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Succesful Application of Cluster Drilling Concept to Reduce Cost and Increase

Profitability in a Mature Onshore Gas Field in East Kalimantan, Indonesia

Article · January 2008

DOI: 10.2118/116537-MS

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SPE 116537

Successful Application of Cluster Drilling Concept to Reduce Cost and

Increase Profitability in a Mature Onshore Gas Field in East Kalimantan
Hazman, Harry Alam, Andre Wijanarko, Umi Kurniyati, Yoseph A. Prihartono, Bambang Prihandono (VICO),
Antonio R. Ianiro (ENI), Ram K. Narayanan, Donn Schmohr (BP), Martin Rylance (BP)

Copyright 2008, Society of Petroleum Engineers

This paper was prepared for presentation at the 2008 SPE Asia Pacific Oil & Gas Conference and Exhibition held in Perth, Australia, 20–22 October 2008.

This paper was selected for presentation by an SPE program committee following review of information contained in an abstract submitted by the author(s). Contents of the paper have not been
reviewed by the Society of Petroleum Engineers and are subject to correction by the author(s). The material does not necessarily reflect any position of the Society of Petroleum Engineers, its
officers, or members. Electronic reproduction, distribution, or storage of any part of this paper without the written consent of the Society of Petroleum Engineers is prohibited. Permission to
reproduce in print is restricted to an abstract of not more than 300 words; illustrations may not be copied. The abstract must contain conspicuous acknowledgment of SPE copyright.

Abstract
Several development strategies are currently being evaluated and applied by VICO, in order to increase the near term
production rate and maximize recovery from the existing fields, within the Sanga-Sanga PSC, East-Kalimantan, Indonesia.
This paper will focus on the “Cluster” drilling concept; that has been successfully applied within the Nilam field, which is the
second largest field within the PSC.

A combination of a complex fluvial-deltaic depositional environment, along with increasing development costs and reservoir
uncertainty due to advancing field maturity, has driven the VICO development Team to re-evaluate the drilling and completion
techniques being utilised in order to access the remaining hydrocarbon resources within the field. This re-consideration has
allowed a number of novel and alternative solutions to the problems to be proposed, one of these solutions has been the
“Cluster” well approach.

The principal objectives of the “Cluster” approach are, to reduce the unit gas development costs, increase the short-term
production rate and maximize the cumulative recoverable gas volumes from the field. Well cost reductions are being achieved
through improved rig utilization and by the drilling of multiple wells from a single pad location. A dramatic increase in the
short-term rates is being achieved through drilling dedicated wells to produce the shallow, higher permeability reservoirs.
Finally, the recoverable reserves from the deeper, lower permeability reservoirs, which typically produce at lower rates but
have a longer effective production life; are also being maximized through the application of dedicated completions (via the
Dual Monobore concept).

This paper will discuss the “Cluster” concept in detail, in brief a “Cluster” consists of the drilling of a “Mother” well which is
then used as a reference well to acquire a full suite of open-hole data, this data is then processed in order to assess and define
the opportunities within the immediate ‘local’ area of interest. The “Mother” well is then followed by the drilling 1, 2 or more
“Daughter” wells from the same pad; the exact number of these “Daughter” wells being determined by the quality, quantity
and type of information that is made available from the “Mother” well logs and tests. These additional wells were initially
being drilled on twenty-foot centres, and the “Daughter” wells are typically constructed with some form of slim-hole approach,
with minimal associated data acquisition in order to reduce the overall costs.

This paper will present the results from the two sets of complete “Cluster” wells competed to date, within the Nilam field; and
will provide a brief description of a third “Cluster” group that is currently being finished. The application of this technique has
resulted in an average reduction in the well costs of more than 20% and a much improved set of well economics in both the
short- and long- term; compared to drilling a single conventional well from a pad. The paper will also discuss the current
candidate selection process, “Cluster” well design and header configuration, the drilling operations themselves and the
subsequent post well evaluation.
2 SPE 116537

Introduction
The VICO Sanga-Sanga Production Sharing Contract (PSC) acreage, is located onshore of the Mahakam Delta, East
Kalimantan, Indonesia. This is located within the Kutai Basin; which is characterized by the Samarinda anticlinorium 1, with a
series of highly prolific North-East and South-West trending anticline(s). Hydrocarbon accumulations are most often located
within a series of Mid-Miocene upper-delta and delta-plain sandstone reservoir(s), and are principally characterised by four-
way dip closure or two way structural/stratigraphic traps. The VICO Indonesia company has been actively exploring and
developing this PSC acreage since 1968 (Fig. 1).

The Nilam field is the second largest hydrocarbon discovery, within the Sanga-Sanga PSC, with over 16,000 feet of sediment
deposition; and typically over a thousand feet of stacked gas-bearing sand units with more than 1,300 individual gas tanks
located thus far. During the Nilam field development life more than 250 production wells have been drilled so far, with over
170 of these well-bores currently on production to the plant.

The Nilam field depositional environment consists of numerous complex fluvial-deltaic, channel/mouth-bar sands and this
environment; combined with an increasing field maturity, has resulted in significant challenges in delivering a continuous
economic and efficient Nilam field development strategy. The main challenges have been: designing the wells for producing
field-life due to changing conditions, addressing an accelerating field decline rate and increasing the overall recoverable
reserves. Several tight-gas development strategies have been evaluated, such as conventional hydraulic fracturing, high-
angle/horizontal well completions, dual mono-bores, radial drilling/jetting operations, grid-drilling, well of the future
considerations and “Cluster” wells to name but a few. The “Cluster” well concept has been very carefully evaluated and has
been applied very successfully within the Nilam field; and the remainder of this paper will present the results and lessons
learned from this application.

After 31 Year of production the Nilam field has now reached a fairly mature stage of its life, where most of the penetrated
reservoirs/tanks have been depleted considerably from their initial pore-pressure conditions. The Nilam field can reasonably
be considered as being divided into two separate and distinct ‘layers/types’ of sands. The lowermost of these two layers is
described by a thick-band of sands (F, G and H sands), containing large reserves, with fairly low production rates and are of
quite low permeability (of 0.1 to 10 md) sandstones characterised by a classical depletion-drive mechanism. Whereas the
uppermost of the two layers, consists of another band of sands (C, D and E sands); containing more prolific reservoirs (of 100
to 1,000 md); which are much smaller in extent and are characterized by a very strong water-drive mechanism.

Initiating production, solely from the deeper of these two sections, will only provide a very low (but nevertheless sustainable)
gas rate. Alternatively, opening up/completing the shallower sands results in initial high gas-rates but then water production
rapidly ‘drowns’ out the lower-sands and permanently damages their deliverability. Clearly, neither of these two scenarios is
an economically, nor commercially desirable/acceptable solution; particularly for new well performance and reserves
development. The challenge, therefore, was to optimize the completion design in order to; maximize the commercial and
initial rate/NPV from each new well, to accelerate the reserves recovery from the shallower reservoirs yet to ensure the long-
term recovery of the reserves from the deep tight-gas reserves.

This completion optimisation is very efficiently achieved, by running two separate mono-bores within a single open-hole
environment, (Fig. 2). The shallow monobore, or short-string, is then utilised to recover the shallow, high-perm, high-rate and
short-lived water-drive reserves. Whereas the deeper monobore, or long-string, is dedicated to recovering the deeper, low-
perm, low-rate but protracted depletion drive reserves. This concept and application, within the VICO fields, is explained and
reported in more detail by Arianto et al, 2006 2.

The “Cluster” well concept is just one of a number of renewal programme approaches that has been successfully applied to the
Nilam field. The simplistic strategy associated with this concept is as follows; drill one main well (the “Mother” well) as a
reference/correlation well for the pad and the immediate vicinity. Subsequently, using all of the “Mother” well information,
consider drilling one or more branch wells (the “Daughter” wells), in a slim-hole design, from the same pad using a partial or
full skidding rig arrangement (Fig. 3). The objectives of this approach are multiple and include; reduction in the overall
cumulative rig moving time and minimisation of the surface preparation and drilling costs; while at the same time; maximising
the initial well-rates and optimising the development of the shallow and deep reserves. The “Cluster” well candidate selection
approach is based upon a carefully considered combination of detailed geological studies, engineering evaluation and drilling
considerations; in order to maximise the understanding of the localised sub-surface conditions, potential initial production
rates, overall development costs and reserve-development risks.

Cluster Location Candidate Selection

VICO Indonesia utilises a bespoke software/data-base/reserves management programme/system, the field planning model
(FPM); in order to determine, track and audit the reserve distribution for each of the known reservoirs/tanks within the Nilam
SPE 116537 3

field. First of all, the FPM process is utilised to determine an area, within the Nilam acreage; which presents the potential or
opportunity to provide for economic incremental. The software then processes the latest tank-maps, all previous well
penetrations, the current well production distribution, most recent sand-correlations, historical offset-well data, cumulative
tank off-take data, the vertical sand distribution, the local tank control, current well-spacing in order to determine if a
development opportunity really exists in the immediate locale.

Once the reserves opportunity has been identified and better defined, additional (production related) parameters, such as the
permeability/porosity, pore-pressure, sand–thickness, water-saturation, offset well productivity will be utilised to determine
the most appropriate means of development of the reserves on each level/tank. The most optimal approach for each location
may be a conventional well, a slim-hole well, a horizontal well, a hydraulic fracture treatment or in the case of a “Cluster”,
most likely some logical/optimal combination of a number of these approaches (Fig. 2).

Once the evaluation is complete and it has been determined that the “Cluster” well method is the most efficient approach to the
development of the reserves opportunity; then the well-spacing and off-set well data are utilised in order to determine the
potential number of branch wells (“Daughters”), post the initial well (“Mother”), that may be subsequently required from the
location (Fig. 2). This investigation also determines the most appropriate ‘nature/type’ of each branch well, i.e. Dual
Monobore, hydraulically fractured well, slim-hole well and the chosen well type is the approach submitted for AFE approval
for the “Cluster” well location package.

Post candidate selection, the “Cluster” well opportunity and estimated drilling time-line is then combined into the existing
drilling-rig schedule. In order to efficiently/economically merge the “Cluster” well into the drilling-rig schedule; a number of
considerations should be made, such as the current drilling-rig availability, the rig relocation (e.g. minimising the physical
distance of moves or the number of field to field rig mobilisations), the ability of the drilling-rig to skid/partially-skid, the
ability of the drilling-rig to efficiently achieve the targets (HP/hook-load) and consideration of the maximisation of the
annualised average deliverability of the gas production from the rig-schedule options.

A new surface location is then prepared, which is generally ca. 20 % bigger than a conventional single vertical well site; the
location is built to be able to accommodate a number of cellars; with a typical wellhead spacing of 6 metres (Fig. 5). The
number of conductor slots available is designed to be one more than the expected “Mother/Daughter” well count; this extra
slot allows for the flexibility to maximise the pad production, should the “Mother” well logs indicate that significant
opportunity exists for an additional unplanned well. Should the application of production and drilling SIMOPS (Simultaneous
Operations) be a desirable scenario; then in order to accelerate production from the pre-drilled wells, then the wellhead spacing
is appropriately increased. In this way, once the “Mother” well has been drilled, logged and completed; and the drilling-rig
has been skidded to the first “Daughter” well; then the perforation and production operations may immediately take place on
the “Mother” well (with the appropriate level of HSE and HAZOP/HAZID considerations and assurance being fully taken into
account and implemented).

Cluster Location Execution

During the “Cluster” execution phase, the proposed number and BHL (Bottom Hole Location(s)) of the subsequent
“Daughter” wells may be refined and changed, depending upon the “Mother” well logs and results. A small but highly co-
ordinated Team, consisting of a Geologist, a Reservoir and a Petroleum Engineer evaluates and updates the sub-surface model
(real-time during the well drilling sequence) and this information is utilised as a justification for each additional well.

During 2007 two separate “Cluster” well locations were drilled and completed, and currently a third “Cluster” location is being
drilled within the Nilam field. The first two of these “Cluster” locations demonstrated an excellent result, in terms of the costs,
overall operating efficiency, well production rate and unit cost per MM.SCF of gas.

The First Nilam Cluster Location :

• The first “Cluster” location was drilled and completed in the first Quarter of 2007; the “Cluster” consisted of the
initial correlation well N231 (Mother) and two subsequent branch (Daughter) wells N232 & N233.

• The N231 well was located within the Central Nilam field and targeted a number of sand bodies, from the shallowest
water-drive D series down to the deepest G0610 sand, with a total depth of 12,650 ft.SS.TVD. The well was then
completed as a Dual-Monobore.

• Subsequently, the N232 was drilled down to the F0740 sand, with a total depth of 10,220 ft.SS.TVD and the N233
well was drilled to the E0710 sand with total depth of 10,100 ft.SS.TVD. Both of these Daughter wells were
completed as Single-Monobores.
4 SPE 116537

The Second Nilam Cluster Location (Fig. 2):

• The second “Cluster” location was drilled in Mid 2007; and the location was originally planned to consist solely of
the correlation (“Mother”) well and two additional branch (“Daughter”) wells.

• However, after drilling the third of the cluster wells, a close evaluation of the data and results that were available had
indicated additional potential to drill a further branch well (at an acceptable development cost); in order to accelerate
the shallow gas bearing sand potential.

• The correlation (“Mother”) well N239, was drilled targeting the D sand interval down to the deepest G057B-07 sand;
the well was then drilled to a total depth of 13,184 ft.SS.TVD, and the well was subsequently completed as a Single-
Monobore well.

• The first branch (“Daughter”) well was then the N241 well, targeting sands down to the F interval and was drilled to
a total depth of 11,710 ft.SS.TVD; it was subsequently completed as a Dual-Monobore.

• The second branch (“Daughter”) well N242; was then drilled targeting the D – F interval(s) with a total depth of
11,554 ft.SS.TVD; it was then completed as a Single-Monobore.

• Finally, the unplanned opportunity of a third branch (“Daughter”) well N243, was also drilled targeting down to the F
interval(s) with a total depth of 12,666 ft.SS.TVD; it was subsequently completed as a Dual-Monobore.

The Third Nilam Cluster Location :

• The third “Cluster” location is currently being drilled, in June 2008, with the “Mother” well N247 having already
been drilled within the crestal area of the Nilam structure targeting the F – G intervals. This “Mother” well was then
completed as a Dual-Monobore, to take advantage of the shallow sands.

• The first branch well (“Daughter”) N249 was then drilled approximately 530 m North-East of the “Mother” well,
targeting the E - F intervals; this well was completed as a Single-Monobore.

• The second branch (“Daughter”) well N251 is currently being drilled, approximately 680 m to the north west of the
“Mother” well. This well is targeting the G intervals and will be completed with a heavyweight casing, in order to
allow a fracturing stimulation treatment within the G sands.

At least one of the five drilling-rigs operated by VICO is now being fully dedicated to “Cluster” location execution and
completion, within the Nilam field. It is envisaged that as the FPM Model identifies a hopper of these opportunities across all
of the Sanga-Sanga field developments, that many more of these “Cluster” locations will be prepared and drilled during the
next few Years.

Rig Skidding Systems

Early approaches to the rig skidding operations, for the cluster wells, consisted of a partial skidding package from one
cellar to another for the sub-structure alone. Although this was a rapid operation, the partial skid consisted of actually laying
down the drill-pipe and rigging-down the mast and draw-works; moving the sub-structure just 6 m between the cellars and
then rigging up once again. Apart from the inefficiency of the rig-down, this very close well spacing did not allow effective
SIMOPS to be implemented in a safe and efficient manner; which meant that the pre-drilled well-stock would remain idle until
the rig left the location. It was therefore agreed that this initial approach was far too restrictive; and that the delayed
production from the early wells risked masking the benefits of the “Cluster” approach.

It was then determined, from a HAZOP/HAZID study, that in order for this partial rig-skidding package to allow the safe and
efficient implementation of SIMOPS on the location, that the well-spacing would have to be increased to 24 m. Although this
level of spacing could be achieved, clearly some of the location preparation savings and efficiencies would subsequently be
reduced. Therefore it was agreed that in order to arrive at a more optimum solution; that the skidding package would be
adapted to allow the drill-pipe, derrick and draw-works to remain rigged-up during transfer thereby reducing the safe SIMOPS
centre-to-centre distance to 16 m.

The third cluster well is being drilled using the adapted and fully efficient skidding system, in order to achieve the movement
of the drilling-rig from the “Mother” well to the “Daughters”. At present VICO are utilising a fleet of conventional rigs within
the acreage and the minimum wellhead spacing required (for SIMOPS purposes) is ca. 16 metres. The skidding system
SPE 116537 5

consists of a set of skidding beams (Fig. 6 and 8), upon which the drilling-rig sub-structures are set. Once the rig is ready to
move, a series of hydraulic jacking pistons are rigged-up, along with a set of control valves, in order to distribute the hydraulic
power via a valve control panel (Fig. 7). The hydraulic jacking pistons are then capable of moving the rig sub-structure, by
jacking the structure along the rails in a series of cyclic two foot ‘bites’. The jacking system runs with a system pressure of
approximately 1,200 psi and to completely move the drilling-rig from one conductor slot to the next takes roughly twenty-six
steps and 2 – 3 days.

The important areas for consideration; include the need for the skidding beam system to be carefully levelled and also ensuring
that the skidding pace is even/smooth for both sides of the sub-structure. Once the drilling-rig has reached the next wellhead
location there are a number of house-keeping jobs which are required to be taken care of; such as a centring of the rotary over
the conductor and installation of hard-stops to fix the exact position of the sub-structure. The next steps to consider are the
installation of an Xmas tree on the previous well, removal of the previous skidding beams and a clean-up of the previous
wellhead area, a re-arrangement of the high pressure lines, movement of the cable power and cable tray then rig-up of all the
related equipment for the spud of the next well (Fig. 12).

SIMOPS Implementation
The objective of the SIMOPS operations is to ensure that early production can safely be delivered, from the previous
“Mother/Daughter” wells, while continuing with the drilling operations on the remaining well slots. SIMOPS processes have
been set in place, which have allowed the full range of oilfield operations to be performed (e.g. coiled-tubing, slick-line, wire-
line, work-over, flow-line construction and production operations) while continuous drilling operations have been taking place
on the same location.

During the initial location preparation, the individual well flow-lines are buried on each of the well locations (Fig. 13), with a
single block-valve dedicated for each of these flow-lines (Fig. 11). These flow-lines are also flanged at the ground level of
each well cellar, making a readily available flow-line tie-in point for the well which is close to the tree and with a minimum
flow-line surface exposure.

Safety issues are an extremely important consideration for the drilling operations, especially when operating under a set of
SIMOPS conditions. A simultaneous operations plan has been set in place in order to safeguard the personnel, equipment and
installations; while minimizing the interference between the drilling and production operations and any third-party
participation. The VICO Indonesia Drilling Supervisor, is nominated as the Local Area Authority, and is responsible for all of
the operations at the “Cluster” field work-site. Unusually though, in particular respect of the question of safety, the role of Rig
Superintendent is actually subordinate to the Drilling Supervisor (as the Local Authority), and is responsible for many of the
‘softer’ but related issues, such as the coordination of the logistics and planning. Very close coordination is required between
all involved parties, under these conditions, and this is critical in ensuring that safe and effective simultaneous operations can
be delivered at the location.

VICO Indonesia interdepartmental collaboration consists of combining and coordinating the operations between the Drilling &
Work-over, Production, Engineering & Construction, HSE and any/all appropriate and involved third parties. These
departments work closely together to generate a detailed risk assessment for the SIMOPS, consideration of all of the stages of
interaction is included and a mitigation plan (in the event of issues arising) is put together. This is achieved by preparing a
series of Standard Operating Procedures (SOPs) for the normal rig operations, rig-skidding, coiled-tubing rig-up/rig-down,
nitrogen pumping, coiled-tubing unloading, both slick-line and wire-line operations. At the core of each of these SOPs are the
completion of a set of detailed Job Safety Analyses, a functional Work Permit process and then the detailed application of a
robust and complete HAZOP/HAZID procedure.

While drilling the adjacent wells and moving the drilling unit on or off the wellhead locations, additional safety precautions
must be taken to ensure a safe outcome; these additional precautions may include protecting the surface wellhead integrity
with a robust protection cage (Fig. 8) and also equipping the wells with a remote ESDS (Emergency Shut Down System).
These ESDS devices can be operated from both the rig floor and the Drilling Supervisors office. In addition these ESDS
valves are also equipped with eutectic fusible plugs/caps that will subsequently activate the valves in case there is a fire within
the immediate wellhead location. Complex SIMOPS operations, involving heavy-lifts, such as the final raising or lowering of
the mast and draw-works lifting and placement may require a well to be shut-in. In addition to this it may be determined that
the wells in the immediate vicinity of the SIMOPS will require the placement of a TWCV (two-way check-valves), which is
placed within the wellhead recess.

Cluster Location Production

One of the principal advantages of the cluster well approach, is to achieve an optimisation of production from a number of
wells from a single location; both in terms of the individual well PI (Productivity Index) and the overall location optimisation
to the flow-line. Within the Nilam field gathering system, there are generally three differing line-pressures available, these are
6 SPE 116537

MP (300 – 600 psi), LP (120 – 300 psi) and VLP (50 – 120 psi); these differing line pressures are available in order to allow
an optimal integration of the well-stock and gas-compression handling.

The second Nilam “Cluster” location was the N20 offset location which consisted of four wells, the fourth well having been
added to an original three well programme, during the execution phase (Fig. 2). These four wells were nominated as the N239
(Single-Monobore), N241 (Dual-Monobore), N242 (Single-Monobore) and N243 (Dual-Monobore); with a total of six 3 ½”
well-bores cased across a number of different sands (See Table 1.).

Table 1. Distribution of the sand penetrations between the 6 well-bores.

Well N239 N241 N242 N243

Sands Monobore L-String S-String Monobore L-String S-String
C Sand C62A NA NA NA C62A C62A
Series
D52/D53A/D54/D56
D Sand D51B/D52 D56A/D57 D56A/D57
D56A/D57A/D58 D51B/D53A D51B/D52/D53A
Series D53A/D60 D58A/D60 D58A/D60
D59A/D59B/D60
E Sand E73A/E73B
E61/E68 E61/E68 E62/E62A/E68 E53/E57B E53/E57B
Series E73A/E73B E73A/E73B E69/E73B E69/E73A/E73B E69/E73A/E73B
F51/F54A/F56/F57A
F54A/F55A/F56
F Sand F57/F57A/F57B
F50/F51A/F54A F54/F55A F57B/F58A/F61/F64 F51/F54A/F56
F50/F51A
Series F55A/F56/F57 F56/F57 F68A/F70/F70A/F72 F57A/F57B/F58A
F068/F070/F072
F77/F78
G Sand G52A/G53A/G54B
NA NA NA NA
G50A
Series G55A/G56A/G57B
Total sands 22 14 10 19 23 14
Initial Rate
10.8 5.9 9.4 2.5 0.5 8.0
(MMSCFD)
Flow
LP LP LP VLP VLP LP
System
Completed
5 3 2 4 5 4
To Date
Remaining
17 11 8 15 18 10
Opportunity

From the Table above, it can be seen that there were numerous combinations of completion scenarios available to VICO from
these six well-bores, for the initial completion. However, as noted previously the guiding philosophies were : to separate the
water-drive and depletion-drive formations, perforate the sands/tanks progressively over time from the bottom up, accelerate
the shallow high-rate gas delivery but protect the long-term low-permeability gas reserves.

To date the sands that are highlighted within the Table, have been completed within each string; the initial production (in
January) from the “Cluster” location was ca. 37 MMSCFD (Fig. 10). In addition, the Table also shows the flow system into
which each of the well-bores was initially produced; although the overall system is assessed continuously, and the wells re-
routed, in order to optimise the gas off-take. Currently, the “Cluster” location is flowing at a total rate of ca. 11.0 MMSCFD,
see (Fig. 10). During the first 6 Months of the location being on production the wells cumulatively produced ca. 2.5 Bcf of gas
and over 55,000 bbls of condensate and oil.

Significant further production opportunity remains within each of these well-bores, as only 25% of the actual perforation
opportunities have been completed to date. However, the important balance that must be achieved now, is to add the
additional perforations in a structured way (achieving rate but not at the expense of any of the recoverable reserves).

Cluster Location Delivery

To date, VICO has drilled two complete “Cluster” well locations and is currently completing a third; each of the “Cluster”
locations has consisted of the initial “Mother” well and at least 2 or 3 branch or “Daughter” wells. The “Cluster” concept has
provided an extremely effective approach for the VICO development toolbox, some of the benefits that have been realised
from this method include the following :
• Location Preparation :
o Currently, VICO are operating 5 drilling-rigs, within the PSC, this requires that 5 work-fronts be continually
maintained preparing locations (for single conventional wells). This ceaseless construction phase requires
SPE 116537 7

significant investment in support equipment, and when the weather deteriorates this can cause a severe backlog
in the location preparation. However, “Cluster” wells mean that a drilling-rig will remain on a location for 3 or
more wells, and with the location being just 20% larger than a single well location; this offers a huge ‘logistics’
advantage over standard conventional well operations.
o A single “Cluster” well location can readily be prepared for at least three or more wells (typically four), this
location ‘sharing’ dramatically reduces (three or four fold) the effective number of surveys, land-purchase
contracts, construction activities, access roads, local community issues that need to be dealt with during the
preparation phase for each phase.
o Optimisation of a single surface location preparation has been efficiently achieved, including a significant
reduction in the ever increasing costs of the land acquisition. Average location costs, for a 3 well “Cluster”
location are increased just 60%; when compared with a single conventional well location (i.e. a saving of 46%
over three conventional locations).

• Drilling Logistics :
o Typically, mobilising a drilling-rig (just within the Nilam field) can take around two weeks; and significantly
more time than this, when the road conditions deteriorate due to adverse weather conditions. Whereas, the
skidding of a drilling-rig from one cellar to another on a “Cluster” location takes only three to five days. For a
25 day well, this is an effective reduction from 36% to 14%; in the percentage of time spent under mobilisation.
o The enhanced efficiency of the drilling-rig logistics, concentrating solely on the delivery of “Cluster” locations,
mean that it is possible for a single drilling-rig to potentially deliver between 12 – 13 wells /Year versus the more
typical 9 – 10 wells /Year when a drilling-rig is delivering conventional single well locations.

• Logging Operations :
o Given that the branch “Daughter” wells are infill/grid-drilling and targeting many of the same tanks/reservoirs
that the “Mother” well located; this means that once that the “Mother” well has been logged that the number of
and requirement for any additional MDTs within the branch wells, is much reduced.
o If a drilling rig is committed to drilling “Cluster” locations for a Year then it may move 3 or 4 times during a
single Year, if the same drilling rig is drilling conventional wells it may move 9 or 10 times; clearly the amount
of mobilisation and support equipment required is significantly reduced for “Cluster” wells.
• Completion Operations :
o The completion options of both Dual- and Single-Monobores, can be optimised to maximise the off-take from a
single “Cluster” location; and ensure that the most efficient reserves development and recovery from a single
field region; continuous improvements in the approach will allow smaller and smaller gas reserve levels to be
developed economically.
o The use of a dedicated manifold (Fig. 11 and 13) for these wells, means that many of the well-bores can be
optimised for their flowing conditions by sharing a common flow-line to the nearest gathering station. For
example the second Nilam cluster well has 3 bores into LP (Low-Pressure) and 3 bores into VLP (Very Low
Pressure) production.
o As only one location is being constructed this requires that only one ‘common’ flow-line (per pressure system)
actually be installed. Therefore, instead of four well locations with four separate flow-lines (constructed at a cost
of ca. $ 1.0 MM.USD/km), a “Cluster” location simply requires one or two flow-lines to provide a VLP and/or
LP/MP alternative.
o As common flow-lines are utilised for the pad, potential liquid loading of the flow-line is much less of an issue,
given that two or more well-bores may be flowing into the system. This approach allows the additional renewal
programme themes of plunger-lift, soaping and velocity-strings (which bring excess fluids to surface); to
continue unhindered as the flow-lines will remain flushed to the plant by the numerous wells.
• Subsurface Issues :
o Improved reservoir management has also been achieved, the “Cluster” well concept has allowed VICO to
maximize the production-rate in order to meet the daily delivery targets, enhancing the quality of the reserves
development and improving/increasing the overall recovery factor.
o A combination of both the “Cluster” approach and Dual-Monobore concepts, has allowed VICO to develop both
‘types’ of reservoir within the Nilam field (at this stage of maturity); whereby the required production rate can be
achieved Today without sacrificing the ultimate reserves recovery from Tomorrow.
• Unit Development Costs :
o The development costs that have been achieved to date, have been significantly lowered, with the “Cluster” wells
achieving an average of 0.70 – 0.90 $/MCF; compared to the previous 1.20 $/MCF average unit development
cost utilising a conventional well approach. It is believed that .this unit cost will be reduced even further, as the
“Cluster” concept becomes more commonplace.
8 SPE 116537

From the information above, which reports just some of the results achieved to date, it can be seen that there are numerous
benefits that are associated with the “Cluster” location concept. As further refinements are made to the process, it is expected
that the magnitude of efficiency improvements will increase even further; even now VICO are looking at extending the
“Cluster” concept to other fields/developments within the PSC.

Cluster Location Lessons Learned

There have been numerous lessons learned during the implementation of the “Cluster” concept, some of the more
important of these are noted below:

• With the implementation of just partial skidding; then the distance between the well to well centres, in the “Cluster”
approach can be as close as 6 metres. However, the resulting delay, to the POP (Putting On Production) timing of the
well; can significantly impair the overall “Cluster” concept savings.

• In order to safely implement the production and drilling SIMOPS a HAZOP/HAZID study determined that the
necessary allowable well spacing (when utilising a partial rig-skidding package on the sub-structure alone) would
have to be 24 metres; this would allow the completion operations to be performed on the previous wells while still
drilling on the next well.

• In the case of a drilling-rig fitted with a full rig-skidding package, (thereby avoiding laying down drill-pipe, derrick
and draw-works), a study has determined that this allows the SIMOPS capable centre to centre distance to be reduced
from 24 m to 16 m.

• Co-ordination during SIMOPS operations is critical (particularly between and across the drilling and production
operational departments). Most of the SIMOPS activities related to production (flow-line installation, unloading,
perforating) area actually performed at the same time as the rig skidding operations themselves.

• The integration of a dedicated fracturing well within the “Cluster” concept, demonstrates the flexibility of the
“Cluster” approach to including new and existing segments of the VICO renewal programme; within the “Cluster”
concept. This approach allows some of the ‘risk’ for the dedicated fracturing wells to be removed, by maximising the
utilisation of the data gathered from the correlation “Mother” well.

• It is important to retain a certain amount of flexibility with the “Cluster” concept, prior to spud a Pre-Drill AFE
package will have been approved (for the “Mother” well and two “Daughters”). However, once the “Mother” well
logs are available the number of potential “Daughters” may increase (or even reduce occasionally); the driver for any
changes should be purely economic and reserves development driven, based on the information made available from
the “Mother” well.

• Construction of the location flow-line, individual well hook-ups and manifold/header should ensure that there is
maximum flexibility (incorporating minimal complexity and redundancy), in order to ensure that from the 6 – 10
well-bores that may be available to flow on the location; that there is sufficient flexibility to commingle the wells (to
the appropriate line-pressure system). In effect, each of these “Cluster” locations; can be considered as a mini-
gathering centre where the opportunity arises to partially optimise the well flow regime.

• Now that SIMOPS operations are being planned for the “Cluster” wells, the post “Mother” well “Daughter” well
sequence, should be optimised to provide the maximum gas-rate from the location (on an annualised average basis),
this means that the most prolific/fastest drilled “Daughter” wells should be prioritised in the location sequence.

There are many more lessons that have been learned from this approach; and these are being compiled and utilised to improve
and optimise the way forward; it is expected that VICO will enjoy significant additional efficiency improvement in “Cluster”
well implementation and results, as these lessons are more widely and generally distributed and applied.

Conclusions
Although the “Cluster” well concept is still in the early stages of deployment within VICO (i.e. currently drilling the third
“Cluster” within Nilam); the approach has already been shown to deliver dramatic improvements in all of the areas for which
it was designed to have impact. Key to the success of the delivery of this approach; has been the formation of a small dynamic
self-sufficient Team to deliver each of the “Cluster” locations, and to ensure that the opportunity from each application is
being maximised (real-time). The “Cluster” concept, combined with Dual Monobore completions, SIMOPS and the suite of
VICO renewal programmes/tools, is demonstrating significant flexibility and efficiency in maximising the opportunities that
remain within the Nilam field.
SPE 116537 9

Acknowledgements
The authors would like to express their gratitude to the Government of Indonesia, BPMIGAS and the VICO Indonesia
management; for their permission to publish this paper. We would also like to acknowledge the many contributors, to the
efficient implementation of this approach, approach within the VICO workforce. This approach relies completely on Team
effort from all Departments within VICO; if this had not been achieved the outcome would have been very different.

Nomenclature
Bcf Billion Cubic Feet
BHL Bottom Hole Location
BMT Base Management Team
ESDS Emergency Shut Down System
FPM Field Production Model
HAZOP Hazardous Operations Study
HAZID Hazard Identification Study
HSE Health, Safety and Environment
MDT Modular Dynamics Tester
LP Low-Pressure
MP Medium-Pressure
OGIP Original Gas In Place
PI Productivity Index
POP Putting On Production
PSC Production Sharing Contract
RDT Resource Development Team
SIMOPS Simultaneous Operations
SOP Standard Operating Procedure
Tcf Trillion Cubic Feet
TWCV Two-Way Check Valve
VICO Virginia Indonesia Company
VLP Very Low Pressure

References

1. Allen, G. P. and Chambers, J. L. C.; “Sedimentation in the Modern and Miocene Mahakam Delta”; Indonesian
Petroleum Association Special Publication; 1998.
2. Arianto M. A., Susatyo Y., Srisantoso B. and Sumaryanto; “New Completion Solutions for Multi Layered Gas Fields
: A Case History”; Paper SPE 100991-PP, SPE Asia Pacific Oil & Gas Conference and Exhibition, Adelaide,
Australia, 11 – 13 th September, 2006.
3. VICO Indonesia, Kutai Basin Study, Vico Indonesia Internal Report, 1995.
4. VICO Indonesia, Drilling & Workover Policy, 2006.
5. VICO Indonesia, Simultaneous Operations Cluster Wells, 2007.
10 SPE 116537

N IL A M

Figure 1 - Sanga-Sanga PSC and Nilam Field in East-Kalimantan, Indonesia.

W E LL S C H E M A T IC – N L M # 2 0 C lu s te r

2 .5 M
2.5 M Mscfd
M 1515 .3MM
.3 M M
scfd 10 .8MMscfd
1 0 M M 8 .5
5.3  M M scfd
M
3 rd W ell : N -2 42 2 n d W ell : N -2 41 1 st W ell : N -2 3 9 4 th W e ll : N -24 3

D -5 2

F -5 1 A

F -56

F -5 7

F -7 7

G -5 3 A

Figure 2 - Well Schematic of the Cluster Well Concept.

SPE 116537 11

Figure 3 - Well Schematic of the Cluster Well concept.

Figure 4 - Candidate Selection Process.

12 SPE 116537

Flare pit
Rig Structure
Well - 2

Flare pit

Well - 1 Mini Manifold

area
Flare pit

Mother well

Figure 5 - Cluster Well Site Preparation and layout.

SPE 116537 13

Figure 6 - Skidding Rail System in front of the Rig.

Figure 7 - Skidding Equipment, Control-Panel and Process.

14 SPE 116537

Figure 8 - Skidding Rails at back of Rig on top of Location Matting, note the Tree/Wellhead Cage.
SPE 116537 15

Figure. 9 – N 20 Offset “Cluster” Location with Trees/Wellheads on N239, N241, N242 & N243.

30

N243 SS
N243 LS
N242 MB
25
N241 SS
N241 LS
N239 MB

20
Gas Production (mm.scf/D)

15

10

0
01/01/08 01/02/08 01/03/08 01/04/08 01/05/08 01/06/08
Elapsed Time (Months)

Figure 10 - Historical Production from the N020 Offset “Cluster” wells.

16 SPE 116537

Figure 11 - Wellhead & Flowline Configuration.

 SPE 116537 17

Figure 12 – Dual Tree, Flow-Lines and SSV Systems.

Figure 13 - Buried portion of the Flow-Lines (note the rig piling).

Figure 14 - LP & VLP (Dual Header) Production Manifold.

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