CONFERENCE REVIEW

Latin Conference Focuses on Energy Challenges

John Donnelly, JPT Editor

The 2010 SPE Latin American and Caribbean Petroleum Engineering Conference (LACPEC) was held in Peru for the first time in an event that spanned the regions upstream technical activities. The theme of the 3-day conference was Latin Americas Energy Challenge: Sustainable and Responsible Economic Development and focused on the need for maximizing recovery and productivity while enabling the economies of this region to fully benefit from their hydrocarbon resources. Specialized technical sessions covered aspects of recovery, productivity, and research and analysis, as well as a number of overarching industry issues and integrated project management themes. More than 120 technical papers were presented on topics such as deepwater developments, unconventional gas technologies, liquefied natural gas developments, heavy oil, mature fields, safe and environmentally friendly operations, and water management. The conference officially opened with a ceremony featuring Peruvian and Latin American officials and dignitaries. Among those participating were

Peruvian Minster of Energy and Mines Pedro Sanchez Gamarra; Daniel Saba of Perupetro; Carlos Alberto Pereira de Oliveira, executive manager with Petrobras; Santiago Campoblanco Diaz, dean of engineering at Universidad Nacional Mayor de San Marcos; Luis Del Castillo Rodriguez with Gas Natural y Petroqumica; 2010 LACPEC General Chairperson Pedro Grijalba; and 2011 SPE President Alain Labastie. LACPEC is held throughout Latin American venues and this years event recognizes the growing significance of Perus energy industry, Sanchez said. The theme of this years conference strikes the right tone, he said, as the oil and gas industry must focus on maximizing the regions resources to benefit the region while doing it in a socially and environmentally acceptable way. The growth of the oil and gas industry in Peru has been a driver for economic investment, said Campoblanco. The energy industry is in an evolutionary process, he said, moving from wood as a primary fuel, to energy in its liquid phase that fueled the industrial revolution, moving to a gas phase, and

finally will move into alternative forms of energy. It is important that government, industry, and academia work together to make sure this evolutionary process continues in an efficient manner, he added. Peruvian oil output is currently 265,000 BOPD and will rise to 400,000 BOPD within 5 years, said Saba. He expects 100 new contracts to be signed with operators by middle of this year. Mature Fields Examined Mature fields account for a significant portion of production in Latin America and the region has considerable opportunity to boost recovery rates, which often lag the global average of 30% to 35%, panelists in the opening plenary said. The Innovation in Mature Fields: New EOR Technologies brought together representatives of major service companies and Latin American producers to review technologies that hold promise for boosting brownfield recovery. Solange Guedes of Petrobras described her companys systematic approach to optimizing production and increasing recovery from mature fields. That process involves identifying the fields and trying to arrest the production decline, balancing the production with water and gas injection, and determining recovery potential by comparing the fields with other similar fields using both static and dynamic data. Petrobras is using numerous technologies to try to boost mature recovery for both onshore and offshore fields, she said, including an increasing use of subsea and seismic efforts. Argentina currently has a recovery rate of only 18%. Increasing that by only 1% could mean adding 2 years worth of production, said Herman

Panelists in the opening plenary session.

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Carlos Morales Gill of Pemex E&P .

Ladia of YPF His company currently . has 16,000 wells13,000 producers and 3,000 injection wells. This year the company will drill 900 new wells and perform 964 workovers. The company redefined its strategy in 2007 with a focus on achieving excellence in mature field operations, underscoring that as a key competitive area for growth. Technical staff was increased, an analysis of assets was performed, a new management system was put in place, and 3D modeling was used to improve oil in place estimates. About 1,400 prospects were identified for increased recovery rates. Likewise, Colombia also has a recovery factor of about 18%, said Nestor Saavedra of Ecopetrol. His company is focusing on water injection to increase output from Ecopetrols fields, of which just under half can be classified as mature fields. Three service providers also gave an overview of Latin American brownfields. Jeff Spath of Schlumberger detailed two processes that improve recovery rates and address both the technical and economic aspects of increased recovery factors: his companys micro-pilot concept and steamassisted gravity drainage optimization. The micro-pilot approach offers quick screening of enhanced oil recovery (EOR) processes by altering formation properties through the controlled injection of EOR agents while measuring recovery behavior, he said. In a sense, it is a next generation log-inject-log technique, he added.

Roberto Munoz of Halliburton noted how methods used to improve recovery rates in the North Sea were being applied successfully in Latin America. In the Cerro Dragon field in Argentina, three technologies were applied: nuclear magnetic resonance, completion modeling, and fracturing optimization. The field, which began producing in the 1960s, is now producing at its highest level. At the La Cira Infantas field, Colombias oldest, the use of high-performance fresh water-based drilling fluids and electromagnetic telemetry logging while drilling proved successful. David Lysne of Weatherford walked through three case studies involving improved production from brownfields around the globe. In a field onshore India with thin pay zones and that had been drilled extensively with vertical wells, the use of horizontal wells improved output significantly. Likewise, in an onshore field in Europe that had been vertically drilled extensively, the solution was to abandon most existing producing wells, drill six new horizontal wells, reinject gas, and use artificial lift by gas lift. Future Challenges Upcoming challenges facing Latin America was the subject of a wide-ranging plenary discussion on the second day of the conference. Representatives from private and state oil companies throughout the region spoke of the challenges facing their companies, their countries, and the regions oil and gas industry. Carlos Morales Gil of Pemex E&P outlined his companys new strategic plan, which seeks to stabilize production and reserves despite the rapid decline of the prolific Cantarell field. Goals of the 2010-2025 strategic plan include Keeping oil output between 2.4 and 3 million BOPD Keeping gas output stable Reaching a 100% reserve replacement rate by 2012 Achieving high levels of social responsibility and health, safety, and environment goals. Cantarell accounted for 63% of total Mexican oil output and will still be about 20% of output in the future. In terms of technology, Mexico must adopt

new methods to increase enhanced oil recovery, raise deepwater output, and implement critical technologies across the board, including fracturing, optimization of artificial lift, and unconventional drilling, he said. Surveying the Latin American region as a whole, panelist Nemesio Fernandez-Cuesta, executive vice president of E&P for Repsol, said the region continues to have great hydrocarbons potential but it needs a lot of investment to realize that potential. More than 55 billion BOE awaits pending development decisions, he said. Latin America must compete with other regions around the world for investment dollars and must be seen as an attractive place in which to invest. This is the big challenge we have ahead of us, he said. Among large operators, many have a presence in Latin America; however, their Latin American holdings are often less than 15% of their total portfolio. These are the companies that Latin America needs to attract, he added. The region definitely needs fiscal, regulatory, and political stability to enhance business attractiveness, Fernandez-Cuesta said. If you want to attract more investment, you have to drop the government take, he said. Contractual challenges are a reality to deal with. He suggested that governments construct contracts that take into account oil price fluctuations, which would offer both governments and companies some level of stability. Technical challenges also exist such as in the development of heavy oil, presalt, and the sub-Andean fold beltand market integration in the Southern Cone would also benefit the region, he said. Offering a perspective from a small private Latin company, Pluspetrol CEO Steven Crowell explained how his company leveraged experience on smaller projects to tackle big ones. It used its experience in developing the Ramos gas field in Argentina to help develop the giant Camisea gas project in Peru, and it used lessons learned from working on the Centenario field in Argentina for application in Perus Block 8 development. Crowell added that the industry is used to working with the heat and

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Labastie said, and the rise of women in the oil and gas industry workforce is part of the solution for achieving that diversity. One of the panelists, Ana Zambelli of Schlumberger agreed that diversity will be a necessity as the industry is now searching for talent, regardless of gender. She offered advice on how women might approach their careers. Science shows that men and women are different and that fact should inform how women approach their jobs, she said. Women working in the industry should look at challenges as opportunities, capitalize on the strengths and skills they have, strive to become technically expert, and learn how to handle pressure, she said.
The exhibits at the conference attract a crowd between technical sessions.

pressure that difficult geological formations present but will need to begin thinking of heat and pressure in a new way. Going forward, we are going to have to be able to take the pressure and the heat from the public and the government as we go into more challenging areas, including in Latin America, he said. Panelist Ganesh Thakur, of Chevron Energy Technology Company and 2012 SPE President, offered several case studies to show how improved oil recovery and enhanced oil recovery can greatly maximize asset value and increase recovery rates. In fact, IOR/EOR will play a critical role in global energy security in the future, he said, because over the next 25 to 30 years, use of those technologies can add significantly to global production. Opportunities are abundant, he said, in chemical EOR, sour gas injection, and steam injection in carbonate reservoirs. Among the case studies Thakur cited as IOR/EOR success stories included The Hamaca field in Venezuela, where use of horizontal wells was critical Kern River field in California The Nigerian deepwater Agbami and Kazakhstan Tengiz fields, where miscible gas injection was used In the Permian Basin area of west Texas, where CO2 flooding improved recovery Canadian fields that benefited from miscible gas flooding

The Minas field in Indonesia, where surfactant polymer flooding seems to be working. Diversity Lauded On the day before the conference officially opened, a special Women in the Industry session brought together professionals with a range of experience to discuss the personal and professional development of women in the global oil and gas industry. Topics such as career planning, mentoring, and networking were discussed, and the session also reviewed broader topics that will challenge the industry in the years to come. Alain Labastie, 2011 SPE President, delivered the keynote address. He outlined some of the challenges the industry will face over the next decade most notably satisfying growing global energy demand. Oil demand is projected to increase 1% a year over the next decade and, because of declining output from aging fields, this will require the industry to produce 45 million more b/d in 2018 than it does now. Current global output is approximately 85 million b/d. Meeting this challenge will require innovation, capital, and staffand innovation requires technology and creativity, Labastie said. And creativity will require diversity, he added, including diversity in gender, experience, education, and culture. Diversity among a companys employees will give it a clear advantage,

Regional Awards Presented At the conference banquet, several SPE members received awards honoring their contributions to the Society and to the petroleum engineering profession. Regional award winners were: Service AwardHugo Carranza, Total; Jose Luis Bashbush, Schlumberger; Nestor Saavedra, Ecopetrol Reservoir Description and Dynamics AwardJuan Rosbaco, consultant Formation Evaluation Award Alberto Khatchikian, consultant Drilling Engineer AwardRaul Krasuk, Baker Hughes Production and Operations AwardCarlos Pedroso, Petrobras Management and Information AwardRonald Pantin, Pacific Rubiales Outstanding Young Professional AwardJavier Rodriguez, Pacific Rubiales. At the end of the conference, members of SPE student sections in the region met for the first time. They learned about SPE benefits and each student chapter gave a presentation outlining its activities and 2011 objectives. The students also had the opportunity to meet Ruben Caligari of Petrobras, SPE director for the South American and Caribbean Region; Labastie; and Thakur. In addition, Henry Bacca, Peruvian country manager for Baker Hughes, and Cesar Guerra, a consultant for Baker Hughes, spoke to the students about industry challenges and how to be successful in the oil and JPT gas industry.

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