Epm 5

EPMAG.
COM
M AY 2 0 1 2
Extending
Reservoir Life
Marine Seismic
Deepwater Rig
Advances
Sand/Water
Management
Riser
Technology
DEEPWATER
renaissance
Offshore activity flourishes
2012 Meritorious
Engineering
Awards
--
4
A ?
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EXPLORATION & PRODUCTION

WORLDWIDE COVERAGE
M AY 2 0 1 2
VO L U M E 8 5
A H A R T E N E R GY P U B L I CAT I O N
EXTENDING RESERVOIR LIFE
49
EOR system creates seismic shift in waterflood

technology
52
Reservoir modeling extends field life
56
Enhancing asset performance should not

compromise safety
ISSUE 5
w w w. E P m a g . c o m
COVER STORY: DEEPWATER CHALLENGES & SOLUTIONS
34
ADVANCES IN MARINE SEISMIC
60
Broadband acquisition a step-change for

deepwater imaging
62
Marine seismic acquisition gets improvements
DEEPWATER DRILLING ADVANCES
68
Uniform designs win out in ultra-deepwater

activity
73
RFID technology optimizes riser asset tracking,

maintenance
Longer,
deeper,
colder
As oil and gas companies push the limits in terms of
water depths and remote locations, the challenge of
developing technologies and practices that can lower
huge upfront costs is being met collaboratively through
joint industry initiatives and technology partnerships
around the world.
SAND/WATER MANAGEMENT
76
Managing sand through flow control in the

modern completion
80
WEA technique saves time, money
44
RISER TECHNOLOGY
94
Connectors stiffen Caesar Tongas resolve
98
Brazilian E&P spending fuels major supply

vessel growth
Two sides of the same sea
REGIONAL REPORT: GULF OF MEXICO
130
12
Mexico to realize its deep potential
136
2012 MERITORIOUS
ENGINEERING AWARDS
IndustryPULSE:
US upstream promises
opportunities
A new report shows US production
and optimism on the rise.
SPECIAL REPORT: CASPIAN REGION
106
Riser gas risk mitigation on

a drillship uses closed-loop
circulation drilling systems
86
WorldVIEW:
Finding the next big thing

The recipe for a successful geoscientist?
Travel the world and ask a lot of questions.
Unconventional:
International Shales
Shale gas is poised to become
international phenomenon
Overcoming obstacles to develop vast unconventional resources across the globe will be crucial to
meet rising energy demands.
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MANAGEMENT REPORT
Asset management services provide modular solutions offshore
16
DIGITAL OIL FIELD

Integrated operations platform overcomes production challenges
22
Digital automation solution enhances oil recovery in the Caspian Sea 25
EXPLORATION TECHNOLOGY
Does the US government need a lesson in economics?
29
WELL CONSTRUCTION
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Performance is a shared benefit
31
PRODUCTION OPTIMIZATION
Turning fast talk into fast results
33
TECH WATCH
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New tool gathers downhole pressure and temperature

data while fracturing horizontal wells
122
TECH TRENDS
126
INTERNATIONAL SPOTLIGHT: NEW ZEALAND
129
INTERNATIONAL HIGHLIGHTS
146
ON THE MOVE/INDEX TO ADVERTISERS
150-151
LAST WORD
Deep water is the fastest growing offshore sector
COMING NEXT MONTH
152
The June issue of E&P examines the growing and increasingly
complex world of downhole tools and systems as well as unconventional resource development.
Other features focus on logging and formation evaluation, directional drilling, testing and production
management, and advances in mooring systems, and regional highlights include the Mississippi Lime
formation in Oklahoma and Kansas and the hotbed of activity that is South America. As always, while
youre waiting for the next copy of E&P, remember to visit EPmag.com for news, industry updates, and
unique industry analysis.
ABOUT THE COVER
Pictured is ENSCO 8505, now undergoing sea trials in
the Gulf of Mexico. The rig was mobilized from the Keppel Fels shipyard in
Singapore in just 39 days. As part of a rig-sharing agreement, the vessel will be
drilling for Anadarko, Noble Energy, and Apache later this year. On the left, rig
hands on the Deepwater Millennium drillship prepare for drillstem testing for
Anadarko Petroleum on the Barquentine 2 well offshore Mozambique. (Photos
courtesy of Ensco and Anadarko Petroleum; cover design by Laura J. Williams)
E&P (ISSN 1527-4063) (PM40036185) is published monthly by Hart Energy Publishing, LP, 1616 S. Voss Road, Suite 1000, Houston,
Texas 77057. Periodicals postage paid at Houston, TX, and additional mailing offices. Subscription rates: 1 year (12 issues), US $149;
2 years (24 issues), US $279. Single copies are US $18 (prepayment required). Advertising rates furnished upon request. POSTMASTER:
Send address changes to E&P, PO Box 5020, Brentwood, TN 37024. Address all non-subscriber correspondence to E&P, 1616 S. Voss
Road, Suite 1000, Houston, Texas 77057; Telephone: 713-260-6442. All subscriber inquiries should be addressed to E&P, 1616
S. Voss Road, Suite 1000, Houston, TX 77057; Telephone: 713-260-6442 Fax: 713-840-1449; custserv@hartenergy.com. Copyright
Hart Energy Publishing, LP, 2012. Hart Energy Publishing, LP reserves all rights to editorial matter in this magazine. No article may be
reproduced or transmitted in whole or in parts by any means without written permission of the publisher, excepting that permission to
photocopy is granted to users registered with Copyright Clearance Center/0164-8322/91 $3/$2. Indexed by Applied Science, Technology
Index and Engineering Index Inc. Federal copyright law prohibits unauthorized reproduction by any means and imposes fines of up to
$25,000 for violations. RIDEALONG ENCLOSED.
Printed on
recycled paper
Microscope
ONLINE CONTENT MAY 2012
HIGH-RESOLUTION RESISTIVITY
AND IMAGING WHILE DRILLING
PREMIUM CONTENT
Subscribe @ EPmag.com/explorationhighlights
Apache: Green Canyon prospect

could have up to seven wildcats
Apache Corp. filed an exploration plan to
drill up to seven wildcats on a two-block
prospect in the Green Canyon area in
approximately 1,250 m (4,100 ft) water
depth. The first proposed exploratory test
will be in the southern portion of Green
Canyon Block 823 (OCS G33854), with a proposed bottomhole to the
south beneath Block 867 (OCS G33858).
r-
>?
Alberta Bakken discovery reported on Lethbridge property

A Dee Three Exploration Ltd. Bakken well flowed 550 bbl of 30API oil
and 60,000 cf/d of gas.
Offshore Namibia block has mean estimate of 3.17 Bbbl

A prospective report prepared for EnerGulf Resources for four offshore Namibia prospects and nine leads on Block 1711 shows a
mean estimate of 3.17 Bbbl of potentially recoverable oil, according
to Oil & Gas International.
AVAILABLE ONLY ONLINE
Deep water pushes market up

for offshore service vessels
By Scott Weeden, Senior Online Editor
With a fleet of offshore vessels with an

average age of 5.6 years, Bourbon is
poised to tap into the increasing markets
for deepwater and shallow-water vessels.
Service companies benefit

from industry recovery
By Oil & Gas Investor staff
Oil and Gas Investor asked service and

supply analysts to detail the sectors main
themes and describe what will benefit the
companies most in 2012.
True or false? Your unconventional

resources IQ is being tested
By Mike Madere, Senior Online Editor
Whether unconventional resources are

in Poland, France, China, or the US, the
technology to develop those resources is
highly sought after in todays market.
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The RapidFrac` system. Your solution to costly completion challenges .

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in cased-hole and openhole horizontal solutions with the new RapidFrac ' system
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Solving challenges':
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RHONDA DUEY
SEE IT
Executive Editor
1616 S. VOSS ROAD, STE 1000

HOUSTON, TEXAS 77057
P: +1 713.260.6400 F: +1 713.840.0923
www.EPmag.com
rduey@hartenergy.com
Read more commentary at
EPmag.com
RHONDA DUEY
Executive Editor
Senior Editor
TAYVIS DUNNAHOE
Senior Editor
SCOTT WEEDEN
International Editor
MARK THOMAS
Associate Editor
NANCY AGIN
Assistant Editor
CODY ZCAN
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Corporate Art Director

Senior Graphic Designer
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& Reprint Sales
LAURA J. WILLIAMS
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Chief Technical Director, Upstream RICHARD MASON

Director of Business Development
ERIC ROTH
Senior Editor/Manager,
Special Projects
JO ANN DAVY
Group Publisher
RUSSELL LAAS
Editorial Advisory Board

CHRIS BARTON
Sr. VP Business Development, Oil & Gas., KBR
KEVIN BRADY
VP, Sales & Marketing,Verdande Technology Inc.
MIKE FORREST
Exploration Consultant, formerly with Shell
JOHN M. GILMORE JR.
Director of Global Industry Solutions Upstream
Oil & Gas, Invensys Operations Management
CHRIS JOHNSTON
VP & Managing Director, North America, Ensco
ULISSES T. MELLO
Manager, Petroleum & Energy Analytics, IBM
DONALD PAUL
Executive Director, University of
Southern California Energy Institute
EVE SPRUNT
Business Development Manager,
Chevron Energy Technology Co.
MANUEL TERRANOVA
Sr. VP Regional Operations & Global Sales,
Drilling & Production, GE Oil & Gas
RONNIE WITHERSPOON
Sr. VP of Marketing & Business Development,
Nabors Drilling USA LP
DENNIS A. YANCHAK
Sr. Geosciences Advisor, Apache Corp.
Vice President, Digital Media

RONS DIXON
Senior Vice President, Consulting Group
E. KRISTINE KLAVERS
Executive Vice President
FREDERICK L. POTTER
President & Chief Operating Officer
KEVIN F. HIGGINS
Drumroll, please!
somewhat hesitantly step onto this page of E&P as its new executive editor after remembering some of my predecessors feedback. One of our
editors (who shall remain nameless) was so reviled by our managing editor
that she blew up his As I see it photo and thumbtacked it to her bulletin
board such that the thumbtacks looked like devil horns.
Another editor, Bill Pike, once received an e-mail reading, Dear Bill: As I
see it, youre a moron.
So as I prepare myself for target practice, I would like to direct your
attention to our special feature on the Meritorious Awards for Engineering
Innovation (MEAs). This years winners join an august group of groundbreaking technologies that date back to 1971. (The complete list will be
posted to our website once I find out who won in 1999!)
These highly coveted awards are judged by a panel of experts culled from
industry, academia, and consultants. Judges are asked to rate each entry in
terms of its innovation in concept, design, and application; its ability to
help solve a costly problem; and its potential to improve efficiency or profitability.
Out of almost 70 entries our judges chose 13 winners and four honorable
mentions. The specifics on each of these entries can be found further back
in this issue. Winners will be honored at this years Offshore Technology
Conference and at Hart Energys Developing Unconventional Oil conference in Denver, Colo., May 14-16.
While were on the subject of the MEAs, I would like to encourage anyone who develops technology to consider entering the 2013 contest. Entering is simple:
1. Visit Epmag.com/mea/mea.process.php.
2. Create an account, or enter your personal entry page if you already
have an account.
3. Submit an abstract, case study, and up to three supporting documents
for each entry.
This years deadline is Dec. 31.
Weve added new categories to accommodate more entries in the subsea,
deepwater, and Arctic technology arenas, and we welcome those entries as
well as our standard entries for drilling fluids, exploration technology, etc.
Enter early and often, and good luck!
Finally, I would like to thank Dick Ghiselin, head of our editorial advisory
board, and Richard Mason, our executive editor online, for filling this page
while we sorted some things out internally. Well aim for a bit more consistency from now on, and Ill keep my bullet-proof vest close by.
Chief Executive Officer

RICHARD A. EICHLER
industry
PULSE
US upstream promises opportunities

A new report shows US production and optimism on the rise.
Dr. Phil Goddard, Director of EIC Consult

(the Energy Industry Councils research
and consultancy business)
s the worlds largest consumer of oil, gas, and electricity, the US has deemed developing domestic
energy sources to reduce reliance on imports and
ensure security of supply a major priority. As a consequence, the country is seeking to diversify its energy
supplies, creating a range of long-term and large-scale
opportunities at every stage of the supply chain.
These are some of the key trends identified by EIC
Consults USA Country Overview report published in
February 2012, which provides a comprehensive analysis
of contemporary developments in the US energy sector.
It also looks at where the key hotspots of activity can be
found in the upstream sector today.
In the past few years, the US has undergone a seismic
shift in the energy market. The latest Consult USA
Report highlights several key developments that are
shaping the marketplace.
Recovery of offshore deepwater

drilling in Gulf of Mexico
New federal bureaus responsible for energy operations were inaugurated following the Macondo oil spill
in 2010, bringing comprehensive new regulations to
the offshore sector. These new permitting regulations,
which came into effect in October 2010, require higher
standards regarding well design, casing, and cementing.
Operators have adjusted well to the new framework.
With more than 130 new well permits having been
granted since the new regulations came into force,
offshore developments are gaining momentum and
steadily recovering toward the levels seen prior to the
Macondo disaster.
The report finds that currently there are 5,981 active
leases in the GoM. Key project developments include
Shells Cardamom oil field, the first deepwater plan to
be cleared after the Macondo disaster; Chevrons Big
Foot deepwater oil field; BPs Mad Dog oil and gas field;
Anadarkos Lucius oil and gas field, where appraisal
drilling took place in July 2011; and future projects such
as ExxonMobil and Anadarkos Hadrian oil and gas field,
where first production is expected to begin in 2014.
The growth of shale gas
Since the development of onshore hydraulic fracturing

Upstream developments in the US have been revolutionand horizontal drilling, commercial production of shale
ized by new technology. Firstly, the report
shows that offshore, spar platforms, and
semi-submersible drilling rigs have allowed
oil and gas production in federal Outer
Continental Shelf (OCS) waters to move
into far greater depths at more than 1,500
m (5,000 ft). Indeed, by 2009 ultra-deepwater oil production in these depths had overtaken oil production in shallow waters, with
84% of proven federal offshore oil and gas
reserves residing in more than 300 m (900
ft) water depth.
E&P is currently centered on the federal
OCS areas of the Gulf of Mexico (GoM)
due to ongoing drilling moratoriums in the
Atlantic and Pacific oceans. However,
extensive pipeline infrastructure has
Colorado, Alaska, Texas, and Pennsylvania join the GoM as key US hotspots for
restricted the use of FPSO units, with
resource development. (Charts courtesy of EIC; Source: EICDataStream)
only one planned for 2012.
8
May 2012 | EPmag.com
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E M E R S O N . C O N S I D E R IT
SOLVED':
industry
PULSE
oil and gas has grown on an enormous scale.

The report highlights that a particular focus
is the development of liquids-rich plays that,
due to low gas prices and high oil prices, are
set to enjoy years of growth. Daily production from shale gas increased from 1 Bcf/d
in 2003 to almost 20 Bcf/d by mid-2011 and
could reach 30 Bcf/d by 2020.
In the past five years alone, the innovative
application of technologies for tapping gas
found in shale and other types of rock has
enabled a 20% rise in US natural gas production and restored US gas output to levDeepwater and ultra-deepwater projects account for an increasing amount of
els not seen since its peak in the 1970s.
production from the US GoM. (Source: EIC Consult - US Project Opportunities)
As of 2010, there were at least 22 major
shale plays in the US spread over more than
33.355 Bcf in 2009 to 64.793 Bcf in 2010 as a result of
20 states. The oil-rich Bakken in North Dakota and the
the re-exportation of LNG imports.
Texas Eagle Ford plays were identified as the center of
However, the future of LNG remains uncertain as the
many operators long-term shale plans. The Bakken in
market for US exports is far from secure. Furthermore,
particular is experiencing rapid development on a prothe proposed export terminals are located on the East
lific scale. The US Geological Survey estimates that it
Coast, lacking a direct route to the most profitable Asian
holds 3.65 Bbbl of recoverable crude oil in addition to
markets. It also should be noted that for US natural gas
around 2 Tcf. This development, coupled with North
to be competitive in the global LNG market, domestic
Dakotas favorable tax system, has delivered a monumenprices are required to remain moderately low for the 25tal annual increase in the states oil production, with 2010
year life cycle of an export project.
production up more than 40% over 2009 figures.
Lastly, natural gas storage capacity is increasing to
Intensive drilling is driving up demand for developaccommodate shale output, with many new storage
ment and production services, with operators on the
facilities entering construction.
lookout for new technologies to maximize output of
wells with notoriously high decline rates. Despite much
Key hotspots of activity
public opposition, the comprehensive or prohibitive
So where are most project developments taking place?
regulation of shale gas is unlikely due to the number
The EICs project database, EICDataStream, which is
of jobs created and taxes generated.
tracking more than 9,000 active and future projects across
As more shale formations are explored and enter
the global energy industry, shows that the key hotspots of
commercial production, estimates of technically and
activity in the upstream sector can be found in the GoM
economically recoverable shale resources will continue
as well as in the states of Texas, Colorado, Alaska, and
to rise. Elsewhere, conventional upstream developments
Pennsylvania. The chart above shows the number and
in the US have benefited from this newly developed
potential investment value of active and future upstream
recovery technology. EOR has successfully boosted proprojects in these regions, with the GoM leading the way
duction in the Permian basin, and CO2 injection is now
seeing more widespread use in raising production in
with 71 projects with a combined value of US $54 billion.
older fields across the states.
The future
LNG import terminals shift to export facilities
The increase in shale gas development also has led to
existing LNG import terminals being converted to operate as export facilities, according to the report. By July
2011, LNG imports were down 44% compared with the
same time in 2010, and Reuters has estimated imports
were at the lowest monthly level since December 2002.
At the same time, however, exports almost doubled from
10
With oil prices continuing to rise, the US is clearly

focused on reducing imports and developing domestic
energy resources. Diversifying energy sources and
expanding production also are seen as key priorities.
With industry innovation driving new techniques to
extract resources from more challenging environments,
there are plenty of opportunities across the whole supply chain for the long-term future.
T'om'
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4 ere aitthe beginning Here for the future

When you think of petroleum engineeringand petroleum geology/geophysics
programs, the University of Oklahoma's Mewbourne College of Earth &
Energy might be the first college that comes to mind,and it should be.
Home to the world's first school of Petroleum Geology, granting the first
degree in 1904
Home to the world's first school of Petroleum Engineering

Alma mater to more petroleum engineers and petroleum geologists than
any program in the world
OU is alma mater to eight Society of Petroleum Engineers (SPE)

past presidents, eight American Association of Petroleum Geologists
(AAPG) past presidents and five Society of Exploration Geophysicists
(SEG) past presidents.
www.ou.edu/mcee
MEWBOU RNE
COLLEGE OF EARTH&ENERGY
TI IE UNIVERSITY OF OKLAI IOMA
Real education for the real world.
world
VIEW
Finding the next big thing

The recipe for a successful geoscientist? Travel the world and ask a lot of questions.
Susan Klann,
Managing Editor, Oil and Gas Investor
s a geoscientist with Chevron Energy Technology

Co., Andrew Kulpecz has found dynamic and
exciting work that capitalizes on his science background and love for teaching. A member of the Reservoir Prediction team, he is part of a group working
with the different operating companies to contribute
to the biggest exploration and development projects
being undertaken worldwide. And he teaches classroom and field courses to new hires in the US and
internationally.
This mix of fast-paced, ever-changing work suits him.
He grew up in the UK, the Netherlands, and Syria
courtesy of his fathers career as a geologist and senior
executive for Royal Dutch Shell. Kulpecz returned to
the US for his undergraduate studies at Wheaton
College as a history major before falling in love with
geology. He then earned his masters and Ph.D.
degrees in geological sciences at Rutgers University.
On graduating, he found the decision to work in the
energy industry was easy. I really enjoy the teamwork
thats used in industry to solve problems, he said.
At Chevron he is a sequence stratigrapher and sedimentologist, a natural fit given his sharp interest in
nature and history nurtured by road trips his family
took to the Alps, the Dead Sea, Jordans Petra, and
other far-flung natural and man-made wonders. I love
understanding the way things work today and then
applying those concepts back through geologic time
in the search for hydrocarbons, he said.
This past year he spent six months as an ex-pat in
Perth, Australia, working on reservoir characterization
and front-end geology for the Gorgon and Wheatstone
natural gas projects, on which Chevron will spend US
$40 billion to develop. Hes also studied emerging
basins in Brazil, the Arctic, Angola, and offshore
Canada, among others. He is married with two young
children, whom he intends to someday submit to the
same educational family travels he benefited from.
In an interview for Hart Energy, Kulpecz shared his
passion for his work.
12
Andrew Kulpecz, geoscientist with Chevron Energy Technology

Company (Image courtesy of Chevron Energy Technology Co.)
What role does your group play within Chevron?

We evaluate basins for our exploration and new ventures
business partners. We interpret 3-D seismic, study well
and core data, and run paleoclimate and forward stratigraphic models and more to understand and predict the
presence of both reservoir and source rock. These interpretations assist in risking different projects and deciding whether to enter new basins, bid on lease blocks,
and drill exploration wells.
A lot of these basins have sparse data, so its a challenge. Theres much uncertainty, so its difficult to make
robust predictions about what youll find. But thats
what makes it fun you get to be innovative and use
technology to develop accurate forecasts.
What project that you have worked on is furthest along?
The Gorgon and Wheatstone liquefied natural gas projects, where Chevron has had a good run of success in
drilling and finding natural gas resources. A lot of the
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What does your teaching entail?

Given the current demographics of the industry, there
are a lot of young employees. I teach new hires both in
the classroom and in the field. This past year I taught
stratigraphy courses in Australia and Indonesia and
led field trips to Utah and New Mexico to teach key
concepts. Students can look at outcrops that are on
the same scale as the reservoirs theyll be working on.
I also teach integrated teams of modelers, scientists,
and engineers. The goal is to get the whole team out
together to look at analogs for reservoirs so they can
be on the same page.
What is your take on the concept of peak oil?
With any finite resource theres going to be a peak
and eventual drawdown. But the industry is constantly
pushing technology boundaries to further the recovery of existing resources and to find new ones. In just
a decade, weve revolutionized the way we look for gas.
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Will you be working in shale plays internationally?

Chevron has acquired acreage in Poland, Romania,
and Bulgaria. The company is positioning itself relatively close to major markets in Europe and Asia. Im
currently dealing with more conventional clastic and
carbonate reservoirs, but as the portfolio evolves in
the coming years, I will probably be working on
unconventional plays.
future
of m o o r i n g
Given your studies of paleoclimates, what are your thoughts

on climate change?
I recognize the concerns about climate change, and
we must be mindful of the environment. Recent studies have focused on looking for periods when CO2 was
as high or higher than it is today to understand what
could occur in future scenarios. In our work at
Chevron, we use paleoclimate models to understand
environmental conditions in geologic time to predict
where reservoirs will be today.
You mentioned the many new people entering the industry.
What has helped you be successful so far in your career?
Its important to find something you enjoy and can be
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learn. And dont be afraid to ask questions.
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Asset management services provide

modular solutions offshore
A power system upgrade offshore Western Australia was successfully completed at sea using
asset management strategies without significant operational stoppages.
Fran Weaver, Contributing Author
ig operators can maximize the efficiency of their operations while avoiding downtime with the help of asset
management strategies that include well-planned power
management upgrades. Maritime power management specialists are increasingly finding ways to help rig operators
improve the efficiency of their electrical and automation
(E&A) systems through onsite upgrades even in remote
locations, with no need for costly trips to distant dockyards.
Running electrical and automation systems is like running a computer, since over time they start to work less
efficiently, and components eventually become obsolete
when their maintenance is no longer supported, AriPekka Saarikangas, director, Electrical & Automation at
Wrtsil Services explained. To maximize the overall cost
effectiveness of operations, its important to run regular
E&A upgrades. Planning and scheduling upgrades proactively can minimize the time when assets are out of operation and avoid expensive surprises when an obsolete
component suddenly has to be replaced.
tion can be built up from tried and tested engineering

modules, while the remaining crucial 20% will consist of
customized solutions designed through close collaboration between the companys technical development, engineering, and sales personnel and customers.
Getting customers involved in project management
gives us a vital understanding of how each system works,
what we can do while its running, and exactly when we
can go in to execute so as to minimize disturbance to
operations, he added.
Wrtsil is currently developing modular solutions
for offshore applications including integrated control
and safety systems, fire and gas safety systems, and emergency shutdown systems as well as power management
systems. Lee compared the idea to building blocks.
Complex electrical and automation systems often fail
due to problems at their interfaces, he said.
A new technical management approach

The Services division at Wrtsil Corp. provides support
for offshore operations through a new kind of technical
management agreement designed to ensure that engines
and power systems will constantly run optimally.
According to Tage Klockars, general manager, Wrtsil
Service Agreements Marine, This kind of technical management involves installing high-tech electrical and
automation equipment in a rigs control room to enable
the continual online monitoring of conditions on the rig.
Wrtsil has been using such experiences to develop a
modular engineering concept that will make it easier to
find solutions in the future. Were building up best practices that we can embed in modular solutions to help customers achieve seamless transitions during upgrades,
modernizations, and conversions, Peter Lee, general
manager, Global Oil and Gas, said. Best practices derived
from our proven offshore applications, together with customer feedback, can form the basis of modular solutions
with an 80/20 approach. Lee said about 80% of a solu16
Wrtsil is incorporating its offshore services experiences and

best practices into a modular engineering concept that will
make it easier to find solutions in the future. (Photo by Michele
Rossi, 2009, courtesy of Wrtsil Corp.)
46
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year extension, Klockars said. The benefits to customers

include reduced fuel and maintenance costs, the prolonged lifetimes of components, savings on the time spent
by rig crew on monitoring and maintenance, and fewer
unplanned stoppages due to component failures and
unscheduled maintenance work.
Modular solutions create seamless connections

between different systems. This reduces risks, costs, and
execution times, also allowing repeatability and scalability
for future operations and maintenance.
Dynamic maintenance planning

According to Klockars, constant monitoring enables
comprehensive dynamic maintenance planning based
on actual conditions. The online systems, for example,
transmit real-time data to Wrtsils Condition Based
Maintenance Center in Vaasa, Finland. These data are
analyzed monthly to create summary reports and
updated recommendations. We also give six-month predictions for future maintenance needs, Klockars said.
Selected components are additionally inspected visually
on a periodical basis in tandem with the training of the
rig crew. Data from the online condition monitoring of
rig thrusters are sent to the companys Propulsion Condition Monitoring System Center in Holland. The resultant data from all these sources allow Wrtsil to closely
monitor the actual condition of vital equipment.
Such technical management agreements are typically
made for a minimum of five years, plus an optional five-
interrupting drilling. Such an upgrade project would

normally involve towing the rig to a dockyard in Asia
for a layup of several weeks.
Careful planning coupled with our technical and
project management expertise enabled us to propose an
optimized solution, said Venkata Srinivasan, E&A engineering manager of Wrtsil Services in Australia. Taking
only one engine offline at a time and working within the
available window periods, the work was successfully completed in approximately three months without interrupting drilling.
Successful onsite upgrade at sea

In 2010, Wrtsil Services Australia carried out a major
power management system upgrade on the Nan Hai VI
semisubmersible exploration and appraisal drilling rig in
the Carnarvon basin offshore Western Australia. The rig,
owned by Chinese Oilfield Services Ltd. (COSL) and managed by Maersk Drilling Australia, had started to suffer
from power problems in 2009 while prospecting for oil
beneath the Indian Ocean. We realized we needed to
replace the engine control system because of its obsolete
parts and the lack of knowledge to enable field engineers
to service existing equipment, Ulrich Neumann, technical superintendent, Maersk Drilling Australia, said.
Maersk Drilling and COSL challenged Wrtsil to
identify the root causes of the power management
problems and find ways to resolve these issues without
Overcoming challenges
The rigs four 28-year-old 1.8 MW diesel engines required
complete overhauls, and the four sets of engine controls,
generator controls, and governors needed to be replaced.
Limited space on the rig was a considerable challenge in
terms of finding storage space for the almost four tonnes
of machinery and equipment needed for the upgrade and
accommodating the servicing team members. Wrtsil
had to carefully map out the project stages to ensure that
the necessary equipment and the team members with the
right skills were all onboard the rig at the right time.
On the basis of a detailed technical audit of the rigs

obsolete power management systems, which had limited
documentation, our team carefully studied the issues they
had with the present system and came up with a detailed
report and recommendations for the customer on the
components that needed to be replaced or upgraded,
Wrtsil Australia Technical Manager Matt Riley said.
The Nan Hai VIs revamped power system incorporates a
SCADA system featuring two Wrtsil Operator Interface
Stations (WOIS), whose LCD screens enable the constant
monitoring and touch-screen operational control of the
rigs power source.
Completing this kind of upgrade while enabling a rig to
continue uninterrupted drilling in its offshore location
can result in substantial savings for customers. According
to David Roberts, sales manager at Wrtsil Australia, well
planned and executed onsite upgrade projects can avoid
downtime that would effectively cost millions of dollars.
Maersk Drilling also was satisfied the upgrade could be
successfully planned and executed while the rig remained
fully operational. The rigs new reliable electricity supply
will be the basis for the safe and successful operation of
Nan Hai VI in the future, Neumann said.
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OIL FIELD
Integrated operations platform

overcomes production challenges
By improving data quality, automating routine operations, integrating workflows, and uniting
data and models in a common environment, a new platform gives operators a clear picture
of field production.
Colin Smith, Schlumberger
eeting production targets is a continuous challenge, and many components of a field operation
have the capacity to significantly impact the economic
success of an asset. Fast and easy access to reliable information whether real-time or historical is critical to
enable engineers and management to make the right
decisions at the right time to meet both operational and
longer-term strategic objectives. This is the case whether
onshore or offshore and in conventional or unconventional fields.
In most cases, production operations are becoming
more complex, and with field automation, the volume of
measurement data is growing exponentially. In addition,
engineers are being tasked with managing an increasing
The flexibility of the Avocet platform enables solutions for inte-
number of wells. To work efficiently, engineers need to be

presented, at the right place and time, with information
tuned to their particular needs, whether for routine surveillance, extensive diagnostic analysis, or as the basis for
intervention and treatment programs.
A wide range of automated systems has been developed
in past years to support production management, such as
downhole and surface measurement devices, data historians, and business performance and reporting processes.
However, many of these systems are difficult to maintain
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and often costly efforts to integrate disparate software
components, they often fail to communicate effectively
across the whole operation.
To meet this challenge, Schlumberger released the Avocet integrated production operations software platform,
which enables production managers and asset teams to
see a clear and complete picture, understand production
status and field events, identify the root causes of production shortfalls, and act effectively to close the gap between
potential and actual performance.
The platform combines the functionality of a range of
proven information management and operations management tools into one complete software solution. It
combines well operations and production data management systems to deliver a clear, complete, and up-to-date
picture of operations, from capturing and validating
field data to production and equipment surveillance
and tracking of specialized oilfield operations. The platform integrates with corporate datastores, accounting
and fiscal modeling systems, and other applications. Significantly, the platform connects directly to petroleum
engineering simulators and analytical applications to
provide insight into the root causes of production shortfalls. By uniting data with models in a single environment, problems can be identified more quickly,
downtime minimized, and production optimized.
grated operations, including monitoring and optimizing artificial
20
lift systems to maintain optimal lift performance and maximize
Built-in flexibility
pump run-life. (Images courtesy of Schlumberger)
Every producing asset brings unique production chalMay 2012 | EPmag.com
iii
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OIL FIELD
Avocet provides detailed visualization of wellbore configurations, and its data storage is date-effective so that changes
can be tracked through time.
lenges, which can demand new or nonstandard solutions

to address them. This software platform can capture all
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A Microsoft Silverlight interface allows full
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figurations and the tracking of wellbore workovers;

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Model-based flow assurance surveillance functionality
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production systems. These software tools model multiphase flow from the reservoir to the wellhead and analyze
flowline and surface facility performance.
Sharing architectural components enables OFM well
and reservoir surveillance software projects to be set up
with just a few mouse clicks within the platform. This capability provides advanced production surveillance views and
powerful production forecasting tools to manage and
improve oil and gas field performance throughout the
entire life cycle. It allows all asset disciplines to view, relate,
and analyze reservoir and production data with comprehensive workflow tools such as interactive base maps with
production trends, bubble plots, diagnostic plots, decline
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Tight integration with the OFM well and reservoir analysis software also delivers easy flow of data collected and verified by the Avocet platform into the Petrel E&P software
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Production computations & industry standards

The integrated platform can perform full-stream and component-based allocation for a wide range of fluid and disposition types. API, ISO, and AGA standards are used for
Integrated technology
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The integrated platform can collect all types of
production operations information from subsurface, wellbore, wellhead, surface networks,
and facilities. Example applications include
comprehensive solutions to monitor and analyze multiphase meter measurements and monitoring and optimizing the performance of
artificial lift operations. Other applications
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Projects and data transfers in GIS-enabled OFM well and reservoir analysis
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digital
OIL FIELD
volume computation and temperature and pressure correction. Theoretical methods can be used for wellhead estimation and setting up allocation using network schematics.
Operations data are automatically loaded from SCADA
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date-effective and version-controlled to
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By improving data quality, automating routine operations, integrating workflows, and uniting data and models
in a common environment, the Avocet platform provides
operators with many new opportunities to improve field
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Information to act
and add barrels
The integrated production operations
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range of producing asset disciplines
field staff, production and reservoir
engineers, production accountants, and
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relevant information that can affect
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Production managers can visualize asset
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of assets in a consistent manner, in a single environment, regardless of asset
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The platform includes the capability to
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assigned, identified, and tracked for
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The platform provides easy access to
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analysis to detect anomalous behavior,
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requirements.
EPmag.com | May 2012
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digital
OIL FIELD
Digital automation solution enhances

oil recovery in Caspian Sea
Automation services and technologies will help recover additional oil from the massive
Azeri-Chirag-Guneshli field in the Caspian Sea.
Raoul Mercer, Emerson Process Management
he Chirag Oil Project is the next major step in

the ongoing development of the Azeri-ChiragGuneshli field, the largest oil field in the Azerbaijan
sector of the Caspian Sea. The multi-billion-dollar project, which was sanctioned in March 2010, is planned to
increase oil production and recovery through a new
offshore facility designed to expand field infrastructure
between the existing Deepwater Gunashli (DWG) and
Chirag-1 platforms.
Toward this end, the Azerbaijan International Operating Co. (AIOC), a consortium led by BP, has contracted
Emerson Process Management to automate the new offshore platform. The company is expected to provide the
automation and safety systems, asset management tools,
and a broad range of measurement instruments to help
operate the platform safely and efficiently. Emerson also
will act as the Main Automation Contractor for the project, responsible for delivering project management services to ensure all equipment is properly installed and
integrated to meet technical, budget, and schedule

requirements.
Support for the Chirag Oil Project is being provided
by the companys recently expanded base in Baku.
Emerson has been represented in Azerbaijan since 1997,
but the new office increases the range of project management and support services to the region and will play
a critical role in this oil recovery project.
Project workscope
The company worked closely with BP for 18 months as
part of the integrated FEED team to define a digital
automation solution to meet the project needs. Emersons PlantWeb digital plant architecture including
Foundation fieldbus communications, digital automation systems, asset management software, and intelligent
field devices will provide process control and access to
management information. Its network of intelligent
transmitters and valve positioners also will deliver continuous process and equipment health information to
identify potential problems before they affect operations. These predictive capabilities also will help to
deliver high platform uptime.
As part of the PlantWeb architecture,
the DeltaV digital automation system for
process control and DeltaV SIS process
safety system for process shutdown and
fire-and-gas monitoring will enable secure
control of oil production on the platform.
Additionally, AMS Suite predictive maintenance software will provide online access to
instrument and valve diagnostics and automatic documentation of field device maintenance information all contributing to
ongoing efficiency of platform operations
and maintenance activities.
The AMS Suite APM software is being used as part
of Emersons digital automation solution for the
Chirag Oil Project offshore Azerbaijan. (Image
courtesy of Emerson Process Management)
25
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Drilling-with-casing (DwC")
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Ingrated driling ri gs
Liner systems
Mechanized drilling rigs
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Swellable well-construction technolog ies
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The AMS Suite: Asset Performance Management, based on Meridiums

APM software, features a unified interface to assess asset health and criticality, optimize maintenance expenditure, and view key performance indicators
of asset performance that help guide maintenance decision-making. Asset
Performance Management also allows performance comparisons of key
assets at other locations.
Emerson is delivering a range of solutions to monitor and preserve the efficiency of operation. For example, Roxar corrosion monitoring equipment can
be used to monitor the internal condition of pipes, verify their integrity, optimize corrosion mitigation, and support inspection planning and planned
asset maintenance. And a nonintrusive acoustic sand monitoring system also
can provide efficient monitoring of sand production at the field. Additional
Roxar intrusive systems will give direct information about the erosion effect of
produced sand. Corrosion and sand erosion data will be integrated within an
online system, enabling data management and reporting.
A range of measurement instrumentation including Rosemount level,
pressure, and temperature transmitters will be installed throughout the platform. Advanced integrated diagnostics will help to identify potential problems before they cause a disruption to production. For example, Emersons
Rosemount guided wave radar transmitters will be deployed to monitor
levels within inlet separators and scrubbers. These devices incorporate
advanced diagnostics that help to identify any build-up on probes that
can potentially cause problems. Early warning enables maintenance to
be scheduled to minimize disruption.
The companys Micro Motion mass flowmeters are to be deployed for
critical chemical injection measurement applications at the field. Underinjection of inhibitor chemicals can lead to mechanical problems, while
over-injection can increase costs and adversely affects downstream fluid
characteristics. Coriolis mass flow measurements, meanwhile, will provide
the highest levels of accuracy and reliability.
TopWorx Valvetop Discrete Valve Controllers will deliver control and position indication feedback for pneumatically actuated ball isolation valves,
and Foundation fieldbus communications will enable seamless interface
between the automated isolating valves and the integrated control systems.
gets high-integrity casing
string to total depth
OverDrive '" casing running and

drilling systems combine many
conventional casing tools into
one system; and extends the
functionality of the rig 's top
drive from drillpipe to casing,
enabling simultaneous
rotation, reciprocation/
push-down and circulation
of the casing string.

Drilling-with-casing (DwC")
systems can drill, run , set and
cement casing in a s i n g e trip. DwC
technology eliminates the risks of
tripping pipe and BHAs and protects
against drilling hazards with casing in
the hole all the way to total depth (TD).
Performance -matched Technology

Our Tactical Technology can be employed
in virt ually any drilling environment.
Equipped with an application-specific
TorkDrive'" tool , the OverDrive system
enhances safety and wellbore integrity and
reduces nonproductive time. Our Defyer"
series of drillable casing bits provide high

penetration rates and durability in a wide
variety of formation types and compress ion
strengths. The new Defyer DPA drillable
casing bit makes DwC operations possible
in deeper, harder formations at longer

intervals than ever befor
Commissioning and support

With Emerson responsible for all automation engineering and acceptance
testing and for supporting BP with commissioning, configuration, and startup services, the Chirag Oil Project is set to deliver additional hydrocarbons
to secure energy in a key region of the world. BP has estimated potential
ultimate recovery from the supergiant field at more than 5 Bbbl of oil.
The commissioning will initially take place onshore Baku, including all
loop checkouts and loop tests before the final offshore hook-up, and the
AMS Suite will be used to streamline device configuration, commissioning,
and system validation, helping to ensure the project meets its tight deadline.
Construction of the AIOC-operated project is scheduled for completion in
2013 to be followed by first oil. After startup, the local Emerson team will
provide ongoing support services to the BP consortium, with the companys
engineers based permanently on the platform for an initial period to provide complete support for the control and asset management systems, plant
networks, and instrumentation. Additional onshore support will be provided, and this will continue throughout the lifetime of the project.
Our Tactical Technology does not end

there. Find out how we integrate our broad
portfolio with cross-discip line expertise
to get high-integrity casing strings to TD.

Contact your Weatherford representative or
visit weatherford.com/TotalDepth.
The change will do you good "

weatherford .com
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exploration
TECHNOLOGY
Does the US government

need a lesson in economics?
Will geophysical contractors shoot seismic in the Atlantic Ocean just for
the heck of it? Probably not.
n the latest iteration of lets look like were doing

something, the US Department of the Interior
(DOI) and the Bureau of Ocean Energy Management
have announced that the DOI is taking steps to assess
the conventional and renewable resource potential in
the Mid- and South Atlantic. A draft Programmatic
Environmental Impact Statement (PEIS) was released
March 28 for public comment and is intended to determine whether, and if so where, leasing would be
appropriate in these areas.
More to the point, the draft PEIS will assess, and
potentially green-light, geological and geophysical
activities.
Seismic contractors are not likely
to rush into Atlantic exploration
just because they can. (Image
courtesy of PGS)
While the DOIs announcement referred to this decision as a milestone, those in the industry were less
ecstatic. Why? On its face, this looks like progress. No
oil and gas activity, including G&G activity, has taken
place in the US portion of the Atlantic Ocean in
decades. Its possible that areas off the East Coast might
be analogous to some of the geology offshore North
Africa, where major discoveries have occurred.
But while the DOI announcement goes into great
detail about the need for G&G studies, it neglects to
note that there are no lease sales planned anywhere off
the East Coast in the 2012-2017 OCS leasing plan. And
RHONDA DUEY
Executive Editor
rduey@hartenergy.com
EPmag.com
while several permits have been filed to carry out G&G
work in the area, most of these were filed when the
drilling moratorium off the Atlantic coast was temporarily lifted in 2008.
With the removal of any lease sales from the proposed 2012-2017 Five Year Leasing Plan currently
under consideration, the economic or financial incentive to acquire that data and offer it for license has
been removed, said Chip Gill, president of the International Association of Geophysical Contractors, in his
organizations official response.
Gill also expressed disappointment that the North
Atlantic Planning Area was not included in the draft
PEIS. The wind doesnt stop at the New Jersey state
boundary, and neither does oil and gas prospectivity,
he said, adding that Shell Canada is spending US $1 billion to explore for oil and gas offshore Nova Scotia, just
north of the North Atlantic Planning Area.
Currently, DOI Director Ken Salazar is reviewing the
comments and is expected to allow surveying to start
next year. Oddly, the environmental groups are no happier about the decision than the oil and gas industry,
though for different reasons.
Todays announcement is great for petroleum
companies but horrible news for our coastlines and a
potentially deadly blow to ocean fisheries and wildlife,
Natural Resources Defense Council President Frances
Beinecke said in a statement.
It would seem, based on the
immediate backlash to the
announcement, that the decision is not really great for
either side.
29
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CONSTRUCTION
Performance is a shared benefit

Shaving days from the drilling and completions time cycle is a worthy
goal, but who gets to take the credit?
ownhole tools are valued for their ability to lower

costs and decrease the time it takes to get to first
production.
From the bit to the top drive and the fluids circulating through the annulus, each component shares the
stake in both outperforming past results and overall
failure. Todays drilling technology market is strong,
and it boasts a wide variety of processes and tool
suites that give operators more confidence. Work is
done safely, with more efficiency, and everyone benefits when a job comes in under budget.
But the question remains, Who takes credit for
improvements in efficiency?
As youths, my father and his younger brother used to
pick cotton for extra money. He once told me that his
brother had a knack for the activity. At the end of the
day, no matter how hard he tried to out-pick him, my
uncle always came to the scales with more cotton to
trade. I never could figure out how he did it, but he
always beat me, he said.
Its true that at the end of the day, some people
always end up with more cotton in the sack than their
competitors. This analogy is simplistic when compared
to tools supplied for well construction, but it still
makes sense.
With each new benchmark,
performance results are verified and published. Each stakeholder supplies its various
clients with the story of saving
days and trips in an otherwise
difficult drilling scenario. Operators cite mobilization strategies;
drilling contractors cite experienced crews and engineering
design; and tool companies make
claims based on advanced,
propriety technology. The
savings are apparent,
and performance gains
provide confidence
within all facets of the
drilling market.
TAYVIS DUNNAHOE
Senior Editor
tdunnahoe@hartenergy.com
EPmag.com
Case studies for a particular tool or process can identify the specific drilling problem or challenge, the solution applied, and the end results. Highly engineered
solutions deserve recognition when it is due, and the
most advantageous means of drilling in troublesome
environments soon becomes the new standard practice.
In the meantime, engineers and technology providers
continue to scramble to innovate further. Benchmarks
continue to become more impressive. Lessons learned
become the foundation of new research.
The real answer is that everyone participates in
the success of improved well construction methodologies. This is evidenced by the wide range of papers
published by a variety of trade organizations and
other institutions.
The nature of competition contends that companies
must garner improvements in well construction to
validate their internal research and subsequent lab
work. Putting a new tool in the field is no small feat as
virtually no operating company wants to be the first
one to deploy an untested technology. Once this trial
period is accomplished, the results are then quantified
into how much it saved either by cost of investment or
in time/day rates. This information is then pushed
out to encourage repeat business and to bring on
new clients.
Thinking back on my fathers analogy, Ive often
wondered if he would have had a different experience
had he taken a different tack. Rather than focusing on
picking more cotton than his
brother, what would have resulted
had they formed a joint effort?
Most likely they would have
shared an overall gain.
31
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production
OPTIMIZATION
Turning fast talk into fast results

The digital oil field concept has come a long way in a short time, with
results in terms of increased production now backing up all the early talk.
he implementation of intelligent energy or smart

digital oil field technologies has been a hot topic
MARK THOMAS
for the upstream industry. Its come a long way in a
relatively short time (about 10 years), with a lot of talk
mthomas@hartenergy.com
and behind-the-scenes development early on and not
much proof. As a result, it is still viewed by some as an
item to be filed in the IT folder, with its impact on
EPmag.com
day-to-day operations negligible.
As the approach is more firmly embedded in companies around the world, the results in terms of rising
observed similar progress being made in other compaproduction levels are starting to speak for themselves.
nies, he added.
In the early days of implementation it was hard to
Roberts also pointed out that BPs digital oil field
quantify the benefits, but BP is one company that, via
drive has focused mainly on alignment around a core
its Field of the Future program, is reaping the
focus area, driven by its portfolio, where a significant
rewards. While chatting with BPs
proportion of total production is dependSteve Roberts, vice president of
ent on a comparatively small number
the flagship technology proof wells. These wells are typically
When you look at the
gram, at the SPE Intelligent
(but not exclusively) high-rate oil
Energy International event in
and gas wells in moderate to deepchanging world and
Utrecht, the Netherlands,
water depths, on fields producing
the complexity of the
Roberts made it clear the comunder waterflood and with a
pany is seeing quantifiable
propensity for sand production.
challenges facing us,
production optimization beneIt has therefore made perfect
technology is going to
fits from implementing intellistrategic sense for the company to
get us to a different
gent energy solutions.
prioritize and target this element
At the end of 2011, the operaof the portfolio, and it is pushing
place, a new level.
tor estimated it had incremenon rapidly with its next generation
tally increased production levels by
of solutions. According to Roberts, BP
73,000 net boe/d directly as a result of the prohas begun to change its strategy and
gram. It has an internal goal of 100,000 boe/d by
approach to enable this and is aspiring
2017 and Roberts said the company is well ahead of
to become fully empowered by real-time information to
that schedule.
make better decisions faster, he said.
Key features of the program include reducing operEdwin Verdonk, vice president of Subsurface Expertational risk, automating routine tasks, optimizing proise and Technology Deployment at Royal Dutch Shell,
duction, and continuously improving. Technologies
was in agreement. We see that the speed and implebeing implemented include real-time tools for monimentation of new technology is faster than ever before,
toring facilities and predicting failure to enable proacand thats very important, he said. When you look at
tive maintenance, particularly in key areas such as
the changing world and the complexity of the chalrotating equipment and where corrosive materials
lenges facing us, technology is going to get us to a difare being used.
ferent place, a new level.
Roberts said effective solutions have been deployed
When talk is turned into results as
into eight of BPs operating regions, including Alaska,
quickly as the digital oil field initiaAngola, Azerbaijan, the Gulf of Mexico, the North Sea
tive has done, you can see what
(UK and Norway), Oman, and Trinidad. It also has
he means.
33
COVER STORY: DEEPWATER

CHALLENGES & SOLUTIONS
Mark Thomas,
Longer, deeper, colder

As oil and gas companies push the limits in terms of water depths and remote locations,
the challenge of developing technologies and practices that can lower huge
upfront costs is being met collaboratively through joint industry initiatives
and technology partnerships around the world.
eepwater and ultra-deepwater E&P activities mainly

carried out until recently in the established Golden
Triangle of West Africa, Brazil, and the Gulf of Mexico
(GoM) are being rapidly expanded by operators and contractors to include emerging remote frontiers offshore
East Africa, the eastern Mediterranean, Northwest
Australia, and Southeast Asia.
There also is a large crossover in terms of the same deepwater technologies and solutions being potentially applicable to harsh environment areas such as the Arctic and
sub-Arctic.
At present, the Golden Triangle still dominates deepwater
output and expenditure but the picture will soon start to
change. In terms of production, the situation is this:
Deepwater oil production is dominated by Brazil, the
US, Angola, and Nigeria;
Deepwater gas production is dominated by the US, Norway, Egypt, and India;
Deepwater production growth is rapid, forecasted to
grow at 6% per year over the next decade; and
Significantly, ultra-deepwater output in more than
1,500 m (4,921 ft) water depth is expected to grow at
12% per year.
34
According to Infield Systems, deepwater (more than 500 m/

1,640 ft) is the key growth market within the offshore oil and
gas sector and the most capital-intensive area for development.
The emerging trends within the deepwater and ultradeepwater sector reflect the dynamic state of the industry
and the strong level of operator optimism going forward,
according to Infield. With advances in upstream technologies combined with a growing geological understanding of
deepwater plays, international oil companies, independents, and national oil companies (NOCs) are all looking
ahead to an increasing number of prospects within the
deepwater market in established areas as well as in areas
previously deemed to be of marginal value.
Infields Global Perspectives Deep and Ultra-Deepwater
Market Report covering the period to 2016 also points out,
however, that in addition to the environmental and geological
challenges of deepwater production, with rising resource
nationalism and increasing NOC involvement, geopolitics also
will continue to shape the future of activities going forward.
Deepwater capex leaders

In terms of major deepwater players, Petrobras is the continually dominant figure according to Infield, the state-owned

2012-2016 timeframe. Comparatively, North Americas capex share of the market is expected to stand
at 21%, followed by Europe and Asia.
The largest technology segment for investment will
be pipeline installations Infield expects this to comprise 39% of total global deepwater expenditure.
Latin America and Africa are expected to account
for the greatest proportion of deepwater pipeline
spend, although the single most capital-intensive
pipeline project is expected to be Gazproms South
Stream development, which was approved recently
by the Russian government and which will be situated in up to 2,200 m (7,218 ft) water depth.
By 2020, deepwater production from the current major contributors will
Subsea spend stays strong
Deepwater subsea expenditure is expected to

such as Australia, Israel, Malaysia, and Indonesia. (Source: Rystad Energy; remain high, with projects offshore West Africa
McKinsey analysis)
forecast to comprise the largest share of subsea
demand over the same five-year period.
giants projected share of capex to 2016 is forecast to
According to Infield, oil and gas operators venturing
make up more than a quarter (26%) of the total global
into deeper, harsher, and more remote locations increasdeepwater spend and will be directed predominately
ingly need top tier equipment often at a significantly
toward its presalt assets in the Santos basin.
higher cost than more standard equipment to access
Adding to this will be high investment levels by the
these reserves.
supermajors, the firm said. Chevron, Total, Shell, BP, and
Ultra-deep installations will account for almost 25% of
ExxonMobil will, combined with Petrobras, make up more
the annual subsea tree market by 2016, and Infield said
than two-thirds (65%) of the total global deepwater capex
the potential for subsea capex throughout the forecast
figure to 2016.
period has increased dramatically.
The growing influence of independent operators such
Petrobras is again a leading light, with an expected
as Anadarko Petroleum, Noble Energy, Hess, and Tullow
capex of US $18.9 billion between 2012-2016 and key
Oil also is apparent, with these companies expected to
developments such as the pilot projects on the Iara and
substantially increase their proportion of capex within the
Guara fields and a series of extended well tests on Iara,
deepwater market over the next five years. For Anadarko,
Libra, Franco, and Iguacu fields. In Brazil, an estimated
the rise in investment is particularly significant, with key
38% of the projected subsea capex will be needed to
projects including the GoMs Lucius project and exciting
develop the regions presalt projects.
new developments offshore East and West Africa.
Prospects for manufacturers also are looking positive
In terms of reserves coming onstream over the period
globally, with the market outlook showing a well-supplied
2012-2016, from a regional perspective it is again Latin
market with a total capacity of 690 trees. Toward the end
America (almost entirely Brazil) that will dominate, with
of the forecast period, Infield expects higher utilization
the area forecast to supply 39% of total global reserves
rates and the start of a saturated market, driven mostly by
additions. More than 60% of these are projected to come
the increasing demand for subsea trees in main phases in
from Brazils presalt basins.
Brazil and West Africa.
However, the largest deepwater field development
Global subsea tree manufacturers utilization rates are
expected onstream during the same five-year period is
expected to increase to an average of 75% in the next
located offshore Australia at a depth of 1,300 m (4,265 ft),
three years, up from 49% in the 2009-2011 period.
with the ExxonMobil-Chevron joint development at Jansz
Advanced seabed technologies
(Greater Gorgon) expected to start flowing in 2014 with
Advances in technology are increasingly being tested and
reserves totaling some 2.8 Bbbl.
deployed in response to the industrys insatiable demand
Offshore Africa, Infield anticipates strong investment will
for solutions to deepwater and harsh environment chalcontinue, with the region holding an equal global deepwalenges as well as sustaining production rates in mature
ter capex share to that of Latin America at 30% across the
have risen still further but with growing contributions from emerging areas
35

Sunrise over Peregrino Brazils presalt development

bonanza is driving the global deepwater market, both in
terms of investment and technology development. (Photo
courtesy of Statoil ASA)
developments, boosting flow rates in low pressure reservoirs, accommodating a larger number of fields tied
back to host facilities, and ensuring the energy and costefficiency of a project.
Infield highlighted that potential projects that could
benefit from the use of advanced seabed technologies
include mature fields in the North Sea and the US GoM,
where a large number of smaller developments are
expected to be tied back to existing platforms to be
commercially viable.
It also expects West Africa will be one of the key regions
for implementing subsea processing because of the
regions already extensive deepwater production; significant oil reserves; and geographical distribution of its
fields, which require multiple wells being tied back to
single central processing facilities.
In Africa, oil companies such as Total, BP, ExxonMobil,
Chevron, and Eni will try to take advantage of the areas
ample resources to leverage against the declining reserves
from other mature areas. Total is leading the subsea
charge there with a projected $8 billion of expenditure
within the forecast period, according to Infield.
Australia also was flagged as a major player in the global
gas market, largely due to the development of its offshore
natural gas projects. Post-2013, a significant backlog of
major projects is predicted to provide a boost to the market, with more than 50% of the forecasted subsea market
expected to relate to tiebacks to a fixed, floating, or terminal facility.
Lastly, in the GoM the changing regulatory environment governing operators activities will lead to future
subsea equipment and infrastructure needing to comply
with stricter regulations. This will result in higher safety
specifications and consequently lead to greater capital
expenditure per development, Infield said.
36
Chevron at the sharp end

Chevron has been a key player offshore, having invested in
deep water for an extended period of time as a major part
of its future production profile.
Project expenditure over the next six years will see deepwater projects account for nearly 30% of its total spend,
only just behind the companys largest project investment
area (LNG), which comprises more than 35% of its total
spend. This year deepwater project startups for Chevron
include the Usan and Agbami II developments offshore
Nigeria and Tahiti II in the deepwater GoM. These will be
followed in 2013 by Papa Terra offshore Brazil and the
following year by the Jack/St. Malo, Big Foot, and Tubular
Bells projects in the GoM and Gorgon offshore Australia.
Gary Luquette, president, Chevron North America E&P
Co., said, Weve had a strong presence in deep water for
many years and are focused on maintaining this going forward. Our exploration success has translated into worldclass producing fields such as Tahiti in the Gulf of Mexico,
Agbami in Nigeria, and BBLT in Angola. These projects,
along with many others, are delivering about 375,000 b/d.
Our success has led to a strong queue of major capital
projects, resulting in a full pipeline that is expected to
grow our deepwater production to 470,000 b/d by 2017.
Chevron has three deepwater projects in various stages
of early startup. In Nigeria it has Usan, with a peak capacity of 180,000 b/d of oil, which began production in February. Ten wells already have been drilled, and peak
production is expected in 2013. Also in Nigeria, the company expects to start production from Phase 2 of Agbami.
This was originally planned for 2011, but strong production performance from existing wells kept the fields
FPSO at capacity throughout the year. Chevron said it
presently is drilling Phase 2 wells to maintain that production plateau.
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In the GoM, the companys Tahiti II project is progressing despite some delays due to the recent moratorium.
The topsides water injection equipment has been installed,
Luquette confirmed, and the operator began injection in
February. Were currently drilling and completing additional producers, which are expected to reduce field
declines and improve ultimate recovery, he said.
tance of incremental recovery through technology.

Our industrys experience is that big fields tend to get
bigger, and with continued development and application
of technology, the reserve base in the Lower Tertiary trend
will continue to grow. We sanctioned Jack/St. Malo on the
basis of existing technology and recovery of less than 10%.
With incremental technologies, we see the potential to
increase ultimate recovJack/St. Malo:
ery to more than 20%.
a template for
By doubling recovery,
others
we have effectively
Looking further out to
added 500 million bar2014, Chevron is conrels to Jack/St. Malo,
tinuing with construcand were looking fortion for its Jack/St.
ward to applying what
Malo development in
we learn here to other
the Lower Tertiary
Lower Tertiary develtrend in the GoM. Fabopments.
rication of the floating
He also gave extra
production facilitys
insight into the GoMs
hull and topsides is
current activity status.
under way, and in late
According to Luquette,
2011 the operator
Chevron is now ahead
began drilling the iniof its pre-Macondo,
tial development wells
pre-moratorium pace
Helix Energy Solutions Groups Well Enhancer intervention vessel has just
at both Jack and St.
in the deepwater GoM.
completed a three-month campaign carrying out West Africas first well
Malo. In addition, the
We were at three drillintervention work and subsea well operations conducted from a mono-hull
nearby third-party
ships at the time the
intervention vessel. This was the deepest operation conducted by the
operated Julia field will
moratorium was put in
Well Enhancer since it joined the Helix fleet in 2009. (Photo courtesy of
be tied back to the proplace, and we now
Helix Energy Solutions Group)
duction hub, increashave five deepwater
ing its capital efficiency
drillships four on
and investment returns.
location and a fifth one, the Pacific Santa Ana, that will
A noteworthy aspect of Jack/St. Malo is that its
arrive soon. That level of capability is something that
designed to provide a template for future developments,
were going to sustain for the foreseeable future. Its the
said Luquette. Were already evaluating its potential use
right level for us, he said.
for our Buckskin and Moccasin co-development. Big Foot
Of the five drillships that the company is going to have
also is making significant progress. The hull and the topworking over the next couple of years, four will be engaged
sides fabrication has begun, and we are currently drilling
in development drilling as a result of its success with its
the initial set of production wells.
exploration program and getting Jack/St. Malo and Big
Another GoM project, Tubular Bells, has a total develFoot online with a full complement of wells.
opment cost estimated at about $2.3 billion, with producCollaborative technology development
tion expected to peak at 40,000 b/d. Like Big Foot,
Chevron has been one of the main supporters of the
Tubular Bells will develop a Miocene reservoir. These are
upstream industrys increasingly collaborative efforts to
characterized by relatively high flow rates and high recovresearch and develop new and improved deepwater techeries, Luquette said.
nologies through globally respected and well-established
He also stressed the impact of advancing technology for
programs such as DeepStar.
incremental recovery on Chevrons deepwater developThe industry is generally focusing its attention on
ments. When we drilled the initial discovery wells at Jack
achieving improvements in areas such as:
and St. Malo, it was clear the Lower Tertiary trend held a
Subsalt imaging;
significant resource base. We also recognize the impor-
38
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3-D wide-azimuth surveys;

Drilling in 3,000 m (10,000 ft) water depth;
Next-generation drillships;
Single-trip multizone frac pack completions;
In-well artificial lift;
Rigless well intervention;
Long-distance tiebacks (oil: 80+ km, gas: 322+ km);
Seabed boosting and processing;
Host facilities with small-field (50-200 MMbbl) tieback;
Hull/mooring design standardization;
Compact modular processing systems; and
Intelligent wells and i-field solutions.
DeepStar still delivering

Having started back in 1992, DeepStar is administered by
Chevron Energy Technology Co. The latest phase (Phase
XI) kicked off in January, and its focus reflects many of
the above interest areas. Some of the key deepwater challenges being tackled in the latest phase are:
Ultra-deepwater development:
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Enhanced well productivity and recovery:
Subsea boosting and artificial lift; and
Remote well test pressure monitoring.
Flow assurance:
Asphaltene deposition simulation and validation;
Hydrate kinetics and plugging; and
Cold restart.
Enhanced deepwater production systems:
Global performance;
Alternative systems and methodologies; and
Extreme current and wave measurement.
Well cost reduction:
Dual density/riserless mud recovery; and
Conceptual improvements.
It also is tackling other areas including improved economic thresholds for small fields; systems operability
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accenting the value of this kind of partnering for technology development. These include organizations such as
Research Partnership to Secure Energy for America
(RPSEA), Norways Demo 2000, and the UK-based
Industry Technology Facilitator (ITF).
availability and reliability; drilling, completion, and intervention paradigm shifts; and early production systems.
DeepStars collaborative efforts are being driven by participation from oil companies and contractors, all of
whom increasingly recognize the benefits of addressing
common challenges. This latest phase has 10 oil company
participants, and DeepStar has more than 35 service and
vendor company contributor members.
Within DeepStar oil companies, vendors, regulators,
academic institutes, and research organizations cooperate
to develop technologies necessary to meet the identified
challenges. In doing so, each participant reduces the cost
and risk of developing technology with leveraged funds
and the collective wisdom of more than 1,000 subject matter experts in areas absent of competitive advantage (to
the oil companies).
Phase XI will conclude at year-end 2013, while most
ongoing projects in Phase X will be completed by 2Q 2012.
The DeepStar program also regularly links with other
similar joint industry projects around the world, further
RPSEA program rolls on

One of these, RPSEA, recently selected six research
proposals as part of its own ongoing Ultra-Deepwater
Program. These were chosen as part of its contract with
the US Department of Energys National Energy Technology Laboratory, with the US government contributing
$9.6 million towards the projects.
Along with contributions from research partners, the
investment will total more than $26 million over three
years.
The selected projects, in summary, are:
More improvements to deepwater subsea measurement.
Project Leader: Letton-Hall Group. Other participants include Oceaneering International/Deepwa-
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41

LEFT: Shells Perdido spar facility has

been producing from the Lower Tertiary since 2010 in 2,450 m (8,000 ft)
water depth. (Photo courtesy of Shell)
BELOW: The development of nextgeneration drillships like the Stena
Drillmax, capable of drilling in ultradeepwater and harsh environment

areas such as the Norwegian and
Barents Sea, has enabled operators
to tackle exploration in remote frontier areas previously beyond their
reach. The drillship currently is carrying out ultra-deepwater exploration
drilling offshore Ghana for Hess Corp.
(Photo courtesy of Stena Drilling)
ter Technical Solutions, Joe Brown Company,

BP, Chevron, ConocoPhillips, Shell, Statoil,
and Total;
Coil tubing drilling and intervention system using costeffective vessels. Project Leader: Nautilus International. Other participants: INTECSEA/WorleyParsons Group, General Marine Contractors, NOV
CTES, Tidewater, GE VetcoGray, Anadarko Petroleum, Chevron, Shell, ConocoPhillips, Hess, Halliburton, Baker Hughes, and Rolls-Royce;
Effect of climate variability and change in hurricane
activity in the North Atlantic. Project Leader: University Corporation for Atmospheric Research.
Other participants: Willis and Chevron;
Deepwater reverse-circulation primary cementing.
Project Leader: CSI Technologies. Other participants: Weatherford International and the University
of Houston;
Autonomous underwater inspection using a 3-D laser.
Project Leader: Lockheed Martin. Other participant:
3-D at Depth; and
All-electric subsea autonomous high-integrity pressure protection system architecture. Project Leader: Granherne.
The ITF, meanwhile, has identified deepwater-related
priorities mainly in the subsea sector that it says its operator and service company members want to see tackled in
2012. This will include subsea power, ultra long-distance
42
tiebacks, produced water and separation, and cleaning

and replacement of valve actuators.
ITF is offering up to 100% funding for the right solutions for some of the most pressing challenges and is aiming to secure around $75 million of investment directly
from its members over the next three years for this and
other technology priorities.
Such collaborative industry programs and initiatives,
because of the beneficial effect they have in terms of
reducing the costs and increasing the speed of development of new technology solutions for deepwater projects,
will play a vital role in the race to find and produce new
reserves to meet growing global energy demand.
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Riser gas risk mitigation on a

drillship uses closed-loop
circulation drilling systems
In deep water, one of the hazards that closed-loop drilling systems
help mitigate is the threat of riser gas.
Julmar Shaun S. Toralde and Ardia Karnugroho,

Weatherford International
losed-loop drilling (CLD) systems allow drilling

operations to be performed in a closed environment instead of the conventional method of keeping
drilling fluid returns open to the atmosphere.
The ability to close or restrict the flow of circulation
returns and control and maintain pressure on the well
while simultaneously rotating and continuing to drill is
only possible with a rotating control device (RCD). An
RCD creates a pressure-tight barrier in the wellbore

annulus that allows fluid returns to be contained and
diverted, forming a vital line of defense against drilling
hazards. In a deepwater drilling environment, one of
the hazards that CLD systems help mitigate is the threat
of riser gas.
Previous studies on deepwater wells have revealed
that due to the use of oil-based fluids, gas kicks that are
unintentionally entrained in the return mud flow are
unlikely to break out of solution until they reach a
depth of 610 m to 915 m (2,000 ft to 3,000 ft) below
the drill floor. At this point subsea BOPs will no longer
be able to contain them. The conventional practice of
dealing with gas in the riser is to use the rig diverter
system to vent it, but there is minimal control and considerable risk involved. It is for this reason that handling of gas in the riser on a deepwater rig is complex
and challenging.
To mitigate this risk using CLD systems, an RCD is
installed on top of the rig marine riser together with an
additional annular BOP and flow spool directly below it.
This combination provides a system that is already in
place to safely divert fluids containing gas away from the
rig floor and toward an automated managed-pressure
drilling (MPD) choke manifold system.
Riser gas handling applications require an automated
MPD choke manifold with Coriolis mass flow meters and
high-precision pressure sensors that enable higher sensitivity and greater data resolution. An in-line gas chromatograph and a high-rate mud/gas separator provide
gas characterization and gas handling capabilities,
respectively. In addition to safely handling gas in the
riser, this system allows drilling operations to be conducted with surface pressure and advanced kick and loss
detection and control capabilities.
The BTR RCD is a key component of a deepwater MPD system, containing annular flow and redirecting it to help form a closed-loop
circulating system. (Photos courtesy of Weatherford International)
44

The RCD and the MPD joint are shown during the installation process.
Closed-loop drilling systems

for DP drilling vessels
CLD systems only recently have been used in deepwater
environments and more recently in dynamically positioned (DP) drilling vessels. A major technical hurdle
for this application was cleared when the industrys first
RCD made up below the tension ring and integral to the
riser package of a DP drillship was developed.
The Weatherford SeaShield Model 7875 Below-Tension-Ring (BTR) RCD was first deployed in 2010 and has
since been used on at least five deepwater wildcat wells
in Indonesia.
The BTR RCD, a key component of a deepwater MPD
system, contains annular flow and redirects it to help
form a closed-loop circulating system. The RCD forms
part of what is called an MPD riser joint (together with a
surface annular BOP and a flow spool) that is installed
through the rotary table when the riser and BOP are
deployed.
In Indonesia, the BTR RCD was installed above the
intermediate riser joint and below a standard slip joint
about 43 m (140 ft) below the rig floor and 12 m (40 ft)
below sea level. Hydraulic and electrical connections
below the water line are made via a subsea-rated
hydraulic stab plate. The BTR RCD is the first rotating
head designed and field tested to support riser tension
requirements of as much as 3 million lbs. and is certified
to the drill-through specifications of API 16 RCD, the
industry standard for RCDs. Using this standard, the
RCD has been rated to a static and dynamic pressure ratings of 2,000 psi and 1,000 psi (at 100 rpm), respectively.
Prior MPD operations aboard floating vessels have been
configured with a surface RCD above the water line and
the tension ring. Because the new RCD is made up
below the tension ring, no modifications are required
to the risers telescoping slip joint or the rigs mud
returns system.
In the deepwater CLD set-up, an MPD annular BOP is
installed below the BTR RCD. The MPD annular BOP is
used in conventional drilling operations when the RCD
sealing element is not installed to shut the well in and
facilitate CLD riser degassing operations. The MPD
45

annular BOP also can be used when the RCD sealing

element needs to be replaced. The MPD flow spool is
installed below the MPD annular BOP and is connected
to flexible hoses, which act as the primary flow lines for
MPD operations.
The other major component of the deepwater MPD
system is the Microflux Control Automated MPD Choke
Manifold. It is a specialized 5,000-psi manifold equipped
with dual chokes and instrumented with a Coriolis mass
flowmeter and precision pressure sensors. The system
enables the management of annulus pressure throughout the wellbore and in the marine riser. Adding annular pressure control at surface and controlling pressure
in the marine riser will assist in controlling gas breakout.
The gas can be kept in solution by applying pressure on
surface and will then expand after exiting the riser and
passing through the automated MPD choke manifold
system. The expanded gas is then diverted and managed
accordingly through the high-rate MPD mud/gas separator system.
Deepwater CLD systems

and riser gas risk mitigation
The CLD system for deepwater applications on a DP vessel takes both a proactive and reactive approach on mitigating the risk of an event involving gas in the drilling
riser. The proactive approach uses the early kick detection and control capabilities of the CLD system to drastically cut back the incidence of reservoir gas entering the
oil-based mud system at depth and dissolving into it
without being detected, only to come out of solution
later on when already in the drilling riser and above
the subsea BOPs.
Both testing and field deployment have proven the
systems ability to detect flow anomalies within its
defined range earlier and faster than conventional
systems. The automated MPD choke manifold system
is operated in automatic mode and will immediately
detect a kick and close in on its choke to increase the
bottomhole circulating pressure and control the well.
In the six rank wildcat deepwater wells drilled with
the CLD system, there have been no
instances recorded where formation
gas has broken out of solution above
the BOPs and inside the riser.
Furthermore, the CLD system control algorithms detected at least five
f !) J J'
flow anomalies, kept them to a minimal
volume, and circulated them safely out
itJJJJ J] J r? lS.Jir1J
using the rig well control equipment.
,,,
In the unlikely event that an influx
Ill r J. r JJI
Y^ I
does make it above the subsea BOPs
1 1,
and into the riser, the CLD system setup can be used to circulate the influx
r
out of the well in a controlled manner.
In the deepwater CLD system
deployed in the field, there has so far
been one instance when an influx was
circulated out through the riser using
the system after being detected. After
::
"rte
closing in on the subsea BOPs, the
MPD annular BOP also was closed, and
the fluid system above the subsea BOPs
was circulated out through the automated MPD choke manifold and the
high-rate mud gas separator. The mud
?pFFSHOy?\
in the riser was then weighted up, and
OTC2012
the subsea BOPs were opened and the
\\
RELIANT PARK
rest of the well circulated to a higher
? coy' .,. HOUSTON , TEXA S
mud weight with the MPD choke maniApril 30 - May 3 Come visit us at Booth #10159
fold exerting and controlling backpreswww. TheGasGun .com 877 .557.1370
sure to avoid subsequent fluid gain.
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46
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EXTENDING
RESERVOIR LIFE
EOR system creates seismic shift

in waterflood technology
A new approach practically shocks reservoirs into giving up more oil.
Rhonda Duey, Executive Editor
he oil and gas industry has gotten quite creative in its

efforts to enhance oil recovery in its aging fields
waterfloods, surfactant floods, CO2 and nitrogen floods,
steam floods, and even firefloods have been tried to
squeeze more oil out of the reservoir.
But liquids in a reservoir are somewhat lazy, taking the
path of least resistance when injected. They will follow
the areas of highest permeability, and if a producer is
converted into an injector, those areas will be the same
pathways that the oil has been using to find the well
bore for the past several years. The oil that remains is
not likely to be swept through those existing pathways.
Downhole, the water exits the tubing, finds the perforations, and then enters the reservoir, said Brett Davidson, founder, president, and CEO of Wavefront
Technology Solutions. Once it enters into the reservoir,
it doesnt go in as a discrete front; it goes in as fingers.
Waterflooding was first patented in the late 1800s,
and though its added a lot of extra barrels to oil fields,
the inefficiency of it is that it cant contact all of the oil
in place.
What is needed is a system that can temporarily open
additional pathways to help the water sweep more oil.
Davidson said his company has that solution.
The Powerwave valve
The earthquake theory

Wavefront was founded by Davidson and two professors
who were studying the phenomenon of EOR after earthquakes. Dr. Tim Spanos was a theoretical physicist at the
University of Alberta, and he was intrigued by the fact
that a swarm of earthquakes in a tectonically active area
create a temporary increase in oil recoveries.
There was a lot of research going on at the time
using large shockwaves to try to influence fluid flow,
Davidson said. Tim studied that phenomenon and
thought that the type of waveforms they were trying to
induce werent really the link to the EOR.
Spanos theorized instead that the type of wave energy
that was interacting in the subsurface was more like a
is easily installed in an
injection well, helping
fluids find additional
pathways to bypassed
oil. (Images courtesy
of Wavefront)
tsunami, where the wave moved slowly rather than

quickly like a seismic wave.
Spanos approached Davidson and Dr. Maurice
Dusseault, a professor at the University of Waterloo, and
asked them to study his theory. The resulting process
and tool was originally field-tested in Alberta.
49
EXTENDING
RESERVOIR LIFE
We found that by using our downhole technology, we

could increase oil recovery during flooding processes,
Davidson said. The problem was that the price of oil
was so horrible in 1999 that nobody was really interested
in EOR.
The equipment required also was not conducive to a
global product launch, so the next few years were spent
developing downhole tools that could be shipped to the
client by courier.
Ultimately Wavefront purchased part of an oil field in
Oklahoma to test the new tools. It got its first commercial pilot contract in 2007. Currently the company
has clients in Canada, the US, Argentina,
Colombia, and Oman.
20% to 25%. Based on what weve seen in the field over

the years that weve had tools installed, it may be possible to add another 10% or more to that recovery.
The upside to our clients is their balance sheet. If I
can take probable reserves and move them to proven
reserves, because Ive slowed the production decline
and extended the field life, it has a large impact on my
clients balance sheet.
For instance, the original client in Alberta has slowed
its decline rate from 3.4% per month to 1%. Davidson
added that in addition to producing more oil, the system also decreases the water cut.
Currently the system can manage any
type of liquid flooding, including
steam. It even injected a mixture
How it works
of iron filings and corn oil at
Davidson compared the cona NASA project at Cape
cept behind the technology,
Canaveral. Its an emulPowerwave, to a kink in a
sion, he said. It doesnt
garden hose. Water presmatter what the fluid
sure does not build up
medium is. The fluid is
behind the kink, but
always trying to follow
energy does. When the
the path of least resistkink is undone, a sudance. Wavefront is
den burst of water
improving that.
spurts out.
He added that the
If I take that simple
combination that has
concept and put a valve
worked best to date is a
at the bottom of the
combination of Powerinjection string, the tubwave and a surfactant.
ing above the valve is storSo what about fracturing energy when its closed,
ing? A lot of companies
Davidson said. When its
have asked us if we can do
opened, all of that momentum is
that, Davidson said. The
released, and the response of the
quick answer is yes, Wavefront
reservoir is, Holy heck!
can fracture if we decide that
Once installed downhole, Powerwave valves
The reservoir responds to the
Powerwave can be used in that
can be turned on and off, creating an influx of fluid
sudden influx of pressure by
application. The primary differinto the reservoir to cause additional fingering.
dilating its pore structure to
ence is that typical fracturing
accept the onrush of the addiprocesses create a deeply penetional fluid. We dont eliminate fingering, he said. We
trating fracture that forms lenses in different direccreate thousands of additional fingers.
tions. Using a pulse-frac method like Powerwave would
Unlike hydraulic fracturing, which permanently crecreate less penetration depth but also would create
ates new fissures in the rock, this is a temporary flexing,
many more fractures.
but it allows the water to find pockets of oil that have
For now the company is content to help operators
not yet been produced.
wring more from their fields. Ultimately, every oil comDavidson said the technology also can be used for
pany wants to get the maximum amount of oil out of a
ground water remediation, but for now he is focusing on
reservoir, he said. Powerwave is allowing them to do
the EOR business because of the value proposition.
this without having to drill as many new wells. If they
If I do enhanced recovery, I might get 40% of the
can drill fewer wells and get more oil out, thats a winoil, he said. The heavy oil fields in Canada are getting
win situation.
50
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EXTENDING
RESERVOIR LIFE
Reservoir modeling
extends field life
Accurate models help improve recovery rates.
Tyson Bridger, Emerson Process Management
ith average global oil and gas recovery rates in the

low 20% range, the smallest improvements can
have a huge impact on both future oil and gas production and the bottom line.
Toward this end, the last few years have seen a renewed
technology focus on squeezing more from less and in
extending the life of oil and gas reservoirs through a
plethora of EOR and artificial lift techniques. And the
stakes and benefits are huge. There are predictions that
an increase of just 1% in recovery rates would replace
three years of global oil consumption.
The default platform

for predicting behavior
and lower recovery rates. This is particularly important

when it comes to incorporating 3-D and 4-D seismic into
the reservoir model.
It is with this in mind that Emersons Roxar RMS
enables 4-D seismic data to be incorporated into the reservoir model alongside existing data types such as geological, geophysical, and simulation data. Facies modeling
tools also enable the user to rapidly improve the quality of
interpretations, structural and property models, simulation models, and well plans.
The latest version also comes with new seismic inversion
and seismic attribute tools. The inversion tool and
increased automation, for example, allows geoscientists to
use seismic data to create a rock property model quickly
and accurately. This is achieved through combining highfrequency information from well logs with band-limited
One often overlooked means of extending

reservoir life and increasing recovery rates
is reservoir modeling. Three-D reservoir
modeling today is the standard platform for
mapping, understanding, and predicting
reservoir behavior. A robust, reliable, and
accurate reservoir model that captures all
the fields complexities can provide operators
with the crucial information they need when
developing their assets and extending the
reservoirs life.
Such models provide operators with a spatially accurate analysis of the field, tools to
RMS 2012 incorporates new inversion and attribute tools. (Images courtesy of
explore reservoir management possibilities,
Emerson Process Management)
and crucial information on oil in place and
how the oil can be produced.
One of the key ways in which todays reservoir modeling
frequency information from the seismic data. Users also
packages can achieve this is in their ability to deal with
can create attributes that more clearly define reservoir
whatever structural or modeling complexities are thrown
structures and guide them through the facies modeling
at them while generating predictive reservoir models that
process.
realistically represent the underlying seismic data.
A new object-based, facies modeling tool combines data
extracted from seismic with geostatistical tools such as
Making full use of seismic
guidelines and trends to generate well-constrained sediAny reservoir model that oversimplifies geological commentary bodies. This ability to access both deterministic
plexities is not going to deliver the vital information operand statistical techniques gives the modeler access to the
ators require and will lead to reduced field productivity
gray area between seismic resolution and data-con52
SHALE PLAYS
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EXTENDING
RESERVOIR LIFE
A stochastic 3-D model of

the Kutz field in Mexico will
help Pemex plan for future
EOR activities.
strained statistical
modeling. The net
result is a realistic
property model conditioned to well observations and with accurate
volume calculations
all vital information when looking to extend the life
of the reservoir.
These are just a few of the features provided by todays
reservoir modeling solutions. Other tools include field
planning to design multiple targets, optimize pad and target locations, and automatically generate well paths; fracture modeling and well correlation tools; and improved
integration and usability features. The result is a seamless
route from seismic to simulation absolutely central to
efforts to improve oil and gas recovery and extend reservoir life.
North American case studies

One example of where this reservoir modeling software
helped reservoir management and well productivity
was in Pemexs Kutz offshore field, which is part of the
Cantarell asset, one of the worlds largest oil and gas
fields. Production peaked at 2.1 MMbbl/d in 2003. The
field was placed on nitrogen injection in 2000. Production has declined since 2003, however, falling to 464,000
b/d by year-end 2010.
Pemex wished to create a more detailed 3-D reservoir
model of the Kutz field a field that comes with significant reservoir heterogeneities, including a symmetrical
anticline, complex compressional faulting, and a diversity
of sedimentary environments.
There was a need for a 3-D model that tackles the fields
geological complexities, leads to a greater understanding
of the asset and its reserves, and helps support updated
field development plans based around its 12 existing wells.
The reservoir model also will provide input to further simulations and decisions around the adoption of future EOR
techniques.
With its ability to enable direct reference between the
model and the 3-D seismic; its fault, fracture, and objectbased facies modeling capabilities; and its simulationfriendly grids, this software was the ideal solution for
Pemex and helped generate a robust and accurate model
of the Kutz field addressing all geological complexities as
54
well as honoring reservoir

heterogeneity. The model will
be used for the further development of the field, in future
simulation processes, and in
maximizing oil recovery through
water, gas, CO2, and nitrogen
injection processes.
North Sea
case study
The North Sea is
another region where operators are investing in and
using reservoir models as a means of extending reservoir
life and increasing recovery rates. One of the leading
operators in the region, Statoil, has a target recovery
factor of 65% for platform-operated fields and 55% for
subsea-operated fields and is starting to make good on
these goals.
Today the North Sea is delivering recovery factors of
approximately 46%, with the highest recovery ratios on
the Norwegian Continental Shelf.
Many of these fields including 92% of all Norwegian
fields are employing Roxar RMS. One example is Statoils Statfjord field, which in 1987 posted the record (still
going to this day) of the highest daily production ever
recorded for a European oil field outside Russia of
850,204 bbl. Today Statfjord is one of Statoils late-life
fields, delivering recovery rates of up to 66% and currently scheduled to remain active until 2019.
Here, according to INTSOK, a joint partnership
between the Norwegian oil and gas industry and Norwegian government, reservoir modeling software has played
a crucial role generating predictive models for the field
and providing input to well intervention, 4-D seismic, and
water management decisions. Any IOR efforts for the field
such as water injection also are very dependent on the
predictive model developed.
No more focus on the short term

Too often oil and gas production strategies have been
guided by short-term decision-making predominantly
by fluctuating oil and gas prices and a knowledge that
once the easy oil has been found and a recovery rate of
30% has been achieved, easier oil can be found elsewhere.
However, as oil and gas become harder to find and as
energy demand continues to rise, the industry no longer
has this luxury.
It is encouraging to see that reservoir modeling today is
playing such a crucial role in extending reservoir life and
delivering high oil and gas recovery rates.
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At Polarcus our highly trained

geoscientists specialize in survey
design and planning. Utilizing some
of the latest software modelling tools
and a wealth of experience we can

help you choose the right project
configuration for the geological
objectives, to ensure that you get the
most from your data.
Making the RIGHT
N
DICE;
EXTENDING
RESERVOIR LIFE
Enhancing asset performance

should not compromise safety
Process management tools help reduce costs and improve HSE.
David Bleackley, Aspen Technology Inc.
ature assets present their own challenges for safe

and profitable operations. There have been many
improvements in drilling and reservoir technology that
have been instrumental in extending field life, but this
in turn is creating the need to improve the performance
of the production facilities themselves. There is often a
perception that maximizing production from mature
assets puts safety at risk, but in many instances the two
objectives can be complementary.
Achieving success
To succeed in increasing longevity of mature assets,
there are a few key considerations:
People and work processes;
Data and information; and
Effective use of technology.
The first task is to fully identify the correct work
processes and associated tasks to safely manage the operations of the asset. Once this evaluation is complete,
companies need to focus on what people and skills are
required to fulfill these tasks and where those people
need to be located for
example, at the asset, collaboration center, or
headquarters. Once
the human infrastructure is in place,
operators can then
Applications such as
the Aspen IP.21 Mobile
on the iPhone allow
experts to see operating data and performance dashboards in
consider the information infrastructure and applications required to turn the high volumes of data into
information and, more importantly, into timely and
effective actions.
Optimizing this balance of the human infrastructure
can lead to significant cost savings by relocating certain
tasks from hostile offshore or remote locations to more
hospitable and safer environments. This not only can
reduce costs but also increase safety and production.
Rebalancing the operating personnel in this way can liberate space so maintenance activities can be increased,
making for a safer and more productive asset.
Transport mileage be it by helicopter or road transport can be reduced to lower costs and increase safety.
From an HR perspective, being located in a comfortable
central technology suite close to family is more appealing from a long-term career point of view than protracted periods offshore. This also means that technical
expertise can now serve multiple assets around the
world rather than be locked to a single asset.
Data and information

To support these human capital infrastructures, the corresponding technology infrastructures and advanced applications need to complement the desired work practices.
Many companies have now implemented collaboration
centers or technology centers that collate data from distributed assets. In these central collaboration centers, a wide
range of multidisciplinary teams can review current and
historic operating conditions in real time with the assetbased personnel and advise on the best course of action.
The original concept of these advanced collaboration
centers was based on bringing domain experts into a central control center. Recent advances in mobile computing
and network communication technologies are allowing
this paradigm to evolve. Experts can now see operating
data and performance dashboards in real time from anywhere in the world.
real time from anywhere in the world.
Workflow
(Image courtesy of
There are many human workflows involved in the operation

and maintenance of an asset. Recent events in the Gulf of
Aspen Technology Inc.)
56
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Mexico show the need to validate that correct operating

procedures are followed. Manufacturing execution systems
(MESs), an essential element used widely in other highly
regulated parts of the process industries, are equally applicable to workflow management in this environment. Such systems guide operators through various stages of a process
while simultaneously providing an auditable record that the
procedure has been completed appropriately.
Similarly, production planning and scheduling (P&S)
tools used in downstream refining and chemicals industries to manage supply chain processes are now finding
adoption in the upstream industry to manage the scheduling of operations and maintenance activities in assets and
terminals. This ensures appropriate resources are available
to conduct activities in a timely and safe manner and that
target production is maintained to maximize profitability.
Advanced applications
Mature assets often are characterized by highly dynamic
and unstable operating conditions. While the production
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advanced process control (APC) as a tool to deliver safer
and more stable operations and achieve production targets.
APC technology is used in the downstream industries
to maximize production and profitability. It manipulates
multiple variables in the control system simultaneously to
minimize variation on key target variables. This minimization of variability means the plant operates in a more stable manner in response to natural variations such as crude
quality, feed rate, ambient temperature, and other factors.
This makes the asset less likely to reach alarm or trip
points and reduces wear and tear on major equipment
items by reducing large swings in operating conditions.
APC technologies have been used successfully in downstream assets such as refining, LNG, and gas processing for
many years. The upstream and midstream sectors tended
to ignore this technology, which was partly due to lack of
skilled resources in these industries and partly the challenge in maintaining the application. Recent advances in
this technology have made it more cost-effective, simpler,
and faster to deploy by a wider pool of engineers, such as
process engineers. At the same time, these applications can
be sustained more easily through self-monitoring capabilities and remote maintenance. This is driving companies to
adopt APC to increase profitability in existing assets.
Several AspenTech clients including BP and other
super majors have seen production increases of 5% to
7%. These production optimization models are developed from the same process models used to design and
provide engineering support for the asset. The challenge
again has been the effort to sustain and maintain the
application. Recent advances in areas such as search
capabilities, visualization, and integration with common
applications such as Excel are making these complex models easier to use by nonexperts. These high-value applications are easier to integrate into workflows in a robust way
and enable companies to capture and propagate knowledge about the operational constraints of a given asset.
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Mature asset optimization

As regulatory hurdles and the challenges associated with
finding and producing from new reservoirs grow, operators are reevaluating how they can increase their return
on existing assets through greater use of innovative IT
solutions to gain a competitive advantage. By leveraging
engineering models in operations, APC, MES, and P&S
tools, production companies are finding new ways to
achieve tremendous benefits in cost savings, profitability
gains, and safety and environmental improvements for
mature assets that have many years of life in them yet.
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ADVANCES IN
MARINE SEISMIC
Broadband acquisition a step-change

for deepwater imaging
A wider range of frequencies, combined with multicomponent data,
are helping geoscientists peer beneath complex overburdens.
Jo Firth, CGGVeritas
roadband acquisition techniques have provided a stepchange in seismic image quality of similar magnitude
to the earlier changes from 2-D to 3-D and from narrowto wide-azimuth (WAZ) acquisition. The value of broadband data is recognized for almost all seismic applications,
and especially for deepwater environments, where the targets are frequently below complex overburdens. Imaging
these deep targets is challenging as only a limited range of
frequencies can penetrate to them, making recording and
preservation of the low frequencies essential. However,
high frequencies also are required to provide detailed
images of the overburden and near-surface to obtain good
velocity models for accurate imaging and so that drilling
hazards can be avoided.
In a 2-D data comparison from the GoM, the BroadSeis data

show improved resolution and clearer layer differentiation as
well as greater subsalt illumination. (Data courtesy of CGGVeritas Data Library)
Broadband acquisition
Deep-towed hydrophones or ocean-bottom nodes provide
the optimum low frequencies. BroadSeis uses variation
in streamer depth to provide receiver ghost notch diversity, allowing the streamer to be towed deeper to improve
the low-frequency signal-to-noise ratio without compromising the high frequencies. This ghost notch diversity
60
is exploited by proprietary deghosting and imaging techniques to produce a wavelet with excellent low-frequency
signal (down to 2.5 Hz) and maximum bandwidth (six
octaves) for optimum imaging of deep targets.
Using a proprietary curved streamer shape rather than
a straight slant provides a steeper slope and therefore
greater notch diversity for the near offsets as well as allowing a greater average streamer depth. The exact shape of
the streamer can be tuned according to the water and target depths to maximize bandwidth at reservoir levels.
Due to the deep tow of the majority of the receivers,
only the nearest offsets are significantly affected by
weather-related noise, which can be attenuated using standard techniques. Using purpose-designed X-Bow seismic
vessels, which perform better in marginal weather, highquality data can be recorded earlier and later in the season. The Oceanic Sirius seismic vessel acquired three
surveys in the North Sea in late 2011 in adverse weather
conditions where conventional acquisition would fail to
deliver satisfactory results.
Since BroadSeis uses only hydrophones, there is reduced
susceptibility to noise from streamer steering. This makes
it fully compatible with fanned streamer acquisition for
reduced infill in areas of strong currents; a recent 3-D survey offshore the Bahamas was recorded with zero infill.
Steering the streamers also increases 4-D repeatability.
BroadSeis data have been successfully matched to conventional baseline survey data using 4-D prestack co-processing, demonstrating its compatibility with legacy surveys.
However, the full benefits of broadband 4-D reservoir monitoring will not be realized until BroadSeis monitor surveys
have been performed over a BroadSeis baseline.
The exceptionally sharp wavelets with minimal sidelobes
provided by variable-depth acquisition enhance the fine
stratigraphic detail and reveal the genuine seismic reflection response of geologic formation boundaries. This clarifies impedance contrasts and creates sharp images of small
features. The extra-low frequencies give an envelope to the
seismic signal, shaping the larger-scale impedance variations or major lithology variations to provide clear differentiation between sedimentary packages and increase
confidence in correlating seismic interpretation across
ADVANCES IN
MARINE SEISMIC
Trilobit nodes recorded high-resolution data directly under a

drilling platform where towed streamers could not provide coverage. The Trilobit timeslice data is inserted into the conventional
data (top) and shows much higher resolution. Bright spots, indicating gas accumulations, are clearly visible on this and the
inline section (bottom). (Data courtesy of Apache)
faults and other major structural features.

Deghosting is both true-amplitude and fully 3-D, so it
preserves AVO anomalies. The improved low frequencies
provide greater stability and more quantitative inversion
results. In conventional seismic data, the lack of low frequencies requires a low-frequency model to be incorporated in the inversion process, adding a bias to the final
results which may not be correct. With broad-bandwidth
data, high-resolution seismic velocities are used to define
the low-frequency model in the 0-5 Hz
range while the reflectivity provides information from 2.5 Hz, giving access to more
meaningful quantitative results.
coprocessed with the towed-streamer broadband data

to produce seamless coverage of modern, high-quality
broadband data in areas where there may currently only
be data that predates the rig. The resolution of the nearsurface broadband data allows drilling hazards such as
shallow gas pockets and channels to be imaged over the
entire survey area, even directly under platforms.
As an added bonus, Trilobits record 4-C multicomponent data so the shear waves can be analyzed for a more
accurate model of the subsurface. Shear waves can be
used for imaging under gas clouds since they are largely
insensitive to pore fluid content. They also can be used for
lithology characterization and add information to distinguish between lithology, fluid, and pore pressure effects.
Both Trilobits and BroadSeis can benefit from a broadband deghosted source, which fills the source notch to provide frequencies to 200 Hz (at 2 msec) and provides full
source designature to remove the bubble and ghost, further enhancing interpretation. Due to the exceptionally
low frequencies recorded by BroadSeis using a conventional source, the improvement in low frequency is incremental, although a boost in the 7-20 Hz range is expected
from a deep-deployed broadband source, which will benefit subsalt and sub-basalt imaging.
Broadband acquisition is revolutionizing deepwater seismic by providing low frequencies for imaging deep targets
while providing high frequencies for detailed resolution of
the overburden and near surface. With more than 30,000
sq km (11,583 sq miles) of data acquired to date, in a
range of water depths and geological settings, variabledepth streamer acquisition has proved itself to be a robust,
efficient, and effective solution. In all cases, increases in
bandwidth at both low and high frequencies provided significant improvements in imaging and data quality.
Seabed nodes
In mature areas with considerable infrastructure, long-endurance Trilobit nodes
provide the ideal partner to towedstreamer broadband acquisition since
they can be placed beneath rigs to infill
holes in the towed-streamer coverage.
These nodes record down to 0.1 Hz
on the hydrophones and 1 Hz on the
geophones. The node data can be
A deghosted broadband source can provide more high frequencies and removes
the visible bubble and source ghost. (Data courtesy of CGGVeritas)
61
ADVANCES IN
MARINE SEISMIC
Marine seismic acquisition

gets improvements
Broader frequency spectrums and increased fold are providing better data than ever.
Dennis Yanchak, Apache Corp.
arine geophysical contractors are continuing

to push the technology envelope to find ways
to improve the imaging of the subsurface and increase
oil and gas exploration and development success.
Wide-azimuth (WAZ) marine surveys have become
commonplace in areas requiring subsalt images, and
todays surveys are now using full-azimuth shooting
using ocean-bottom nodes/cables or coil shooting with
towed streamers.
But those areas not hampered by salt or other imaging
obstructions are in need of improved seismic data as
well. Two new technologies are allowing us to dramatically improve the quality. The first is broadband marine
seismic, which produces a broader frequency spectrum
in the recorded signal and improves stratigraphic and
structural detail in the final processed and imaged section. The second, simultaneous shooting, produces
higher quality data through
increased fold without a linear
increase in acquisition costs.
ghost removes the very low frequencies and creates

notches in the frequency spectrum of the recorded
energy that are a function of the depth of the streamer.
Figure 1 shows the response for the receiver ghosts for
different towing depths. Note the notches are at different frequencies for the different depths.
Streamer depth in marine survey design is based
on the tradeoff between shallow tow depths to obtain
higher frequencies but typically more noise and deeper
tow depths that are less noisy but have notches at lower
frequencies. It would be helpful to have the benefits
of both.
Today geophysical contractors are getting those benefits through novel ways of implementing different tow
depths. By towing a combination of shallow and deep
streamers, the output can be combined to fill in the
notches and produce a flatter frequency spectrum or,
in the time domain, a higher resolution time section.
There are other ways to fix ghost notches and broaden
the spectrum of the data. One method is to use both
Broadband marine seismic

Conventional marine 3-D seismic
acquisition uses multiple cables
pulled behind a marine vessel.
Each of these cables or streamers
contains hundreds of groups of
hydrophones that record the pressure changes as seismic energy
returns from reflections deep
within the earths surface. This
energy also reflects off of the
oceans surface, creating what is
called a ghost. The combination
of the primary reflection plus the
FIGURE 1. Amplitude-frequency reponses
differ for receivers at different depths.
(Image courtesy of Apache Corp.)
62
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PGS MultiClient
The starting point for your next success
From new frontiers to the world' s mature basins , PGS is committed to delivering the right data ,
in the ri ght place at the ri g ht time to support your exploration. Wherever you need hig h quality,
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Supporting your exploration success

A Clearer Image
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.
a
ADVANCES IN
MARINE SEISMIC
hydrophones and geophones as receivers. PGS has

implemented this approach in its GeoStreamer, combining hydrophones and geophones in a towed streamer to
improve resolution. Since hydrophones measure pressure and geophones measure velocity, the two can be
combined to remove the ghost notch and produce a
higher resolution image.
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In addition to the receiver ghost, there also is a

source-related ghost. Marine sources radiate energy
in all directions, not just down, so energy from the
source is reflected off of the oceans surface, creating
notches in the spectrum as well. PGS also has addressed
the source ghost. Figure 2 shows an example of the
improvement obtained by removing the receiver and
the source ghosts. Again, there is a
-Alt
marked improvement in the stratigraphic and structural detail on the
broadband image.
Other companies use this approach
in ocean-bottom cables or nodes,
combining hydrophone and geophone outputs to remove unwanted
ghosts and other types of multiple
reflections. Ocean-bottom node
surveys, although typically more
costly than towed streamer surveys,
have their advantages. They can be
deployed in areas that streamers dare
Y
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not tread shallow water, shipping
channels, around platforms, etc. Most
nodes record four components, a
hydrophone and a three-component
geophone/accelerometer, allowing
subsequent processing technology
to remove ghosts and other energy
reflected in the water layer. Like the
broadband towed-streamer data,
nodes are pushing the frequency
spectrum at the high and low ends
of the spectrum, even recording
signals below 1Hz.
Simultaneous shooting
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64
FUGRO
JASON
Simultaneous shooting in land

acquisition has been used for several
decades. Hundreds of land surveys
around the globe have and are successfully employing these techniques.
Now marine acquisition is getting
into the game.
Since most marine sources are
impulsive, there is little that can be
varied to encode the source signature. There are, however, other ways
to differentiate simultaneous, or
nearly simultaneous, sources. Many of
these techniques rely on a known but
random variation in the timing of
source detonations that allows subseMay 2012 | EPmag.com
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TGS acquired Stingray Geophysical and now provides integrated Permanent Reservoir Monitoring solutions. Visit the
Reservoir Zone to find out how you can enlighten your reservoir to increase production and maximize reserves recovery.
TGS products and services include:
Worldwide 2D and 3D multi-client seismic libraries
Industry 's largest global database of digital well logs and regional interpretive products
High-end depth imaging services to help resolve complex seismic imaging problems
Permanent Reservoir Monitoring solutions
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ADVANCES IN
MARINE SEISMIC
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FIGURE 2. With source and receiver ghosts removed, the broadband image on the
right shows considerably more detail than the conventional image on the left. (Image
courtesy of PGS)
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FIGURE 3. Marine simultaneous shooting data (right) looks very similar to conventional data (left). (Image courtesy of Apache)
quent separation of the nearly time-coincident shots during the processing. Figure 3 shows an example from offshore Australia where the initial
results from simultaneous shooting are similar to conventional acquisition.
Denser spatial shooting in simultaneous shooting can eliminate the spatial
aliasing artifacts that have plagued conventional shooting.
Combining forces
The obvious path forward is to combine these technologies to reap the
benefits that each of them bring to the table. Simultaneous shooting could
produce large benefits in ocean-bottom node surveys since the cost of
these surveys is directly tied to battery life. Doubling or tripling the number of shots that can be recorded in a given deployment of the nodes can
increase data quality while decreasing the cost. Obviously, longer battery
life would be a plus as well.
We can also expect to see WAZ and full-azimuth surveys shot with
broadband technologies like BroadSeis, GeoStreamer, and others.
Couple that with simultaneous shooting, and WAZ techniques will be
able to cost-effectively move from exploration tools to routine appraisal
and development tools.
Also expect to see improved sources down the road. With the push
to see broadband seismic and pressure from environmental protection
groups, the industry needs to find better marine sources. Whether this
is the marine vibrator or some other new technology remains to be seen,
but lower frequencies and limits on higher frequencies will definitely be
in order.
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DEEPWATER
DRILLING ADVANCES
Uniform designs win out

in ultra-deepwater activity
Deepwater activity is picking up in the US Gulf of Mexico.
Tayvis Dunnahoe, Senior Editor
has built a history of performance drilling a major discovery in the US GoMs Lucius field that year. In 2011,
the ENSCO 8503 drilled another significant discovery
for Tullow offshore French Guiana. The ENSCO 8500
Series is currently one of the strongest workhorse fleets
in the industry. Proven to be efficient and cost-effective
nce again, deepwater rigs are finding their way

into the US Gulf of Mexico (GoM). With a
renewed focus on safe, efficient execution, operators are
seeking out agile, purpose-built rigs to venture
The companys 8500 Series of semisubmersibles feature a uniform design, which simplifies
back into the region.
training from rig to rig and eases recertification for working in the US GoM. Pictured is ENSCO
The age gap typically is
8505 prior to undertaking sea trials in the GoM in April. (Images courtesy of Ensco)
used to describe the situation of most crews; however, this phrase aptly
describes rig fleets as
well. Providing uniform
design with an ample supply of modern equipment
is an important first step
for most drilling contractors seeking work charters in the worlds
deepwater basins.
A younger breed
Now the second largest
drilling contractor in the
world, Ensco has moved
swiftly in the past five
years to become a major
player in the worlds
ultra-deepwater drilling
market. Aside from the
companys fleet of ultradeepwater DS Series, its
fleet of ultra-deepwater
semisubmersibles,
referred to as the ENSCO
8500 Series, is major news
this month.
The ENSCO 8500, the
first of seven semisubmersibles, commenced
operations in 2009 and
68
DRILLING
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HYDRAULIC DRILLiNGRIGS
DRILLMEC INC
18320 Imperial Valley Drive

77060 Houston, Texas - USA
+1.281.885.0777
info@drillmecinc.com - www.drillmec.com
drilling machines, the fleet accumulated a

record of 97% utilization in 2011.
The company is now completing sea trials on
its sixth semisubmersible in the series, ENSCO
8505. As part of a rig-sharing agreement, the
vessel will be drilling for Anadarko, Noble
Energy, and Apache later this year.
Uniform design
The story of the companys 8500 series begins
with the design. According to Mark Burns,
senior vice president, Western Hemisphere at
Ensco, Our strategy was to design a rig that
addressed the greatest need as opposed to
designing rigs to a wish list.
The idea was to target what Burns referred
to as the heart of the deepwater market.
According to IHS ODS-Petrodata, the largest
number of deepwater wells since 2005 has
been drilled in water depths ranging from
914 m to 2,286 m (3,000 ft to 7,500 ft). The
8500 series rigs are capable of drilling in of
up to 2,591 m (8,500 ft) water depth.
Burns added, We also wanted to have a
cost-effective, proven design, so we leveraged
our experience with the ENSCO 7500 that had
been operating successfully for five years.
The end result is a series of rigs that are
durable, fully equipped, and suitable for both
exploration drilling and development projects.
The company has leveraged its relationship
with the Keppel Fels shipyard in Singapore to
deliver each of the 8500 series with both standard and specialized equipment based on the
central needs of operating in ultra-deepwater
environments.
The companys strategy of designing the
series to be identical is paying off. Given the
demand for qualified crew members, the benefits of not having to retrain workers who transfer from one rig to another are magnified in
the current environment, Burns said. In addition, the identical nature of the 8500 series has
proven invaluable in the post-Macondo recertification process. Once one rig was recertified,
the others quickly followed.
Each of the series is outfitted with heave compensation packages that provide constant control of the
drillstring despite average surface conditions experienced in most ultra-deepwater environments.
70
We set the record

for setting records
DEEPWATER
DRILLING ADVANCES
A drillers rig
According to David Hensel, vice president, North and South America
(excluding Brazil) at Ensco, The ENSCO 8500 Series truly represents a
drillers rig.
The substructure features an open height of 14 m (46 ft), which allows
more room for tree handling. With a regular staff of approximately 70 personnel, the design is equipped for 150 persons-on-board to accommodate
regular crews and added specialists during specific, crucial operations. In
addition, the rig also features deck space with an open design that provides great flexibility for installing operator-provided equipment. The
vessels low profile reduces weight and overall height, which provides a
better environmental profile.
The drilling package has the ability to work offline both on the drill
floor and in the moon pool. The mud system is designed as a split system
capable of handling both drilling and completion fluids simultaneously.
The ENSCO 8500 Series features the latest generation of BOP equipment.
The six-ram BOP comprises a functional profile configuration with the sixth
ram being a test ram. The blind and casing shear ram contain 22-in. operators at 5,000 psi, and these are capable of shearing all operator-specified
drillpipe. After the new regulations were passed, the ENSCO 8500 and 8501
were the first rigs to be recertified for operations in the US GoM.
To date, our deepest water operating depth in drilling mode is 2,195
m (7,200 ft), but weve been approved to operate as the rigs are currently
configured in up to 2,804 m (9,200 ft) of water for a completion,
Hensel said.
The rig has performed workover operations in 2,438 m (8,000 ft) of
water. As a testament to the series performance, ENSCOs 8500 Series
has joined the six-mile club drilling a well to 10,302 m (33,800 ft) measured depth. We have current approval for a well planned to 11,430 m
(37,500 ft), Hensel said. The rigs have run 1358-in. casingstrings weighing
up to 1.8 MMlbs, which is considered typical for an average subsalt well
in the US GoM.
Strong currents are just one of the challenges confronted by drillers in
ultra-deepwater environments. The dynamically positioned 8500-series rigs
are classified as DP-2. Operating in French Guiana, the ENSCO 8503 ran in
currents up to 5.8 knots. To put this in perspective, typical operating currents in the US GoM range around 2 knots.
The latest addition

As of mid-April, ENSCO 8505 was mobilized to the GoM (Corpus Christi,
Texas) from Singapore, which took 39 days. According to the company, its
8503 improved its deepwater acceptance testing to 49 days, which was 10
days sooner over the 8502. We expect to test the 8505 in 49 days or less,
Hensel said.
As its latest addition to the series heads back into the deepwater GoM,
the company is poised for future growth. The companys strategy behind
its latest generation of semisubmersibles is long-term. Ive worked in the
contract drilling business my entire adult life, and I can tell you that it is
the best example I can think of where a company has had a well thought
out strategy, enacted a nearly flawless execution, and cultivated great success with customers and excellent financial results, Burns said.
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DEEPWATER
DRILLING ADVANCES
RFID technology optimizes riser

asset tracking, maintenance
Deepwater drilling contractors have significant investments in riser assets,
which have to perform without failure.
Jona Williams, National Oilwell Varco
ith offshore drilling being far-reaching and expansion happening across the globe, it is a challenge
for companies to keep track of all documentation
requirements. This, compounded with the need to operate across multiple jurisdictions, also translates to a magnitude of regulatory requirements. As drilling contractors
look to secure bids and work across multiple regions,
maintenance records must be accessible worldwide via an
enterprise asset management (EAM) system. Shipping,
inspection, and maintenance paperwork are just a few of
the items that need to be managed.
Riser joints fall under particularly high compliance
regulations. These regulations are necessary because
marine risers are exposed to great stresses with repeated
drilling in deep waters. A lack of proper paperwork can
Long-term exposure to seawater and hydrostatic pressure

demands special RFID tags tags and mounting designs. This new
patented solution for RFID tagging of subsea assets has been labtest as well as extensively field-tested with working pressures of
more than 5,000 psi. (Images courtesy of National Oilwell Varco)
be more painful than waiting on weather when looking to get onsite quickly.
Contractors typically have comprehensive records for
their risers; however, one challenge facing the industry
is linking data to physical equipment assets in rig fleets.
Identifying a riser joint on rigs and interacting with
related data on location is key. Using radio-frequency
indentification (RFID) technology, rig personnel can
access relevant information about riser assets and input
new information into the rig EAM system.
Managing global riser assets

RFID technologies are considered to be the most reliable mechanism to link data and a management system
with physical assets in the field. A robust management
system combined with the benefits of an RFID link
between riser joints and databases increases accuracy
and reduces risk. National Oilwell Varco (NOV) has
expanded its RigMS web-based EAM application to
include advanced riser management capabilities.
Teams are equipped with handheld computers featuring RFID readers. These computers run RigMS field
software, prompting rig personnel for information
directly associated with the riser joints they are working
with. Additionally, historical information and comments
from past maintenance also is made immediately available to teams inspecting the riser. As handheld computers are directly linked to a network database (typically
via a satellite internet connection), RigMS field software
makes available field information to the RigMS web
server application, effectively linking local rig crews and
riser information with remote operations teams who are
managing a fleet of global riser assets.
While RFID technology may be in everyday use at
grocery or electronics stores, subsea assets pose unique
challenges for RFID tagging. Long-term exposure to
seawater and hydrostatic pressure demands special
RFID tags and mounting designs. NOV provides a
patented solution for RFID tagging of subsea assets.
These solutions have been lab-tested as well as extensively field-tested with working pressures of more than
5,000 psi.
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DEEPWATER
DRILLING ADVANCES
Handheld computers featuring RFID readers allow

rig personnel to access information directly
associated with the riser joints they are
working with. Additionally, historical information
and comments from past maintenance also is made immediately available to teams currently inspecting the riser.
Benefits for drilling contractors

Deepwater drilling contractors have significant
investments in riser assets, which have to perform without failure. RigMS provides instant
information on the location and status of each riser
joint so that high-integrity riser runs can be planned and executed for every
well. Engineers and rig supervisors have to make sure needed riser assets are
onboard, ready to run, and are picked up in the most appropriate configuration (e.g. in accordance to use with associated depth). Once a riser run is
planned and configured using RigMS, it is available globally and may be modified by drilling contractor personnel at the office or on location with predetermined authority to make changes. Effective run planning for riser,
execution, maintenance, and optimized utilization of these assets produces
significant economic benefits and improved visibility on maintenance, potentially corresponding to safer operations for contractors and operators drilling
in deepwater environments.
Offshore drilling contractors are committed to preventing structural failures
of riser string. The capability to access specifications and historical records,
together with current and planned maintenance and inspections for each riser
joint, enables the design of a high-integrity riser run. While utilizing RigMS,
drilling contractors have been able to create riser run plans prior to shipment
and verify runs are completed as ordered via RigMS handheld computers. This
ensures a proper calculation of wet/dry days as well as equipment wear.
As a result of RFID technology investments, purpose built systems for
upstream oil and gas applications are rapidly improving the ability of drilling
contractors to manage their equipment assets globally and in real time.
Through the use of NOVs RigMS, drilling contractors can now achieve a reduction in unplanned maintenance along with higher levels of comprehensive
planned maintenance procedures. As a result, RigMS users will see increased
technical uptime, higher levels of visibility for fleet management, and an
increase in overall operating profit.
Staying on track
Integrated oil and gas companies, land and offshore drilling contractors, crew
boats, and vessel operators all share a common problem: high dollar value
capital assets operating under extreme conditions in remote locations. The
distributed nature of the business adds to the complexity of this issue as
equipment assets frequently move. Up-to-date and instant availability of information incorporating historic records, documentation, modifications track,
and regulatory compliance has historically been a labor-intensive, time-consuming, and challenging task. Recent regulations and compliance in offshore
drilling has made this information imperative for tracking a companys riser
assets. Through the use of NOVs RFID tags and RigMS EAM system, users can
properly maintain, document, and track a fleet of risers.
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Halliburton on the
use of this 'green'

suite of technologies
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Operations, El Paso Exploration & Production
Helping our customers
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For more info about these

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75
SAND/WATER
MANAGEMENT
Managing sand through flow control

in the modern completion
Operators are continually searching for improved ways of working smarter and more costefficiently while still enhancing production.
Duncan Harper and Chris Rodger, Tendeka
key question in the drive for enhanced production is

how best to control and manage sand. Controlling
the flow of unconsolidated sand into the well is one of the
most critical challenges in any sand face completion. The
failure to address it correctly can have a significant impact
on productivity, well life, completion equipment life, and
safety through the erosion of surface equipment as well as
the environmental and financial impact of disposing of
large quantities of sand.
Inflow control devices can be installed as a standalone option

or in conjunction with a sand screen such as the FloMax Dutch
Weave sand control screen. (Images courtesy of Tendeka)
In unconsolidated formations, high flow rates and drawdown pressures, pressure depletion, and water production
trigger sand production. Besides prematurely killing well
production, excessive sand production can cause erosion
and the blockage of downhole hardware, which can damage or disable downhole and surface equipment.
Drilling technology has advanced to such an extent that
horizontal and multilateral wells are now the norm, with
76
greater reservoir penetrations and lower drawdown pressures. This increased length and uneven pressure profile
along the well bore has resulted in an increase in sand
control issues such as installation risk due to extreme drag
and water influx due to reservoir heterogeneities.
Controlling the sand

The first step in any sand control application has to be a
detailed exploration of the characteristics of that formation. There are various methods used to determine the
optimum sand control methods for each well. Establishing
the formation sand grain size is essential to sand control
selection, and laboratory technology is used to help establish the most suitable sand control method.
Traditional completion methods that allow sand-prone
reservoirs to be exploited often dramatically reduce production efficiency and are being replaced by a number of
technologies that keep formation sand in place without
unduly restricting productivity.
Most options for completing sand-prone reservoirs offer
physical restraint of sand migration. These include:
Resin injection, where a resin is injected into the formation to cement the sand grains in situ;
Gravel pack, where a gravel slurry in a carrier fluid
is pumped into the annular space between a centralized sand screen and the open hole, creating a granular filter;
Standalone screens, which are simple installations
suited for uniform formations, typically where the uniformity coefficient is calculated at less than three; and
Inflow control device (ICD) screens, deployed to
reduce or delay an influx of water but with added
sand control benefits such as reducing annular flow
to near zero.
Go with the flow

More recently, great emphasis has been placed on extending production by using ICDs in conjunction with sand
screen technologies. This type of completion solution has
been most prominent in the Middle East and North Sea
but is now gaining greater recognition elsewhere.
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SAND/WATER
MANAGEMENT
Passive ICDs are used to enhance the performance of

horizontal wells in unfavorable environments such as
nonuniform permeability and/or pressure along horizontal sections. The advent of passive ICD technology has dramatically improved well productivity and wellbore cleanup,
resulting in increased recovery and its associated benefits.
An ICD is deployed as a part of a wells completion to
create an evenly distributed flow profile along a segmented
producing zone. Each ICD placed along the zone creates a
localized restriction to flow that is predetermined during
the completion design. This restricted flow creates an additional pressure drop, which balances the wellbore pressure
drop. The resultant evenly distributed flow profile can
reduce water or gas coning and sand production and solve
other drawdown-related production problems.
Standalone ICDs can be spaced throughout the completion liner adjacent to the production or injection reservoir.
They can be placed on every joint or run in combination
with blank joints to provide the desired well compartmentalization and inflow profile.
A well-designed ICD completion assisted by wellbore
hydraulic modeling can promote production from the
entire length of the lateral and mitigate the effect of the
severe pressure gradients, eliminate cross-flows existing in
openhole completions and, in certain cases, significantly
reduce water cut.
ICD technology comes in a variety of modes: fixed,
adjustable, and with shut-off capabilities in conjunction
with sliding sleeve technology.
Tendekas ICDs can be installed as a standalone option
or in conjunction with a sandscreen in a FloRight ICD. By
installing ICDs, a predetermined pressure drop can be

created between the reservoir and the completion liner.
This choking effect creates a back pressure on higher
quality sections of the reservoir, allowing tighter sections
to contribute and even out the wells inflow profile. This
will result in better coning control, therefore delaying
water breakthrough.
Additionally, the FloCheck valve allows for full washdown capability without the need to deploy an inner
string, the ability to set liner hanger/packers and mechanical packers simultaneously against the valve, fluid loss
control, and the ability to pressure-test the full string without setting any additional packers.
This has enabled ICD completions to be installed during periods of high well losses without having to pump a
loss control material.
The FloCheck valve also is a convergence technology
based on several important lessons learned during the last
decade of ICD installations:
Deploying inner strings is sometimes mandated due to
poor hole conditions;
Low bottomhole pressure can cause differential sticking due to inability to circulate;
Low bottomhole pressure can lead to multiple runs
with inner strings to set mechanical packers;
Inner strings take time to run and can increase weight
and stiffness; and
Fluid loss during running of upper completion is difficult and costly to control.
The valve allows for circulation to the bottom without
an inner string, permits the setting of mechanical packers
without an inner string, enables the spotting of breakers
and spacers prior to pulling out, and provides fluid loss
control while running upper completion.
When used with ICD technology, FloCheck closes off
the nozzle, thus preventing any fluid loss while running in
hole. Once production is initiated, the ball merely comes
off seat and the cage is shortly eroded on flow, allowing for
both production and injection.
The companys ICDs achieve an even, consistent flow
of fluid along each interval throughout the completion
string, improving performance, efficiency, and production. Combined with a sand screen in an unconsolidated
reservoir, the reservoir fluid passes from the formation
through the screen and into the flow chamber, where flow
is regulated by the ICD orifice. Along with other ICDs, the
pressure drops in the production zone are balanced, yielding a more efficient completion.
Tendekas FloCheck valve allows for circulation to the bottom with-
78
out an inner string. Once production is initiated, the ball simply
World first in Gulf of Mexico
comes off-seat.
Tendeka recently deployed the worlds first slimhole ICD

SAND/WATER
MANAGEMENT
completion in a sandstone reservoir in the Gulf of Mexico

(GoM).
Due to a severely depleted reservoir with difficult
drilling conditions, the well was planned as a reentry out
of a 5-in. liner with a 418-in. openhole, which negated the
use of conventional technologies. Offset wells with sand
control equipment installed experienced very high completion skin and used a variety of high-rate water packs,
frac packs, and expandable screens.
The companys solution was to provide inflow control
screens and swellable packers, which were installed in a 418in. openhole section of the well. Coarse metal mesh sand
screens were used to minimize the plugging of sand and
mud during well flowback, and the swellable packers were
of a slip-on-sleeve design, which were simple to deploy and
quick to install. The new FloRight 238-in. ultra slim hole
ICD screen system was used across the 170-m (560-ft) zone
at a depth of more than 4,000 m (13,125 ft).
The ICD technology used was based on a recent successful 378-in. openhole reentry completion deployed by the
company in the Middle East to manage water in an openhole multilateral horizontal oil-producing well. That project
was another world first in that it allowed the deployment of
passive inflow control devices to manage inflow from two
lateral wells connected to the mother bore.
The carbonate well had reached 50% water cut. Limited
success was achieved with plugging it back to minimize
water production, so it was decided to carry out a workover
and install the ICDs to passively control inflow from the
laterals, uniformly produce from the mother bore, and
reduce the potential for cross-flow between the laterals.
Fourteen Tendeka FloMatik passive ICDs and six
swellable packers were installed to compartmentalize the
reservoir, and numerous wellbore hydraulic simulation
runs were undertaken to match flow and pressure profiles.
The project saw the ICDs create proportionate inflow
along the well and passively control influx from the laterals with no cross-flow or packer leaks. A rate of 4,100 b/d
of oil with 0% water cut was achieved, compared to 1,500
b/d before the workover.
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79
SAND/WATER
MANAGEMENT
WEA technique saves time, money

A new multispecies effluent test encompasses the range of responses
obtained from higher order tests.
Dr. Carol Phillips, NCIMB Ltd.
he OSPAR Commission, the mechanism by which 15

governments of the western coasts and catchments of
Europe cooperate to protect the marine environment of
the northeast Atlantic, has been considering a risk-based
approach to the monitoring of produced water discharges. It seems likely an approach using whole effluent
assessment (WEA) alongside a single substance approach
could be introduced in the near future. The essential element of WEA is the application of testing to a sample of
the whole effluent rather than individual substances
known to be within it.
According to OSPARs 2007 Practical Guidance Document on Whole Effluent Assessment, the added value of
WEA is greatest in complex effluents, which contain mixtures of chemicals or require very detailed process-specific
knowledge to allow characterization. Produced water would
seem to fall into that category, as it consists of both naturally occurring and added chemicals, which can include
biocides, defoamers, or scale and corrosion inhibitors, and
its composition varies depending on location, formation
type, and stage of production. Therefore, a WEA approach
to produced water testing can have the potential benefit of
providing a measurement of not only the effects of substances known to be present but also unknown substances
as well as the combined effects of all components.
tests, MARA and LumiMARA, are based on the use of 11

microbial species to assess toxicity, and work to date indicates that results obtained from these tests encompass the
range of responses obtained from more costly and timeconsuming higher order tests.
The company was formed 30 years ago to manage the
UKs National Collection of Industrial Food and Marine
Bacteria. It has since grown to offering a range of chemical
analysis and microbiological services to industry sectors
including oil and gas and houses the biggest reference
collection of industrially and environmentally valuable
microorganisms in the UK. There are approximately 8,000
strains in the collection, which have been isolated from a
wide variety of environmental locations and sources such
as the gills of marine fish and hydrothermal vents. Some
of these bacteria are regularly supplied to industry for
use in antibiotic production, while others could have
unique properties and commercial potential that has
not yet been realized.
NCIMB used strains from the collection to develop its
MARA test. The microorganisms used were carefully
selected to cover a wide genetic diversity and provide a
spectrum of sensitivities to different components of produced water.
The MARA test comprises 10 bacterial species and one
yeast. A serial dilution of the effluent is prepared, added
A new approach
The WEA approach involves using biological tests to
determine persistence, bioaccumulation, and toxicity
(PBT-criteria), and tests commonly applied to marine systems are based on the use of single species from different
trophic levels. For example, in the UK the Offshore
Chemical Notification Scheme requests ecotoxicity data
for offshore chemical products from an algae (Skeletonema
costatum), a crustacean (Acartia tonsa) and a fish species
(e.g. Scophthalmus maximus). The bacteria Vibro fisheri
also is commonly used as a single species test.
Researchers at the UK-based company NCIMB Ltd.
have taken a new approach in developing what they
believe to be the only multispecies WEA tests currently
available. The Microbial Array for Toxic Risk Assessment
80
This LumiMARA plate image was captured after 30 minutes of

exposure to a two-fold dilution series of sample. The decrease in
the percentage of inhibition of bioluminescence is compared
against the control row containing no sample. (Images courtesy
of NCIMB Ltd.)
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importantly, hard work. That's where we come in. We are Select Energy Services, an indust
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11
SAND/WATER
MANAGEMENT
to microbial growth media in a microtiter plate, and inoculated with the array of microorganisms. The plate is
incubated for 18 hours at 30C (86F), with the addition
of a redox dye that allows assessment of the amount of
growth, and scanned. The response of the bacteria can
range from no inhibition of growth to no growth, with
varying degrees of growth inhibition in between. The
data are imported to image analysis software and plotted;
different strains will respond differently to different dilutions of the effluent, so a toxicity rating for each strain
can be calculated and used to create a toxicity profile for
the effluent.
LumiMARA employs 11 naturally bioluminescent bacteria from a variety of habitats, including nine marine and
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are exposed to toxins, their luminescence is inhibited,
and reduction of light output can be used as a rapid and
direct measurement of toxicity. Different dilutions of the
effluent sample are added to a plate containing the 11
.....
Terry Dando, MARA R&D, and Emma MacGill, Oilfield Services,

examine the analysis of a MARA plate using the MARA software.
bioluminescent strains. The plate is incubated for 15 minutes and read using a luminometer, and results are used
to calculate a toxicity rating (for both tests an EC50 value
is calculated for each of the species, i.e. the concentration
of toxicant which induces a response halfway between the
baseline and maximum). Combined integrated evaluation of all 11 species provides a unique toxicity profile for
the effluent being tested.
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duced water samples from 15 North Sea oil and gas installations, alongside established algae (Skeletonema costatum)
and crustacean (Acartia tonsa) single species tests, as part
of a wider coordinated study to assess the role of WEA in
a risk-based approach to produced water monitoring. The
offshore installations sampled included a mixture of oil
and gas producers as well as early and late stages of production and high and low water cut.
The microbes, the algae, and the crustacean used in the
test all showed different degrees of sensitivity to the different produced water samples, but for all of the produced
water samples tested, the sensitivity of the algae and crustacean fell within the range of responses shown by the different microbial species. In other words, it appears that
tests using a genetically diverse group of microorganisms
can give results that are indicative of the response of the
wider ecosystem. As higher order testing can take up to
three days, the results suggest that multispecies microbial
tests like MARA and LumiMARA can offer a fast, low-cost
method for the WEA toolbox that could potentially be
used as an initial screening test before moving on to testing that uses higher order organisms such as crustaceans
and fish.
Additional benefits
The multispecies microbial approach to WEA also offers a
number of additional benefits and uses. The growth of each
of the different microbial species in the presence of different dilutions can be used to produce a dendogram comparing unknown chemicals to standards and can provide
insight into the mode of toxic action. The fingerprints produced from the multispecies tests are ideal tools for allowing comparisons to be made between samples, locations,
and time points as well as in response to chemical treatments. The tests also can be used to detect subtle changes
within the toxicity profile of samples, making them a valuable tool in terms of identifying any unexpected changes
in composition of the produced water before they become
a bigger problem and for monitoring the effectiveness or
otherwise of any remedial steps taken.
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84
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UNCONVENTIONAL:
INTERNATIONAL SHALES
Shale gas is poised to become

international phenomenon
Overcoming obstacles to develop vast unconventional resources across the globe
will be crucial to meet rising energy demands.
Nancy Agin, Associate Editor
s the rapid development of tight gas, shale gas, and

coalbed methane (CBM) continues to transform the
North American energy landscape, unconventional natural gas resources, particularly shale gas, are being targeted
in Europe, Latin America, and the Asia-Pacific region to
augment declining production and provide new hydrocarbon supplies throughout the world.
On its way to becoming a global phenomenon, shale
gas, the prospective resources of which are conservatively
estimated by Hart Energy Research at approximately 20
Tcf worldwide, already is in play in many corners of the
globe, but the exploitation and development of these
resources is largely in an embryonic stage and not without
continued obstacles in reaching the widespread commercial success seen in both the US and Canada.
In fact, no commercial shale gas is produced outside of

North America, but interest is gaining ground in many
basins some largely untapped while international operators are eying new prospects in Africa, Asia, Australia,
Europe, and South America.
Tremendous upside
While economics have yet to be proven for shale gas on a
global scale, ballooning estimates of shale gas resources
have helped increase total US natural gas reserves nearly
50% in the last 10 years, with shale gas expected to comprise 47% of US natural gas production in 2035, according to the US Energy Information Administration
(EIA). In the EIAs International Energy Outlook 2011
(IEO2011) reference case, US unconventional natural gas
production is expected to swell from 10.9 Tcf in 2008 to
19.8 Tcf by 2035,. Unconventional natural gas resources
also will be critical in securing future domestic gas sup-
International and national oil

companies and independents are eying shale gas
basins across the globe.
(Map and data proved by
Rextag/Hart Energy
Research)
86
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JewelSuite 2012 incorporates

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UNCONVENTIONAL:
plies in both Canada and China, particularly as the latter

country evolves industrially. The worlds largest energy
consumer, China, is predicted to have 72% of total domestic production contingent on these resources by 2035,
according to the IEO2011 reference case.
A separate report commissioned by the EIA from
Advanced Resources International Inc. and published in
P'Howcan we work
F9nancia
In
GeospadW and
PPF'
April 2011 found that the international shale gas resource

base holds tremendous potential, with an initial estimate of
technically recoverable shale gas resources in 32 countries
totaling 5,760 Tcf.
Coupled with the US estimate of 862 Tcf of technically
recoverable shale gas resources, the 5,760 Tcf figure rises
to a total shale resource base estimate of 6,622 Tcf, according to the report. In January 2010
Advanced Resources estimated proved
natural gas reserves to be around 6,609
Tcf, and world technically recoverable
gas resources (excluding shale gas) were
projected to be approximately 16,000
Tcf. Combining the identified shale gas
resources with other gas resources
worldwide, the EIA report pegged total
world technically recoverable gas
resources at 22,600 Tcf.
But regulatory hurdles like South
Africas six-month extension on its
moratorium for issuing gas exploration
licenses in the shale gas-prospective
Karoo region, restricted accessibility,
infrastructure and services constraints,
and nascent technical capabilities and
efficiencies all could play a part in tempering the near-term development of
international shales.
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88
Europe could be
a main contender
North America is seen the world over as
the leader in unconventional resources
development due to prolific shale plays
contributing to burgeoning oil and gas
production. But Europe also holds enormous unconventional commercial gas
potential, the volumes of which could
stabilize domestic supplies and curb
conventional production declines over
the long run.
Estimated at 6,115 Tcf of unconventional gas in place (including both shale
gas and CBM) in a March 2011 study by
IHS CERA, the regions unconventional
gas resources could ultimately rival that
of North America. And because of
Europes proximity to energy-hungry
regions like Asia, substantial production
of unconventional gas could have a
major impact on international markets.
Significant regulatory challenges lie
UNCONVENTIONAL:
plies while rampant economic development is expected to

ahead for the region as a whole, however, and rapid develcontinue accelerating in the next few decades and as it
opment of these resources is uncertain at this time. Specifiattempts to wean itself off of coal.
cally, the studys researchers cite concerns over length of
tenure, permitting regimes and norms, and water manageIn March the Ministry of Land and Resources appraised
ment as near-term impediments to wide-scale shale gas
Chinas indigenous potentially recoverable shale gas
exploitation.
reserves at an impressive 25.1 Tcm. And underscoring an
Nevertheless, Europes unconventional gas is likely to
ambitious goal to develop this tremendous shale gas
make significant contributions to the worlds energy supresource base, the National Energy Administration said the
ply in the next 10 to 15 years, with production levels ranggovernment is targeting a production rate of 229.4 Bcf/year
ing from a minimum of 60 Bcm (or less than half of
by year-end 2015, according to the official Xinhua news
current North American shale gas production) to 200
agency. Rice Universitys Baker Institute in Houston also estiBcm through 2025, according to IHS CERA.
mates Chinas shale gas production could be as high as 1.2
Poland appears to be taking the lead in unconventional
Bcf/d by 2020 and 2.6 Bcf/d by 2030, while CBM producE&P and is likely to make the most significant contribution
tion is projected to reach 1.8 Bcf/d by 2020 and 4.5 Bcf/d
to future unconventional production in Europe, Ben
by 2030.
Hollins, head of gas research for Wood Mackenzie UK,
The countrys pipeline infrastructure could prove to be
said in a March presentation at Gastech 2011 in Amstera significant bottleneck in the face of fluctuating demand,
dam. With estimates of between 10 Bcm and 30 Bcm per
however, in addition to its water scarcity and a lack of techannum of unconventional gas production by 2030, Poland
nical expertise in exploiting shale gas. Thus, increased
could have enough gas to meet its own domestic requireR&D initiatives, government investment, and internaments and perhaps also be in a position to export, he said.
tional partnerships will be key to unlocking the countrys
As with China, a major challenge will be accessing the
true shale gas potential decades out.
pipeline infrastructure needed for bringing that gas to market, Hollins said.
Environmental and safety concerns
related to hydraulic fracturing, meanwhile, have contaminated regulatory
sentiments in France, halting exploration altogether. In July 2011, French
THE HEAT IS ON! :L l hn and \laxi Hcattamcsth cmostb rurul
lawmakers in the Senate voted 176:151
cold w ith up to 1,010,000 btu h of clean , cr y , b re athable , indirect-fired hot
to outlaw hydraulic fracturing and
revoke all permits from companies that
air. Whct her it 's keeping we llheads flowing, curing concrete , or simple
planned to use fracing in their oil and
? rru( i I a u arnxr , su tù- wnrl; environment ...
gas operations. The move has been seen
Allmand has the cure for the uncommon cold.
as unfavorable to regional energy security by companies seeking to harness
See this and more at the
cleaner fossil fuel resources.
Global Petroleum Show 2012
Booth 7348
Asian energy giants

When considering the Asia-Pacific
region, China, alongside India and Australia, will likely follow the US example
of changing LNG supplies by exploiting
unconventional reserves, a summit
paper from the 2011 Pacific Energy
Summit, held in Jakarta, Indonesia, in
February 2011 states.
China has enormous untapped shale
gas potential. Already a significant
coalseam gas producer, the emerging
powerhouse is seeking to tap shale gas
as a primary source of new energy supEPmag.com | May 2012
pt a D
2M
1
89
UNCONVENTIONAL:
India, fast becoming an industrialized, energy-dependent market, also has joined the international shale fracas,
albeit in the early stages of the game. The country has
begun appraising its shale gas resources and anticipates
having exploration rules in place by 2013, Prime Minister
Manmohan Singh was quoted as saying in March. Indias
Oil Secretary also has confirmed the countrys plans to
auction off prospective blocks in 2013.
Indias state-run Oil & Natural Gas Corp. (ONGC) is
credited with discovering the countrys first significant
shale gas find in January 2011 in the Burdwan district of
West Bengal. The 12,000-sq-km (4,633-sq-mile) shale gas
reserve is estimated by ONGC to contain between 600 Tcf
and 2,000 Tcf of total reserves, according to an announcement in the Hindustan Times.
Argentinas
Vaca Muerta shale
n 2011, Repsol YPF made a massive oil-prone shale discovery in
Argentinas prolific Neuqun basin that could potentially transform the country and surrounding region into becoming a major
exporter of hydrocarbon resources. Argentinas gas output also
could rise 50% if encouraging results from new exploratory wells
are confirmed, the company said.
According to the Spanish-Argentine operator, the Vaca Muerta
project is the first major development of an oil-prone shale reservoir
outside of North America. At year-end 2011, the play had produced
700,000 boe.
The Late Jurassic shale formation covers a 30,000-sq-km (11,583
sq-mile) area (12,000 sq km or 4,633 sq miles net to Repsol YPF) in
the province. Repsol YPF first drilled and fractured five vertical wells
in the Patagonian town in the Loma La Lata area of the basin, with
initial recoverable oil estimated at 150 MMbbl. Preliminary results
indicated 77% of the shale area contained oil, while the remainder
comprised both dry and wet gas.
As of February 2012, the company has pegged gross contingent
reserves in a 1,100-sq-km (425 sq-mile) area at 1.525 Bboe, consisting of approximately 1.115 Bbbl of oil in associated contingent
resources and 410 Mboe of gas, based on an external audit by
Ryder Scott. The hydrocarbons reserves and resources estimate in
the Vaca Muerta shale play was raised in February to approximately
22.807 Bboe.
Exiting January 2012, YPF had drilled 28 new wells and recompleted one existing well in the Loma La Lata and Loma Campana
blocks. Twenty-four were vertical wells completed with between
two- and four-stage stimulation treatments, with 20 wells producing
excellent-quality crude at initial rates restricted between 180 and
600 boe/d. According to Repsol, six of these wells are producing
without the need for stimulation, and the remaining four were awaiting termination at the time of publication.
According to Kristian Rix, deputy director, Business and Markets
at Repsol, The beauty of Vaca Muerta apart from the geological
90
Taking its cue from Indian conglomerate Reliance

Ltd.s joint ventures in the US shale plays, ONGC recently
signed a memorandum of understanding with ConocoPhillips to explore and develop global shale resources,
including those in India and North America. According to
the company, the pact heralds an exciting new chapter in
its continuing saga of hydrocarbon exploration in India
and abroad, with the goal of achieving energy security for
sustaining Indias booming economy.
South Americas shale riches

In South America, the focus has turned to Argentina and
the abundant shale gas and shale oil potential that exists
in the emerging Vaca Muerta shale play. The country
reportedly boasts more than 774 Tcf of combined shale
imagery is that logistically the infrastructure is already in place

because it is a producing region. At this stage of development, however, the play is delivering only modest production, he said.
But, Rix said, (This is) a region that knows the industry, knows
how to work as an infrastructure, so (the operating conditions are)
more comfortable than in other plays. And, he added, Its very
easy to put things onstream in Vaca Muerta.
According to Repsol YPF, the thick, organically rich Vaca Muerta
shale is analogous to the liquids-rich South Texas Eagle Ford and
the North Dakota and Montana Bakken plays. Like its North American counterparts, the Argentine shale promises to be one of the
most prolific hydrocarbon discoveries in the countrys history. YPF,
alone and jointly with partners, plans to carry out the drilling and
workover of 20 wells in 2012 to further evaluate the potential
prospective resources contained within the emerging play.
The key metrics that I think define a shale play are thickness and
permeability of the rock, and in that sense, if we look at the Bakken
and Eagle Ford shales, the Vaca Muerta is a lot thicker, and also the
rock appears to be relatively permeable, he said.
What this means, Rix explained, is that oil could potentially flow
better from the formation. The crucial aspect of the companys success so far in producing from Vaca Muerta lies in the shales thickness, which is three times that of the Eagle Ford, according to Ryder
Scott. Where others are very quickly forced into drilling horizontal wells, so far we have had spectacular results from drilling and
fracing only vertical wells, he said.
Meanwhile, Argentina will need to put forth a massive effort to
gather the necessary resources, such as highly technically qualified
service crews, and foster significant capital investment to develop
this enormous shale oil and gas potential longer term.
Shale is certainly a growth factor for the whole industry, Rix
said. I think its fair to say that all of us are interested in shale and
interested in increasing our knowledge of shale. Its a learning curve
for everybody, and were all interested in scaling that curve as soon
as possible.
As for Argentinas prolific unconventional reserves potential
within the Vaca Muerta, We really think this is a transformational
play, he said.
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resources, or the worlds third-largest of such reserves,
according to the EIA. But nearer term, future unconventional resources development could be stymied by current stringent government regulations within the
country, a March 2012 report by GlobalData suggests.
According to the report, the Argentine government
has set regulations on international currencies and
upper price limits on exports that could prove to have a
significant impact on the countrys long-term goal of
becoming a major unconventional resources development hub.
Specifically, in October 2011 Argentina decided to
prohibit companies from converting export earnings
into international currencies. Because remitting profits
from Argentina in local currency would be problematic,
this would leave earnings to remain invested, and thus
not freely convertible, for longer periods of time,
thereby affect investor interests and disrupt market
growth, the reports researchers said. Additionally, in
December 2012 the government set an upper price limit
of US $42/bbl for both domestic oil exports and oil
92
sales, which has been seen as having a negative impact

on companies that export oil from Argentina, according
to the report.
Despite these hindrances, operators are targeting the
massive oily shale potential of the Vaca Muerta shale.
Ready, set, go?

Although the extent of unconventional natural gas
resources has not been assessed fully, the US government maintains that shale gas resources will continue
to build at a steady and substantial rate not only in
the US and Canada but also increasingly in emerging
powerhouses like China and India. Time will tell if
national governments will begin to grow more tolerant
toward hydraulic fracturing and when global operators
begin to gain the technical know-how and advanced
drilling technology to ramp up shale exploration and
development operations.
What is known is that basins across the globe are rife
with unconventional resources opportunities and cleanenergy potential for future generations.
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RISER
TECHNOLOGY
Connectors stiffen
Caesar Tongas resolve
The supply of the first bespoke male latch bend stiffeners helped to reduce costly downtime
after an issue with a deepwater production riser system threatened to delay first oil.
Andrew Shearer, FES International
aesar/Tonga is a joint project operated by

Anadarko Petroleum Corp. developed as a subsea
tieback to the Constitution spar facility situated 306 km
(190 miles) off the coast of New Orleans. The Spar has
the capacity to produce 70,000 b/d of oil and 200
MMcf/d of natural gas.
A combined development by Anadarko and its partners, the Caesar/Tonga development comprises the
Tonga, Tonga West, and Caesar fields in the Green
Canyon area of the Gulf of Mexico (GoM). The first
development phase is estimated to have cost US $1.3 billion, including the drilling of four wells. The first three
wells were put into operation in March; the fourth well
is anticipated to be completed before year-end 2012.
Flow and reservoir tests on the first three wells were
undertaken during 2Q 2011, with all the wells testing at

flow rates of 15,000 b/d of high-quality oil.
The Caesar/Tonga development was the first not only
to use a spar floating production facility but also the pioneering application of steel lazy wave riser technology in
the GoM.
Riser issues arose

However, in January 2011, Anadarko announced there
was a mechanical issue on the Caesar/Tonga field project that could potentially have delayed production plans
significantly. A hydro-test of the production riser system
revealed that it was not working properly.
The fields associated with Caesar/Tonga, located on
Green Canyon Blocks 683, 726, and 770, are situated in up
to 1,525 m (5,000 ft) water depth. At these depths maintenance and repairs can be a lengthy process causing significant delays to production and increased downtime.
Wellstream, which is responsible for the design and
manufacture of the risers for the project, commissioned
FES International for the supply of diverless bend stiffener connectors (DBSCs) that would enable another
riser to be connected to the well on the seabed while
repairs were being made to the existing risers.
Bend stiffeners are important in maintaining the
integrity of flexible risers, umbilicals, and other kinds of
cables deployed from spar facilities or floating units. They
are tapering cylindrical devices that are fixed to the end
of the I- and J-tubes through which the riser runs out
beneath the platform, and they support the pipe or cable
by limiting its movement and preventing it from damaging itself against the mouth of the tube. Bend stiffeners
failures can reduce the life of the pipe or cable by a factor
of 20 times.
DBSC design
The DBSC is lifted onto the platform for installation

and fitting. (Photos courtesy of FES International)
94
FES has designed its DBSCs specifically to allow for the

quick, efficient, and cost-effective installation of riser and
umbilical bend stiffeners in congested or confined areas.
Latching mechanisms on the DBSCs have been tailored
and manufactured to fit Wellstreams requirement, providMay 2012 | EPmag.com
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HALLIBURTON
RISER
TECHNOLOGY
LEFT: Prior to disconnecting the DBSC
male and female connections, the
weight of the riser is removed.
BELOW: Significant testing ensures
that all components will operate as
needed during installation.
ing an automatic intervention, which offers safer and

more reliable connections.
The installation of DBSCs to a riser can be broken down
into five stages. First, the riser/umbilical pulls in the head
inserted through the DBSC female unit, then the DBSC
male unit approaches and locates the female unit. Once
located, the male engages through the latch arms where
the riser/umbilical pulls up through the I-/J-tube and into
the hang-off position. At this point the male and female
units are engaged and fully operational. Underwater operations, principally attaching the connecting bend stiffener
to the riser or cable to be pulled in, are performed by
ROVs and as a result, the full connection operation can be
completed within a matter of hours.
Prior to disconnecting the DBSC male from the DBSC
female, the weight of the riser is removed from the latch
arms. The riser end termination pull-in head is attached
to the recovery deployment winch. The riser is then recovered to allow for removal of the riser hang-off collar and
allows for the latch arms to be energized.
Energizing the hydraulic cylinder and rotating the cam
ring allows the latch arms on the DBSCs to retract freely
past the male half and enable riser/umbilical deployment.
Once the riser is fully deployed, the DBSC female latch
arm can be de-energized, reengaged, and ready for further use.
FES tests all of its bend stiffener connector (BSC) units
to be sure they can endure the high pressures and environmental conditions of their destinations. All tests assess
the integrity of the pressure-retaining parts and ensure the
appropriate alignment of the latch, cam rings, and the
hydraulic cylinder. The latches need to be able to fully
engage and fully retract at the hydraulic cylinders fully
closed and fully opened positions.
96
The team at FES also performs latch function and pressure testing of the BSC male and female cam latch dog systems to ensure pressure integrity of the hydraulic system.
Load tests also are conducted that subject the BSC male
and female assembly to the maximum operation loads to
verify structural integrity. Further simulated installation in
loaded condition tests are carried out to verify the coefficient of friction between the DBSC male and female units
and to check that the male unit pulls in and engages with
the female unit when entered at a misaligned angle.
These final tests are crucial for checking whether or not
the unit will be able to function in the conditions on site.
Riser restoration
For this project, FES designed a bespoke DBSC in line
with Anadarkos specifications. Usually DBSCs are
designed with female latching. However, the company
manufactured the industrys first male latch DBSC, which
can be easily connected to the risers using pressure-operated valves. The male latch is operated by ROV/diver
intervention, which allows a much quicker and more efficient method to release the risers and umbilical end terminations from the latching mechanism to the topside
hang-off/connection point.
Name your challenge .
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RISER
TECHNOLOGY
A flexible solution
for corrosion mitigation
The first successful application of a solution for repairing damaged flexible risers
without using costly intervention techniques has been carried out
for an independent operator in the North Sea.
Stuart Mitchell, Flexlife
t is not uncommon for the outer sheath of flexible risers and umbilicals to be damaged during installation or
to become ruptured by annulus vent blockages. According to Oil & Gas UK, the annulus integrity of flexibles
represents 35% of all flexible pipe-related issues worldwide. If the problem is left unaddressed, it can lead to
rapid corrosion of tensile armor layers and premature
pipe failure.
The enclosed area inside an I-tube is particularly
problematic because there is restricted access for
inspection, and damage often occurs around the
splash zone level where oxygenated seawater can
cause aggressive corrosion.
Flexlife recently carried out a successful
first application of its FlexGel product in a
UK North Sea operation for an independent
oil company. FlexGel is an oil-based product
that is nonsoluble in water with a density that
can be tuned depending on the application.
It was devised to mitigate corrosion of damaged areas of flexible risers or umbilicals
within I-tubes and help safely extend the
operating life of assets within the oil and gas
production process.
Once the product is in place, Flexlife carries out predictive engineering and testing, setting a benchmark for
continued operations and allowing the pipe to remain
in safe service rather than having to be changed out at
considerable expense.
FlexGel has the following properties:
Density: Customizable 0.79-0.88 g/cc;
Maximum working temperature: Up to 150C; and
Viscosity: Customizable from 50 cP to more than
50,000 cP.
Prevention and repair

The gel provides a highly efficient solution for operators
and major subcontractors faced with costly change-outs
of risers. The companys products are devised not only to
How it works
One of its advantages is that it can be
deployed from topside or subsea without the
need for costly intervention by rope access
or diving teams and the associated health
and safety risks of those types of operations.
The substance can be pumped into an Itube to completely surround a riser with an
annulus breach, displacing seawater and preventing further corrosion in the structural
tensile armor wires of the flexible pipe and
increasing the possible lifespan of the riser.
98
Flexlife carried out extensive R&D to identify FlexGels corrosion-inhibiting properties and other essential data. The gels specific gravity and viscosity can be
tuned to allow a sufficient plug to completely encapsulate any area of concern.
(Images courtesy of Flexlife)
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resolve issues but also to prevent them from happening

in the first place. There is a huge potential international
market for the gel since it is ideally suited for the large number of flexible pipe-driven field developments offshore
Brazil, Asia Pacific, and West Africa as well as the North Sea.
In fact, it is suitable for any platform where I-tubes are used
and so is not restricted to deep water.
Deployment
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Intervention.
r..
RISER
TECHNOLOGY
Ju-
This is one of a variety of different gels and is essentially an

adaptation of a gel pig, which is commonly used in pipelines
of varying diameters. Flexlife realized this gel floated and
was immiscible, leading company scientists to identify a specific project requirement where a client had a riser with a
small breach in the corrosion-critical splash zone region.
This breach was within an I-tube, meaning that a more conventional repair was very difficult to conduct.
The company carried out extensive R&D to identify the
corrosion-inhibiting properties of the gel, failure modes of
various gels, and essential operational data including the
flash point and environmental suitability. FlexGel has been
approved by the Center for Environment, Fisheries, and
Aquaculture Science as suitable for use offshore and does
not pose a risk to marine life.
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Approximately 70% of damage to flexible risers is caused during

installation. FlexGel has the potential to act as both a lubricant
and corrosion inhibitor, helping to alleviate this problem.
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PERFORMANCE
MATTERS.
RISER
TECHNOLOGY
The gel also was found to be robust and longlasting unless exposed to ultra-violet light, which
is not an issue within the confines of an I-tube.
The company then deployed the gel using the
natural protective containment of the I-tube as a
receptacle to contain the gel in place. The gels
specific gravity and viscosity can be tuned to
allow a sufficient plug of gel to completely
encapsulate any area of concern. The viscosity
means the gel will rise and fall within the I-tube
in sympathy with tidal ebb and flow or changes
to vessel craft. However, its viscosity is such that
it is not affected by short-period movements
such as wave action.
The first commercial deployment of FlexGel
was carried out following consultation with the
UKs Health and Safety Executive for an independent oil company in the UK North Sea.
An annulus breach was discovered during testing in a 4.5-in. gas main flexible riser at a point
This schematic shows the layout of the FlexGel operation in the UK
North Sea to repair a flexible riser breach.
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4.5 m (15 ft) subsea. A total of 9,500 liters of FlexGel was

deployed to fill the I-tube from 11.5 m (38 ft) above seawater levels to 33.5 m (110 ft) subsea. The product was
pumped in approximate 1-m increments above the
mean sea level within the I-tube. This deployment
method allowed time for the FlexGel to settle and displace all water and to fully surround the breach.
Future developments
Further potential uses include installing FlexGel prior
to riser pull in as a preventative solution. It also can be
used where the I-tube itself has been damaged to prevent further corrosion.
According to industry statistics, approximately 70% of
damage to flexible risers is caused during installation,
and FlexGel has the potential to act as a lubricant and
corrosion inhibitor, helping to alleviate this problem.
There also is an issue of corrosion internally within Itubes, which is equally difficult to address, so if clients
have a concern that I-tubes may be corroded, the company can address that.
Further potential uses for the product and other gels
developed include fire suppression; Flexlife is currently
carrying out tests for this application. Assuming these
tests prove successful, it may open up another significant
potential market.
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SPECIAL REPORT:
CASPIAN REGION
Prepared by Global Business Reports

for E&P. More information can be
found at gbreports.com
Aker Solutions performed

a complete EPC contract
for Azerbaijan International
Operating Company on this
rig owned by BP. The project
included a new derrick
structure, drilling equipment
package, and control system
Two sides of the same sea:

The Caspian region presents lucrative but
different visions for oil and gas investment
Eugene Yukin, Joseph Hincks, Katie Bromley, Katya Koryakovtseva, and Saskia Coplans, Global Business Reports
The Caspian Sea, the largest inland body of water on earth,

separates what are undoubtedly the two oil giants of the region,
Azerbaijan and Kazakhstan. The Caspian region has become a
central focal point for untapped oil and natural gas resources
and contains an estimated 10% of the earths potential oil
reserves. The major projects that have contributed to this enviable position have been Tengiz and Karachaganak in Kazakhstan and Azerbaijans Azeri, Chirag, and Guneshli fields.
Natural gas reserves in the Caspian region are proven at
more than 236 Tcf, and the regions total oil reserves are
reported to constitute more than 60 Bbbl of oil, with some
estimates as high as 200 Bbbl. With the aid of substantial
foreign investment, the region produced 4.5 MMb/d in
Azerbaijan:
Land of fire
Near the Georgian border there is a spring from which gushes
a stream of oil, in such abundance that a hundred ships may
load there at once, so says the account of Marco Polo in reference to Baku oil.
106
2010, compared to just 870,000 b/d in 1995. While no

doubt a remarkable achievement, the bulk of potential
remains largely untapped.
Further development faces significant challenges. The two
oil giants, with vastly different economies, legal structures, and
political environments, are addressing very similar issues surrounding the production and transportation of oil and gas in
the region but in very different ways. This report by E&P
and Global Business Reports explores the directions
each country is taking. The success of these respective paths
has implications for Azerbaijan and Kazakhstan and will
no doubt hold important lessons for neighboring countries
Uzbekistan and Turkmenistan.
rom the time of Zoroastrian and Hindu pilgrims, who

traveled from India to worship at Ateshgah of Baku where
a vent from a subterranean gas field once fed a continuously
burning flame; throughout the Second World War, when
almost 80% of the Soviets oil was produced in Azerbaijan; to
the December 1994 ratification of Heydar Aliyevs first production-sharing agreement (PSA), the Contract of the Century,
which would propel the country toward being the worlds
fastest-growing economy in 2006; the history of Azerbaijan
is interwoven with the development of its oil and gas industry.
Vic.,
t.q
Visit www.akersolutions.com/drillingequipment
offer you.
or scan the OR code to see what Aker Solutions

can
AkerSolutions"
part of Aker
SPECIAL REPORT:
CASPIAN REGION
There are 57 oil deposits in Azerbaijan. Eighteen of

them are in the Azeri sector of the Caspian Sea, and the
rest are on land. According to the State Oil Company of
Azerbaijan (SOCAR), the Caspian basin has deposits of
30 billion tons of oil and 18 Tcm to 20 Tcm of gas. Oil
has always been part of the life of the people in Azerbaijan, said Adil Mammadov, president of Azpromo, Azerbaijans national body for the promotion of foreign
investment.
Azerbaijan is arguably the most experienced oil and
gas producing nation in the world. The first industrial
production of oil in Azerbaijan took place in 1846, a
decade before the Americans sank their first oil well in
Pennsylvania. The worlds first oil pipeline was laid from
Baku to Supsa on the coast of the Black Sea, and the
worlds first oil tanker was built in Azerbaijan. In 2012,
the country must draw on its exceptional heritage as it
prepares to undertake some of the most ambitious
hydrocarbon plays in the world.
The contract of the century

and the rise of the PSAs
Despite Azerbaijans heritage as an oil and gas producing nation, after regaining independence from the
Soviet Union the country was desperately in need of
foreign investment and technology to reinvigorate its
hydrocarbons sector and bolster its nascent economy.
The Azeri, Chirag, and deepwater Guneshli Contract
No. 1, a 2004 agreement signed between then President
Heydar Aliyev and the Azerbaijan International Operating Company (AIOC), is commonly referred to in Azerbaijan as the Contract of the Century. Azerbaijans first
PSA laid out special provisions for the shareholders who
would develop the field and was to change the economy,
political standing, and standard of living in Azerbaijan
for decades to come. The
Azeri-Chirag-Guneshli (ACG)
deal was not only a massive
financial coup for the government ACG has estimated oil
reserves in excess of 5.4 Bbbl,
and conservative predictions
when the field came onstream
in 2006 had it that the contract would bring in up to US
$170 billion in revenues for
the country before 2025 but
also set the framework for
George Taggart, regional
future extraction of oil and
manager, Caspian,
gas in the country. Since 2004,
Drilling Technologies
more than 20 PSAs have been
at Aker Solutions
signed in Azerbaijan.
108
Parties to Azerbaijans PSA agreements are the government of Azerbaijan represented by SOCAR and
contractors represented by various foreign oil and gas
companies. The tax system consists of two alternative
regimes: the statutory regime governed by the Tax
Code, and the tax regime established by existing PSAs.
Contractors under PSAs pay a prenegotiated profit tax
but enjoy various favorable conditions such as exemption from VAT and customs duties on imports.
More broadly, the legal regime for foreign investors is
as favorable as the one created for local investors, and
Azerbaijani law protects foreign investors interests from
future adverse changes in the legislation for the next 10
years, although this does not apply to changes in legislation concerning defense, national security and public
order, environmental protection, credit and finance,
and public morale and health.
The success of Azerbaijans PSAs, and their continued
stability, has been key to attracting foreign investment
into the country. Salans, the largest international law firm
operating in Azerbaijan, played a major role in fostering
agreements for the ACG field in Azerbaijan as well as
the Karachaganak and Kashagan fields in Kazakhstan.
The other Caspian states with major oil production
succumbed to a great extent to impulses of resource
nationalism, particularly in Kazakhstan, said James
Hogan, managing partner at the Baku office of Salans.
The Kazakhstan approach entailed periodic demands
to renegotiate contract terms, which held up projects,
and in some cases such changes rendered the original
contract somewhat meaningless. Azerbaijan was different. There has not been a single case of a PSA having
to be renegotiated, said Hogan. It is a system that has
worked well for both the contracting oil companies and
the state, and both parties concentrate on getting the
job done.
The scope of Azerbaijans PSAs goes beyond the basics
of extraction to include provisions for various sectorrelated subcontractors. Customs regulations in Azerbaijan, for example, are regarded as problematic, subject
to complex bureaucracy and vulnerable to corruption;
however, logistics companies who deal directly with the
oil and gas sector have a somewhat easier experience
thanks to the PSAs.
The energy sector for the most part falls under the
PSA and as such clients benefit from preferential tax benefits to encourage trade in Azerbaijan, said John Quinn,
operations director at ACE Forwarding Caspian, whose
company has a 15-year history of offering freight forwarding and dangerous goods management services to international oil and gas companies operating in Azerbaijan.
If you look at the region Russia, Kazakhstan, AzerbaiMay 2012 | EPmag.com
SPECIAL REPORT:
CASPIAN REGION
jan, Turkmenistan, Georgia a lot of the legislation follows suit, and all have similar requirements ... (but) there
are differences in the PSA agreements; we find that the
PSA in Azerbaijan will currently allow you to bring in
goods with greater flexibility than in Kazakhstan.
One egg, one basket
relationships in Azerbaijan are, in some cases, providing

the parameters for activities elsewhere in the world.
Aker Solutions Drilling Lifecycle Services, a division of
Aker Solutions, has four rigs operating in the ACG fields
and has maintained a long-term operational service
agreement (OSA) with BP. BP is considering using
the Caspian contract template model in other areas
of the world. Aker Solutions is a Norwegian company,
and the fact that the Caspian region is leading the relationship is hugely significant for us, George Taggart,
regional manager of Drilling Lifecycle Services at Aker
Solutions, said.
The Azeri, Chirag, and deepwater Guneshli Contract No.

1 was not only central to Azerbaijans oil and gas evolution, it also served to cement the place of BP as the countrys most prominent international oil company (IOC).
BP, which established an office in Baku in 1992, has a
dominant stake in the majority of the countrys large
projects. In addition to being the operator of the ACG
Shah Deniz Phase 2
field, BP has heavily invested in the giant gas field Shah
The Caspian region was BPs largest operation globally
Deniz and will lead the field into its second phase of
at the time of writing and particularly in the wake of
development. Other projects in which BP has a signifiBP losing out to ExxonMobil in the Arctic. The comcant interest include the BakuTbilisiCeyhan (BTC)
panys handling of Shah Deniz as it enters its stage
pipeline, which transports crude oil from offshore fields
two development will be keenly watched by investors
in the Caspian Sea to the Turkish coast of the Mediterlooking for assurance that BP can still deliver on worldranean for further shipping into Europe; the South Cauclass projects.
casus Pipeline, designed to transport
gas from Shah Deniz through Georgia
and on to the Georgia-Turkey border;
r.i j
and the Western Route Export
Pipeline, which transports oil to Supsa
on the coast of the Black Sea and the
SC
.i
Sangachal Terminal that feeds it.
BPs longstanding pre-eminence has
ENGINEERING & CONSTRUCTION
had implications across the strata of the
Azerbaijani oil and gas value chain.
Main Power Distribution Systems /Transfixmers/ Sub Power DistriService companies face fierce competibution Systems / Internal Lighting System / External Lighting SysAbsheron
tion for a contract with a single operatems including Street Lighting / Emergency Lighting Systems / Main
tor that can be regarded as something
Circuits / Lightening and Earth Protection Systems / Data
Engineering Power
Networks / Fibre Optic Cabling / Fire and Gas Detection Systems /
of a golden ticket; the success of some
/ CCTV / Access Control / Intruder Detection / Flood Detecwill deliver VESDA
of the largest engineering, procuretion Systems / Integrated Security Systems / Piping and Pumping
ment, and construction management
/ Water Distribution Systems / Gas Distribution Systems /
high qual- Systems
Steam Systems / Hy draulic Systems/ Hoses / Valves / Actuators /
in the region can at least partly be
Repair Systems / Fire Suppression Systems
ity products Composite
attributed to the long-term relation(C02 - Sprinkler - Fire Water Ring Mains -Water Mist) / Fiscal
ships that they have cultivated with BP.
/ Steel Frame Buildings / Modular Buildings / Drainage
and services Metering
Systems / Concrete Works / Insulation materials and Sealants / PartiThe reason we came here so early is
Walls / External Cladding / Dry Lining / Fire Doors / Fire Stopthat meet tion
having worked extensively with BP in
ping / Steel Support Work / Painting and Decorating / General Fit
the North Sea. We followed them here
Works / Environmental and Bio Remediation Services / Facilities
and exceed Out
Maintenance / Roofing / Overhead Cranes / Mobile Cranes / Lifting
when they needed our asset support
services, Peter Ward, AMECs general
our clients Equipment / Fork Lifts / DumperTrucks / Procurement Services.
manager in Azerbaijan, said. AMEC,
Covered: Oil and Gas / Marine and Offshore / Industrial
expectations Sectors
Commercial and Domestic
the main provider of rig support and
engineering services for BP, has been
i
Suites 29 to 32, 48 Nizami Street, Baku ,
in Azerbaijan for 14 years.
AZ 1005, Azerbaijan.
I
Tel.: +(99412) 493 4369 / 493 3698
l
In a shift that can be considered
+ 994-50-215 0585
III El , Mob.:
reflective of the importance BP now
Email: infoaabsheroneng ineering.com
places on the Caspian region, BPs
Web: www.absheronengineering.com
ABSH ERON
109
SPECIAL REPORT:
CASPIAN
Shah Deniz was discovered by BP and SOCAR in May

1999 and contains more than 1 Tcm of gas. In 2006, just
seven years after the initial discovery, Shah Deniz came
into its first phase of production, which is expected to
maximize at 8.6 Bcm of gas per year and about 50,000
b/d of condensate.
The planned Phase 2 expansion, or full-field development, is the largest gas development project operated by
BP in the world and could take production at the field
up to 16 Bcm per annum and 100,000 bbl of condensate. Shah Deniz Phase 2 is significant for both Azerbaijan and the wider world. It will mean that we can deliver
gas not only for local consumption, Georgia, and
Turkey, but also to Europe, said Rauf Aliyerov, managing director at SOCAR Shah Deniz LLP.
Phase 2 will involve the construction of two new
bridge-linked production platforms, 26 subsea wells to
be drilled with two semisubmersible rigs, and 500 km
(311 miles) of subsea pipeline. The technical difficulty
of Shah Deniz wells, augmented by uncertainty over
transit routes, means that at present it is difficult to get
much certainty on production timelines. Our best
guess is that Phase 2 will be producing in 2017, but it
depends largely on how the commercial issues are finalized, Aliyerov said.
Commercial issues aside, Azerbaijans operators and
service companies alike are gearing up for what promises to be an extremely technically challenging project.
The South Caspian Sea and Azerbaijan have a very
complex tectonic history, and there are a lot of variant
pressures both shallow and deep, said Rob Algie,
Schlumbergers regional president. When drilling,
these create a lot of complexity, so there is a huge role
for technology.
One of the biggest challenges for Azerbaijan will be
well integrity. The region is tectonically very active,
which creates numerous over-pressure and under-pressure zones. Reservoir pressures change very rapidly, and
this narrows operational margins. Narrow drilling margins such as the difference between pore pressure and
fracture pressure require advanced technology and
processes to control and good execution to deploy
successfully, Algie explained.
SOCAR
The most striking consistency throughout Azerbaijans
variant landscapes, its giant oil and gas fields, its oily
rocks, its numerous transit pipelines, and its refineries
is the ubiquity of SOCAR. Government-owned SOCAR
is now one of the largest oil and gas companies in the
world and an integral player in all of Azerbaijans PSAs.
110
SOCAR was established in 1992 with the merger of

Azerbaijans two state oil companies, Azerneft and
Azneftkimiya, in part to ensure that Azerbaijan reaped
the benefit from its abundant hydrocarbon resources.
While post-Soviet Azerbaijan was left not only economically but also technologically depleted, SOCARs collaboration with foreign players and active engagement in
major project development has precipitated a step
change in the country: SOCAR has transitioned from
simply being a necessary partner for foreign E&Ps wishing to undertake projects in Azerbaijan to a global force
to be reckoned with in its own right.
As a multinational, SOCAR currently holds representative offices in Bucharest, Frankfurt, Geneva, London,
Istanbul, Vienna, Astana, and Tehran and has made substantial investments overseas.
In a move that embodies the distance SOCAR has traveled, both in terms of technical capability and financial
clout, November 2010 saw the company announcing the
discovery of 200 Bcm and 30 to 40 million tons of gas
condensate at the Umid field. For the first time since
the Contract of the Century, SOCAR conducted exploration activity independently and was able to unlock the
second largest gas field in Azerbaijan. SOCAR leadership estimates that with further drilling, the overall
reserves at Umid are likely to reach 300 Bcm, while
those at the Babek field, which lies under Umid, are
estimated to reach 600 Bcm.
Totals discovery at Absheron X2

SOCARs discovery at Umid is not the only indication
that the current one egg, one basket situation, with BP
as the sole foreign operator, is set to change. Back in
1997, ChevronTexaco and SOCAR signed a PSA for the
Absheron field, 100 km (62 miles) to the southeast of
Baku. In 2001, gas condensate beds were found at a
depth of 6,500 m (21,326 ft), but back in the early 2000s
low gas prices, compounded by the deepwater and complex tectonic structure that make Caspian oil wells especially challenging, lead Chevron to the conclusion that
Absherons gas reserves were commercially unprofitable.
The company quit the project in December 2005.
Total, which had been a partner with Chevron during
Absheron 1, maintained that the Absheron block had
commercial potential and on Feb. 27, 2009, signed an
agreement with SOCAR to re-explore the area. The
agreement set the framework for the drilling of three
exploration wells over the following three years. In September 2011, Total announced a major gas discovery at
its exploration well Absheron X2, drilled by the Heydar
Aliyev rig (now Maersk Explorer) operated by Maersk
SPECIAL REPORT:
CASPIAN REGION
Drilling. The Absheron field is expected to contain 350

Bcm of natural gas and 45 million tons of gas condensate, subsequently boosting Azerbaijans gas reserves
from 2.2 Tcm to 2.5 Tcm.
The market conditions for gas have changed significantly since 2005. European demand has soared, and
the success of Shah Deniz and the South Caucasus
Pipeline (SCP) means there is already good access to
markets, with another pipeline purportedly on the way.
The discovery at Absheron X2 is not only significant
for PSA partners Total, SOCAR, and 20% stakeholder
GDF Suez, but additionally the likelihood of Total
becoming a second major operator in Azerbaijan will
have repercussions across the entire value chain of the
countrys oil and gas industry.
Yet Total is not the only IOC with potential to become
an operator in Azerbaijan. Austrian company OMV has
been present in Azerbaijan for a few years on the back of
the companys interest in the Nabucco project. However,
in May 2011 the company signed a memorandum of
understanding on enhanced cooperation with SOCAR.
At the time of writing, OMV was in talks with SOCAR
concerning possible various upstream positions. We are
very positive about the South Caspian, and we are considering several options, Dorin Baru, exploration and
production, general manager at OMV Gas & Power
GmbH Azerbaijan, said.
One of the critical success factors in the development
of both Shah Deniz and Absheron will be Azerbaijans
ability to manage the ramp-up of rig capacity. With only
two rigs in the Caspian Sea today capable of drilling
wells as complex as Shah Deniz, this will require incremental rig capacity investment, said Rob Algie, country
manager, Azerbaijan, at Schlumberger.
Nationalization, economic diversification,

and the broader implications for Azerbaijan
Hydrocarbon investment might have propelled Azerbaijans economy through the first decade of this century,
but for the country to develop sustainably, the revenue
the oil and gas industry has generated must in turn
invigorate other sectors of the economy.
The State Oil Fund of the Republic of Azerbaijan was
established Dec. 29, 1999, to manage foreign currency
and assets generated from oil and gas exploration and
development. In recent years, the Azerbaijan government has placed increased emphasis on diversifying the
countrys economy through the reinvestment of these
funds. The approach has started to pay dividends,
according to Movlan Pashayev, managing partner at
Pricewaterhouse-Coopers (PwC) in Azerbaijan. PwCs
market study predicts that the oil and gas industry will
remain the countrys main revenue provider for the
next 10 to 20 years, but its long-term future will be
driven by local investments. The emphasis is shifting
to the government and private investments, whereas
the vast majority of investment in the past came from
foreign investors. This is probably one of the most
striking differences and changes in the last few years,
Pashayev said.
However, the hydrocarbon sectors contribution toward
the wider economy transcends the basic provision of
wealth for reinvestment. In addition to profit sharing,
Azerbaijans PSAs oblige foreign contractors to undertake
a process of workforce nationalization. This is facilitated
through Azerbaijans heritage as an oil-producing nation.
In Soviet times, Azerbaijan was the nerve center for the
oil industry in the region, and consequently there are
some outstanding universities with very strong training
for petrotechnical expertise, Algie said.
While the countrys heritage sets a precedent for the
development of local expertise, the technical complexity
of contemporary projects necessitates investment in
state-of-the-art training systems. The technology-driven
Aker Solutions group, for example, is planning to build
a new facility in Azerbaijan including training classrooms and a simulator facility. In our niche we have
been reasonably successful, and this has allowed us to
invest more into our infrastructure in Azerbaijan, said
George Taggart, regional manager at Aker Solutions
Drilling Lifecycle Services. We currently have four platforms with state-of-the-art drilling control systems; the
simulator facility will enable to us to have a virtual asset
on each of these four rigs, enabling us to test upgrades
and train operators.
Workforce nationalization filters through all levels
of the industry, from IOCs through
to contractors such as AMEC and
Aker Solutions and to smaller subcontractors and service companies.
Formed in 2008, Absheron Engineering provides electrical and
mechanical solutions for many of
the drilling companies operating in
Azerbaijan. Absheron Engineering is
fully registered in Azerbaijan, and
95% of its workforce consists of
Azerbaijani nationals.
Morgan Phillips, general
As well as guaranteeing eligibility
for project tenders, employing local manager of Absheron
Engineering &
staff has enabled Absheron Engineering to leverage a cost advantage Construction LLC
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SPECIAL REPORT:
CASPIAN REGION
over its competitors. You receive the same service from

us as you would from an international company but for
quite a big reduction in costs, Absheron Engineering
general manager Morgan Phillips said.
Through investment in training and the enforcement of
industry best practice, foreign contractors and sub-contractors have been able to induce a step change in Azerbaijans safety culture. This has in turn contributed to the
promotion of a more responsible attitude to safety on the
client side. Absheron Engineering withdrew its staff from
a project last year when the company was unhappy with
onsite safety provisions. There is no compromise whatsoever on safety, Phillips said. My engineers know they are
fully empowered to stop the job if they are not happy with
a safety aspect.
Demonstrating successful engagement with a local
workforce is key for companies looking for regional
expansion. Buoyed by its strong reputation in the local
market, Absheron Engineering has recently won contracts in Kazakhstan and Turkmenistan. We are an
Azeri company with a good reputation, which carries a

lot of weight, especially in the Caspian and Central Asia
region, Phillips said.
Kazakhstan:
Land of the free
he ancient traditional nomadic life on the steppe

poses a stark contrast to the emerging market
economy of this vast and mineral-rich land. According
to scientists, the Caspian region contains the third
largest reserve of oil and natural gas in the world,
behind the Gulf region and Siberia. But drilling for oil
in the region is by no means a recent phenomenon, with
a presence of oil production clearly visible across the
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SPECIAL REPORT:
CASPIAN REGION
landscape since the latter part of the nineteenth century. However, it is only now, through a mix of foreign
investment and government control, that the Kazakh
people are truly benefiting from their natural resources.
Uncovering the wealth

While Kazakhstan also can claim a history of hydrocarbon production going back more than a century, its
oil and gas industry, unlike Azerbaijans, has only
recently initiated a trajectory of rapid growth and technical modernization. In 1993, the newly independent
Kazakh government invited international oil companies
into Kazakhstan for the first time, but oil prices were
low and the country lacked a developed oil and gas sector. In the same year, Kazakhstan signed its first agreement with a foreign oil company, establishing the joint
venture between Chevron and KazMunaiGas (KMG)
for the development of the Tengiz oil field.
It was this agreement that paved the way for international oil companies to play a major role in Kazakhstans
energy sector. Western firms had been
eager to exploit the former Soviet
empires massive oil reserves, but the
Onshore
closed market of the Soviet Union
did not allow this as an option. It is
now a reality. Kazakhstan has the
Caspian regions largest recoverable
crude oil reserves. In 2005, Kazakhstan produced approximately 1.29
MMb/d of oil, and its production
accounted for almost two-thirds of
that of the entire Caspian region.
However, as Johan Vanderplaetse,
vice president of Emerson Process
Management, points out, it is not just
foreign companies who are benefiting
from the opportunities presented by
an open market. There are few places
in the world, particularly considering
the uncertainty in the Middle East,
where there are so many upstream
opportunities. This is why the big
companies such as ExxonMobil,
BP, Total, Chevron, and Shell are
operating here in the CIS and in the
Caspian region. But besides these
international players, the domestic
companies have stepped up their
investments in upstream and downstream as well: KMG in the case of
Kazakhstan, Lukoil and Rosneft in the
case of Russia, and SOCAR in the

case of Azerbaijan, to just name a
few of them. Ten years ago, these
companies were considered by
many to be local players, but now
they have expanded significantly
to become global players.
Lukoil, for example, entered
Kazakhstans market only two years
after Chevrons agreement was
signed and expects the republic
will continue to play a central role
Johan Vanderplaetse,
for the company. According to
vice president of Emerson
Andrey Kirillov, director of Lukoil
Process Management in
Overseas in Astana, investors are
CIS and Turkey
attracted to Kazakhstans political
stability, sustained economic growth, and geographical
location. The country has set a goal of attracting investment as a key factor in its economic development and is
thus constantly improving its legislative and regulatory
I Offshore I
Downstream
Minerals
Infrastructure
r:
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etc
Visit www.kbr.com to find out more.
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SPECIAL REPORT:
CASPIAN REGION
framework, Kirillov said. Potential investors have seen

an undeniable advantage in the development of special
economic zones whose members are exempt from all
taxes. So the investment climate prevalent in Kazakhstan
today allows investors to operate stably and develop.
By encouraging foreign investment, Kazakhstan
Condor Petroleum is co mmitted
CO MMITMENT
C O M M U N I T Y................
CO ND OR
Condor is actively exploring in

Kazakhsta n's Pre-Caspian and
Chu-Sarysu Basins.
CONDOR
P E I R0
TSX:CPI www.condorpet roleum.com
114
already has seen an impressive growth in the sector and

now expects the majority of future growth to come from
the four elephant fields: Tengiz, Karachaganak, Kurmangazy, and Kashagan. The large-scale investment into
these fields has led the Kazakh government to increase
projected production levels to approximately 3.5
MMb/d by 2015.
While a majority of developed oil
and gas economies are struggling to
keep up production levels, it is the
basic estimate of resources that allows
the government to be so optimistic.
There are very few countries in the
world with significant untapped oil
.
and gas potential; Kazakhstan happens
to be one of these countries, said
Norman Storm, Kazakhstan managing
director of Condor Petroleum, a junior E&P company that began operations in the country in 2007. Almost
45 billion barrels of oil have been discovered in the pre-Caspian basin to
date, but many experts predict that
this is only around one-third of the
total potential of the basin. I believe
that most of the easier discoveries have
been made, but at the same time,
there will still be significant additional
resources discovered in the coming
years through the application of new
technology and ideas.
Yet despite such high resource estimates, little of the investment has
gone into new exploration efforts and,
with large-scale projects being plagued
by heavy delays in recent years, the
lack of a more diversified strategy has
been considered by many to be a mistake. The priority for the industry
should be new leads and new acreage
toe
since the major blocks and fields are
known, Aslanbek Jangirov, interpretation manager at PGS, said. Most of
the current leads are not necessarily
attractive to foreign investors because
they are old, with low-quality geological and geophysical data.
PGS has had a presence in KazaLE U U
I N C
khstan since 2002. Dmitri Khitrov, who
heads the Seismic Data Processing
Division, is optimistic that exploration
SPECIAL REPORT:
CASPIAN REGION
accept greater state ownership of natural resource assets.

prospects will crop up due to a mix of better technoloThis can create some tension between the oil companies
gies and the overall global economic situation. The
and the state. So far it has always been resolved amicably,
political stability we are seeing here, conjugated with the
but it is something that requires careful attention and
slowdown of the oil industry in Egypt and Libya due to
will continue to be an issue going forward.
the civil unrest in these countries, is providing the right
As the concept of a resurgent state has dawned on
environment for major oil and gas companies to invest
multinationals operating in the country, the attitude
in Kazakhstan. In addition, seismic processing is congoing forward has become one of acceptance and a
stantly advancing and allowing us and our clients to
desire to overcome hurdles in order to move on major
review their reservoir potential through improved imagexpansion programs. One recent example of this policy
ing after reprocessing. We are definitely upbeat, and we
should take effect this year when KMG is expected to
believe that exploration and seismic data processing will
take a 10% ownership in Karachaganak, an enormous
only improve over the course of the coming years.
gas field in Kazakhstans northeast containing an estiGovernment action to stem the decline of exploration
mated 9 Bbbl of condensate and 48 Tcf of gas. Mark
efforts will likewise be crucial, saidGennady Bannikov,
Rollins, president of BG Kazakhstan, which operates the
chairman of the board for Geostan, a newly established
field, described KMGs entry into the consortium.
company specializing in seismic data services. If I had
We have been in discussion for quite some time with
to compare the situation from the Soviet era to now,
the Republic of Kazakhstan; the primary objective of the
previously there was a more systematic and centralized
discussions was to resolve some past issues relating to
approach in the exploration of new hydrocarbon
interpretation of the production sharing agreement.
deposits. Now the Kazakhstan government is trying
to resolve this situation by creating a
new government company called KazGeology, which is just at the beginning
of its work.
These proactive actions by the government have not been isolated to
spurring the countrys exploration
1
efforts alone. In 2002, President Nursultan Nazarbaev created the countrys
P1
national oil and gas company, KMG,
which has since been an effective government vehicle for state influence
and has actively sought to secure
stakes in the countrys major oil and
gas projects and infrastructure.
KMGs intervention has not always
been greeted kindly, as many consider
the Kazakh government to be a primary reason for the multiyear delays
Rapid Cycle PSDM
in expanding major projects in the
PGS hyperBeam
Moving Depth to Interpretation
country, such as Kashagan. However,
Curtis Masters, partner at law firm
Fast iterative velocity model building
Baker and McKenzie, sees the governInteractive anisotrop ic depth imaging
ments desire to secure a greater stake
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try as being reflective of any emerging
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want to have greater ownership of
their natural resources, so there is constant pressure on oil companies to
l
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SPECIAL REPORT:
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This has been very successful, and

part of the resolution is for KMG
to become a partner in the consortium. We are very much looking forward to having KMG as a partner.
This will allow us to benefit from
different insights into the consortium, and now that many of the past
issues have been resolved, we can
Mark Rollins, senior vice
move forward with the next phase
president, Central Asia,
of development. KMG has an enorBG Group; president,
mous amount of expertise and close
BG Kazakhstan
relationships to the various government stakeholders, which will be
enormously helpful to the consortium going forward.
Backbone of the nation

Pipelines have long been the backbone of the Kazakhstan oil and gas industry. Though oil production was
well established throughout the Soviet period, Kazakhstans gas production remained less significant; the
bulk of the gas was a by-product of oil production and
was usually flared. The gas sector did not begin to evolve
in Kazakhstan until the 1970s, although at this time it
was basically a conduit, when the USSR initiated the
construction of several major Central Asian gas trunk
pipelines. These were centrally planned and executed as
a system of transportation for Turkmen and Uzbek gas
through the territory of Kazakhstan to Russia, the Caucasus, and Europe. As a result, the pipelines were not
designed with actual production in mind, do not cover
the entire territory of the country, and are not united.
Oil and gas infrastructure is still a challenge within
the country. If you do not have a gas pipeline in the
near vicinity, or even in the extended vicinity of your
fields, then utilization of the associated gas during commercial production, or even test production, is an issue,
said David Barker, the country manager for Condor
Petroleum.
This underdevelopment has put enormous constraints
on the countrys emerging gas industry, and Kazakhstan
is still completely dependent on Russia for access to
major gas markets to the north and west.
The energy sector in the Caspian region has a bright
future, providing oil prices remain robust and local
companies continue to be internationally competitive.
We think the demand for carbon-based fuels will remain
high in the medium term, but there is clearly increasing
competition from other supplier countries around
the region. Kazakhstan and other Caspian countries
understand that they must deliver a reliable and
116
dependable supply, so transparency at the fiscal, operational, and regulatory levels is important, said Christopher Renwick, general director of Lloyds Register
Kazakhstan LLP.
In the meantime, major developments also have been
taking place in the countrys oil pipeline infrastructure.
The Caspian Pipeline Consortium (CPC), which operates and runs Kazakhstans major oil and gas pipeline
running from the Caspian to the Black Sea, is investing
in a $5.7 billion enlargement project to double the existing pipeline capacity of roughly 28.2 million metric
tonnes annually (mta) in anticipation of additional oil
flow from Caspian oil fields.
Since the moment that the project was sanctioned in
December of 2010, we have been actively working on its
realization, said Nikolai Platonov, general director of
the CPC. In this period of time, we have signed agreements with the contractors who will be undertaking the
work of upgrading the existing CPC infrastructure, which
includes reconstruction of existing and construction of
10 additional pump stations, upgrading the Marine Terminal facilities including the Tank Farm, as well as the
replacement of the 88 km pipeline section in Kazakhstan
with a larger diameter pipe. We already have begun working on the first phase of the project. The expansion project is very complex, so the development plan was thus
split into the three different phases, whereby each phase
will achieve a consecutive expansion of the pipelines
capacity. After the first phase is completed, the consortium is expecting to increase oil flow to 35 mta.
Weathering the storm

Despite investments in infrastructure for the industry,
with the issues surrounding the recent global financial
crisis one has to ask what the current investment climate
looks like for Kazakhstan.
When oil and gas prices fell in 2008, this had a heavy
effect on the countrys economy. Kazakhstan was hit
hard by the global economic crisis, and Kazakh banks had
to accommodate liquidity to repay foreign obligations,
Murat Koshenov, chief risk officer and compliance controller for Halyk Bank, one of the leading Kazakh domestic banks, explained. Oil and gas prices collapsed,
forcing the central bank to devalue our currency by
25%, and a lack of liquidity in the banking sector led to
a financing cut for the construction sector, leading to
significant price reductions in the real estate market.
Added Marc Brenneiser, president of STS Logistics,
a leading logistics company in Russia and Kazakhstan,
Investment in developing markets are always a risk, but
there is still much talk in the air about the region being
in a crisis, and that is misleading. Its true that industries

were hit quite hard in 2008-2009, but the potential is here
and the demand in the long term is only going to increase.
The risks are low compared to the benefits and the profits
one can achieve by investing in these territories. We are
planning to double our business in the next three years,
and this is a conservative approach because of the market
and the potential.
Indeed, the economic situation in Kazakhstan today is
quite different than the difficult years following the economic crisis. We still see new investors in the oil and gas
sector; however, probably 80% of them are now coming
from the service sector rather than exploration, like drilling
companies, companies providing human resources, or
safety services. Many companies are coming to render services for oil and gas to subsoil users, observed Almat Daumov, partner at Grata, a leading independent law firm in
the country.
The key areas that have attracted service companies have
been diverse and varied, but certain industry segments such
as environmental services have seen more growth than others. When Ecoenergogas, a Kazakh engineering company,
was hit particularly hard in 2008, rapid diversification into
ecological work helped turn the companys fortunes around.
The crisis forced us to group together, and we seriously
undertook environmental work, said Bolat Yegeshbaev, the
companys general director. We opened a whole new division dedicated to the protection of the environment and
thus attracted several ecologists. These efforts have resulted
in us winning several projects already.
In a conversation with Westdala, the first private company
established in western Kazakhstan to take on waste management, Managing Director Dias Khabiyev said that competition
has grown tremendously in the past few years. Westdala was
the first private company in the Atyrau region of Kazakhstan
to get involved in the business of providing comprehensive
services in the field of waste management. Due to the lack of
effective competition, for a long time the company could to
some extent dictate terms to its customers and prices for its
services. Today the situation is quite different, thanks to the
fact that the market for waste management solutions has constantly been evolving and expanding. What is helping the
market is the rule of law and the fact that agencies and local
authorities are paying ever more attention to environmental
issues, Khabiyev said.
In the wake of the global financial crisis, a large number of
domestic companies say the rule of law and positive government policies have allowed them to regain their previous positions. However, according to Linsi Crain, deputy general
manager of policy, government, and public affairs at Tengizchevroil, government policies have not completely
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Tengizchevroil
Address :060011, Republic of Kazakhstan,
Atyrau, Satpayev Street, 3
Tel:+7 712 227 1212 / +7 712 302 6000 Fax: +7 712 302 6752
www.tengizchevroi I.com
117
SPECIAL REPORT:
CASPIAN REGION
addressed the investment issue, and not all companies are

seeing foreign investment materialize quickly enough
since the 2008 decline in the market.
I do not see many new investors coming in, so the question should be posed: is it an attractive investment climate
for new investors? Kazakhstan seems to be focused on
localized issues; they should look internationally because
there are so many examples around the world of great legislation and policies that could be introduced to improve
the climate for new investors, Crain said.
Nurlan Abdrasulov, deputy general director for marketing at KazRosGas, agrees that reaching out and developing relations abroad is key to economic success. One
must admit that business is a risk, and companies should
be encouraged to take on this risk and invest in Kazakhstan, he said. We have a young country with a lot of
ambition. For development to happen, we need constant
and open dialogue with foreign countries to exchange
best business practices.
Reaching out?
Despite Kazakhstans proactive efforts to be seen as a
friendly investment destination, the question posed by
most foreign companies operating
here has been whether government regulations have indeed
promoted a culture of dialog and
whether they have allowed them
to assimilate smoothly into the
country. A major concern has
been Kazakh laws on local content. The law itself has been
around for some time, but beginning Jan. 1, 2012, ratios for the
Dougal Monk, senior manpermitted number of foreign
ager of Business Developworkers relative to local workers
ment, Kazakhstan, at KBR
were further tightened, and this
has caused concern from certain
companies.
We recognize the transition that
the government has made over the
last 20 years and are very keen to
support it, said Dougal Monk, senior manager of business development for oil and gas at KBR, a
global engineering company that
has been involved in the Kashagan
project since 2003. In Kazakhstan,
labor laws have changed rapidly
John Kirby, project director within the last 18 months, directed
at KBR, Kashagan PMSC
towards establishing, expanding,
118
and stabilizing local content in technology and experience. We feel that this is the right thing for the country
and are one of the international companies that take the
legislation most seriously.
John Kirby, project director of the Kashagan PMSC project, explained some of the training that KBR has undertaken. We have spent a lot of time recruiting nationals,
and at present around 180 out of our 250 people are
Kazakh. National middle managers within the company
undergo extensive training in communication and other
soft aspects of management that are important to their
development. Our local staff is trained to international
standards by in-house company trainers who we bring to
Atyrau from our regional headquarters in the UK.
Kazakhstan has a very particular culture, added Mark
Peck, general director of YKK, a major training solutions
provider in Kazakhstan. YKK first arrived not long after
Kazakhstan achieved independence, and the Kazakh regulatory framework was very much in its infancy, but we have
managed to grow our company with the industry here; as
it has developed, so have we. The key to operating here is
having a robust, committed, and well-trained national
workforce. Some of the regulatory information is not as
visible as you would like from time to time, but once you
get used to the system, compliance is achievable.
As companies have complied with the laws, there have
been different perspectives on the exact way to implement
them. Crain said that retaining a certain amount of expatriate staff will ultimately benefit the Kazakh workforce.
From our experience around the world, we see that there
is a need to keep 10% of the workforce expatriate. This
allows for the movement of Kazakhs to go to other parts of
the world to gain experience and learn new skills. Expatriates are then able to fill in for those jobs as required and
also mentor and improve the skills of the Kazakh staff they
are working with, she said.
Though many companies are in support of the local
content laws and can see the benefit to Kazakhstans workforce, others are struggling to source suitably qualified
workers as a result of the recently implemented quotas.
The government has not adjusted the education system
to meet its regulatory requirements, Cyril Bainbridge,
branch director for Intertek, explained. It is a positive
investment climate, but you have to appreciate the challenges. Encouraging investment into the country is one
of the countrys top foreign agenda policies. However,
despite having tremendous resources and being a great
country, if the skills and education was there, it would be
a much more attractive market.
Telling signs that the government recognizes the challenges spurred by the implementation of local content
SPECIAL REPORT:
CASPIAN REGION
laws have been the large-scale investment into technical

education and the lack of implementation of these laws at
major projects. There will be a delay in the application of
all local content laws at the major fields including Kashagan, Tengiz, and Karachaganak until Jan. 1, 2015, said
Daulet Argandykov, head of the employment department
at Kazakhstans Ministry of Labor and Social Protection.
This decision was taken in October 2011 and was due to
the enormous value of these projects for the Kazakh economy. At the moment we are negotiating with companies
on the subject of training local workers to replace foreign
workers by 2015.
Dominic Lewenz, director of oil and gas research for
Visor Capital, one of the leading investment banks in the
country, argues that at the end of the day, there will be a
need to have a degree of stability in legislation. Government legislation and intervention can significantly affect
investors both positively and negatively. The progress on
projects can be greatly influenced by the governments
attitude towards a project, which impacts those who have
invested in the projects. This is especially true in a sector like oil and gas,
where investors place a high premium on the stability of the legislative system due to the long
investment horizons, he said.
Despite concerns that such laws
may affect levels of standards by
forcing companies to source products and services from locals, the
reality remains that local contractors
still have to comply with very tough
Daulet Argandykov, head
standards to cooperate with foreign of Employment Departventures. Yuriy Belyayev, general
ment, Ministry of Labor
director of Zeinet, a company speand Social Protection,
cializing in automation and techno- Kazakhstan
logical processes in Kazakhstan, said
that it was the companys own efforts and not local content laws that have allowed them to work with foreigners.
In order to work with foreign companies, one must meet
[ES
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Developme nt of integrat ed waste management systems for all waste types from their generation at
Collection and transportat on of domestic and hazardous wastes by special vehic es;
Provision of special containers for collection and transportation of various types of waste;
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Integration and application of the most effective technologies forwaste;treaht ntandd ip_osa
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119
SPECIAL REPORT:
CASPIAN REGION
strict requirements in order to receive certificates and

accreditation by the specialists, Belyayev said. Receiving
such accreditations previously was very difficult, but we
are getting closer to the level where we can comfortably
work with foreign companies. Many multinationals ini-
the only two countries where GDP-per-capita exceeds

$10,000, and the most integrated into the global marketplace. In their exploitation of the regions vast hydrocarbon resources, the countries enjoy a dominance that
cannot be explained through access and reserves alone.
As Uzbekistan and Turkmenistan seek
to build their own oil and gas industries,
they will no doubt be looking toward
these giants for guidance. Despite differences in the particulars of legislation, the
primary lessons to be learned from the
development of an oil industry in Azerbaijan and Kazakhstan are very similar.
Since independence, both Azerbaijan
and Kazakhstan have gone through several stages of development, from an initial reliance on foreign expertise to a
newly emerging operational independence. Both countries are enforcing policies that aim to ensure wealth generated
from oil and gas benefits their nation, all
while taking into account the fine line
between nationalization policies and antiinvestment behavior.
While there are many positive aspects
to the current state of the hydrocarbon
Emerson office opening in Almaty with Johan Vandeplaetse and Andrey Tian,
sector in Azerbaijan and Kazakhstan,
General Director at Emerson LLP, Kazakhstan
there are nonetheless obstacles to overcome before these countries take the intetially had a particular distrust of local contractors, which
gral role in the global oil industry that the size of their
is why major projects in the country usually ended up
reserves indicate they should.
being executed by foreign firms.
Ensuring the generation of more wealth and its benefit
The Kazakh government is using both policy and
to the countries peoples will depend on their ability to
investment to ensure that the Kazakh people benefit
overcome corruption. While faring better than Uzbekfrom this mineral wealth; however, the future of the
istan and Turkmenistan, the two countries continue to
industry ultimately will be determined by the relationperform poorly on Transparency Internationals Corrupship between foreign companies and domestic politics.
tion Perception Index rankings. Improvement, however,
This balance is understood well by Yerzhan Bilyalov,
is evident. The Ministry of Taxation is taking the situaexecutive director of Kazakhstan Petroleum Association.
tion seriously and is one of the most forward-thinking
The oil and gas industry in Kazakhstan is making one
ministries in Azerbaijan. They are now moving towards
of the most significant contributions to the prosperity
making their services totally electronic and have taken
of our country, Bilyalov said. What we have achieved
those steps to become more transparent and usershould be used effectively to ensure the continuous
friendly for the tax payers, said Ziya Ibrahimov,
improvement of industry as a whole, a better economy,
partner at Baker Tilly in Azerbaijan.
and a higher quality of life for the Kazakh people.
In addition to these challenges, questions remain over
We should use this opportunity now and not leave it
Kazakhstans ability to facilitate greenfield exploration,
to the future.
and in Azerbaijan the issue of how best to transport gas
from Shah Deniz to international markets. The one
Region on the rise
certainty, however, is that the rise in the economic and
Azerbaijan and Kazakhstan stand out among the
geopolitical importance of the Caspian region is set
Caspian countries. They are the two largest economies,
to continue.
120
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tech
WATCH
New tool gathers downhole

pressure and temperature data
while fracturing horizontal wells
Acquisition platform measures pressure and temperature before, during,
and after fracturing.
Jay Miller, Smart Frac Systems
igh costs are preventing operators from widely

adapting to real-time data acquisition while fracturing horizontal wells. Common thought in the industry is
that without downhole measurement, operators are fracturing blindly. Many believe measurements at the wellbore interface are needed to correctly understand what
is happening during fracturing.
Everyone would like real-time data; however, there
are issues with obtaining this, said John Ely, president
of Ely and Associates, a hydraulic fracturing analysis and
consulting company.
Today, the downhole pressure values during fracturing
operations are calculated using published friction data
that are determined using smooth-wall pipe. Therefore,
calculating downhole pressures by applying friction data
to surface pressure is an inaccurate process.
The pressure that you see is not only a function of

what is going on in the well but also a function of pipe
condition; friction; and function of density, rate, and
varying fluid qualities throughout the job, Ely said.
Fracturing blindly produces viable wells even without
correct data. But the wells are not being optimized to
their full production potential.
Emerging solution
SmartFrac is a new data acquisition platform where
memory pressure and temperature data acquisition
tools (DATs) are run inside fracturing plugs to measure
pressure and temperature. Industry-proven Omega
memory gauges are the pressure-temperature DATs
employed within the SmartFrac plugs. The data gathered will help optimize well production and allow engineers to do a better job evaluating and planning the
fracturing of their wells. Successful well production can
equate to increased financial success.
The new SmartFrac
tool is part of Omega
Well Monitoring, a
designer, manufacturer,
and worldwide supplier
of a comprehensive
range of rugged products and services to
many of the leading
SmartFrac uses standard
fracturing plugs that are
conveyed into the hole
during normal pump-down
operations. The plug deployment does not add to operating time, and the DATs are
recovered during plug drillout. (Images courtesy of
Smart Frac Systems)
122
LIJ
z
Q
man
,
01
.t -l
Society of Exploration Geophysicists

International Exposit ion and 82nd Annual Mek
2kl
Mandalay Bay Convention Center

4-9 November 2032 . 9 Las Vegas,Nevada USA
www.sog.org' /0'
tech
WATCH
LEFT: A DAT is installed in the center of the plug, which collects the
pressure and temperature data.
The DATs are retrieved after the
operation in a catcher barrel during the milling of the plugs. The
data are then uploaded to a USB
outlet on a computer to view the
measurements. BELOW: This new
data acquisition platform provides a simple solution allowing
memory pressure and temperature DATs to be run inside fracturing plugs to measure pressure
and temperature.
players in the international

energy industry. Omega specializes in well monitoring,
including surface logging,
memory logging, production logging, electric submersible pump monitoring,
permanent well monitoring,
and fracturing monitoring.
SmartFrac is a simple tool that will provide fracturing
engineers with the data needed in designing and implementing fracs.
Tool specifications
SmartFrac uses standard fracturing plugs that are
conveyed into the hole during normal pump-down
operations. The plug deployment does not add to
operating time, and the DATs are recovered during
plug drill-out.
Three things were considered when developing this
tool. The plug and perf method of separating and perforating zones in a horizontal well could not be changed.
The tool would have to provide data that service companies need to optimize their wells. The system also had to
be affordable.
The benefits
A DAT is installed in the center of the plug, which collects the pressure and temperature data. The DATs are
retrieved after the operation in a catcher barrel during
the milling of the plugs. The data are then uploaded to
a USB outlet on a computer to view the measurements.
To avoid blind fracturing, this tool provides a neces124
sary low-cost option for obtaining data to optimize field

development.
A clear and reliable recording of a horizontal wells
fracturing operations can be obtained through the pressure and temperature data gathered without the high
price tag before, during, and after each fracturing stage
operation. The SmartFrac tool costs considerably less
than other options, and the DATs can be reconditioned
and reused on other wells.
SmartFrac provides knowledge of where the fracturing
fluid is going and helps engineers make better decisions
for future field development. Engineers can review the
trends of the data they collect and make informed
adjustments to the fracing programs prior to fracturing
nearby wells.
This will change the way oil and gas wells are evaluated and fractured. The tool will gather accurate temperature and pressure measurements at each stage by
obtaining accurate breakdown pressures, observing
cross-communication of different stages, and optimizing
future fracturing and development programs.
The industry has a definite need for these data, Ely
said. I think this is a worthwhile tool. SmartFrac may
not give you real-time data, but it can give you real data,
which makes this product unique to our industry.
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tech
TRENDS
MVD provides safer, more reliable ESP control

in remote applications
The Schlumberger SpeedStar MVD variable-speed drive
NEMA 3R option is a medium-voltage drive (MVD)
designed for the control of ESPs and surface pumping systems for outdoor installations. According to the company,
the MVD provides a reliable and efficient control solution
for high-horsepower, high-value applications in a single
package and is the first in the industry that does not
require installation in a climate-controlled environment.
The SpeedStar MVD is engineered for remote applications where building infrastructure is unavailable or
nonexistent.
An integral,
applicationinsensitive sinewave output
filter eliminates
resonance,
regardless of
variations in
cable length
An optional marine version of the Speedand motor type,
Star MVD can be used in nonhazardous
which produces
and harsh environments typical of plata nearly sinuforms or offshore applications. (Image
soidal output
courtesy of Schlumberger)
voltage and
current that
ensures speed control without a speed-sensing device.
It also comes equipped with a visible disconnect switch
interlocked with Kirk keys to protect personnel and
assets, input fuses that provide a current limit, and vacuum contactors that can interrupt a fault current and
potentially prevent fire and explosion. Additionally, the
technology features a pre-charge circuit, which limits
the inrush current and any mechanical and electrical
stresses during startup to ensure longer-term reliability,
the company said. slb.com/mvd
126
companies to combine asset maintenance schedules into

one program to improve process efficiency. Because
rotating and instrumentation equipment have more
diverse components and damage mechanisms and
higher variations in damage rates and usage-to-failure
times than fixed equipment, they require more complex
lifecycle assessments, the company said. In answer to
this need, the Capstone RBMI system uses a screening
process to select the best maintenance strategy for each
piece of equipment by accessing streamlined information that supports real-time testing, which, according to
Lloyds Register, can reduce downtime and increase cost
savings. lrenergy.org/software
Multiphase pumping solution

extends well production life
The Moyno Tri-Phaze System is an abrasion-resistant
solution for multiphase pumping applications used to
simultaneously transport all wellsite fluids, including oil,
water, gas, and sandy fluid, through one pipeline to a
central processing station.
The unit features a stator elastomer formulation that
exhibits exceptional resistance to aromatics, and lowshear pumping action preserves each fluids characteristics without emulsification or degradation, the company
said. It also is capable of generating flow rates up to
60,000 b/d of fluid, with suction pressures to 900 psi
and discharge pressures to 1,200 psi, and can handle
gas void fractions up to 99%. Moyno.com
RBMI inspection software integrates

equipment maintenance programs
The Tri-Phaze Systems low total cost of ownership and pumping
Reliability-based mechanical integrity (RBMI) software

by Lloyds Register identifies critical assets and prioritizes maintenance and inspection tasks to help provide
fewer equipment and in-service failures. Its design
includes new modules that recognize different maintenance programs needed to test rotating and instrumentation equipment needs and the controls that have a
substantial impact on safety and operational reliability.
According to the company, the software modules integrate with the components of Capstone RBMI, allowing
courtesy of Moyno Inc.)
efficiency can improve the profitability of marginal wells. (Photo
New mixers boost performance

in drilling mud applications
According to Chemineer, the companys range of mud
mixers combined with advanced impeller technology
enhance performance, efficiency, and reliability in mud
mixer applications.
The mixers feature high-efficiency gearboxes designed
for agitator service and have configurations to meet appliMay 2012 | EPmag.com
tech
TRENDS
cation requirements that are unique to mud mixing

applications, the company said, and proprietary analysis
software is available to evaluate process parameters and
ensure proper impeller selection for specific drilling
mud-mixing conditions. Additional benefits include:
Proven performance in mixing larger and deeper
mud tanks for cost-effective operation;
Rugged gear drives that withstand harsh environments typically encountered in mud-mixing applications for reduced maintenance costs and long
service life;
Highly efficient impeller technology that reduces
horsepower requirements and blade erosion over
canted impellers and submersible mixers;
Uniform suspension of solids for optimal drilling
mud consistency; and
Upgrades for underperforming agitators.
Chemineer.com
New seismic workflow predicts reservoir

lithology, prestack fluids
LithoSI, part of the HRS-9 suite of reservoir characterization applications by Hampson-Russell Software & Services, can be used to predict facies type and fluid content
from seismic inversion attributes while quantifying prediction uncertainty, the CGGVeritas company said.
According to Hampson-Russell, the latest software
suite encompasses all aspects of seismic exploration and
reservoir characterization, from AVO analysis and inversion to 4-D and multicomponent interpretation. The
new workflow is based on the modeling of multivariate
probability density functions from log data or inverted
elastic attributes at well locations, allowing reservoir geoscientists to further refine risk profiles and optimize
reservoir production. Probability functions are mapped
to elastic property volumes from seismic inversion using
a supervised Bayesian classification, and outputs include
a series of litho-probability cubes and a cube of the most
probable facies. CGGVeritas.com
Diverless ARC technology

improves bend stiffener connections
First Subseas automatic release clamp (ARC) connector
was successfully used to attach six Technip bend stiffeners for lift and production flexible risers to the Glas Dowr
FPSO at the Eni-operated Kitan oil field offshore Australia. The technology was designed for riser and umbilical bend stiffener connections in applications where
external intervention can be difficult.
According to the company, the ARC connector eliminates the need for an ROV and diver during terminaEPmag.com | May 2012
tion head connection.

During the Glas Dowr
operation, the connector
was used to join 2-in. gas
lift risers and 6-in. production risers to the
FPSOs I-tubes.
Specifically, the First
Subsea connector technology, which comprises
a male ballgrab ball
and taper component
attached to the riser,
is pulled into the premachined, compact
female receptacle
attached to the FPSOs
tube, giving a grip that
increases in direct proportion to the load
applied, the company
said. FirstSubsea.com
First Subseas ARC bend stiffener

connector was deployed on the
Glas Dowr FPSO operating in up

to 320 m (1,050 ft) water depth
at the Kitan oil field, located in
the Joint Petroleum Development Area in the Timor Sea.
(Image courtesy of First Subsea)
Subsea tool maximizes production time

in remote downhole operations
Red Spider is expected to deploy its new eRED-FB downhole valve products on a series of subsea dual-ESP wells
this summer in the UK North Sea. The technology will
allow the removal of all wireline runs used in completions operations, offering significant savings and risk
reduction, the company said.
The eRED tool is the companys first to implement its
patented ROCT technology for remotely operating downhole valves. The latest offering provides a downhole barrier that can be opened and closed by remote command,
allowing the tubing integrity to be tested without using
conventional plug and prong equipment and eliminating
the need to deploy traditional wireline methods.
According to Red Spider, the valve has allowed major
operators to save nearly US $500,000 during a single
subsea completion operation by typically reducing slickline runs from 8 to 1. In deepwater workover operations,
for example, savings of up to 36 hours and approximately $800,000 have been recorded in a single job.
Additional benefits listed by the company include
removing the requirement for rigging up and down
wireline units, speeding up operations, reducing risk to
personnel and equipment, and reducing the risk of
exposure to bad weather. RedSpiders.com
Nancy Agin, Associate Editor
127
MARCELLUS
MIDSTREAM
C O N F E R E N C E
&
E X H I B I T I 0 N
THANK YOU
FOR PARTICPATING
THREE YEARS I OVER 3,800 ATTENDEES I OVER 340 EXHIBITORS

UTICA I MARCELLUS I NGLS I TAKEAWAY PLANS I LNG EXPORTS
THE LARGEST MIDSTREAM EVENT IN THE WORLD!
Hart Energy anticipated the need for a conference that would report on the infrastructure needed to
support gas and liquids production and provide information to cap ital providers. Thanks to you, it became
the hottest unconventional resource event in the world.
The Marcellus Midstream conference proves there's no substitute for face-to-face meetings even in this
digital age. Now in its third year, the 2012 conference drew more than 1,700 attendees to Pittsburgh's
convention center. This year, Marcellus Midstream conference exceeded its own record.
To all attendees, sponsors and exhibitors who have helped build this conference , we say thank you for your
participation . We also pledge to continue to provide an annual forum for industry professionals to come
together and discuss future activities in the Marcellus and Utica plays.
Make your plans now and mark your calendars for the 4th annual Marcellus Midstream Conference and
Exhibition . The event will take place on January 29 - 31, 2013 at the David L. Lawrence Convention Center
in Pittsburgh , Pennsylvania.
PRESENTED BY:
HOSTED BY:
HART E N E RGY
MIDSTREAM Investor
UNCONVEE N T IO NAL
GA S"CENTER
international
SPOTLIGHT
New Zealand 2012 bid round

opens new offshore areas
Twenty-five blocks have been selected by New Zealand in a bidding round that covers onshore
and offshore for both North Island and South Island, including coal-seam gas acreage.
Scott Weeden, Senior Editor
or the first time, New Zealand will be opening new

offshore and onshore areas in multiple basins to
attract broader participation.
New Zealand Petroleum & Minerals announced the
annual block offers for competitive bidding Feb. 1,
2012. In addition, the first-in, first-served priority-in-time method of permitting was removed.
Exclusive use of the block-offer approach brings
into effect the governments block-offer strategy
that was announced in August 2011.
The 2012 offer includes 25 onshore and offshore blocks with the tender due to open in April.
The proposed blocks cover approximately 40,285
sq km (15,554 sq miles) of offshore seabed in the
East Coast, Canterbury, Great South, Pegasus, and
Taranaki basins, and approximately 5,704 sq km
(2,202 sq miles) of land in Waikato, Taranaki,
Tasman, the West Coast, and Southland.
The block offer also includes new offshore areas
in the Pegasus basin, two prospective blocks on
the east coast of North Island, as well as coal seam
gas blocks.
At press time, the invitation for bids was scheduled to begin April 27. The bid round will close
Sept. 21. The bid evaluation period is from Sept.
22 to Dec. 20, with the public announcement of
the awards on Dec. 21.
Each bid will be assessed based on corporate
profile, financial capability, technical capability,
and quality of work program. Companies can bid
on more than one block. If there is a group of
bidders for a particular block, the companies will
be evaluated individually and as a group.
The ministry is consulting with local iwi (New

Zealands indigenous tribes) and local government in
the areas where the proposed blocks are located. This
consultation will inform final decisions on the blocks
for 2012.
New Zealand Petroleum & Minerals plans to offer
approximately 30 blocks each year going forward. For
more information, visit nzpam.govt.nz.
Twenty-five blocks are being offered in different areas

on both islands. The offer is shown in draft form pending local iwi and government consultation. (Image
courtesy of New Zealand Petroleum & Minerals)
129
REGIONAL REPORT:
GULF OF MEXICO
Mexico to realize its deep potential

With declining domestic onshore and shallow-water production levels,
the deepwater Gulf of Mexico represents the countrys main chance
to restore its upstream fortunes.
Mark Thomas, International Editor
ny conversation about the Gulf of Mexico (GoM)

upstream industry invariably centers around the
offshore activity taking place on the US side of the maritime border. But Mexicos state oil company Pemex is
focusing on a strategic push into the deep waters of its offshore portion of the GoM in a multi-billion dollar initiative to restore its declining domestic production levels.
Pemex is forecast to invest US $8.2 billion to explore its
Golfo de Mxico B (GMB) area from 2012-26 at an average of more than $431 million per year for the first eight
years.
The GMB area spans waters ranging from the shallows
out to more than 3,000 m (10,000 ft) and is the most highprofile part of Pemexs nine areas specifically prioritized
by the company as being most relevant for current and
future deepwater exploration. These nine areas were
selected based on criteria including their estimated
economic value, prospective size, hydrocarbon type, geological risk, closeness to production facilities, and environmental restrictions. In the entire Mexican deepwater
Seadrills West Pegasus semisubmersible rig is on a five-year

contract for Pemex and will drill several of the operators deepwater wildcats in its ongoing exploration program in the GoM.
(Photo courtesy of Seadrill)
130
GoM, Pemex believes it has 29.5 Bboe of prospective

resources.
The GMB project in the southwest marine region began
its evolution in 2003 with the drilling of wells, including
the deepwater Nab-1 oil discovery in 681 m (2,234 ft) of
water. This was followed up quietly and efficiently with the
drilling of a further 14 wells from 2006-2011 that resulted
in seven more gas discoveries (Noxal, Lakach, Lalail,
Leek, Labay, Piklis, and Nen) and two oil discoveries
(Tamil and Etbakel), all drilled in water depths ranging
from 680 m to 1,945 m (2,230 ft to 6,380 ft).
Unfortunately for Pemex, post-Macondo public concern is being expressed about Mexicos deepwater plans
for the GoM (especially those taking it close to the maritime border with the US) when the state-owned major
has already built up a small but exemplary track record
with its frontier drilling activities so far.
Plans for 2012 and beyond

This year will see the company continue to implement its
exploration strategy, with four wildcat wells to be drilled,
targeting the Hux, Kunah, Yoka, and Piklis-1DL prospects.
The first two are already under way, with Hux lying in
1,186 m (3,890 ft) water depth and Kunah in 2,147 m
(7,042 ft) water depth.
Overall, this is a just an early phase of Pemexs plans to
eventually drill at least 70 wells in the GMB area while it
evaluates potential recoverable reserves estimated at more
than 3.1 Bbbl. At this stage around 29 will be drilled in the
Holok area, 19 in the Han area, and 18 in the Nox-Hux
area, with the rest split between the Lipax and Temoa areas.
It also will carry out more than 100 geologic surveys and
shoot more than 15,500 sq km (5,600 sq miles) of 3-D seismic data.
Pemexs CEO of its E&P division, Carlos A. Morales, has
consistently pointed out in recent media briefings that the
company has the experience to tackle its deepwater assets
and that it remains the biggest operator in the GoM, both
in terms of production and the number of rigs it operates
(currently more than 80 offshore rigs). Yes, were going
to Perdido this year, in a few months, he said. And yes,
we are in compliance with all of the requirements.
The company is, however, taking action to put in place
the necessary safeguards in this highly public program. It
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real time calculate
ECD at actual dept h ? -
--
iCem service answers

questions before the job.
Find out how at www .halliburton .com/icem
Solving challenges:'
HALLIBURTON
REGIONAL REPORT:
GULF OF MEXICO
The Lakach field offshore Veracruz will

flow initial gas in November 2014.
already has signed a contract with Wild

Well Control, the Houston-based
blowout specialist, and also is in the
process of joining the Helix Well Containment Group.
Additionally, the company is being
closely monitored by Mexicos
upstream regulatory agency National
Hydrocarbons Commission (CNH),
which has stipulated that Pemex must
obtain environmental authorization for
all activities and CNH approval for wells
drilled in more than 1,500 m (4,921 ft)
water depth. It also must submit
detailed multiyear drilling and study programs, quarterly
reports, and comparative analyses of projected versus
actual results as well as several other detailed reports.
The company is using three deepwater rigs to carry out
its drilling program, including the recently-built Bicentenario semisubmersible unit, which has been leased for five
years at $530,000/day and will carry out much of the Perdido activity. The rig drilled its first ultra-deepwater well
for the company in mid-2011 and was immediately successful, making the natural gas and condensate discovery
Piklis near its Lakach gas field. The Piklis-1 well is the
deepest Pemex has drilled so far, in a water depth of 1,945
m (6,380 ft) to a total depth of 5,400 m (17,717 ft).
Pemex also is likely to use Seadrills West Pegasus semisubmersible rig, previously known as Sea Dragon, to drill
some of the wells. The rig has been signed for a five-year
term valued at around $850 million.
New learnings
Areas where the Mexican major readily admits it is lacking

experience mostly involve aspects related to deepwater
production issues, including the design, installation, and
maintenance of production systems. It has, however, established several technology partnership agreements with
international oil companies such as Shell, BP, and Petrobras, which it is starting to take advantage of as it builds up
its internal expertize.
The companys senior management has long stated its
admiration for the way Petrobras has gone about developing its deepwater reserves and the way it has largely used
FPSOs as early production systems for its fields.
Pemexs deepwater strategy includes prospects with varying degrees of risk.
With Mexicos lack of yards with FPSO fabrica(Data courtesy of Pemex)
tion capabilities, it is likely to adopt a leasing
policy for its first few units.
Area
Risk
Water depth (m) Water depth (ft)
This also is not stopping it from proceeding
at
pace with its first deepwater development;
1. Perdido folded belt
Low-Moderate
>2,000
>6,560
the
Lakach field is expected to start flowing
2. Oreos
Moderate-High
800-2,000
2,624-6,560
initial gas in November 2014. The fields 850
3. Nancan
High
500-2,500
1,640-8,200
Bcf of proved and probable reserves will be
4. Jaca-Patini
Moderate-High
1,000-1,500
3,280-4,920
developed via a subsea-to-shore scheme in con5. Nox-Hux
Moderate
650-1,850
2,132-6,068
junction in later phases with other satellites,
6. Temoa
High
850-1,950
2,788-6,396
including Labay and Piklis. The field, located
7. Han
Moderate-High
450-2,250
1,476-7,380
approximately 60 km (37 miles) southeast of
8. Holok
Low-Moderate
1,500-2,000
4,920-6,560
Veracruz, will produce via seven subsea wells,
(Western)
two subsea manifolds, and two 18-in. gas
High (Eastern)
600-1,100
1,968-3,608
pipelines to shore.
9. Lipax
Moderate
950-2,000
3,116-6,560
When Lakach starts to flow, it will signal what
Pemex
hopes will be the start of a new era for
KEY: Blue = North Deepwater Exploration Asset
Yellow = South Deepwater Exploration Asset.
Mexicos domestic industry.
132
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Judges choose top 17 industry projects
he E&P editors and staff proudly present the winners of

the prestigious 2012 Special Meritorious Awards for Engineering Innovation. The pages that follow spotlight the 17
awards the independent team of judges picked as best of the
2012 crop of entries. The winners reached across a broad
range of disciplines and addressed a number of problems that
posed roadblocks to efficient operations. These technologies
opened new and better avenues to the complicated process of
finding and producing hydrocarbons around the world.
This year, some of the brightest minds in the industry
from service and operating companies submitted entries
representing better technology and new techniques for
judges to consider.
The award program honors engineering excellence and
achievement in every segment of the upstream petroleum
industry. It recognizes new products and technologies that
offer innovation in concept, design, and application.
Winning entries represent techniques and technologies
that are most likely to solve costly problems and improve
exploration, drilling, production, facilities, and IT efficiency
and profitability. The people and companies that submitted
the entries realize the oil- and gas-producing industry

depends on new, better, and constantly changing technological innovation to continue producing low-cost oil and gas
from smaller and deeper reservoirs to feed an increasingly
energy-thirsty world.
Contest judges chose the winners, but there were no losers
in this contest.The products chosen represented the best of
a long list of winners.
The expert panel of judges included engineers and engineering managers from operating and consulting companies worldwide. They applied their expertise in areas in
which they specialize. Judges were excluded from categories
in which they or their companies had a business interest.
E&P would like to thank these distinguished judges for
their efforts in selecting the winners in this years competition.
As in past years, E&P will present the 2012 awards at the
Offshore Technology Conference in Houston, Texas, on
April 30, 2012.
An entry form for the 2013 Special Meritorious Awards
for Engineering Innovation contest is available at EPmag.com.
The deadline for entries for 2013 is Dec. 31, 2012.
2012 MEA JUDGES

Mike Allison
Devon Energy
John Dagleish
Chevron
Carlos Mastrangelo
Petrobras
Lanny Scheoling
KinderMorgan
Scott Wehner
Chaparral
Ken Arnold
K Arnold Consulting
Mike Forrest
Consultant
Carl Montgomery
NSI Technologies
Bob Sears
Consultant
Stephen Wetch
Chevron
Allen Bertagne
Consultant
Jorge Grau
Petrobras
Nelson Oliveros
ConocoPhillips
Cheryl Stark
Consultant
Doug White
Consultant
Paul Broussard
Repsol
George King
Apache
Paul Patusek
ExxonMobil
John Thorogood
Consultant
Dennis Yanchak
Apache
Ben Bloys
Chevron
Vainney Koelman
Shell
Cindy Reece
ExxonMobil
Dan Walker
Oceanic
Consulting Group
David Zornes
Consultant
MERITORIOUS AWARDS
FOR ENGINEERING INNOVATION
ARCTIC/DEEPWATER INNOVATION WINNER

ION GEOPHYSICAL | UNDER-ICE SEISMIC DATA ACQUISITION
Technology allows seismic data acquisition in 100% ice cover

While it holds an abundance of the worlds undiscovered
hydrocarbons, the Arctic poses extreme challenges to all
E&P activities, including seismic data acquisition and
processing. Harsh conditions limit the weather window
for safe and efficient seismic operations and can damage
in-water acquisition equipment and introduce unwanted
noise into acquired seismic datasets. Combined, these
factors have historically limited both the quantity and the
quality of available seismic information in the Arctic.
To address these challenges, ION Geophysical developed new technologies that enable acquisition of seismic
data under ice. From an operations standpoint, ION
employed an icebreaker to open a hole in the ice ahead
of seismic vessels and created specialized handling equipment to allow the safe deployment, towing, and recovery
of specially modified in-water seismic equipment. The
inclination angle of the earths magnetic field in the Artic
required the company to reengineer standard seismic
compass technology to accurately record course headings
in the Arctics cold and weak magnetic environment. To
help manage ice threats, ice field navigation, and cable
defense, ION modified its command-and-control system.
New Arctic acquisition technologies extend the weather window for seismic surveys.
And IONs data processing group developed new algorithms and processing routines to handle the unique
noise events created by operating seismic equipment in
100% ice cover.
These technologies have enabled E&P companies
operating in the Arctic to acquire essential seismic data
in areas where no modern seismic data exists, dramatically extending the time window for data acquisition
while reducing exploration and production risk and
informing drilling decisions. n
DRILL BITS WINNER

TESCO CORP. | XCD3 CASING DRILL BIT
New casing drill bit improves casing while drilling

Running the casing to the desired depth can be problematic in troublesome drilling operations. Combining
the processes of casing running and drilling can drastically cut the time and cost of extensive projects.
Casing while drilling (CwD) is a process that transforms the casing string into a drillstring, allowing the
wellbore to be drilled and cased simultaneously. To allow
the next interval to be drilled, the CwD must contain a
sturdy bit that is also drillable via a rollercone or PDC.
Tesco Corp.s new XCD3 Casing Drill Bit accomplishes
both of these goals.
To compare performance of casing and drilling methods, several La Yuca wells in Cao Limon used XCD3
Casing Drill Bit technology in fields that have previously
been drilled and cased using conventional methods. The
fields that were cased and drilled conventionally had an
average ROP of 40 m/hr (134 ft/hr) for a 220-m (722-ft)
well. According
to the company,
the 958-in.
conventional
drilling, tripping out, and
casing running
process took an
average of seven
hours. In the
fields that used
the XCD3, the
La Yuca wells
were able to be The XCD3 is drillable via rollercone or PDC.
cased and
drilled in 3.5 hours at an average depth of 217 m to
224 m (713 ft to 735 ft). n
137
MERITORIOUS AWARDS
COMPLETIONS WINNER
HALLIBURTON | EQUIFLOW AUTONOMOUS INFLOW CONTROL DEVICE
Next-generation inflow control device increases oil production

Current ICD technology is designed to delay the onset of
water and gas breakthrough in a horizontal wellbore.
However, production is prevented while the delay is in
place. Additionally, the functionality of the ICD ends once
the inevitable breakthrough occurs. The next generation
of inflow control device (ICD) takes current ICD methodology one step further by designing the tool to function
autonomously for the life of the well.
The autonomous inflow control device (AICD) restricts
unwanted production of water and gas while continuing to
allow the unimpeded flow of valuable hydrocarbons. The
AICD utilizes an innovative and highly engineered flow
path to manipulate fluid flow based on dynamic flowing
properties. There are three individual dynamic fluid components: the viscosity selector that determines what fluid is
flowing through the device, the flow switch that directs the
selected fluid down one of two paths, and the flow restrictor
that constricts the flow of undesirable fluids. The ACID
determines fluid properties such as density and viscosity.
The main flow path of the flow switch, called a fluid crossroad, vectors the fluid into one of two directions through
the main flow path through the AICD. If

the fluid contains water or gas, it follows
the viscosity-dependent path, which
then forces the fluid to spin within the
device. The centrifugal force associated
with spinning translates directly into
pressure loss that prevents flow of fluid
through the AICD.
Efficiency improves by limiting
unwanted fluid production at the surface, thereby greatly reducing its associated separation and disposal costs, and
by stimulating oil flow in adjacent compartments, thereby increasing oil proThe autonomous
duction. Halliburtons EquiFlow AICD
inflow control
thus improves completion reliability
and efficiency by smoothing production device can work for
throughout the interval, delaying water the life of the well.
and gas breakthrough, greatly reducing
water and gas production after breakthrough, and increasing ultimate recovery from the well. n
DRILLING FLUIDS WINNER

M-I SWACO, A SCHLUMBERGER COMPANY | ENVIROTHERM NT
Water-based drilling fluid can be used

in high-temperature settings
Improvements in drilling technology have allowed operators to drill deeper, more challenging wells for longer periods of time. Drilling fluids are essential to this process,
providing buoyancy, suspending cuttings, controlling pressure, and cooling the wellbore to avoid wear on the drillbit.
M-I SWACO has developed the Envirotherm NT waterbased drilling fluid. This technology is an HP/HT fluid
that is able to be used in severe conditions, at temperatures in excess of 232C (450F). The system results in low
and stable rheological properties and low HP/HT fluid
loss. The chemistry is water-based and chrome-free, making it environmentally acceptable worldwide. According to
the company, this is achieved by decreasing the bentonite
and drill solids content as fluid density and wellbore temperatures increase. In place of the bentonite, high temperature-resistant polymeric materials are used that stabilize
the viscosity and gel strength, reducing issues caused by
138
flocculation of reactive clay solids

at high temperatures and viscosity
increase resulting from chemical
contamination. The fluid also is
stable in the presence of contamination from soluble calcium, salts,
The Envirotherm NT
and acid gases.
enables operators to
Envirotherm was used when
drilling an exploration well target- optimize drilling and
minimize environmening a HP/HT tight gas reservoir.
tal impact in high-temChallenges included contaminaperature applications.
tion worries and environmental
limitations. Envirotherm was able
to lower the rheology, which helped minimize the equivalent circulating density. The same strategy was used during
both 838-in and 578-in sections, HPHT product concentrations being gradually increased towards well TD. n
MERITORIOUS AWARDS
DRILLING TOOLS WINNER

WEATHERFORD INTERNATIONAL | MOTARYSTEERABLE
Directional drilling optimized by combining

a mud motor system with the RSS
Mud motors can cause a significant reduction in drilling
efficiency in sinuous wellpaths because of sliding. RSSs,
their steerable system counterpart, accomplish the same
desired effect of steering wells with the added technology of 3-D directional control but are typically more
expensive.
The MotarySteerable by Weatherford combines the
traits of these two techniques, optimizing directional
drilling. The system consists of a mud motor equipped
with a bent sub and MWD components that maneuver
via targeted bit speed, eliminating the need for sliding.
The tool also includes full 3-D directional control and
continuous rotation of the drillstring.
A well in South Texas used the MotarySteerable system
to drill an interval from 1,125 m to 2,469 m (3,691 ft to
8,100 ft) in a single

run. It had an average
ROP of 45 m/hr
(149 ft/hr). The
system ultimately
saved the client an
estimated cost of more
than US $200,000.
According to the
company, the tool is
designed for wells ranging in size from 6 in. to
12 in., with low build
rates of 0 to 3 per 30
m (100 ft). n
Weatherfords MotarySteerable
system bridges the gap between
mud motors and RSSs.
EXPLORATION TECHNOLOGY WINNER

WESTERNGECO | DUAL-COIL SHOOTING MULTIVESSEL FULL-AZIMUTH ACQUISITION
New method of seismic data acquisition calls for vessels to

sail in overlapping circles
Traditional marine seismic data acquisition introduces
vey uses two recording vessels with their own sources and
imaging challenges and an inevitable loss of productive
two separate source vessels that sail in wide-diameter intertime. Conventional data acquisition techniques call for a
linked circles.
vessel to sail in parallel lines across the surface of the
In areas of the western Gulf of Mexico, four vessels sailed
water. This method takes time, as the vessel must turn
in interlinked circles with a 12.5 km (7.8 mile) diameter.
around between the end of one straight line and the
The dual-coil design delivered a trace density 2.5 times that
start of the next. Also, in areas of complex geology, ray
of contemporary WAZ surveys, while also improving the
bending can leave portions of the subsurface untouched. signal-to-noise ratio. WesternGecos first dual-coil long-offA new technique developed by WesternGeco can provide set FAZ survey covered more than 4,000 sq km (1,544 sq
a higher range of azimuths and decreases the amount of
miles) in a five-month period with 400 coils. n
nonproductive time (NPT) by avoiding the
need to steer the vessel into parallel lines.
The new technique steers the vessel into a
series of overlapping circles, recording seismic data continuously. This relieves the
operators of unnecessary NPT while still
providing full-azimuth (FAZ) coverage.
According to the company, the design of
the survey is such that additional coils are
easily added on an ad hoc basis to increase
the survey area. A dual-coil multivessel sur- The coil shooting technique improves seismic resolution.
139
MERITORIOUS AWARDS
FACILITIES WINNER
OFFSHORE SOLUTION BV | OAS
New gateway improves efficiency of offshore access systems

Safely transporting personnel to an
fic light system. If there should be a
offshore structure can prove diffineed for an emergency disconneccult in areas where the seas have a
tion, the gripper heads mechanism
significant wave height. Installation
has the ability to automatically
time also is an issue, causing a
release from the landing stations
decrease in productivity and an
connection pole.
increase in maintenance costs.
Installation of the OAS is reduced
Standard offshore access systems
to fewer than 24 hours by using a
(OASs) require an extreme amount
free-standing skid-mounted unit
of attention and care to ensure
installed on the system. The OAS
The Offshore Solution OAS is the only one of its
that marine personnel are transcan service several installations
kind to automatically compensate for the six
ferred safely.
through the use of one vessel,
movement planes of the vessel motion.
Offshore Solution BV produced
increasing available man-hours up
an OAS with a telescopic, hydraulito 70% and resulting in a 100%
cally operated gateway. A hydraulically operated gripper
increase in productivity and 50% reduction in maintehead connects the gangway to the offshore structure. The
nance costs. The Bourbon Gulf Star, deployed at Qatar Shell
heave compensation is disengaged upon connection,
GTL Ltd.s Pearl gas-to-liquids project, has been connected
allowing the gangway to float between the vessel and the
via the OAS for more than 2,500 hours with 100% availabilinstallation. Once connected, the walkway automatically
ity for the past year, providing personnel access at all hours
compensates for the six movement planes of the vessel
of the day. More than 32,000 personnel transfers have
motion and enhances safety by using a semi-automatic traf- occurred without incident. n
FORMATION EVALUATION WINNER

HALLIBURTON | ROCKSTRONG CORING SYSTEM
Coring system isolates swivel from barrel, mitigates vibration

Coring in extreme HP/HT wellbore
tions. Contemporary swivels
environments can be difficult and
undergo the same amount of vibracan require special attention with
tions as the outer barrel. By isolating
the use of specialized tools. In order
the swivel from the barrel, vibration
to prevent jamming, the core should
is mitigated. Because the RockThe RockStrong Coring System increases
be cut very smoothly and should not
Strong Coring System cuts the rock
performance by cutting abrasive rock smoothly.
be exposed to an excess amount of
in a much smoother fashion comvibration. If there is vibration of the
pared to other systems, there is less
core, pieces can be damaged or fractured, causing rock
damage to the core and therefore a decreased risk of jamand rubble that will jam during the operation. In the case
ming. The system also cuts larger sized cores, works with an
of a jamming incident, the core barrel must be tripped to
ultra-stable double-bearing system, and excludes rubber
surface in an attempt to recover the partial core. In areas
seals, which tend to diminish temperature tolerance.
such as deepwater wells and deep gas wells, this process
In the UK North Sea, the coring system cut a total of
can be extremely costly.
153 m (501 ft) of core in four runs with 98% recovery. In
The RockStrong Coring System by Halliburton can
Algeria, the RockStrong cut abrasive quartzitic sandstone
increase performance in HP/HT or hard rock conditions
314 m (1,030 ft) in nine runs at 175C (347F). In Norway,
by cutting the abrasive rock smoothly and making the shaft
there was a 100% recovery when cutting 241 m (792 ft) in
independent of the outer barrel, isolating it from vibratwo runs, at a well angle of 25. n
140
MERITORIOUS AWARDS
HSE WINNER
HALLIBURTON | CLEANSTREAM SERVICE
Ultraviolet light used to

disinfect fracing fluid
Biocides are necessary in fracing fluids because they control
bacteria that potentially destroy their effectiveness, leading
to the corrosion of iron or steel that can cause the well to
produce hydrogen sulfide. Biocides, however, are extremely
controversial when it comes to environmental concerns.
They must be handled carefully and also must be registered
with federal and local environmental protection agencies.
Ultraviolet (UV) light has been used as a disinfectant in
other industries for years but never in a field environment
because of the engineering challenges associated with
applying the technology in fracing operations.
Halliburton developed the CleanStream service to control the bacteria found in fracing fluids with UV light. The
CleanStream service meets the demands of the field environment, significantly reducing and, at times, totally eliminating the need for biocide used to treat the fracing fluids
for bacteria. According to the company, this was achieved
The CleanStream service unit enables effectively using ultraviolet

light to control bacteria in fracturing fluids.
by accurately controlling the UV bulbs, determining the

amount of light required based on the turbidity of water
being treated and determining the extent of effectiveness
of the disinfection.
A nine-stage Haynesville horizontal well in Nacogdoches,
Texas, used the CleanStream process, treating a total of
3,735,469 gallons of water at 80 bbl/min. The bacteria
concentration was measured from both the intake and
discharge side of the CleanStream trailer using the serial
dilution method, showing better than a 99% reduction in
both the sulfate reducing and aerobic bacteria levels. n
INTELLIGENT SYSTEMS & COMPONENTS WINNER

BAKER HUGHES | VISION WEB-BASED MONITORING SYSTEM
New system method to analyze performance of ESP systems,

improves ESP runlife
Standard electrical submersible pumping (ESP) analysis
tools monitor ESP systems to optimize engineering
resources. Most ESP analysis tools require a system expert
to diagnoses an upset condition, and the expert must
review data trends over extended periods of time.
Baker Hughes has developed a Vision Web-based
monitoring system that analyzes the data streams and
diagnoses pump conditions using an advanced mathematical technique called the fuzzy logic diagnostics
engine. Discrepancies between live ESP data and a
model of the well can be viewed for any inaccuracies.
The system monitors more than 2,900 ESPs around the
globe, providing exception-based reporting, which
improves ESP runlife and increases production and fast
payout. The Vision model attempts to alert the production engineer to production improvement opportunities
and any potential consequences in equipment runlife as
a result of those suggestions.
An operator in West Texas was provided trending, alarm-
ing, and exception-based reporting on pilot wells through

the Vision Web-based monitoring system. Full-time ESP
experts from Baker Hughes analyzed the performance of
the operators wells, providing recommendations regarding optimization of production performance. According to
Baker Hughes, its
client reduced
rolling average
failure frequency
by 55%; prevented
25 immediate failures; achieved a
full field-monitoring program with
1,800 active ESP
systems; and
increased uptime, Vision Web-based monitoring service provides the ability to view and track real-time
production, and
system efficiency. n data when dealing with dynamic wells.
141
MERITORIOUS AWARDS
IOR/EOR WINNER
GLASSPOINT | SINGLE TRANSIT TROUGH
Solar energy cuts cost of generating steam

for heavy oil production
Up to 60% of the operating costs for steamflooding heavy
oil come from buying natural gas to produce the steam.
GlassPoint developed a solar-thermal technology that produces steam for thermal EOR, using solar power to produce steam. GlassPoints Single Transit Trough (STT)
design houses solar collectors inside an agricultural greenhouse to protect the system from high winds, dust, sand,
and humidity.
In February 2011, GlassPoint unveiled its first commercial, solar-enhanced EOR project at Berry Petroleums
21Z lease in Kern County, Calif. The 21Z Berry project
used curved-front surface reflectors suspended from a
glasshouse structure. Automated software positions the
mirrors to track the sun throughout the day, focusing the
light on stationary receiver tubes to preheat water to 88C
(190F) with the suns radiant heat that produces about 1
MMBtu/hr of solar heat. This preheated water is then
introduced to the natural gas-fired steam generator, reducing fuel use and operating costs.
The commercial-grade greenhouse is comprised of galvanized steel and aluminum construction, with tempered
4-mm glass roof and

walls covering approximately 650 sq m (7,000
sq ft). The mirrors are
The curved surface of the solar
made of an anodized
energy device preheats water to
aluminum reflective
material, used widely in 88C, thus cutting down the use of
commercial lighting fix- natural gas.
tures. By enclosing the
system inside a protected glasshouse, the company can
deploy inexpensive, lightweight components that are
already in high-volume production worldwide.
The 21Z Berry projects high-performance, front-surface
reflectors eliminate multiple light transits through dirty
glass. As a result, the system delivers higher real-world optical efficiency than traditional solar systems by creating a
more direct pathway from the mirror to the receiver tube
where steam is generated. An automated washing system
and control center ensures the solar EOR system can
achieve performance specifications remotely with minimal
operator intervention. n
PRODUCTION TECHNOLOGY WINNER

BAKER HUGHES | ULTRA-TEMPERATURE SAG-D ESP SYSTEM
Technology improves performance in SAG-D applications

Steam-assisted gravity drainage (SAG-D) wells
that are extreme enough to require an electric
submersible pumping (ESP) system often can
exceed the capabilities of multiple components
in the system. Conventional ESP systems usually
work at temperatures to 149C (300F), but
operators striving for increased production
rates and extended reliability have pushed the
limits of their ESP systems to almost 200C
(392F).
The Centrilift Ultra-Temperature ESP system,
the worlds first ultra-temperature ESP system
for SAG-D wells, can be operated at significantly higher temperatures than conventional
ESP systems and is capable of operating at well
fluid temperatures to 250C (482F). The technology features an electrical insulation system,
142
The Ultra-temperature ESP

for SAG-D wells works at
higher temperatures and
improves performance.
developed from the testing of unconventional

insulation materials. The Ultra-Temperature
ESP system also leads to a mitigation of material
degradation, resulting in less production interruption and operational expenditures.
Thirty-two SAG-D wells in Canada have had
the ultra-temperature ESP system installed.
The technology has accumulated more than
10,000 run days in operator wells with fluid
temperatures ranging between 210C and
230C (410F and 446F). These higher temperatures lower the viscosity of the produced
oil and allow for a larger steam chamber, which
extends the system runlife. Operators have
seen a greater return on investment from the
increased oil recovery and production rates
this innovative ESP system has provided. n
MERITORIOUS AWARDS
REMEDIATION WINNER
SCHLUMBERGER | LIVE DIGITAL SLICKLINE SERVICES
Slickline service measures, transmits information in real time

Though standard slickline service equipment has
remained beneficial in simplicity, cost-effectiveness, and
suitability, depth accuracy and toolstring control at times
are insufficient, leading to operational inefficiencies and
limitations. LIVE digital slickline services by Schlumberger
uses standard slickline surface equipment and cable, insulated with a polymer coating, allowing two-way digital data
telemetry. Downhole tool data and commands flow realtime between a surface acquisition and control system and
a new line of downhole tools and accessories.
The LIVE technology measures and transmits wellbore,
tool, and reservoir information, increasing data visibility
and tool control. Toolstring shock, deviation, tool movement and head tension, natural gamma ray activity, and
casing collar location information, as well as wellbore pressure and temperature measurements, can be transmitted
in real time to the operator during slickline operations.
This technology also can reduce the amount of people
and equipment necessary to complete certain well intervention programs through its inherently light footprint
and the crew and equipment rationalization achieved by
covering a scope of work done previously by a combined
electric line and slickline operation. Schlumberger also
has developed associated accessories such as a surface-
controlled interactive
jar and release device
for fishing and
jarring operations,
electro-hydraulic
setting tools, a surface-activated trigger,
and a tool suite for
logging measurements, expanding
and enhancing slick- LIVE digital slickline services are applicable to any slickline operation, incorline operations.
More than 500 field porating toolstring components that
operations across the enhance the process depending on the
requirements of the operation.
globe have implemented the LIVE
technology. Benefits of using digital slickline include elimination of multiple rig up/rig downs, faster run in/pull out
hole times, explosive free device setting, safe on-demand
slickline perforating, and a significant decrease in equipment transportation and logistics. The wells serviced
ranged widely in types, fluids, and deviations and included
borehole temperatures to 140C (290F) and well depths
to 4,900 m (16,000 ft). n
STIMULATION WINNER
GASFRAC | WATERLESS LPG GEL
New waterless LPG gel uses propane, increases production

In the past, conventional fracing fluids gave rise to concern
because of contamination worries, the use of ciocides and
carcinogens, and an increasing amount of truck traffic that
caused an excess of CO2 emissions. GasFracs new stimulation technology has replaced these fracing fluids with a
waterless LPG gel made up primarily of propane.
Recovery of the LPG is near 100%, phase trapping is
practically eliminated, and LPG properties allow for
extended shut-in times without detriment. This results
in increased production rates of the stimulated well as
compared to conventional water fracing systems. Because
the propane is recyclable and reusable, there also is a
reduced risk of flaring. Multiple storage tanks are used
to store and feed the LPG to specialized sand blenders,
each with its own pressurized nitrogen blanket present
for precautionary reasons. The sand blender is a pressurized enclosed system in which the proppant is preloaded,
purged, and pressurized with nitrogen. A controller then
meters the proppant into the gelled LPG before highpressure pumping units inject the gelled slurry into the
well bore.
In the McCully gas field in New Bruswick, Canada, the
GasFrac waterless LPG gel yielded an effective average fracture half-length that was double that of a water frac. Operators found that 100% of the propane was recovered during
a two-week flow period. In addition, propane fracs in the
fields low-permeability sands yielded an initial uplift factor
of two over a water frac. It has been estimated that the
propane uplift for the McCully field is expected to be sustained up to 10 years. n
143
MERITORIOUS AWARDS
COMPLETIONS HONORABLE MENTION

HALLIBURTON | LINER-CONVEYED GRAVEL PACK
In an effort to improve drilling and completion efficiency and reduce overall well cost, Halliburton developed and deployed its liner-conveyed gravel pack
(LCGP) system. Rather than making multiple trips,
an operator can use the LCGP system to run liner and
perform the gravel-pack installation in a single trip.
The system optimizes production and minimizes erosion. In some applications, use of the LCGP may enable
the reduction of a casing size in the well design. Other
advantages include maximizing the system ID for unre-
stricted flow, eliminating a liner run along with liner

cleanout trip and liner testing, saving drilling fluid, and
allowing installation of an open-hole gravel pack or a
standalone screen installation.
Halliburton adapted its LCGP system for gravel packing a multilateral completion for a major operator working offshore Latin America. The operator was able to
achieve the time and cost savings associated with the
LCGP system, which has been reported to be up to four
days out of a 10-day conventional completion. n
DRILLING FLUIDS HONORABLE MENTION

HALLIBURTON | TUNED SPACER V SPACER FLUID
Excessive bottomhole temperatures require optimized
drilling fluid technology to keep operations flowing
smoothly. With temperatures exceeding 200C (392F),
drilling fluid must be thermally stable enough to perform
efficiently without causing operational challenges.
Tuned Spacer V spacer fluid by Halliburton remains stable in ultra high-temperature environments. It allows
modification of both rheological properties and density at
service temperature for project-specific well conditions
and specific applications through use of its extreme-temperature synthetic polymer. The spacer fluid is pumped
ahead of the cement, displacing drilling fluid and preventing contamination. The fluid is displaced efficiently, erod-
ing the filter cake from the formation. According to the

company, the rheological properties promote turbulence
even at low pumping rates for better mud removal and to
help prepare the well bore to receive cement, allowing the
slurry behind it to bond to the outer casing for effective
zonal isolation.
The fluid can be mixed in any equipment found in the
oil field. The spacer fluid is being used at temperatures up
to 323C (450F). In the South Texas Eagle Ford shale, the
application of the Tuned Spacer V spacer fluid has minimized testing time within the laboratory and on the rig by
providing accurate and reproducible results from the laboratory to the field. n
HSE HONORABLE MENTION

HALLIBURTON | OFFSHORE SLOP UNIT
Slop, a mix of wash water, rain water, remnants of drilling
and completion fluids, and other similar fluids considered as waste, must be transported from an offshore rig
to the shore, where it can be carefully discarded. During
this operation, there is an increased
risk of emissions from transport; risk of spill to the environment during transfer/offloading from rig to boat;
risk of exposure to hydrogen sulfide (H2S); and risk of
the slop settling in storage tanks, leading to costly tank
cleaning operations.
Halliburton has developed an offshore slop unit that
uses chemical flocculation and dissolved air flotation to
address the challenges associated with treating slop in an
offshore environment. A 6-m(20-ft) mobile container provides a high treatment capacity combined with a very high
144
tolerance for particles and oil. The company uses an

online, continuous fluorescence analyzer to monitor the
discharge water, ensuring that the discharge waste is environmentally compliant. By completing the slot treatment
offshore, there is a reduced risk of emissions, H2S exposure, and spill to the environment.
A North Sea operator, with an excess of 1,000 cu. m. of
slop generated per month, previously required slop to be
transported to shore for processing. According to the company, in the first 16 months after installing the offshore
slop unit, more than 10,600 cu. m. was processed, discharging greater than 80% of the processed slop and eliminating the need to transport waste to shore. It also eliminated
associated costs and HSE risk. Estimated cost savings for
this operation was US $2.7 million. n
MERITORIOUS AWARDS
REMEDIATION HONORABLE MENTION

HALLIBURTON | RIGLESS E-LINE RECOMPLETION SYSTEM
Keeping a rig stationed on a well during several steps of
the production process is a very expensive decision to
make. Rental rates for each rig can escalate costs for
operators, and inconvenient scheduling times lengthen
the projects completion timeline. Rigless operations can
be cost-efficient and can speed production.
Halliburton developed a rigless e-line recompletion
system that eliminates the need for a rig when operating
an electric line. Only a wireline logging unit, a crane or
portable mast, and the required pressure control equipment are necessary, giving operators the opportunity to
relieve the field of the rig earlier. The recompletion solu-
tion comprises a DPU-I-LS (long-stroke) electro-mechanical setting tool, a through-tubing high-expansion elastomeric bridge plug, and a non explosively operated
positive displacement dump bailer. The DPU-I-LS can be
used in any borehole fluid and provides a slow and controlled plug setting force that is independent of the
hydrostatic pressure.
In the West Cameron area of the Gulf of Mexico,
the rigless e-line recompletion solution saved the client
more than US $700,000 after effectively completing
the though-tubing plug-back operation without the
use of a rig. n
Cody zcan, Assistant Editor, and Scott Weeden, Senior Editor
145
international
HIGHLIGHTS
For additional
information on
these projects
and other global
developments:
MIDDLE EAST
READ MORE ONLINE
EPmag.com
CENTRAL ASIA/ PACIFIC RIM

ONGC inks deepwater, shale deal
Oil & Natural Gas Corp. (ONGC) has partnered with
ConocoPhillips to explore and develop 19 deepwater oil
and gas blocks offshore the east coast of India and to initiate cooperation in shale gas exploration through joint
studies of opportunities in India, North America, and
elsewhere. The first phase of the deepwater activity will
involve evaluation of data across the Damodar, Cauvery,
and Krishna-Godavari basins. Indias recoverable shale
gas reserves are estimated to be as much as 69 Tcf, with
considerable upside potential.
Karoon spins bit in Browse basin
Karoon Gas Australia is under way with its 2012
exploration drilling campaign with the spudding of
the Boreas-1 exploration. The proposed operation is
to drill a 36-in. hole to the planned casing point,
then run and cement the 30-in. conductor prior to
drilling ahead in a 17-in. hole. Boreas-1 is approximately 4 km (2.5 miles) south of Poseidon-1 in
WA-315-P. The exploration program, operated by
ConocoPhillips, is using the Transocean Legend
semisubmersible rig for the entire campaign and
is expected to continue through 2013. A minimum
of five wells will be drilled.
Indonesia offers 19 blocks
Indonesia is offering 19 oil and gas blocks to investors
in its latest licensing round, according to the countrys
Ministry of Energy and Mineral Resources. Five blocks
will be offered in regular tenders and 14 blocks directly.
Bids must be submitted by May 14 in the regular tender
and by July 26 for the direct offering. The offshore
West Pelikan, East Sokang, South East Mangkalihat,
and East Aru blocks and the onshore/offshore South
Sampang Block will be offered in the regular tender.
The 15 blocks to be offered directly are the offshore
Bengkulu l-Mentawai, Martin, Telen, East Sepinggan,
and Aru blocks and the onshore Bireun Sigh, Bohorok,
Mahato, Bukit Batu, South Link, Tatihu, Palangkaraya,
Babai, and Udan Emas blocks.
146
Myra prospect lined up offshore Israel

The Noble Homer Ferrington deepwater semisubmersible
rig is due to start drilling its next well in the Levantine
basin offshore Israel in May. GeoGlobal Resources said
the rig will, upon completion of its current operation,
mobilize to the Myra prospect (Block 347) to spud an
exploration well. As such, the Israel Petroleum Commissioners Office has granted an extension for the start
of drilling the first well on the Myra and Sara (348)
licenses until June 15, 2012. GeoGlobal also added
that in its Samuel license (388) offshore Israel, the
company has completed the processing of 43 sq km
(16 sq miles) of ocean-bottom cable 3-D seismic data
and has filed a summary interpretation report with the
Israel Ministry of National Infrastructure.
Miran West flows gas in Iraq
Heritage Oil has reported its Miran West-3 well in the
Kurdistan Region of Iraq has flowed up to 17.5 MMcf/d
of dry gas. Technical work is being undertaken to better
understand the distribution of this gas-bearing reservoir
interval using existing well data and recently processed
3-D seismic. Drilling will now appraise the main Jurassic
reservoir intervals, which are the primary targets.
SOUTH AMERICA
Guyane drilling to resume mid-2012
Minority partner Northern Petroleum has confirmed
operator Shells plans to start exploration and appraisal
drilling in mid-2012 on its deepwater permit offshore
Guyane using the Stena DrillMax ICE drillship. Drilling of
the well follows the Zaedyus oil discovery made in late
2011. In the Zaedyus well, 72 m (236 ft) of net oil pay
was discovered in two turbidite sand systems in the first
phase of drilling, proving that the Jubilee play is mirrored across the Atlantic from West Africa, according to
Northern. The second phase of drilling will involve the
spudding of a delineation well on the discovery, likely to
be followed by an exploration well on one of the neighboring prospects in the area. Additional 3-D seismic also
is planned for 2012.
Uruguay round attracts handful of bidders
Uruguays national petroleum agency ANCAP has
received 19 bids for eight of the 15 offshore blocks
offered in its latest licensing round, with BP and BG
Group the most active companies. There were competing bids from at least three companies in five of the
international
HIGHLIGHTS
blocks offered, the agency said. More than 50% of the

area from the bidding process will see exploration work
carried out by four new entrants to the Uruguayan offshore BP (three blocks), BG (three blocks), and Total
and Tullow Oil (one block each).
Already in the countrys offshore sector are Petrobras,
YPF, and GALP. Blocks were awarded in the three
Uruguayan offshore basins: Oriental del Plata, Punta
del Este, and Pelotas, with the last of particular interest
to the new companies. After an assessment of the winning bids and formal approval from the Uruguayan government, ANCAP will sign 30-year production-sharing
contracts with the winning companies by September.
AFRICA
Jodari joy for BG offshore Tanzania
BG Group and its partners have confirmed a fourth
large gas discovery offshore Tanzania. Initial results
from the Jodari-1 exploration well in Block 1 indicate
gross recoverable in-place resources in the range of 2.5

Tcf to 4.5 Tcf of gas based on preliminary evaluation. A
total 124 m (407 ft) of net pay was encountered across
the stacked target horizons in high-quality reservoirs.
BG (60% and operator) and Ophir Energy (40%)
have had exploration successes in all four wells so far
drilled off Tanzanias coast, with mean total gross recoverable resources estimated at nearly 7 Tcf of gas. Jodari-1
is in approximately 1,150 m (3,770 ft) water depth and
was drilled by the Deep Sea Metro I drillship to a total
depth (TD) of 4,465 m (14,650 ft).
Giant discovery ups ante in Rovuma basin
Eni has increased its estimate of its gas reserves offshore
East Africas Mozambique to at least 40 Tcf after unveiling what it has described as a new giant discovery near
its existing large Mamba finds in the prolific Rovuma
basin. The Mamba North East 1 exploration well in the
eastern part of Area 4 has increased the resource base
by at least 10 Tcf, of which 8 Tcf of these are contained
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147
international
HIGHLIGHTS
in reservoirs exclusively located in Area 4, according to

the Italian major.
Mamba North East 1 is located 50 km (31 miles) off
the Capo Delgado coast in 1,848 m (6,063 ft) water
depth and reached 4,560 m (14,961 ft) TD. The discovery well encountered 240 m (787 ft) of gas pay in multiple high-quality Oligocene and Eocene sands. The new
find further improves the potential of the Mamba complex in Area 4 to at least 40 Tcf of gas in place.
Anadarko to test northern extent of Prosperidade
Anadarko Petroleum plans to start testing the northern
potential of its Offshore Area 1 permit offshore Mozambique following its latest appraisal further south in the
block. The company said the successful completion of
its Barquentine-4 appraisal well completed the drilling
portion of its planned appraisal program in the discovery area. The well in the Rovuma basin encountered
approximately 160 m (525 net ft) of natural gas pay and
was the partnerships ninth successful well in the discovery complex (now renamed Prosperidade).
The complex covers the Offshore Area 1 block, including the Windjammer, Barquentine, Lagosta, and Camarao discoveries, as well as the five subsequent appraisal
wells. Prosperidade is estimated to hold recoverable
resources between 17 Tcf and more than 30 Tcf of gas.
The Barquentine-4 well is in approximately 1,650 m
(5,400 ft) water depth.
Extended Enyenra reserves add to Tullows TEN plans
The latest deepwater appraisal well offshore West
Africas Ghana has helped to firm up plans by operator
Tullow Oil and its partners for a new FPSO development. The operator confirmed that its Enyenra-4A
appraisal well in the Deepwater Tano license had successfully encountered oil in very good-quality sandstone
reservoirs, expanding the areal extent of the TEN
(Tweneboa, Enyenra, and Ntomme) complex. Tullow
and its partners are expected to choose a winning bid
for the supply of the FPSO in 2Q 2012. Results of
drilling, wireline logs, fluid samples, and pressure data
show that Enyenra-4A has intersected 32 m (105 ft) of
net oil pay. Pressure data from the oil leg have demonstrated the oil is in static communication with oil seen in
nearby wells and indicate a continuous oil column of
approximately 600 m (1,969 ft).
NORTH AMERICA
Vicksburg/Appomattox hub sanction by 2014
Shell and its Canadian partner Nexen are pushing on
148
with their conceptual development plans for a new hub

floating production facility in the US Gulf of Mexico following their latest drilling success. Nexen, which holds a
20% stake in the Appomattox discovery, said evaluation
of its recent drilling program on the northeast fault
block of the Appomattox structure had demonstrated
contingent recoverable resources of approximately 215
MMboe (50 MMboe net to Nexen), with a range of 120370 MMboe (25-90 MMboe net) of light oil.
As well as its 20% stake in Appomattox, Nexen also
holds a 25% interest in the nearby Vicksburg discovery,
where Shell holds the remaining interests as operator.
Concurrent with its appraisal program, the company is
evaluating development concepts and scenarios that
could result in project development sanction in 2014,
the company said.
EUROPE
Valiants fingers crossed for Handcross
A frontier exploration well west of Shetland has been
lined up for drilling early next year by UK independent
Valiant Petroleum. The operator has booked Stena
Drillings Stena Carron drillship to spud a wildcat on its
Handcross prospect in Block 204/18b near the deepwater
Foinaven and Schiehallion fields in the UK Atlantic Margin. According to Valiant, based on the Stena Carrons current schedule, the rig slot is expected to fall within 1Q
2013. The company also has also secured a six-month
extension to its initial exploration term from the Department of Energy and Climate Change to facilitate this
timetable and is looking to establish gross prospective
resources estimated internally at 180 MMboe in the
block, where it holds a 90% operated interest.
Repsol takes control in Irish Atlantic Margin
Providence Resources has handed over operatorship
of a frontier block off the southwest coast of Ireland
to block partner Repsol. The Spanish operator has
taken over operatorship of License 11/11, which lies
250 km (155 miles) offshore in approximately 1,000 m
(3,000 ft) water depth. The license was awarded to
Providence (40%), Repsol (40%), and Sosina (20%)
as part of the 2011 Irish Atlantic Margin Licensing
Round. The transfer of operatorship has been approved
by the Irish government.
Providence and its partners are investing more than
$500 million in the drilling of a number of exploration
and development wells in six different basins, representfing
o
- the largest drilling campaign ever carried out
shore Ireland.
HART ENERGY
HARTENERGYSTORE.com
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Playbook highlights:
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Drilling and Comp letion Technologies

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People
Oil & Gas UK Chief Executive Malcolm Webb has accepted the role of
chairman for SPE Offshore Europe
2013.
ICoTA Europe has named
Callum Munro (top), who
is a senior well engineer
at BP, as the organizations
new chairman and Michael
Taggart (bottom), Baker
Hughes engineering manager, as its co-chair.
The Houston Technology Center
has appointed Blue Lance President
and CEO Umesh Verma chairman
of its advisory board and Richard
Dick Williams board chairman.
Zilift has elected Stuart Ferguson as
its board chairman.
Executive Vice President Hiroshige
Kitada has retired from the Nippon
Kaiji Kyokai (ClassNK) board of
directors. ClassNK also has pro-
moted Tetsushi Agata and Tetsuya

Kinoshita, general managers of the
General Affairs Department and
Planning Department, respectively,
to managing directors.
David Neser has assumed the role of
COO and CTO and Dave Ridyard
the role of executive vice president,
Strategic Business Development, at
Electromagnetic Geoservices ASA.
Multi Products Co. has welcomed Kevin Brady as the
companys new president.
Bruce Thames was promoted to senior VP and COO of T.D. Williamson.
Magnus Wardle has taken
the reins as Wireline Engineerings first engineering
director.
Kvaerner has added Liv Monica
Stubholt to its executive management
team as senior vice president, Strategy and Communication. Additionally, Stein Are Ystmark has been
appointed managing director for

the companys new Trondheim
engineering office.
Hamish Wilson has joined SLR Consulting as technical director.
Cudd Energy Services has named
Larry Burleson director, Business
Development for Corporate Services.
Wireline Engineering has
tapped Richard Jackson as
its divisional sales manager
for the Asia-Pacific region.
Chris Reinsvold has joined
Preng & Associates as an
executive search consultant
in the Oilfield Services and
Equipment Practice.
Greenes Energy Group has appointed
Lance Bolds as chief legal counsel for
the companys global operations.
Foster Marketing has named
Vicki Wyatt vice president,
Creative Services.
Awards
ATP Oil & Gas Corp. was the recipient of the 2012 Safety-in-Seas
Award at the National Ocean
Industries Association annual meeting in Washington, D.C., which
marked the associations 40th
anniversary. ATP was recognized
for its contribution to offshore
safety as well as for the ATP Titan
deepwater drilling and production
facility in the Gulf of Mexico.
The winner was selected by a
panel of judges from the US
Coast Guard, the National Academy of Sciences Marine Board,
and the US Department of Interiors BSEE.
150
Expro has won the Offshore Achievement Innovator Award for its AX-S
subsea well intervention technology. The Innovator Award, which was presented in Aberdeen in March, recognizes excellence in pioneering technological solutions developed in the UK offshore energy sector.
The AX-S technology, a remotely operated, safe, and cost-effective intervention

system operated from a mid-sized construction vessel, can be deployed on subsea well assets in up to 3,000 m (10,000 ft) water depth. (Photo courtesy of Expro)
.-
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MARKETING | SALES | CIRCULATION
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Tel: 713-260-6442
Fax: 713-840-1449
custserv@hartenergy.com
List Sales
MICHAEL AURIEMMA
Venture Direct
212.655.5130 phone
212.655.5280 fax
mauriemma@ven.com
J&J Technical Services LLC plans

to open a sales and service facility
in the Midland/Odessa, Texas, area
in spring 2012. The Permian basin
Select Energy Services LLC has

launched new brands for its two
business segments, WaterOne and
WellOne, and a new brand for its
multiservice integrated water solutions package, Fluidity.
Continental Resources has moved its
corporate headquarters from Enid,
Okla., to Oklahoma City. The company is located downtown at 20
North Broadway in a 19-story, 27,871
sq-m (300,000 sq-ft) building previously occupied by Devon Energy.
Intertek Group is currently investing
in new Aberdeen headquarters for
its energy services division. The new
center in Aberdeens Energy Park currently is being renovated with all service lines, and 160 staff are expected to
be based there by June 2012.
ADVERTISER INDEX
Aggreko . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
Allmand Bros. . . . . . . . . . . . . . . . . . . . . . . . . .89
American Jereh International Corporation . . IBC
Baker Hughes Incorporated . . . . . . . . . . . . .87
Basic Energy Services . . . . . . . . . . . . . . . . . .83
BGP Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .24
Boots & Coots . . . . . . . . . . . . . . . . . . . . . . .18-19
Boy Scouts Of America . . . . . . . . . . . . . . . .125
Cameron . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17
CGGVeritas . . . . . . . . . . . . . . . . . . . . . . . . . . .53
Cudd Energy Services . . . . . . . . . . . . . . . . . .51
Dragon Products, Ltd. . . . . . . . . . . . . . . .2-3, 32
Drillmec Inc . . . . . . . . . . . . . . . . . . . . . . . . . .69
E&P . . . . . . . . . . . . . .104-105, 128, 134-135, 149
EAGE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .147
Emerson . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .9
Expro Group . . . . . . . . . . . . . . . . . . . . . . . . . .59
FlexSteel Pipeline Technologies, Inc. . . . . . .74
FMC Technologies . . . . . . . . . . . . . . . . . . . . .39
Forum Energy Technologies . . . . . . . . . . . . .97
Freudenberg Oil and Gas . . . . . . . . . . . . . . .13
Frontier Energy Group, Inc. . . . . . . . . . . . . . .57
Fugro Jason . . . . . . . . . . . . . . . . . . . . . . . . . . .64
Gas Gun, The . . . . . . . . . . . . . . . . . . . . . . . . .46
GE Oil & Gas . . . . . . . . . . . . . . . . . . . . . . . . . .48
GEFCO . . . . . . . . . . . . . . . . . . . . . . . . . . . . .102
Glen Raven Technical Fabrics . . . . . . . . . . . .41
Gorman-Rupp Company, The . . . . . . . . . . . .37
Great Wall Drilling Company . . . . . . . . . . . .72
Halliburton . . . . . . . . . . . . . . . . . . .6, 75, 95, 131
IPAA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .121
J&J Truck Bodies & Trailers . . . . . . . . . . . . . .79
McJunkin Redman Corporation . . . . . . . . . . .91
Mewbourne College of Earth & Energy . . . .11
MESA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .40
M-I Swaco . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4
ModuSpec . . . . . . . . . . . . . . . . . . . . . . . . . . . .84
Momentive . . . . . . . . . . . . . . . . . . . . . . . . . . .82
National Oilwell Varco . . . . . . . . . . . . . . .21, 67
Newpark Drilling Fluids . . . . . . . . . . . . . . . . .30
Oilfield Improvements . . . . . . . . . . . . . . . . . .66
P2 Energy Solutions . . . . . . . . . . . . . . . . . . . .88
PGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .28
PGS Exploration (UK) Ltd. . . . . . . . . . . . . . . .63
Polarcus DMCC . . . . . . . . . . . . . . . . . . . . . . .55
Production Technology And Services . . . . .100
Robbins Myers Energy Services Group . . .IFC
Rockwater Energy Solutions . . . . . . . . . . . . .77
Saft America, Inc. Specialty Battery Group . . .23
Schlumberger . . . . . . . . . . . . . . . . . . . .5, 71, BC
Select Energy Services . . . . . . . . . . . . . . . . .81
Society of Exploration Geophysicists . . . .123
Stallion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .133
Supreme Services . . . . . . . . . . . . . . . . . . . . .145
TAM International . . . . . . . . . . . . . . . . . . . . .101
Taylor Valve Technology . . . . . . . . . . . . . . . .40
TEAM Oil Tools . . . . . . . . . . . . . . . . . . . . . . . .85
Tenaris . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .47
Tendeka . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .93
Tervita . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .43
Tetra Technologies, Inc. . . . . . . . . . . . . . . . . .99
Tex-Az Field Services . . . . . . . . . . . . . . . . . . .58
TGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .65
Travelers Insurance . . . . . . . . . . . . . . . . . . . .15
United Electric Controls . . . . . . . . . . . . . . . .145
Vicinay Cadenas, S.A. . . . . . . . . . . . . . . . . . . .14
Weatherford International, Ltd. . . . . . . . .26, 27
Welltec . . . . . . . . . . . . . . . . . . . . . . . . . . . . .103
151
last
WORD
Deep water is the fastest

growing offshore sector
Southeast Asia plays a vital role.
Ken Richardson, ABS
eep water holds tremendous promise. Huge finds

offshore Angola and Nigeria, which have made
headlines for nearly two decades; elephant reservoirs in
the Lower Tertiary in the Gulf of Mexico; and the recent
discovery of Brazils presalt giants estimated to hold
anywhere from 50 Bboe to 100 Bboe are solid indicators of the worlds deepwater potential.
Analysts at Infield Systems expect deep water to
account for 11% of global production by 2015. And
experts at Douglas-Westwood predict the bulk of this
deepwater development will be in Latin America, West
Africa, and Asia.
While Latin America and West Africa have experienced considerable deepwater production, Southeast
Asia is in the relatively early stages of deepwater development. But things are moving quickly.
The Philippines saw first gas from Shells Malampaya
field, the regions first deepwater production, in 2001 in
a development scheme that tied back subsea wells to a
shallow-water platform. Two years later, Unocals West
Seno project offshore East Kalimantan became Southeast Asias first deepwater field produced by a floating
production unit. In 2007, Murphy Oil Corp. brought
onstream the deepwater Kikeh oil field, which lies offshore Malaysia in 1,341 m (4,425 ft) water depth.
Rapid development is ongoing. And much of the R&D
work that will take operations into deeper areas around
the world is now being carried out in Singapore, which
is becoming recognized as the regions deepwater hub.
ABS made Singapore its center of operations in the
Asia-Pacific region in 1990 and created the Singapore
Offshore Technology Center (SOTC) in 2006. The ABS
SOTC has become a key R&D facility supporting the
latest developments in Southeast Asia, partnering with
local industry, government, and academia to extend
the industrys deepwater capabilities.
The centers team of 11 researchers is developing new
technologies to support future deepwater development.
One area of concentration for the team is the practical
application of computational fluid dynamics (CFD).
The recently created Virtual Model Basin at SOTC now
152
ABS, which has been active in Singapore for more than 50 years,
now offers advanced R&D capability through its recently created CFD Virtual Model Basin at SOTC. (Photo courtesy of ABS)
provides a broad range of advanced CFD analysis that

complements testing carried out in towing tanks and conventional model basins. The Virtual Model Basin can be
used to test vortex-induced motions for spars and deepdraft semisubmersibles, evaluate wave impact loads and
global performance due to highly nonlinear regular
waves and extreme irregular waves under hurricane conditions, perform wave run-up and air gap estimates for
offshore structures, and deliver pile motion predictions
for submerged dynamically installed piles. Plans are in
place to add multiphase flow assurance analysis and to
expand its capability to test subsea structures subjected to
erosion effects, such as fixed platform foundations and
seabed pipelines.
As operations continue into deeper water around the
globe, the industry will have to increase the pace of
activities in deepwater centers like Singapore.
ABS is expanding its capabilities at SOTC to address
the challenges ahead, and other class societies now are
beginning to see the value of establishing a presence
in one of the fastest growing deepwater regions of the
world.
MORA
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Jereh Oilfield Equipment

Innovation , Reliablity, Durability
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Trailer Mounted Coiled Tubing Unit

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Skid Mounted Coiled Tubing Unit
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Frac . Pump Control System
Sand Blender Control System
We will exhibit at OTC( outdoor booth No. 129) and GPS (outdoor booth No.3248 ). We are looking forward to seeing you there!
American Jereh International Corporation
Houston , TX , USA
Tel: (281)860-0488
E-mail: zhouy@jereh .com; tanwei@jereh.com
www . ameri ca njereh. com
jeren
American Jereh
International
Corporation
Jereh , dedicated to beyond customers ' expectation
ACTive
IN-WELL LIVE PERFORMANCE
s
'
Precise CT measurements for

better decisions, in real time
The newest additions to the ACTive " family of live CT services-ACTive gamma ray
modular tool (GR), and ACTive tension and compression modular tool (TC)-helped
Saudi Aramco decrease water cut and revive oil production from a dead well .
The packer was accurately placed and strateg ically set, using real-time measurements,
to isolate the water zone through cement squeeze. This revived the well and increased
production to 13,500 bbl/d, with 10% water cut on a fully open choke.
Read the full case study at www.slb.com/ACTive.
Global Expertise I Innovative Technology Measurable Impact
Schiumberger

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EPMAG.

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EXPLORATION & PRODUCTION

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COVER STORY: DEEPWATER CHALLENGES & SOLUTIONS

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ABOUT THE COVER

Pictured is ENSCO 8505, now undergoing sea trials in

ONLINE CONTENT MAY 2012

Apache: Green Canyon prospect

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Read more commentary at

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