermal
Well Integrity and Design Symposium
FORUMS
5–9 November ◗ San Antonio—SPE
“Waterless Fracturing”—Reducing Fresh
Water Use for Reservoir Stimulation in a
Future Water-Constrained World
CALL FOR PAPERS
SPE International Conference and
Exhibition on Formation Damage Control
◗ Lafayette
Deadline: 24 July
SPE/IADC Managed Pressure Drilling and
Underbalanced Operations Conference
and Exhibition
Deadline: 1 August
SPE Canada Heavy Oil Technical
Conference ◗ Calgary
Deadline: 6 August
SPE Canada Unconventional Resources
Conference ◗ Calgary
Deadline: 6 August
SPE Hydraulic Fracturing Technology
Conference ◗ The Woodlands
Deadline: 14 August
JPT • JULY 2017
 FROM GAME STATION TO WORK STATION
Plug GPU and Play tNavigator

FULL PHYSICS WITH NO SHORTCUTS SINGLE EXECUTABLE FOR WINDOWS & LINUX

Optional GPU acceleration is available, free of charge, in all new tNavigator releases,
starting March 2017. Blackoil, compositional, thermal compositional models are supported,
as well as every industry-standard input keyword formats. Specific acceleration factors
are model and hardware dependent. TNAVIGATOR.COM/GPU

RFD-023 _JPT.indd 1 2/3/17 4:10 PM