Epm 12

EPMAG.
COM
DECEMBER 2012
Exploration
Milestones
Production
Review
Offshore
2013
Drilling
Review
Asset
Integrity
Management
REGIONAL
REPORT:
ARCTIC
Technology
improves the odds
Industry advances make
the game worth
the gamble.
DECEMBER 2012
Exploration
Milestones
Production
Review
Determination is in our nature
PON
I inding oil used to he easy. So was recovering it . Ioday, oil exploration requires
highly specialised skills to deal with the vast challenges we are facing, like
unfathomable depths and comp licated geology. When we find the oil, it can
be difficult to recover due to high pressure and low permeability. And most
importantl y, we have to meet the world's toughest safety standards - our own.
Luckil y, we have a secret weapon; our att itude of constantl y raising the bar on
everything we do. Or as we like to call it - never being sat isf ied.
Offshore
2013
Drilling
Review
I x ploie more at nev e r satisf ied.statoil .com

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Asset
Integrity
Management
REGIONAL
REPORT:
ARCTIC
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WORLDWIDE COVERAGE
DECEMBER 2012
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
ASSET INTEGRITY MANAGEMENT
42
Making partnership a priority
44
Offshore asset integrity: lessons learned from

the aviation industry
EXPLORATION MILESTONES
48
Arctic and drilling efficiency

stretch drilling technology
With the industry focusing its efforts on drilling and
completing wells under harsher conditions, innovations
have targeted improving downhole operations in Arctic,
deepwater, and HP/HT operations.
PRODUCTION REVIEW
66
w w w. E P m a g . c o m
COVER STORY: EXPERTS PREDICT
30
Explorers get bigger toolkit

With seemingly no end to their ingenuity and innovative
spirit, companies introduced several useful technologies
in 2012.
DRILLING REVIEW
54
ISSUE 12
Production 2012 a year in review

A big bundle of new oil and gas tools released to
the market in 2012 looks to increase production
and decrease headaches in 2013.
Experts predict:
Technology boundaries
continue to be pushed
Whether its a new seismic technique,
better completions solutions, or a deeper
understanding of reservoir dynamics, the
industry is along for a wild ride.
IndustryPULSE:
OFFSHORE 2013
76
Offshore tide rising in 2013

As wartime British Prime Minister Winston Churchill once
said, It is always wise to look ahead but difficult to look
further than you can see. Bearing those wise words in
mind, what are the key trends and events likely to rise
over the horizon as the industry moves into 2013?
90
REGIONAL REPORT:
ARCTIC
Industry faces
game-changing issues
Resource shifts and global economies
will keep things interesting.
10
WorldVIEW:
Technology drives
the industry
The new COO of First Reserve is
placing his investments in oil and
gas megatrends.
Unconventional:
72
Eaglebine producers
bring new technology
to the historic Woodbine
A liquids-rich play emerges from the tight Woodbine

sands at the eastern edge of Texass Eagle Ford shale.
11
MARCELLUS-UTICA
MIDSTREAM
CO N F ERENCE
r lI
i
1
1
David L.Lawrent
Ar/
& EXHIBIT
ION
W=r0k170""q' .MRW
EXPERT UPDATES ON THE

JvJ f RCELtU U'fJC. f BUILD-OUT
Producers are moving rigs into the liquids-rich-gas Marcellus and Utica windows.
Midstream gatherers , processors and marketers are working on yet another phase
of Appalachian-resource monetization: more NGLs-p lus, oil .
At the Marcellus-Utica Midstream Conference & Exhibition , all of the

highly incented parties-from producer to end-user-exp lain how they 're playing
a role in transforming Northeast U.S. energy supply and demand dynamics.
Learn how they 're affecting even the energy paradigm across the U.S. -from the
Rockies to the Gulf Coast .
REGISTER TODAY AT MARCELLUSMIDSTREAM.COM

PRESENTED BY:
HA RT E N E RGY
HOSTED BY:
(ias
MIDSTREAM InVeSOr
OIL & GAS CENTER

E3P U5 UNCONVENTIONAL
Preliminary Conference Program

8:30 am
8:40 am
Welcome & Opening Remarks

Opening Keynote Address: The Outlook for
New North American Hydrocarbon Demand
Marcellus and Utica Economics,Production
9:00 am
10:50 am
4:00 pm
Hinds Howard,Chief Investment Officer ,
4:40 pm
Guzman Investment Strategies

Midstream JV Spotli ght :Transferring Best
Marcellus Practices to the Utica
Jack Lafield,Founder, Chairman and Chief
Executive Officer, Caiman Energy II
5:00 pm
8:40 am
Midstream Operator Spotlight:Getting the
9:00 am
Liquids Monetization :A S potlig ht on NGL

Economics
David Deckelbaum, Senior E&P Anal yst ,
9:20 am
The Economics of NGLs-Processing

Strateg ies
9:40 am
KeyBane Cap ital Markets
11:30 am
11:50 am
10.00 am
10:30 am
Heavy NGLs Spotlight:Where Will All the
Condensate Go?
Paul Weissg arber,Senior Vice President ,
12:10 pm
10:50 am
Ohio River Valley, Crosstex Energy Services LP
11:10 am
Lunch Keynote Address: A Shale-Side Chat on
Moving Supp ly to Market

The Big Dig: A ppalachian Infrastructure Ahead
11:45 am
Ohio Take -Away Spotlight:Solutions in

Getting Utica Oil & Condensate to Markets
Steve Jacobs ,President , Harvest Pipeline Co.
Jack Lafield
Founder , Chairman
and CEO
Caiman Energy 11
Joseph Blount Jr.
President and C00

NiSource Midstream &
Minerals Group LLC
12:00 pm
Frank Tsuru
President and CEO

Momentum/ M3 Midstream LLC
Petrol Worldwide
End-User Spotlight:Getting the C l to the Cracker

End-User Roundtable:The Appalachian-Made
Ethane Advantage
Pipeline Panel: Taking Northeast NGL Production to
the Gulf Coast
Closing Keynote,Day One:Exporting U.S. Gas
Bill Cooper,President, Center for Liquefied Natural Gas
Keynote Address: A Midstream Giant's
Take-Aways on A ppalachian Supp ly
Energy Transfer Partners LP/Sunoco Logistics Partners LP
S potlight:The Potential for Utica Oil Supply and

Northeast Demand
Kenneth Komoroski ,Partner-in-Charge ,
Pittsburg h - South poi nt Fulbri ght & Jaworski LLP
Refiner Spotli ght:How the Economics of Utica
Oil Compares with Other Sources
Regulatory Spotli ght: EPA Regulations Overview
Me
Utica Stakeholder-Relations:Achieving the
Win Win
Midstream Spotli ght:Leveraging the

A ppalachian Fuel Mix
Producer/ Shipper Case Study: Collaboration
Toward Resource Monetization

Frank Tsuru, President and CEO, Momentum/
M3 Midstream LLC
Closing Keynote:In the Ground - Moving
A ppalachian Natural Gas
Mark Casaday,Chief Operating Officer, PVR Partners LP
Co
James Cutler
President
Petral Worldwide
Manuj Nikhanj
Managing Director,
Head of Energy Research

ITG Investment
GOLD
EQT
Business Development
Thursday,Jan. 31, 2013
Utica There , Too

Joseph BlountJr.
, President and Chief Operati ng
Officer , NiSource Midstream & Minerals Group LLC
11:10 am
2:10 pm
Financing Utica and Marcellus Take-Away:
Cap ita l Access
,=1.
1:50 pm
3:20 pm
3:40 pm
Manuj Nikhanj ,Manag ing Director , Head of

Energy Research ,ITG Investment Research
10:00 am
Liquids Monetization:A Spotlight on NGL

James S. Cutler,Executive Vice President,
and Recoverable Resource
9:20 am
1:00 pm
3:00 pm
(as of November 1, 2012)
SILVER
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DEPARTMENTS AND COMMENTARY
AS I SEE IT
Optimism reigns?
MANAGEMENT REPORT
Searching for the best
12
DIGITAL OIL FIELD

rv
?
Protect against cyber attacks
15
What to look for in modern process automation solutions
18
EXPLORATION TECHNOLOGY
Zooming in on higher frequencies
-r
1
p
F
p
23
WELL CONSTRUCTION
s 1.
Technology grows exponentially for oil and gas industry
25
PRODUCTION OPTIMIZATION
Flow studies expanded
27
OFFSHORE ADVANCES
Plenty more fish in these seas
29
TECH WATCH
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An operator in the Gulf of Thailand 's
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Sourceless formation evaluation reduces HSE risks
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TECH TRENDS
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INTERNATIONAL HIGHLIGHTS
94
ON THE MOVE/INDEX TO ADVERTISERS
98-99
LAST WORD
Ensuring the quality of next-generation geoscientists
100
COMING NEXT MONTH The January issue of E&P features an overview of R&D
efforts by major oil and service companies as they continue to address industry challenges.
Other features include a focus on safety systems and solutions as well as seismic processing and interpretation, HP/HT drilling innovations, subsurface systems, and ultra-deepwater
advances. Oklahoma and West Africa will be featured in regional reports. 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 Operators are upping the ante on major projects in 2013 enabled by an innovation bonanza in 2012. Left, the Arctic is
getting renewed attention as the industry refines its approach to this delicate environment. (Poker chip images courtesy of Statoil, ffA, Emerson,
Weatherford International, and Schlumberger; Arctic image courtesy of
ION Geophysical; 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.
Printed on
recycled paper
ONLINE CONTENT DECEMBER 2012
Subscribe @ EPmag.com/explorationhighlights
PREMIUM CONTENT
New offshore Angola discovery

flows 3,000 Bopd
A new oilfield discovery in Block 16 offshore Angolas
Lower Congo basin was announced by Maersk Oil.
RWE Dea discovery results from Nile Delta confirmation well

In Egypts Nile Delta, RWE Dea has confirmed a further extension of its
#1x-South Sidi Ghazy discovery at confirmation well #1-2-SSG on the
Disouq Project in the South Sidi Ghazy structure.
Anadarko under way at Shenandoah development

in Walker Ridge Block 51
Anadarko Petroleum Corp. of Houston has begun drilling another test
well at its offshore Shenandoah development in Walker Ridge Block 51.
AVAILABLE ONLY ONLINE
Canada trails in LNG game,

but interest remains
By Velda Addison, Associate Online Editor
Although some oil and gas executives believe

Canada has ground to make up to position itself
as a player in the LNG export market, the countrys assets are attracting interest worldwide despite low gas prices.
Every Rock
Tells a Story
What 's your reservoir
rock telling you?
East Africas gas potential

holds hope for Asian markets
Understanding rock behavior can help you

make the best decisions while developing
your reservoir , from determining where to
drill to creating a comp letion strategy.
As reliance on natural gas grows, focus has

turned to East Africas potential as a gas
producer with hefty reserves.
IEA: US could become

worlds top oil producer
The World Energy Outlook 2012, released by the

International Energy Agency, shows US shale oil
success could put the country above the rest for oil production.
With a scientific approach that spans

decades , TerraTek* expertise turns the
complexities of reservoir rock into
actionable information you can use.
www.s lb.com/TerraTek
Challenges face industry

with Brazils local content policy
With US $250 billion on the line for oil and

gas operators in Brazil over the next five
years, local content laws could slow
foreign investments.
READ
TH
LATES E
T
EPmag
.
com
INDUS
TRY
NEWS
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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

RHONDA DUEY
Executive Editor
EPmag.com
JO ANN DAVY
Group Managing Editor
SCOTT WEEDEN
Senior Editor, Drilling
MARK THOMAS
Senior Editor, Offshore

Senior Editor, Production
JENNIFER PRESLEY
Chief Technical Director,

Upstream
RICHARD MASON
MARY HOGAN
Associate Managing Editor
VELDA ADDISON
Associate Online Editor
CODY ZCAN
Assistant Editor
Optimism reigns?
ALEXA SANDERS
Corporate Art Director

Senior Graphic Designer
LAURA J. WILLIAMS
Production Director
JO LYNNE POOL
Reprint & PDF Sales
ERIC MCINTOSH
Director of Business Development
ERIC ROTH
RUSSELL LAAS
Group Publisher
Editorial Advisory Board

CHRIS BARTON
Sr. VP Business Development, Oil & Gas, KBR
KEVIN BRADY
President, Multi Products Company
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
President,
Superior Well Services, a Nabors company
DENNIS A. YANCHAK
Sr. Geosciences Advisor, Apache Corp.
Editorial Director
PEGGY WILLIAMS
Senior Vice President, Consulting Group
E. KRISTINE KLAVERS
President & Chief Operating Officer
KEVIN F. HIGGINS
s I write this, Hart Energys DUG East conference in Pittsburgh has just
ended. More than 3,000 people gathered for two days to visit with
exhibitors and get the latest updates on news from the Marcellus and Utica
shales.
The largely Republican group was still reeling from the Nov. 6 news that
President Barack Obama had been elected for a second term. Karl Rove,
senior advisor and deputy chief of staff during most of former President
George W. Bushs administration, gave a keynote talk excoriating Obamas
agenda as it pertains to the energy industry. Operators spoke about the
constantly shifting regulatory landscape and their fears that the federal
government would seek to take a more active hand.
And low gas prices in North America didnt exactly put a rosy glow on
the occasion.
Still, some of the operators who spoke during the conference seemed
genuinely positive about the future. This optimism stems from the fact that
the industry always manages to figure out how to work its way through any
roadblocks that stand in its way.
Steve Schlotterbeck, senior vice president and president of E&P for EQT,
said that the application of horizontal and air drilling in the Huron shale in
Kentucky had improved recovery rates from 8% to as much as 40%. No one
would have expected that 10 years ago, he said. I dont know how were
going to go from 40% recovery to 70% recovery, but its a huge prize. Im very
optimistic that, over time, well be able to do that.
Dewey Gerdom Jr., CEO of PDC Mountaineer, was even more effusive. Even
though low gas prices caused his company to stop drilling earlier this year, he
is very bullish on the future.
The industry never stops trying to learn, Gerdom said. I think the next
step will be that some of the lower-quality areas in the shales will be unlocked.
That will be a step change.
It will be a new gel or completion technique or something. But well find a
way to operate in a low-cost environment. The industry will find a way to make
it work.
As you read this issue of E&P, I think youll be tempted to
agree.
This past year has seen many important technical breakthroughs, and 2013 promises to continue apace. Lets enjoy the ride.
Chief Executive Officer

RICHARD A. EICHLER
industry
PULSE
Industry faces game-changing issues

Resource shifts and global economies will keep things interesting.
Clinton A. Vince and Jennifer Morrissey, SNR Denton
here is no question that the energy industry has undergone rapid and frequently unexpected evolution in
just the past few years. Less than a decade ago, experts
warned that we had less than a 10-year supply of natural
gas left. The US was on the verge of a nuclear renaissance. Clean coal was touted as the answer to air pollution, particularly ozone problems. And both the average
person and the average politician equated any discussion
of energy or national energy policy to the price that was
paid at the gasoline pump.
China has plans to build more than 20 nuclear reactors in the

next seven years.
Today, we have recoverable natural gas supplies that

could take us into the next century; the US nuclear renaissance has largely stalled; and thanks in part to the 24/7
news media, Internet bloggers, filmmakers, and minor
celebrities drawing public attention to energy issues,
energy industry terms such as fracing, smart grid,
and green power have become household words. All
within a few short years, a handful of game-changing
events has completely reshaped the energy industry,
and with it, the public and governmental responses to
energy-related issues have been dramatically altered.
Shale gas revolution

Far and away the most significant game-changer in US
energy markets has been the shale gas revolution. Once
8
thought to be nearly exhausted, cheap, abundant supplies

of domestic natural gas are now readily accessible through
a combination of the relatively new horizontal drilling
technique and the long-standing and proven technique
of hydraulic fracturing. With the exception of the Bakken
shale in the Dakota region, the major US shale plays fortuitously align with existing natural gas pipeline infrastructure, making it easy to get this resource to market. Driven
by a combination of low prices and increased environmental regulations affecting coal-fired generation, US energy
companies are phasing out coal-fired generation including both newbuilds and retrofits faster than anticipated.
The shale gas revolution also has been a contributing
factor in the stall of the nuclear renaissance in the US,
with a much greater impact than the safety concerns stemming from the Fukushima nuclear disaster, newbuild
licensing issues, or the lack of a comprehensive waste
disposal policy. The abundance of domestic gas supplies
also has had a significant impact on the deployment of
renewable resources, which face funding uncertainties.
As recently as five years ago, some industry experts
discounted shale gas as an unattractive energy option
because, among other things, it was believed that production would require too much water. Water is an issue,
but it turns out that the problem is more one of water
quality than water quantity. Shale gas production is less
water-intensive than the production of coal or nuclear
energy and represents only a small fraction of municipal
and industrial water uses. And the water quality issues,
although these have attracted widespread media interest,
are proving manageable as long as industry and regulators work together and not against each other.
Resurgence of western oil

From the oil sands in Canada and the tight oil found in
the US from the Dakotas down through Texas all the way
to the presalt of Brazil, discovery and recovery of conventional and unconventional oil sources is a second important game-changer that is having a profound impact on
the global energy scene. This new oil axis is not the result
of any policy shift; rather, it is driven by market forces and
technological developments, most notably the same horizontal drilling techniques and increased use of hydraulic
fracturing that have been the main drivers in the shale
gas boom. As a result, the US is now poised to retake the
December 2012 | EPmag.com
www.halliburton.com/HSE
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Get information in advance on the
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On the road, if your vehicle becomes
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2012 Halliburton. All rights reserved.
industry
PULSE
position it has not held since the 1950s and 1960s as the
world leader in oil production, and Brazil is on track to
overtake Venezuela in terms of output in the near future.
Emergence of BRIC countries

The role of emerging markets in the global energy industry is a huge story whose impact has yet to be appreciated.
Substantial capacity builds in these countries and elsewhere in the developing world over the next 10 to 15
years for all fuel sources will alter global markets. This
will, of course, impact demand and price of resources,
but it also will affect global climate policies.
Brazil, Russia, India, and China the BRIC countries
are expected to be both major exporters and consumers.
They also will bring a lot of renewable technology development to scale. As the US becomes more energy self-sufficient at the same time that demand increases from these
regions, there will be a shift in energy exports, especially
in the Middle East.
Brazil will develop its oil reserves. Russia will continue to
export gas, although its continued stranglehold on European markets is up in the air as those countries begin to
switch to alternative energy sources and seek other sources
of natural gas supply. India will be an enormous consumer, with growth potentially surpassing China.
In 2009, China overtook the US as the No. 1 consumer
of energy, and within the next decade, China will almost
certainly become the worlds largest economy. Within the
next 15 years, China will add generation capacity equivalent to the entire existing US generation fleet. China will
also become the global leader in nuclear energy. China is
planning to build more than 20 reactors by 2020, while
the US is presently building only four new nuclear reactors, Germany is shutting down its nuclear program
entirely, and Japans nuclear industry faces uncertainty.
Water shortages will have a significant impact on future development of oil and gas reserves.
are creating an opportunity to recover resources previously thought to be inaccessible, further complicating
efforts to resolve this problem.
Iran
Iran is a game-changer with its nuclear ambitions, which
are bringing that nation to the brink of crisis in the international community. A nuclear-armed Iran would alter
the balance of power in the Persian Gulf region, with
major implications for the global oil market. Iran would
be positioned to assert dominance over the flow of oil
throughout the Persian Gulf, creating insecurity for the
region and for world oil supplies.
Climate change
Climate change remains another potentially game-changing issue globally. In the US, cap and trade, the carbon
tax, and clean energy standards are all dead-on-arrival, at
least under the current political stalemate. Although a
wide majority of Americans believe in climate change, the
more immediate, tangible, and personal concern over
jobs surpasses the concern over the climate. However,
more broadly, people in the US are beginning to understand that soot and mercury kill and that long-term survival depends on finding a near-term solution. We are
now witnessing changing weather patterns, causing more
frequent disruption of food supplies along with other
impacts on economic activity and well-being. But at the
same time, global warming and the melting polar ice cap
EPmag.com | December 2012
Water
Finally, one of the biggest global game-changers for the
21st century is the relationship between energy production and the availability of water. As regions experience
water distress, this will have a dramatic impact on our
industry. This has been playing out in certain regions of
the US in connection with shale gas and with competition
for water in interstate river basins and federal reservoirs.
This issue promises to be far more acute in areas of the
globe where the water resources are already severely
stressed by a growing human population but where there
is also a tremendous and rapidly growing demand for
energy resources or the opportunity to exploit resources
for economic gain.
9
world
VIEW
Technology drives the industry

The new COO of First Reserve is placing his investments in oil and gas megatrends.
Rhonda Duey, Executive Editor
he enthusiasm that Claudi Santiago brings to his job is

infectious. Santiago, COO for private equity company
First Reserve, is in the somewhat unique position of
watching technological progress unfold and deciding
which parts might need a little financial boost. The oil
and gas industry is, some might say, his oyster.
Santiago came to First Reserve after a 32-year career at
GE. He spent the last 14 years as president and CEO of
GE Oil & Gas, a business that was started with the acquisition of a compression company and that he built to a US
$15 billion company.
After competing with private equity firms during his
time at GE Oil & Gas, Santiago decided to test the waters.
After meeting with several firms, he chose First Reserve,
feeling it was the most knowledgeable, the most capable,
and the most reputable. It was also a decision based on
firsthand experience.
I had the opportunity to buy businesses from First
Reserve, sell businesses to First Reserve, and compete
for deals with First Reserve, he said. I had a very good
insight about the domain, knowledge, and expertise that
exists within the firm.
nals that were once considered for importing gas are

instead being considered as potential export terminals.
Deep water is another frontier that has been unlocked
by innovation, he said. Five years ago, it was unthinkable
that we would be able to monetize and exploit oil from
deep water, he said. The industry was in a clutch at a
time when the economies of China and India were booming, the industry was facing the depletion of existing
reserves.
Again, thanks to the innovation and the technology
appetite of the industry, we are now capable of producing
oil that five years ago was unthinkable, Santiago said.
With the global economy in slow recovery after the
2008 recession and developing nations continuing to
demand more hydrocarbons, Santiago said it is paramount to continue to invest in technology innovation.
These subsea reservoirs that have been brought
onstream over the last few years will allow us to satisfy this
incremental demand and compensate for the depletion
of our existing reserves, he said. If we hadnt invested
Wild about energy

First Reserve also seemed a good fit because of its dealings in the oil and gas industry. To me, it is one of the
most fascinating industries that exists today, Santiago
said. Much of this has to do with the technological strides
the industry has made in recent years.
One obvious change has been the shale gas revolution
in the US. Santiago recalled, correctly, that just a few
years ago the US was concerned about future supplies
of natural gas. The countrys main source, the Gulf of
Mexico, was headed into serious decline, and onshore
fields were also less than prolific.
Five years ago in the US, everybody was busy trying to
build LNG import terminals to bring liquefied natural gas
from countries like Qatar or Trinidad, Santiago said. In
five years, the industry has turned upside down.
He attributes this flip-flop to technology and innovation, which have had such a profound impact that termi10
Claudi Santiago, COO of First Reserve. (Images courtesy of First

Reserve)
world
VIEW
BELOW: Cobalt International Energy pursues

prospects in the deep offshore waters of the Gulf of
Mexico and West Africa with an emphasis on subsalt and presalt exploration, development, and production. RIGHT: Barra Energia do Brasil Petrleo e
Gs Ltda. is an E&P company focused on offshore
basins in Brazil.
significant amounts of money on technology and innovation, we would have hit the wall.
Investing in the future

Santiago said that First Reserve is in the business of anticipating these types of market trends. Our role as a private
equity firm is to spot, ahead of anyone else, trends that
will create opportunity for us and our investors that will
allow us to make smart investments, he said.
During the firms 29-year history, First Reserve has
invested in 30 E&P companies.
About 70% of the current E&P portfolio companies are
domiciled in the US, and the majority is in the two megatrends he outlined shale gas and deep water. Those
are the two megatrends that are driving the industry and
that we are convinced will grow for many, many years to
come, he said.
Shale gas has revolutionized the way the industry thinks
about its energy supply. First Reserve has made an investment in an E&P company focused on shale development
in Romania. He said that country has been dependent on
expensive Russian gas for years, so investing in a company
in Romania that will develop its vast shale gas reserves
was a good thing to do.
The companys offshore focus is primarily on two markets: Brazil and West Africa. In Brazil, First Reserve has
invested in a company called

Barra Energia in a joint venture
with Petrobras. We have done
some exploration work that has
been very successful so far with
very encouraging results, Santiago said. This is located 232 km
[141 miles] from the coast of So
Paulo State and is occurring at a
depth of 6,213 m [20,383 ft], so
its very high-tech.
But once again, these are
investments that we like because
these are the kinds of reserves
that the world is going to need
to compensate for the depletion of the more traditional
reservoirs, in particular those in the Middle East, he said.
West Africa shares analogous geology to Brazil, and
First Reserve also has made a major investment in Cobalt
International Energy, which has assets offshore Angola
and Gabon.
In addition to investing in E&P companies, First
Reserve also invests in other energy-related companies
focused on midstream and downstream, equipment and
services, and infrastructure. With our global footprint
and our knowledge about the industry, we try to accelerate the growth of these companies, opening doors for
them in new geographies and trying to figure out synergies with other portfolio companies that can help them,
he said. Its all about technology and innovation. Generally, an asset has to have a lot of these ingredients and be
a company that is scalable, that has good technology
DNA, and that has the opportunity to grow as part of a
larger platform.
We are looking for these volume-growth kinds of assets
that will benefit from our acceleration.
The next wave of tech transfer

The oil and gas industry has been highly successful at
developing, mostly from within, the technologies needed
to drive these megatrends. But it has the opportunity to
learn from other industries as well, Santiago said.
I am convinced that the next wave of innovation in the
oil and gas industry will come from what I call the sister
industries, he said.
If we can put a black box in a plane that is flying to
register everything that is happening to the engines, we
can put a similar black box on a christmas tree that is
working 2,000 m [6,500 ft] below the seabed. The oil
and gas industry is discovering that not everything needs
to be invented here.
11
management
REPORT
Searching for the best

One companys online search tool could render resumes obsolete.
he year 2009 was tough for a lot of people. The recession caused the oil and gas industry, which had been
in a period of robust hiring, to freeze hiring and even
consider layoffs. For a staffing company, it was not a
good time to be helping people find employment
there were very few opportunities.
Chris and Carolyn Sutton, partners at Clover Global
Solutions, were carefully eyeing the terrain. The Suttons,
who had spent 24 years in Alaska Chris in the energy
industry and Carolyn in tourism and construction
bought Houston-based Clover in 2000, though they had
little experience with staffing prior to that time. In their
first nine years, they built and expanded the company as
a staffing source for the oil and gas industry. But the
recession signaled a time to change tactics.
The job boards were full of resumes because everybody was looking, said Chris Sutton. Since hiring likelywould resume eventually, it seemed like a good time to
assemble a backlog of qualified candidates. But how best
to match the candidate to the job?
The Suttons decided it was time to overhaul the way
they helped their clients find suitable candidates. Taking
US $225,000 that had been earmarked for marketing,
they developed a search tool patterned after how people
search for things on the Internet. Internet buying is
just a lot of search criteria, isnt it? Sutton said. We
spent about five months developing the filters: engineering, drilling, directional, extended-reach, 10 years experience, and ability to speak a second language such as
Arabic or Portuguese.
We keep our ears tuned to put that capability into the

sourcing tool, he added.
Early on, it was decided that technology, i.e. the search
engine capability, would be Clovers key differentiator.
The company also doesnt rely on a website to market
itself, preferring to establish interest groups on social
media sites.
We control 25 specific groups, he said. Theres a
drilling group, a safety group, etc. People put thought
leadership articles in them. We have more than 60,000
members in those groups.
Clover also has an active thought leadership blog. Sutton said that a recent blog on shale plays got 1,100 hits.
There isnt a word about Clover in there. They really
are articles, things we research.
This entrenchment in social media in turn drives candidates and clients alike to Clovers database, and Sutton
keeps careful track of who is participating in the groups
and reading the blog. This has caused a tremendous
number of people to go say, Im going to profile myself,
he said. But clients like the search tool as well.
It gives them a budget, Sutton said. Lets say a
startup gets $7 million from investors. They come to us
and say, This is the kind of team Im going to be looking for. We go online with our tool, we source the candidates, and then we ask about their project.
In many cases, the clients are not looking for full-time,
permanent employees, but rather employees who can
The database
The result Sutton said, is a giant matrix that is constantly changing to reflect the needs of the energy
industry. The shale and unconventional work is a good
example, he said. While Im talking right now, my staff
is updating unconventional job titles and experience.
Job titles, in fact, are a challenge for this type of system. Titles get invented every time something is done
differently, Sutton said. These titles arent catalog items
like drilling engineer or electrician. Especially in the
unconventional work thats happening, there is a lot of
blending of competencies.
12
Like Google for human resources, Clovers online search tool

helps find the right candidate for the job. (Image courtesy of
Clover Global Solutions)
W ELLEZ
The Leading Oil & Gas

Reporting System
see a specific project through. Often these are not desk jobs but rather jobs
that require rotational shifts or unusual working hours. Because of the indepth profiles that the search tool provides, clients also can find workers
willing to fill these types of positions.
The tool also helps clients budget because the rates quoted for these types
of positions reflect real-world compensation. These are market-reflective
rates, Sutton said. Theyre not pie-in-the-sky rates. These are rates from
consultants averages that were placing on our projects.
Of course, theres also some wiggle room, he said if clients will commit to
a longer work assignment, those rates often come down.
This type of flexibility in working arrangements is attractive to retirees who
want to keep a hand in the game but are no longer interested in or in need of
full-time employment, Sutton said.
Another interesting aspect of the tool is its alumni setting. Many companies
like to rehire former employees, because theyre already familiar with the company and its culture. Additionally, candidates can list companies that they will not
work for, either because theyve had a bad experience or dont want to relocate.
A recent enhancement to the system is the ability to identify emergency
response skills. We list in there every active property in the Gulf of Mexico by
client who owns it, who operates it, etc., Sutton said. A candidate has the
opportunity to say, I worked on the Thunder Horse platform, or I was a first
responder to Hurricane Katrina. That was a huge home run for us because
now one of the filters asks them to share their emergency response and disaster experiences.
Even with this type of in-depth profiling, not all positions can be quickly
filled. Sutton said the shale plays in the US are taxing the countrys ability to
find enough skilled workers; Russia and Saudi Arabia face similar problems.
Everybody who wants to work and can find a bedroll is working, he said.
Clovers system helps it maintain a solid reputation in these cases because clients
arent being bombarded with resumes of candidates that really dont fit the bill.
In fact, not everyone who wants to create a profile makes it all the way
through the system. Sutton said that as many as 50 to 100 people fill out profiles each day, but each profile is vetted before being made available to clients.
Part of this is just to save clients time, but its also to ensure that candidates
actually have the certifications they claim to have.
If our clients ask for a drilling engineer who has experience with HP/HT
conditions and I provide them with that person, I am acknowledging that I
have vetted them for the skills, competency, and experience needed to do that
job, he said. I see it as a fiduciary obligation to vet that individuals skills.
Landing the right candidate fast

The time and effort put into creating the search tool and keeping it up to date
have paid off. Sutton said that in one case, the traditional system of going to
online job boards and looking for candidates netted 217 resumes. Clovers
tool was a bit more efficient.
We found two perfect matches and 49 almost-perfect matches in about a
minute, he said.
Requests to license the technology are being turned down for now. It was
not meant to be software as a service, Sutton said. It took 112 years to develop
our search tool, and we overspent our budget. But it has paid for itself in the
first year.
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emarkable progress from remarkable people
The University of Oklahoma's Mewbourne College of Earth & Energy ha

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OIL FIELD
Protect against cyber attacks

Think your companys proprietary data is secure? Think again.
t was every companys worst nightmare. On Aug.

15, while thousands of Saudi Aramco employees were
preparing for a Muslim holiday, someone with privileged
access to Saudi Aramco computers launched a virus that
wiped out three-fourths of its corporate PCs. When
employees logged back on, their files were replaced by
the image of a burning American flag. This was not an
isolated incident. Within the past two or three years,
Telvent, Adobe, and even Google have been the targets
of highly sophisticated cyber attacks.
Protection against this type of attack is not easy, nor is
it inexpensive. But the alternative is so crippling that it
could put some companies out of business.
Cyber attacks
These types of attacks are not simple worms or viruses that
require a trip to the local computer shop to repair. In the
attack on Google and Adobe, several pieces of malware
and several levels of encryption were used to dig into networks, according to an article on wired.com. Not only did
the perpetrators attack the networks, but they also succeeded in avoiding detection methods through their
encryption efforts.
This new type of cyber threat poses serious concerns for
oil companies. The Saudi Aramco situation is interesting
because it wasnt just stealing information; it was actually
damaging infrastructure, said Dave Aitel, CEO of Immunity Inc. The general impression is that the threat is not
that bad. Some groups steal information and may destroy
your company solely by undercutting all of your bids, but
theyre not doing it by destroying all of your IT infrastructure the way the Saudi Aramco team did it. The worst-case
scenario is that theyve lost the ability to continue their
business.
Aitels company focuses on doing security assessments
for major companies. It has a strong focus on mobile and
web application areas.
Who is behind these attacks? In the case of Google, it
was traced to hackers in China. Aitel said Google did the
only thing it could do under the circumstances it left the
country. They got lucky in a way because they suffered an
attack, and after that they simply pulled out, he said.
Immunity consultant Mark Wuergler performs a wireless assessment. (Image courtesy of Immunity Inc.)
They felt it wasnt possible for them to maintain a secure

infrastructure in China and do business.
Oil companies that come under attack may need to consider the same strategy. Even nation states might attempt
cyber attacks if its in the countrys interest to do so. You
have huge amounts of money and power at risk, said
Aitel. Therefore, nation states are willing to put a large
portion of their aggressiveness toward attacking other
countries and other companies.
Given this concern, oil companies might need to think
twice about moving into a new geographical area, even
though the licenses are enticing. Aitel said companies
need to understand how to spread geographically but
segment their businesses properly to avoid putting their
companies at risk.
Cyber security
Aitel outlines several steps that can help companies avoid
being targets. First is a term called whitelisting. This is a
simple procedure that ensures that an individuals computer only runs certain programs. For instance, a company CEO might need only four or five applications,
whereas an engineer might need dozens.
Second is monitoring. It sounds simple, but its amazing how few people do actual monitoring of what their
executives do, he said. Obviously executives dont want
their Internet searches being checked out by their IT
departments. But in light of cyber threats, its important
to monitor their activities.
15
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Cyber attacks
go far beyond the
simple theft of data.
Exfiltration monitoring is a way to catch hackers at their game. By looking for

websites that are only visited by one person within a company, its possible to ferret hackers who might be sending in data.
Network segmentation is also a useful exercise. Aitel described network segmentation as a way to segment different business sections IT or SCADA, for
example to make that data less accessible to others. The IT administration
staff needs to be segmented on their own networks, and their machines should
be unreachable by other machines in the network, he said. Sounds like very
commonsense advice. But IT networks actually have hardly any segmentation
whatsoever.
Perhaps the most critical activity a company should undertake is to develop
situational awareness. A lot of executives in the energy industry dont want to
know how bad it is because if they knew, theyd have to do something about it,
Aitel said. There is an executive order in the US that is forcing companies to
develop situational awareness. But you shouldnt have to force them; they
should want to know how bad it is.
He added that, while some of this process can be automated, it still requires
IT professionals to keep a companys data and infrastructure safe. Theyre not
cheap people, but its cheaper than losing all of your data, he said.
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Fear factor
A simple step in the right direction is to check a small piece of a companys network for a kernel rootkit, which represents an active penetration. Aitel said it
can be done blindly on just a few machines.
If you find one, you have a serious, serious problem, he said. Its something
that has no return on investment in the short term, but its a step toward developing situational awareness.
Another simple precaution is not to leave devices unattended in hotel rooms.
If youre traveling around the world, it might be best to consider that the
devices you leave in your hotel room have had visitors, said Justin Seitz, senior
security researcher at Immunity Inc. Even thinking about this and giving yourself nightmares about it can be a useful exercise.
In fact, a healthy dose of fear seems to be exactly what the energy industry
needs when contemplating this issue. Some of these cyber attacks are not that
sophisticated technically. It doesnt have to be technically sophisticated as long
as its psychologically sound, said Seitz.
Added Aitel, I think the main thing your readers need to know that this is a
problem thats happening right now. Its not something they can put off for
next year. If they want to talk in depth with us about their own corporation,
well be happy to do demos for them that will scare their pants off.
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OIL FIELD
What to look for in modern process

automation solutions
While oilfield technology continues to develop at a fast pace, the techniques for energy recovery
and the demands of accessing oil and gas reserves require open, proven technology.
Neil Enright, Rockwell Automation
hile the top priority for companies involved in

accessing and processing energy reserves remains
the safety of workers, an increasingly important set of considerations is production plant or rig integrity and protection of the environment.
More important than ever is total cost of ownership
of infrastructure and equipment, including the lifecycle costs of maintaining it. Reaching maximum productivity onsite whether on an offshore rig or vessel
or an onshore facility can be the difference between a
highly profitable model and an unsustainable one. Proven
integrated process automation solutions can help with
each of these key criteria, while working closely with an
automation solutions provider can help to deliver the service to keep critical infrastructure online and available.
Knowing what good process automation for the industry
looks like is a matter of understanding the potential control that can be achieved with the latest systems. Recognizing how scalable integration with existing infrastructure
and management systems can offer advanced visualization
and asset performance management possibilities is vital to
getting the most out of an investment.
Looking at process automation technology in more
detail is helped by breaking it down into key areas where
the solutions performance is critical to the profitability
and safety of the facility:
Process control;
Process safety and critical control;
Advanced process control;
Compressor and turbine machinery control;
Condition monitoring and protection;
Integrated information and visualization;
Asset performance management; and
Information flow.
or SCADA solution. It is now possible to combine discrete

process control for drives, motion, safety, and communications in a modular way, allowing complex systems to be
built and improved with the advantages of a DCS system
using faceplates and standard databases.
At the process control level, controllers should offer a
reliable, proven solution, while high-speed, high-performance, multidisciplined control needs to integrate at low
engineering and start-up cost and allow full integration of
motor-control equipment. The best control platforms also
will offer fully redundant architecture, which allows seamless switchover and a high level of availability. The critical
element of how the control platform communicates with
the whole system means that the best platforms will offer
more flexibility.
Analogue, digital, and specialty input/output communication options are important so that new architecture fits
with installed equipment, as are the engineering and con-
With skyrocketing capital and operational costs and a shrinking

pool of experienced workers, oil and gas companies today are
looking for ways to maximize production while minimizing system
complexity and costs. Integrated information, control, power, and
safety systems are built to support collaboration with one com-
18
Process control
mon design and operating environment. These systems help
Technology convergence has resulted in a blurring of the

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reduce design, commissioning, and training needs for some of

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OIL FIELD
figuration considerations of implementing advanced controllers. High-performance controllers offer the processing power to control many loops, and configuring
complex functions should be as simple as possible.
Where the reduction of downtime is of considerable
importance to the process being controlled, it is important to use a solution that allows additions and modifications to be made while the process is operating, making
redundancy capabilities desirable. Seamless integration
with software is also a consideration so that real-time information databases are maintained.
Overspeed avoidance and protection;

Vibration monitoring;
Extraction control;
Process control;
Load management; and
Power management.
The decision to implement an integrated or standalone
process safety system is mostly driven by the requirements
of the plant and, while both options are in use today, a
process safety system fully integrated into the process control system does provide significant advantages.
Process safety and critical control

Convergent technology is also an important factor in
understanding the best safety solutions for oil fields. The
best modern controllers come certified by independent
auditing authority TV Rheinland for use in safety integrity
level (SIL) 1 and SIL 2 applications; according to International Electrotechnical Commission 61508 standard.
Thus, the controller itself is often capable of running
the required safety level concurrently with the control
requirements of the process.
Regardless of the size of the process, safety should be a
fundamental part of the design process for new lines and
should be built into upgrades or changes. For those unsure
of the requisite SIL targets for the job at hand, systems can
be built in a modular fashion with a minimal SIL solution
and then added to with cost-effective upgrades on a loopby-loop basis if necessary.
Offshore E&P requires maximum uptime, often under extremely

harsh conditions. Whether operations are manned or unmanned,
Advanced process control
oil and gas companies need reliable, integrated systems that
Turning data into useful information can be the competitive edge that producers look for in response to demands
for reduced costs, increased yields, and gaining full leverage of existing technology. A stabilized production process
can be achieved with an advanced process control solution
that can use software to constantly drive the process
towards optimum performance. This can maximize production rates and yields and minimize off-spec production
while satisfying all process constraints such as emissions
limits and energy consumption.
offer advanced remote monitoring capabilities to help address
Compressor and turbine machinery control

When it comes to controlling specialist equipment such as
turbines, producers must consider flexibility and integration into existing infrastructure. Controllers should have
features that suit a number of potential applications, including gas and steam turbines, gas expanders, mechanical
drives, pumps, and compressors. These features include:
Speed governing;
Temperature monitoring;
20
government regulations and improve worker and environmental

safety.
Condition monitoring and protection

Condition monitoring systems are not so new now, but
with increasing amounts of data becoming available, these
have become integral to running an efficient system. By
constantly monitoring the health of process machinery
using live feedback, anomalies can be spotted quickly,
unplanned downtime can be reduced, and productivity
can be increased. Importantly, monitoring also can help
extend the life cycle of equipment by raising the alarm if
anything is running outside of its most efficient operating
conditions.
Integrated information and visualization

Real-time information exchange from modern process
automation solutions allows a producer to make real-time
decisions to improve productivity, control costs, and assure
digital
OIL FIELD
regulatory compliance. Optimizing production is a

constant process reacting to the information and everchanging conditions of the production environment and
equipment. It is here that a fully integrated programmable
automation controller solution has an advantage over
traditional DCS functionality, with information needs
met from a globally distributed database and fully
integrated information and visualization.
There are several key access points to information and
visualization tools, from operator human-machine interface (HMI) points at workstations on the process to management-level, plant-wide control interfaces.
When assessing HMI points in a well-integrated
automation solution, it is important to look for functionality that makes relevant information available and easily
accessed. A consistent interface across the whole production facility, no matter which HMI terminal is being
used, helps engineers move around the system within a
single environment.
Multiple language support seems a simple requirement in the modern age of user interfaces but should
not be overlooked; experienced global process automation solutions suppliers are likely to have language support as standard. Single-click access to alarm summaries
makes it easy for engineers to quickly appraise the local
running conditions, while easy access to real-time and
historical trending data can help the operator make
localized decisions to maintain optimum production
based on evidential information.
Having this much control at operator workstations
brings with it certain issues that must be considered by oil
and gas producers. HMI functionality should include a
strong layer of user-based security to ensure that engineers
have clearance to access sensitive information and make
decisions that change the settings of the system.
At the management level, the information available at
all of the HMIs should be easy to access with powerful data
management infrastructure that combines production
data, alarms, and events across the whole plant or system.
Key features of a fully integrated system to look for are the
ability to manage alarms and historical data with precise
control using:
Real-time alarm management;
Controller-based time-stamping for sequence of event
analysis;
Alarm suppression;
Alarm filtering by process resource and operator role;
Operator flexibility in display preferences;
Historical performance equations;
Advanced calculation engines with recalculation capabilities; and
Whether operating a traditional onshore oil field or producing

resources from oil sands, shale, and coal beds, oil and gas
companies are implementing integrated control solutions to
help simplify operations and boost recovery.
Data access server technology (open database connectivity, object linking and embedding, and open productivity and connectivity data access specification).
Accessing and managing such data should be simple,
intuitive, and above all flexible. With vast amounts of data
available, it is important that the visualization offers information and control levels appropriate to the role of the
person accessing it.
Asset performance management

Fully integrated systems offer great opportunities for operations and maintenance personnel to maximize the value
of assets by ensuring these are always operating within
parameters that ensure they achieve maximum lifespan
and reduced maintenance requirements. This reduction
of life cycle costs is achieved through good data aggregation, workflow emulation, role-based virtualization, and
automated performance analysis.
In addition, producers should be looking for solutions
that provide high levels of security and configuration
archiving of asset control information.
Information flow
From the control equipment, turbo machinery, devices,
and instruments to the HMIs, visualization tools, and powerful software, the strength of a modern integrated system
is the simplicity with which the modular nature of it can
be created, adapted, and built upon, according to the
requirements of the system. In terms of networking, it is
now possible to use single or multiple networks that
enable all technologies to communicate through a single
integrated platform in a common language. The result is a
system that can manage everything from a single source
rather than requiring separate control systems.
21
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Defining benchmarks
We have through our history launched step
changing innovations, among these are the
Ramform Series - benchmarks of marine seismic
We take great pride in our achievements , knowing

that the strong will and ability that made us the
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focused and competitive in the futu re.
Our competent and interdisciplinary teams are
And most importantly; we always work tirelessly to

be your first choice. PGS - Unrivaled Performance
constantly pushing the limits through technology

development, gaining operational experience and
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A Clearer Image
www.pgs.com
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exploration
TECHNOLOGY
Zooming in on higher frequencies

A new seismic imaging method pushes resolution boundaries even further.
rom humble beginnings come great ideas, sometimes. Take expandable casing, for instance. Rumor
has it that two Shell scientists were playing with the
expandable sleeves that keep wine bottles from clinking
together when they had their Eureka moment. And
sometimes, a technology that has been developed for
one application suddenly finds a much larger audience
once someone says, If it can do that, can it also do this?
Such was the case with Dr. Jacques Yves Guign,
the co-founder of PanGeo Subsea and the original
inventor and developer of whats called an acoustic
corer. Rather than taking an actual core from the
near-surface, Guigns tool can sit on the seafloor
and take multi-aspect acoustic measurements of the
seabed subsurface that present geohazards for
geotechnical engineering projects.
Guign found himself at a bar in Stavanger, Norway,
with Greg Herrera, a partner with Energy Ventures.
Herrera was interested in the corer but had a very
different application in mind.
Greg said, You can see very high resolution 30 m [91
ft] down, so can you focus that deep into the reservoir
and see [3,050 m] 10,000 ft with that technology? said
Jim Sledzik, another Energy Ventures partner. Jacques
thought he might be able to do it.
The result of this conversation is Acoustic Zoom,
a new seismic methodology that Sledzik said might
be able to solve one of the holy grails of seismic
imaging higher resolution.
Eventually, PanGeo and its investors partnered with
Global Geophysical to pursue field trials. They shot a
full-scale Acoustic Zoom dataset in the Eagle Ford
The Acoustic Zoom system captures many wavelengths across

a large bandwidth. (Image courtesy of Acoustic Zoom)
RHONDA DUEY
Executive Editor
rduey@hartenergy.com
EPmag.com
shale that covers part of one of Globals larger multiclient datasets.

Sledzik said that the Acoustic Zoom data acquisition
resemble microseismic data. Unlike a traditional microseismic grid, however, the Acoustic Zooms densely
packed receiver sensors are laid out in a multispoked
star formation but spaced unevenly to capture many
wavelengths across a large bandwidth from 200 Hz to
well below 50 Hz, and just a few vibrator positions are
required. But the nature of the acquisition geometry,
in which an antenna probes a 12.5-sq-km (4.8-sq-mile)
area at a 45 angle, provides better imaging of the
underlying geology, Sledzik said.
Sledzik added that current processing emphasizes
the non-specular or diffuse reflections off of subsurface
objects like structures and faults that would normally
be lost in what is deemed noise.
So far, the Acoustic Zoom team, with Globals participation, has created synthetic datasets and built the
beamforming algorithms and software to steer into the
data to help direct the imaging process. Phase 2 will
deliver an image by applying the Acoustic Zoom beamformer to the real data. Sledzik said the application to
the synthetic data was very convincing and proved up
the theory.
Meanwhile, Guigns team has partnered with Global
and PanGeo Subsea to form its own company, Acoustic
Zoom Inc., with an aim to commercialize its land applications and also to pursue future offshore reservoir
monitoring applications using a modified marine highfrequency vibrator that can record up to 200 Hz. Data
results from the Eagle Ford experiment should be available by early 2013; first indications show 140
Hz data at the Eagle Ford formation.
All of us are very excited to see
the results, Sledzik said.
23
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well
CONSTRUCTION
Technology grows exponentially

for oil and gas industry
Innovations in the offshore industry show just how quickly technology
advances to meet new challenges.
n the December issue each year, E&P looks back on

the new technology that was introduced to the oil
SCOTT WEEDEN
and gas industry during the year. The number of
Senior Editor, Drilling
innovations grows exponentially with the challenges
sweeden@hartenergy.com
that the industry faces.
A few years ago, one of the National Oilwell Varco
companies reprinted a price list for Oil Well Supply
EPmag.com
Co. of Bradford and Oil City, Pa., dated Oct. 1, 1884
128 years ago. At that time, you could buy a complete
drilling rig for US $3,111.45 to drill a well 304.8 m
wells in 3,545 m (11,700 ft) of water in 1961 for Project
(1,000 ft) deep. Of course, it was made of hemlock.
Mohole. The first purpose-built semisubmersible, the
The hardwood timbers could be put together with
Ocean Driller, started up in 1963.
spikes and nails.
In only 63 years, the industry
A portable 10-hp engine and
had gone from drilling wells
boiler were available for $850.
304.8 m deep onshore with
The operator probably needed a
wooden derricks to the first
horse or two to move it.
well out of sight of land. Now
Fast forward to Nov. 14, 1947,
on the 65th anniversary of the
when one of the most significant
first well out of sight of land,
industry advances occurred.
Shell is producing from a well
Kerr-McGee began production
at a water depth of 2,917.3 m
from the first well out of sight
(9,627 ft) in that same GoM.
of land offshore Louisiana on
As the New Orleans TimesShip Shoal Block 32 in the Gulf
Picayune noted in its Nov. 18,
of Mexico (GoM). A land rig
1947 edition, The first oil promounted on a steel platform
duction from the open Gulf of
(costing $230,000) in 5.45 m
Mexico, in the shoals beyond the
(18 ft) of water with a tender
low tide limits, has fallen to the
barge next to it was used to drill
credit of a Louisiana operation
the well. Three 25.9-m (85-ft)
conducted by Kerr-McGee Oil
wooden fishing boats were used
Industries of Oklahoma. It may
as supply vessels and were standwell mark the beginning of a
ing by in case of emergency.
new era in worldwide petroleum
Imagine the number of innovaextraction.
tions that it took the industry to
How prophetic was the newsThis 1884 price list from Oil Well Supply Co.
get to that point and the new
paper. In the January 2013 issue,
offered 4-in. casing at $0.56/ft ($1.84/m).
technology that followed.
E&P will be looking ahead at
As the industry moved offshore,
where the industry will be
the first jackup rig was built in 1954, taking the industry
headed in the next five to 10 years. It will
to waters depths of 76.2 m (250 ft). The CUSS I (an
be fascinating to take part in the expoacronym for Continental, Union, Superior, and Shell)
nential technological growth in the
was the first drillship built. The vessel drilled a series of
industrys future.
25
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NOV " understands the pressure of your position and what it takes to help
you succeed . Since 1841 , National Oilwell Varco" has been delivering
innovative oilfield products and services that help our customers explore
new opportunities and achieve their maximum economic potential regardless of the operating environment. location or project scope.
National Oilwell Varco supports your worldwide operations by combining
innovative new methods generated from years of industry expertise with
cutting edge technology and premium components. From a simple
expendable to a full y integrated system , you can count on NOV to deliver
what you need, where you need it , when you need it.
1
0 ,'
Downhole
Drilling
Engineering and Project Management
Industrial
Lifting and Handling
Production
Supply Chain
Tubular and Corrosion Control
Well Service and Completion
www.nov.co m
0
Email: corporatemarketing n nov.com
NATIONAL OILWELL VARCO

O ne
Com p an y .
. .Un limi ted
So l u ti ons
production
OPTIMIZATION
Flow studies expanded

A laboratory advances the study of well perforating and flow optimization
to the next level.
uring a recent lunch conversation with a friend,

the topic of how an oil well is drilled came up.
My friend has a very rudimentary understanding of
the process and was curious as to how it all worked
because it couldnt be all that difficult to understand
seeing as how were really just poking a big straw in
the ground and sucking up the oil from underground
pools, right?
Clearly, there were many things wrong in his
description of what is, in fact, a very complicated
dance between man, metal, and Mother Nature. Of
the many complexities operators face during the well
construction process, the challenge of establishing
contact with the reservoir for optimal well flow is one
of the greatest. Researchers at Halliburtons Advanced
Perforating Flow Laboratory tackle these types of challenges and develop perforating solutions to optimize
connectivity between the reservoir and wellbore and
improve well performance.
The lab is part of the 800-acre Jet Research Center
campus, tucked away on a hidden patch of rolling Texas
pastureland. The facility specializes in the design, test-
The 25,000-psi advanced flow vessel can rotate 180 to simulate flow effects of perforating and fracturing in horizontal
wells. (Image courtesy of Halliburton)
JENNIFER PRESLEY
Senior Editor, Production
jpresley@hartenergy.com
EPmag.com
ing, and manufacturing of products like perforating
charges but also works with operators to understand
the effects of perforations in different formations and
in different environments to identify the optimal perforation program and completion design for their wells.
An example of this partnership recently occurred
when an operator contacted the company seeking assistance in optimizing its gun system for use in a marginal
gas condensate field in the North Sea. Testing at the
flow lab led to the development of charges that, according to Halliburton, produced a 21% greater increase in
rock penetration and a 12% increase in productivity in
the field.
The flow lab recently underwent an extensive
expansion to provide additional testing and analysis
services to meet the needs of its clients. The expansion
included increased lab space and the installation of a
CT scanner that allows researchers to see inside the
perforated core without needing to first split it open.
The crown jewels of the newly expanded lab are the
specialized advanced flow vessels that can, according to
Halliburton, do more than any other facility in the
industry. The 50,000-psi vessel tests flow at high pressures, while the 25,000-psi, high-temperature vessel
tests flow at temperatures reaching 204C (400F).
For gravity-related studies, the labs third vessel can
rotate up to 180 while conducting flow tests at pressures up to 25,000 psi.
Tests like those performed at the flow lab can help
operators gain a better understanding of the complexities in well perforating and flow optimization. Knowing how costly a wrong assumption can be makes one
more cautious, which isnt a
bad thing in todays often
misinformed world.
27
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offshore
ADVANCES
Plenty more fish in these seas

The long-term picture for offshore oil and gas developments is becoming
more robust by the day, and companies are wasting no time in positioning
themselves accordingly.
he number of offshore developments being

launched around the world between now and
2020 is rising inexorably higher. Whether in shallow
or deep waters, the forecasts all reflect the same
positive outlook.
Having recently spent time gathering my thoughts
for a forecast of offshore trends likely to emerge in
2013 and garnering those of industry professionals
much more knowledgeable than I, the lasting impression was that looking one year ahead in this business
is like thinking about what youre going to eat for
supper tonight.
The sheer length of time it takes to shift a sizeable
project from initial exploration success to producing
field is, of course, a moveable feast. But unless they are
exceptionally straightforward, very few get done in less
than five years from discovery well to first oil.
So while my initial focus was on the short-term yearout picture, the wealth of information about longer
term forecast activity seemed too good to waste.
For example, between 2011 and 2020 there are a
predicted 1,630 offshore surface facilities planned for
installation worldwide. That is 1,292 fixed platforms,
164 FPSOs, 17 semisubmersibles, 14 spars, 14 floating
storage and offloading units (FSOs), 11 tension-leg platforms (TLPs), and 118 others (where the concept is
unknown or still in the pre-FEED stage).
According to information from PFC Energy, presented at Johnson Rice & Companys recent energy
conference, there are some big numbers to note out
there. The number of fixed platforms forecasted for
installation in the US Gulf of Mexico up to 2020 is
Global offshore fixed and floating
installations (2011 to 2020)
1,292 fixed concepts
164 FPSOs
17 semisubmersibles
14 spars
14 FSOs
11 TLPs
118 other floating units
Source: PFC Energy
MARK THOMAS
Senior Editor, Offshore
mthomas@hartenergy.com
EPmag.com
580, with 284 in the Asia Pacific region and 141 in the
Middle East.
For FPSOs it is sub-Saharan Africa that dominates,
with 57 units penciled in between 2011 and 2020. The
Asia Pacific region will have 37, and Brazil will have 36.
There are also 118 floating production candidates globally where the final concept has not yet been selected,
but more than half are expected to be FPSOs.
It is also worth pointing out that the total global figure above of 1,630 does not take into account subseaonly projects.
The point is that there is a solid queue of visible
projects stretching out into the next decade, with little
expected to delay their development. No wonder there
is now an increasing number of contractors repositioning themselves to catch a slice of this market.
Joint ventures like those between Samsung and
Amec where Amec will carry out FEED and detailed
design for Samsungs future fixed and floating platforms, FPSOs, and subsea pipeline projects illustrate
that the industrys contractors are acutely aware of the
need to widen their global client services.
Technip and Heeremas five-year alliance for the subsea market is another. Ultra-deepwater projects are
expected to be the fastest growing part of the subsea
market over the next several years. For example, ultradeepwater infield pipelines are forecasted to grow at a
yearly pace of more than 15% between 2012 and 2017,
the companies said jointly in their press announcement.
Such linkups, with others in the pipeline, are clear evidence that the offshore industry is in a long-term
upward cycle, with 2020 increasingly looking like just the start of the next chapter
in a remarkable growth story.
29
COVER STORY:
EXPERTS PREDICT
Experts predict:
Technology boundaries
continue to be pushed
Whether its a new seismic technique,

better completions solutions, or a
deeper understanding of reservoir
dynamics, the industry is along
for a wild ride.
s 2012 comes to a close, its useful to
take a look back to see where weve
been. But we like our editorial advisors
to take the opposite approach and
look ahead. Some of our advisors
work for major oil and service
companies; others are retired
but do a considerable amount
of consulting. Who better to
keep their fingers on the
pulse of emerging trends
and technologies?
30
COVER STORY:
EXPERTS PREDICT
Dick Ghiselin, P.E.

Chairman, Hart Energys E&P
Editorial Advisory Board
Crystal balls and

tarot cards
Predicting the future is no easy task.
ver since I was asked to opine on the future of the

oil and gas industry, I have been looking for inspiration, but clouds of doubt have filled my crystal ball.
When I shuffled my Tarot cards, I discovered I didnt
have a full deck.
You would think that with more than 55 years of
experience in this business I should be able to tell with
some degree of certainty what is likely to drive business, technology, and human resources in the coming
year. The truth is, I have no idea what will happen to
our industry next year or any year after that. So many
factors can and will affect our future that any prediction I could make would be the sheerest conjecture.
So instead, I will write about what should happen.
Energy demand should continue

its growth, but in stormy seas
The worlds need for energy is not going away, and the
role played by fossil fuels will continue to dominate.
Until a viable and deliverable renewable energy source
that can meet the worlds demand is developed, oil and
gas will rule. Exploration, leasing, drilling, and production will continue to be a political football game, refereed by bureaucrats with little knowledge of, or often
interest in, the facts. On the world stage, the battle
between the haves and the have-nots will intensify, as
will the threat of global terrorism. The incidents of
world strife in producing countries should break the
political logjam that has denied our access to public
lands, arctic areas, and vast offshore leases. The longawaited road to energy independence in the US should
be opened for traffic, potholes and all.
Technology should be the great enabler

Development of new tools and techniques will enable
exploration, drilling, and production to find and exploit
deeper, less accessible frontiers. Advances in every

sector will be realized. One major area of technical
growth should result in increasing the recovery factor
of existing reserves. Starting with the use of 4-D seismic
and its associated processing, operators will gain a better
understanding of reservoir drainage patterns, discover
bypassed hydrocarbons, and improve formation stimulation designs. Well construction will be able to reach
farther and more efficiently than ever before as new
techniques of extended-reach drilling, casing drilling,
and geosteering make better wells placed more precisely
in reservoir sweet spots. And greatly improved stimulation technology will improve reservoir contact while
delivering higher fracture conductivity.
Advances in production technology will improve our
ability to produce and process more heavy oil, enabling
access to huge, untapped reserves. EOR techniques will
improve oil mobility, sweep efficiency, and ultimate
economic recovery. We should make better use of
our assets.
We should preach beyond the choir

The big crew change is upon us, and we should be
ready. But will there be enough geoscientists, engineers, and technical experts to continue the race?
Like the fabled Cassandra, the industry has decried
the looming shortage of technical staff, but is anyone
listening? Our industry is not well thought-of by a
large fraction of technical students. Even as fewer
young people sign up for science and engineering
education, even fewer accept to work in our industry
despite historically high starting salaries and benefits.
We should do a better job of selling our industry to
the public. Starting with 10-year-olds, we should sponsor education outreach to identify and attract young,
technology-minded people. We should initiate follow-up programs to sustain their interest. Scholarships and summer internship programs
should be expanded. We cannot wait; in fact,
many fear we have waited too long already.
We should learn to help ourselves

Technical markets dont just grow; they
must be created and nurtured. It is
therefore incumbent upon us all to
expand our scope. Instead of waiting for nations to realize that
clean-burning natural gas is a
great energy resource for elec-
31
COVER STORY:
EXPERTS PREDICT
trical power generation, we should take the

initiative to expand that market. We built
refineries and petrochemical plants to bridge
the gap between crude oil and petroleum
products, fuels, fabrics, and plastics. Why
shouldnt the oil and gas industry build
power plants and run them more economically and with smaller carbon footprints than
the existing infrastructure? We could create
our own markets for natural gas. T. Boone
Pickens foresight should be accepted by
every producer. Already, compressed natural
gas (CNG) and LNG have been proven viable
for transportation uses. Recently, an LNG railroad engine was introduced, and the Cummins Corp. has launched a new line of
Technological innovation will allow the industry to drill farther with a smaller envimultifuel truck engines. Instead of waiting
ronmental footprint. (Image courtesy of Halliburton)
for the market to develop, we should take
the initiative by equipping our service stations
with CNG and LNG fuel pumps. If Detroit wont do it,
motorcycle reportedly tooling around Oklahoma.
our industry should build and operate vehicle conversion
The crystal ball has cleared. It says we should wake up
enterprises. The technology exists; there is even a CNG
before the hanged man card is dealt! n
Dennis Yanchak
Apache Corp.
Beware the
technologies
are coming!
Onshore, offshore, and downhole, new
technologies will revolutionize exploration.
he thirst for energy continues to push the boundaries of science in the oil and gas sector. Spanning
drilling and completions to remote sensing, we are seeing numerous advances in all scientific disciplines. On
the geo side, seismic technology is moving forward
with the rest of the industry, with new marine equipment and technologies as well as frac monitoring on
the surface and downhole. Lets take a closer look at
some of these emerging technologies.
32
On the marine side, the need for a broader frequency

spectrum continues to grow. With the requirement of
lower frequencies for subsalt exploration and full waveform inversion to higher frequencies for identification
of subtler traps, new technologies are increasing in use.
One of the main limitations in the marine seismic quest
for broader bandwidth is the mirror-like reflection of
seismic energy from the sea surface. This relection,
called a ghost, eliminates frequencies at both the high
and low end of the frequency spectrum and is a function of the streamer depth. Two technologies are helping to recover the frequencies in those ghost notches.
New equipment that employs multicomponent cables
with hydrophones, geophones, and accelerometers is
one approach, while a variable tow depth along the
length of conventional seismic streamers is the second
technique. These advances come not only from new
equipment and operations but also from new seismic
processing algorithms that can begin to recover the
frequencies in the ghost notches on existing marine
seismic data. Look for the use of these technologies,
coupled with other seismic processing techniques, to
grow in the coming year.
Meanwhile, at the bottom of the ocean, marine node
technology continues to develop and increase in utilization. Better and longer-life batteries allow for improved
spatial sampling, especially wide-azimuth spatial samDecember 2012 | EPmag.com
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The Baker Hughes FracPoint" multistage sleeve

completion system cuts days off the time it to
fracture horizontal wells. Now our
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71 bakerhughes.com/PZM-shale
and open sleeves without deforming. Then, their

nanostructured material reacts with wellbore fluids
so they disintegrate within days, assuring flow
without intervention.
COVER STORY:
EXPERTS PREDICT
pling, which has proven critical for subsalt illumination

and imaging. The use of marine nodes will continue to
increase, especially in field development and 4-D field
monitoring in both deep and shallow water and around
infrastructure. And while those autonomous nodes sit
on the seafloor, look for seismic receivers that independently sail near the surface of the sea, recording
both active and passive seismic signals that one may
be a little further down the timeline.
Back on terra firma, shale exploration and exploitation continues to drive the industry in North America.
Surface monitoring of fracing is growing, and there is
still a lot to learn. Understanding the earth stress fields
subtle variations over time, combined with passive seismic and active frac monitoring, will continue to push
the boundaries in shale exploitation. The role of conventional 3-D seismic will continue to provide information on structures and depositional environments, but
look for more detailed subsurface information on

lithologies, fluids, and porosities to continue to be
pulled from high-quality 3-D seismic in combination
with good well logs and core analysis.
In both conventional and unconventional seismic,
land data often suffered from noise, both source-generated and environmental. In the coming year, sourcegenerated ground roll will begin to play a larger role in
understanding and compensating for the near surface.
The near-surface weathered layer often causes problems
with seismic data, particularly the higher frequencies
that are needed for delineation of stratigraphic details
in the subsurface. Ground roll, that troublesome noise
that hides reflections while traveling in the near surface, can provide additional insight into the physical
properties of the weathered layer. With this knowledge
it is possible to better attenuate the ground roll noise
while gaining a better understanding of near-surface
seismic properties. This additional
knowledge will increase the ability to
handle other near-surface effects (like
statics) and allow for improved imaging
of the deeper structural and stratigraphic
features in the subsurface.
Covering both onshore and offshore,
vertical seismic profiles (VSPs) are often
used to gain a better understanding of
the subsurface near the wellbore. These
have typically come at a high cost for a
number of reasons, most notably the
deployment of seismic receivers in the
well. But new technology using fiberoptic cable allows a continuous measurement of acoustic seismic energy along
the entire cable/wellbore. Existing
wells with fiber-optic cables may already
be instrumented for VSPs at a much
finer spatial sampling than has ever
been done with conventional downhole
receiver arrays. Imagine measuring
the wave field at 1-m (3-ft) intervals
along the entire wellbore. There are
still limitations on the surface seismic
source and the earths attenuation,
but spatial sampling along the wellbore
might no longer be a limitation.
Another piece of information that
has historically been omitted due to
cost constraints will be available.
Conventional seismic is compared to broadband seismic offshore Australia. (Image
Look for these and other technologies
courtesy of Apache Corp.)
in the coming year. n
34
COVER STORY:
EXPERTS PREDICT
Mike Forrest
Consultant
Seismic amplitude
anomalies play a
major role in worldwide deepwater
exploration
Research continues on direct hydrocarbon
indicators.
eepwater oil and gas exploration, generally defined

as greater than 300 m (1,500 ft) water depth, started
in the Gulf of Mexico (GoM) during the early 1980s
and expanded worldwide in the 1990s. The initial exploration phase in the deepwater GoM was based on seismic
amplitude anomalies, called bright spots at the time but
now called direct hydrocarbon indicators (DHIs), on
salt-related structural closures. Later, DHIs proved
to be critical for stratigraphic traps.
Today most of the deepwater GoM exploration is subsalt, where the seismic imaging is poor because of complex seismic ray paths through salt. This makes DHI
interpretation very difficult. However, the GoM was the
proving ground for DHI technology to expand around
the world, notably offshore West African basins, including
stacked channel sands on elongated closures in Angola
and fan lobe stratigraphic traps in Ghana. Also, in the last
few years there have been large discoveries in the Mediterranean Sea, offshore East Africa, and a new discovery off
the coast of South America.
Most deepwater reservoirs are turbidite sands, channels,
and sand lobes originally deposited in a slope or basin setting. The acoustic properties (velocity and density related
to rock physics) of turbidite sands in contrast with the
overlying shales are generally in the range where channels
and sand fairways can be mapped. Regional geology basin
studies and well control, if available, are integrated with
the 3-D seismic interpretation. The presence of gas and oil
in turbidite sands will cause a change in the acoustic properties, and thus DHIs can be identified.
Even though DHI technology is more than 40 years

old, research continues to improve the risk analysis work
process, the reliability of estimates of probability of geological success (Pg), and the oil and gas resources on a
prospect. Rock physics studies are important to classify
the geologic setting of the sands, ranging from unconsolidated sands (called amplitude versus offset or AVO Class
3, consisting of low-impedance gas sands or bright spots);
to modestly consolidated sands (called AVO Class 2, consisting of a very weak reflection at near offsets with a sharp
increase in amplitude with offset or angle); to AVO Class 1
(consisting of very consolidated sands or dim spots). AVO
Class 4 gas sands are a subset of Class 3, where the amplitude is flat with offset or where it dims with offset (caused
by a high-impedance shale, siltstone, or carbonate above a
good-quality, low-impedance gas sand). In an exploration
setting, it is very difficult to distinguish oil versus gas using
DHI technology because oil contains dissolved gas, and
reservoir quality variations are a factor.
During the past 12 years, I have been fortunate to lead a
team that has managed Rose & Associates DHI Interpretation and Risk Analysis Consortium. Forty-five oil companies
have been members of our consortium for at least one
phase, and there are currently 22 member oil companies
in Houston and Europe. The consortium has reviewed 224
drilled DHI prospects worldwide, comprising 60% from
the GoM and an increasing number of North Sea/North
Atlantic and Africa prospects. Many of the prospects are
Tertiary-age sands, but DHI successes are present in rocks
as old as the Cretaceous and Triassic. The acoustic properties of the sand and overlying seal (rock physics) are the
discriminating factors, not the geologic age.
We have documented the seismic/rock physics data
quality and up to 35 seismic anomaly characteristics of
each prospect with a grading system that allows us to identify the most important seismic anomaly characteristics
and document reasons for failure.
In this example of a DHI success, two gas pays are shown with a
low-saturation economic seal failure likely related to a late-moving
fault. (Image courtesy John OBrien, The Leading Edge, 2004)
35
COVER STORY:
EXPERTS PREDICT
Lessons learned:
It is always important to understand the geologic
setting, including depositional environment, so
the interpreter can classify the DHI as a Class 1, 2,
3, or 4 AVO anomaly prospect;
Seismic and rock physics data quality is important.
Propriety data processing with emphasis on the
interval of interest is much better than spec data.
Seismic gathers, the data from varying offsets that
make up a single seismic trace, should be carefully
reviewed because of their impact on AVO and amplitude versus angle studies;
There is no single silver bullet. There should be
multiple positive anomaly characteristics to have a
high probability of geologic success;
There is a threshold effect on the high and low
ends of the Pg range (5% to 90%). At the upper
end of the risk spectrum there is a point (DHI threshold) at which a significant amount of risk has been
reduced so that the final Pg is dramatically increased.
At the lower end of the risk spectrum there is a low
Pg threshold, below which essentially most wells are
failures;
Ronnie Witherspoon
Nabors Completion
& Production Services Co.
Industry trends set

stage for innovation
Hydraulic fracturing companies will
continue to develop solutions to improve
efficiency while protecting the environment.
he oil and gas service industry is driven by efficiency

demands, versatility in fluid systems, government regulation, environmental sensitivity, and reservoir enhancement challenges. In response, service companies are
rapidly developing innovations and technology in this
changing environment.
Recent industry challenges and trends are driving a new
breed of innovations and solutions, especially within the
hydraulic fracturing service sector. Such trends can be categorized into four attributes efficiency, versatility, envi36
The most important anomaly characteristics are

downdip conformance to structural contour, flat
spot, character and phase change at a downdip
structural contour, consistency of the amplitude
in the target area, and several AVO characteristics
where calibration to well data is critical to map the
separation of acoustic properties between wet and
gas/oil sands. The latter is especially important for
AVO Class 2 prospects; and
The most frequent reason for DHI failures is wet
sands, often blocky, thick, and high-porosity. The
second most frequent reason is low-saturation gas,
especially in the GoM and Asia Pacific. There are
many other reasons for failure, including low impedance, shales, low-permeability gas-filled siltstones,
and seismic processing artifacts.
Finally, its very important to have a systematic and
consistent work process to interpret and risk seismic
amplitude anomalies. The process is as important as the
numerical analysis. Peer group reviews, experience in
risking seismic amplitude anomalies, and commonsense
thinking are essential for a company to build a successful exploration portfolio. n
ronment, and reservoir brand service. The trend involves

innovations that boost efficiency gains, provide operational versatility, protect the environment, and provide
enhanced reservoir performance.
Efficiency gains are being achieved in hydraulic fracturing through a number of innovations, including the
adoption of factory-type processes such as
Zipper fracs, where multiple wells on the same
drilling pad are perforated and hydraulically fraced
in alternating operations where fracing pressure on
one well is maintained while another well is being
perforated. This process increases hydraulic fracturing efficiency, increases estimated ultimate recovery,
decreases cost per boe, and reduces the environmental footprint;
Increased usage of pad drilling and well manufacturing concepts;
Enhancements in product logistics and bulk supply,
like proppant, centralized water sourcing, and installment of onsite bulk chemical delivery systems; and
Enhancements in pump system longevity involving
improvement in maintenance, fluid end design, and
lubrication systems.
Hydraulic fracturing fluids that work across a wide range
of conditions drive the need for industry innovations in
fluid system versatility. The development of new products
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COVER STORY:
EXPERTS PREDICT
and fluids that are less sensitive to

emission reduction, and shallow gas
source waters enables the reuse of
migration, among others. Nabors
flowback waters and the use of atypiCompletion & Production Services
cal sources of frac waters, such as
Co. has been making investments in
saline groundwater and acid-mine
technologies and proprietary infordrainage.
mation systems to address these new
Significant recent innovations are
industry trends. Examples include
meeting growing industry needs.
fugitive silica capture and the SUPER
These include
ChemDAT chemical disclosure sysNabors LGS-150L brand gel provides better prop Onsite water testing and
tem. Product examples include green
pant suspension than traditional linear guar gels. products such as nonhazardous, highanalysis;
More proppant grains remain suspended in the
Sequential flowback analysis;
temperature gel breakers; crosslinked
Pre-frac fluid optimization; and fluid compared to guar at equivalent design load- gels that tolerate a wide range of
ings. (Image courtesy of Nabors Completion &
The use of additives that elimibrines and water sources; and synProduction Services Co.)
nate the effects of problem ions
thetic guar alternatives.
Increasing demand for enhanced
and elements.
reservoir performance has placed focus on creating fluid
Diversity of reservoir types within shale plays has driven
systems that reduce formation and conductivity damage.
the need to develop fluid systems that function well in
Sequential flowback analysis has proven to be a valuable
both gas- and oil-bearing zones.
Driven by public perception and a lack of understanding,
process innovation involving chemical fingerprinting
environmental issues are perhaps the most challenging to
of the geochemical signature of flowback waters following
overcome. As an industry, hydraulic fracturing service
hydraulic fracturing operations. This process enables
providers are providing information to the public to a
enhancement in reservoir-compatible additives and fluids
degree unlike anything the industry has previously experito mitigate damaging precipitates and assists in optimizaenced. Hydraulic fracturing providers have responded to
tion of fluid designs in a range of fluid types, allowing the
the growing demands for chemical ingredient disclosures,
reuse of flowback waters without the need for expensive
silica emissions reduction, onsite spill protection, engine
water treatment. n
Kevin Brady
Multi Products Co.
Being a production
engineer becomes
fun and important
With fewer wells being drilled, production
engineers will be the heroes of the future.
few months ago, I was visiting with a group of operator customers at their office in the Northeast US.
A young production engineer met me at reception, and
we chatted as we made our way to the conference room
where our meeting was taking place. I asked him how he
38
liked his job, to which he replied, I like the company a

lot, but Im trying to get transferred over to drilling.
And so it goes with production engineers throughout
the US and probably the world. The seemingly mundane life of a production engineer takes a back seat to
the wild and gritty life of a drilling engineer. Pictures
comparing the two tell it all. Drilling engineers are typically photographed on the rig floor, with dirty coveralls
and mud everywhere, surrounded by rotating drill pipe,
spinning wrenches, and chain tongs. Production engineers, however, show up in clean coveralls and a white
hard hat and stand next to a wellhead as they log information into a laptop. Which role sounds like more fun?
Think about where we have come in the past few years
regarding well count and footage drilled. Using data
from Spears and Associates, even when taking into
account the economic downturn of 2008 to 2009, the
number of wells being drilled in the US over the past
five years has remained steady, compared to the previous
five years, while the footage drilled has increased by
almost 20%. It has been a very good time to be a drilling
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COVER STORY:
EXPERTS PREDICT
engineer. But I think that the importance of the production engineer is undergoing a rapid change, at least in
the mind of many operators.
Lets look at what is happening in the market now.
Natural gas prices remain soft, so more new wells are
shifting over to those that can produce NGLs and oil. As
operators begin to focus less on dry gas areas, the US rig
count is slowly declining, and in turn we are starting to
drill fewer wells. The higher liquid production rates for
on how a well should be drilled and completed to maximize its ultimate recovery. Some operators are questioning if longer laterals always result in the best-producing
wells. Longer laterals are good at tying up more acreage,
but do they always translate into higher production
rates? Should wells be drilled with a toe-up or toe-down
profile? How many frac stages are optimal for maximum
ultimate recovery? Work is underway by the Artificial Lift
Research and Development Council (comprised prima-
Production engineering will be an

important career as operators try
to wring extra oil from their
existing fields.
the new wells that operators are focusing on are driving

a quicker onset of artificial lift needs. Operators are
starting to discuss a philosophy of making the most out
of the wells they have. Which strategy produces the best
return on investment for the current business climate?
Should an operator drill one new well, or should it use
that money to perform maintenance and optimization
on, say, 50 producing wells? As operators shift their strategy and make adjustments for the current environment,
the production engineer starts to play a more prominent role than before. Production engineering is valuable to operators that want to maximize earnings.
Production engineers have the best understanding
of what methods and technologies are going to be
most effective in increasing the returns from wells
that have already been drilled.
There also remains a disconnect between geologists
and drilling engineers, and now production engineers,
40
rily of production engineers) to answer specific questions

related to producing horizontal wells. Other efforts are
more localized in operator companies or even asset
teams. The approach may be something as simple as
comparing producing wells in a field or region and then
drawing conclusions on the best drilling and completion
methods from a small sample. These projects are under
way, and the findings will steer the strategic direction for
many of the companies that are developing unconventional assets in the US. These projects are being led primarily by production engineers.
So the importance of engineering roles inside operating
companies is changing, and production engineers are not
always taking a back seat to the drilling guys anymore. I
am waiting for the day when I am sitting among a group
of drilling engineers and one of them says, I want to be
where I can deliver more value for my company, and that
is why I am transferring over to production.
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ASSET INTEGRITY
MANAGEMENT
Making partnership a priority

The evolving requirements of asset management for major supply companies require
a partnership approach with their oil company and contractor customers.
Bill Jensen and Scott Hunter, Weir SPM
n the oil and gas industry, asset management has traditionally been associated with multidisciplinary teams
making decisions on the exploration, development,
and production strategy for an oil field. Essentially, the
approach is heavily results-driven and modeled on the
financial services sector, where the term originates. That
definition of asset management has morphed into a more
detailed engineering-style approach to every component
of a projects operation over the whole life cycle, drawing
in contractors as well as equipment and service suppliers.
ISO certification
The definition of what asset management entails has
been the subject of international discussion in recent
years, with some positive outcomes in terms of clarifying
its requirements and adding substance to the discipline.
In 2004, the UK Institute of Asset Management, in
conjunction with the British Standards Institution,
developed PAS 55, the first publicly available specification for optimized management of physical assets. It
describes asset management as systematic and coordinated activities and practices through which an organization optimally manages its physical assets and their
associated performance, risks, and expenditure over
the life cycles for the purpose of achieving its organizational strategic plan.
The 2008 update (PAS 55:2008) was developed by 50
organizations from 15 industry sectors in 10 countries.
The International Standards Organization (ISO) has
now accepted PAS 55 as the basis for development of the
new ISO 55000 series of international standards, due to
be published in 2014. The whole process has strong parallels with the introduction of the ISO 9000 quality management system standards more than 20 years ago.
The fluid end repair is one of the most critical pieces of equip-
Macondo
ment that must be maintained. (Image courtesy of Weir SPM)
In North America, the perspective on asset management

has, of course, been significantly altered by the Macondo
factor. The 2010 disaster in the Gulf of Mexico focused
public attention on the management of potentially hazardous infrastructure in the event of failure and whether
the systems in place provided sufficient safeguards. In the
aftermath, the relationship between operators, contractors, and supply companies has been a key point of interest. The industry is now in a period when new standards
of compliance for the US oil and gas industry are in the
process. Following the Deepwater Horizon event, the Bureau
The difference is probably best emphasized when reference is made to asset integrity management, which
puts the responsibility more obviously on physical assets
employed on a project. It implies that managers have to
closely monitor and coordinate the optimal operation
or integrity of their assets to maximize productivity while
ensuring that safety is the number one priority.
Today operators, contractors, and suppliers are moving into a new era of asset management that challenges
42
them to work more closely together as a team so that no

player is left out of the loop, no aspect of the operation
is taken for granted, and improving the overall process
is the watchword. This is partly a result of the evolution
in the definition of asset management but does not necessarily mean that current practices are not covering
most of the bases.
ASSET INTEGRITY
MANAGEMENT
of Ocean Energy Management creequipment supplier to a large extent

The key to
ated a regulation that requires operastill boils down to having effective mainimproving asset
tors in the US Outer Continental
tenance systems in place and personnel
management
Shelf to develop and implement
with the training to execute them. All
a safety and environmental managethe old virtues of tracking and traceabilstrategies
ment system. In November 2010, the
ity of equipment still apply; much of it
will always come
entirety of the American Petroleum
is already subject to regulations and
down to forging
Institutes Recommended Practice
standards that responsible companies
75, development of a safety and enviendeavor not just to meet but to exceed.
a partnership
ronmental management program
Among other things, this is a big
approach.
for offshore operations and facilities,
information management deal. An
introduced in 2004, became a mandaexample is Weirs Iron Man asset mantory requirement.
agement software program used for
The situation is somewhat analoflow-control equipment. When assessing
gous with the raft of regulations
the refurbishing requirements for cergoverning operations offshore the
tain equipment materials, the relevant secNorthwest European Continental Shelf,
tions of the manual include instructions for
which were introduced following the Piper Alpha
an inventory check, visual inspection, wall thickness
disaster in 1988 and the recommendations of
inspection, disassembly and assembly, magnetic
the subsequent official inquiry contained in
particle inspection, pressure testing and deadthe Cullen Report (1990).
head testing, paint assessment, and final inspecIn this changing environment, the objective
tion, plus reports on the work order service
for equipment supply and service companies
history and Iron Man certificate of compliance.
is to make certain internally that the equipEssentially, all equipment must have an idenment they supply meets the highest standards
tifiable recorded history of its original construcand specifications. At the same time, they have
tion, installation, periodic and mandatory testing,
to be proactive in assisting clients in monitoring
servicing, etc. This is a matter of safety, reliability, and
performance and identifying and implementing the
performance as well as one of providing transparency
best solutions going forward. Weir SPMs specializaand accountability should an incident occur. It also is
tion for the upstream oil and gas operation is the
about inventory control. For example, in Weirs Willismanufacture of high-pressure well service pumps and
ton, N.D., service center, it stocks multiple replacement
related flow-control equipment along with repairs,
parts. A local oilfield services company recently needed
parts, and service of pressure control and upstream
a replacement TWS 2500 pump. By having the equiprotating equipment. As such, it provides oil companies
ment on the shelf as spare parts, support saved at least
and major service companies around the world with vital
four days of getting parts shipped from the main wareassets for their operations on a 24/7 basis, which it and its
house in Fort Worth, Texas, representing a major savings
customers both have to manage and sustain, something
in downtime.
best achieved by close collaboration.
Weir is addressing the need to automate as many of
these functions as possible to deliver increased efficiencies
Asset management
in project asset management programs. With more data, it
In recent years, Weir has placed increasing emphasis on its
also is possible to provide customers with better costing
asset management practice and its staff training on partand scheduling estimates for equipment and consumnering with clients. One of the challenges has been to
ables, all of which can improve the bottom line. This
avoid the silo mentality, where communication about the
includes working with the customers in analyzing the
role of equipment and services is walled off from related
timing of an asset reaching its minimum standards for
aspects of the project to the potential detriment of optisafe operations.
mal use. Roundtable reviews, which include oil company
The key to improving asset management strategies
operator, contractor, and supply representatives, tend to
will always come down to forging a partnership
have the most positive outcomes.
approach in which everyone involved consciously
Although the companys understanding of the terms
works together toward the same objective, with no
may change over time, optimal asset management for an
participant left behind.
43
ASSET INTEGRITY
MANAGEMENT
Offshore asset integrity: lessons

learned from the aviation industry
The application of standard aviation practices can go far
in prolonging the life of offshore assets.
Brian Mercer, Theon Ltd.
he global offshore industry can make strides in terms

of improving its offshore asset integrity by placing
an increased focus on predictive and preventative maintenance alongside more reliable data monitoring. By
doing so, the potential to reduce unplanned downtime
by 50% and opex by as much as 25% is realized.
Design for support

The starting point in the design of the asset and its facilities needs to be the consideration of the entire life cycle
of the project. Taking the time at the outset to consider
the changing conditions over the life of the field and
then factoring this into the design will pay dividends in
the long run. By having an understanding of fluid composition throughout the duration of the project, important decisions can be made at the concept stage when it
comes to plant design and material selection.
Too often, facility design focuses primarily on the
early stages of the project with limited regard for how
changing conditions will necessitate altering assets further down the line. Such an oversight could lead to
costly failures and the need for major and very expensive modifications at a later stage.
Integrating support into conceptual design was mandated by UK military aviation in 1991 and has paid dividends in improved reliability and maintenance and has
increased operations and reduced support teams. All of
this adds to reducing life cycle costs.
Improved maintenance data recording

Once the correct design has been implemented, it is
equally important to establish a detailed maintenance
program. The empirical data generated from regular
recording is vital in terms of capturing an overall picture
of the health of project-crucial equipment. Providing
greater detail when recording maintenance logs, such
as including details of the task performed, when it
took place, and what was found, can considerably aid
a project in the long term.
44
The application of a few lessons learned from the aviation industry by the offshore oil and gas industry can lead to more efficient management of assets.
Much offshore maintenance takes the form of a simple

tick-box exercise and acknowledges that maintenance
has taken place. However, by producing detailed maintenance records, companies start to build up a valuable set
of empirical data that can then be analyzed. These practices and the data gathered not only allow for consistency
across crew changes but also tell a story. They provide
much greater insight into the overall health of the asset
and will allow maintenance and reliability programs to
evolve and increase efficiency. This is particularly evident
in aviation, where detailed records provide a comprehensive history for the airworthiness of the aircraft and drive
regular reliability and maintenance cycle reviews. Consequently, over the life of an aircraft type, support programs
are optimized, with waste and inefficiency eradicated.
ASSET INTEGRITY
MANAGEMENT
By taking support requirements into account at the

earliest stages of a project, significant steps are taken
toward improved asset integrity and life cycle cost
improvements. Downtime can be dramatically reduced
along with maintenance team sizes and subcontractor
mobilizations. Likewise, warehouses full of spares, many
of which will never be used, can be optimized with the
potential for very large savings. Essentially, short-term
investment reaps dividends in reduced long-term financial outlay.
There is enormous
opportunity for
the offshore industry
to benchmark
against aviation
Health monitoring systems

Health monitoring systems are readily available and represent another tool that can be added to the arsenal.
Common examples include vibration analysis and thermography as well as oil and acoustic analysis. While
these are capable systems in their own right, their value
can be heightened by using them in a manner that
allows for a more integrated approach. All assets have
a wealth of performance monitoring systems to ensure
production optimization. By integrating the performance and health monitoring data with the maintenance
data, a more holistic view of the facilitys health can be
determined and more importantly trended. In turn,
this will lead to increased safety, more efficient production, and reduced costs.
Combining both health and performance data allows
for greater equipment control and real-time trending.
This enables operators to perform timely interventions
by observing certain trigger points.
A practical example of this would be a trigger point
caused by increasing vibration combined with performance tail-off and/or visible degradation. This is an indication that a piece of equipment is heading towards
failure and would allow the asset management team to
plan for required spares, manpower, specialist contractors, and the intervention point.
Many health monitoring systems are manpower-intensive. There is a definite gap in the marketplace for data
to be transmitted externally, monitored remotely by
experts, and fed back to clients. This real-time fingeron-the-pulse approach is one that aviation has been
using to provide safe and reliable operations for many
years. It is a tried and tested model that works very well.
Educating people
People are important to the process and should not be
overlooked. They are a vital aspect when it comes to asset
integrity. For this reason, educating individuals to adopt
a change in thinking and develop this overall support
philosophy presents a major challenge. Here, a crossEPmag.com | December 2012
departmental understanding is essential as there must

be synergy between design, operations and maintenance,
and supply chain. Beyond this, each and every individual
must understand the role they play in support of this.
This re-education program presents an opportunity to
change habitual ways of working for the better. Practical
and positive hands-on education is necessary to challenge traditional working practices in the industry. This
change in management philosophy will not only streamline maintenance processes but also will improve safety
and reliability while reducing personnel numbers and
subcontractor support.
This integrated approach to thinking will lead to
improved safety and a reduction in opex. The sector
can achieve improved efficiencies by introducing regular
reviews, performing timely and accurate interventions,
and establishing an active education program.
While there are definitely strong examples of effective
preventative and predictive maintenance programs within
the sector, there is an enormous scope for improvement.
We can all learn from those early adopters through building on and sharing best practices. By considering people,
plant, and process and their role at each stage of the project life cycle, asset integrity can be markedly improved
while leading to considerable savings.
For more than 20 years, aviation has been combining
all of the above aspects to constantly evolve and optimize
integrity while reducing costs. In both civil and military
aviation, continual challenges to drive down costs have
necessitated getting the most air miles for each dollar or
pound spent while ensuring that airworthiness is not
compromised. Consequently, that drive has stimulated
substantial innovation in technology, design philosophies,
and management systems to achieve that aim, and there
is still scope to improve. With that in mind, there is enormous opportunity for the offshore industry to benchmark against aviation, adopt a similar approach, and
generate comparable improvements in years to come.
45
HART E N E R G Y
USE THESE TARGETED

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EXPLORATION
MILESTONES
Explorers get bigger toolkit

With seemingly no end to their ingenuity and innovative spirit,
companies introduced several useful technologies in 2012.
Compiled by Rhonda Duey, Executive Editor
his year has been a busy one for oil and gas exploration. In addition to some truly mind-boggling discoveries (see shaded box), oil and service companies
continued to push the limits of hardware and software
technology to solve tough physics problems inherent in
looking into solid material. Here is a snapshot of some
of the major exploration technology advances in 2012.
Acquisition
WesternGeco and a Schlumberger senior fellow. If you

shoot two sources, you collect twice as much data.
Apache first started considering marine simultaneous
sources in 2010 while doing tests at the Forties field in the
North Sea. The company acquired a test to understand
the concept and to see if it was feasible. Those tests gave
the company confidence to try the acquisition methodology in a commercial setting.
The survey was done on a single vessel usually configured with flip-flop sources. Its not what we would have
predicted would be our first commercial job, Beasley
said. But its pleasing to see the technology demonstrated in that challenging environment, because it
opens the door for simultaneous sources in virtually
any marine acquisition.
CGGVeritas designed StagSeis to reduce E&P risk by
providing illumination for the best seismic images in the
most challenging areas where conventional wide-azimuth
acquisition fails to image targets below complex overburdens. It employs a staggered multivessel design acquisition
configuration producing ultra-long offsets up to 20 km
(12 miles) and full-azimuth coverage up to 10 km (6
miles) for improved illumination. It is BroadSeis-compatible, adding enhanced frequency bandwidth, which will
further improve deep imaging, according to the company.
Schlumberger unveiled the IsoMetrix marine isometric

seismic technology and IsoMetrix family of marine seismic products in June, which output isometrically sampled point-receiver data in crossline and inline
directions, capturing returning wavefield in 3-D.
According to the company, the new acquisition technology was developed through a 10-year research and
engineering program to provide the most accurate
images of the subsurface ever recorded. The IsoMetrix
system uses calibrated, multisensory micro-electromechanical sensor technology with sensors measuring
both acoustic pressure and vertical and crossline acceleration throughout the frequency range. It also facilitates
high-resolution near-surface
characterization, well integrity
planning, and 4-D repeatability,
and measurements are provided as customer deliverables.
WesternGeco researchers
announced the first commercial
job using simultaneous sources
in a marine survey. Conducted
by WesternGeco for Apache and
its partners offshore Australia,
the approach was characterized
as a complete revolution in
acquisition technology.
With every additional source
you put out, you increase the
productivity of the seismic crew
Conventional (top) versus IsoMetrix (bottom) data are exhibited in a North Sea time slice.
in a linear fashion, said Craig
(Image courtesy of Schlumberger)
Beasley, chief geophysicist for
48
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sign and planning. Utilizing some
the latest software modelling tools
d a wealth of experience we can
Ip you choose the right project
nfiguration for the geological
jectives, to ensure that you get the
)st from your data.
Making the RIGHT
EXPLORATION
MILESTONES
Hawk stations were swiftly

deployed with VectorSeis
digital sensors throughout
wooded areas. (Image courtesy of INOVA Geophysical)
ION has launched the

Calypso next-generation
redeployable seabed acquisition system, which the company said is designed to
operate at twice the depth
and deliver twice the operational efficiency of its predecessor system.
The system leverages tiltinsensitive multicomponent
VectorSeis digital sensors
that provide enhanced
broadband seismic data,
and it also features buoybased recording; a rugged
design capable of operating
in 5 m to 2,000 m (16 ft to
6,562 ft) water depth; and an unlimited number of
cables with twice the length (12 km to 24 km or 7 miles
to 15 miles), which shortens cycle time and increases
production.
To image an acquisition project in dense hardwood
forests, Tesla Exploration Inc. selected INOVA Geophysicals autonomous nodal technology, Hawk. After validating the Hawk system firsthand, Tesla purchased
10,000 Hawk stations (30,000 channels) configured to
support up to three analog channels plus a digital VectorSeis 3-C sensor interface for its upcoming projects.
The first project covered 207 sq km (80 sq miles) and
required 7,200 Hawk stations. Because of Hawks
Field Discovery/Extension
lightweight frame, crews
were able to transport the
Mamba North/North East
stations and batteries
Golfinho/Atum
throughout the densely
Jodari
wooded region efficiently.
Franco/Franco SW
The use of VectorSeis multicomponent digital sensors
Trion
further reduced station
Carcara
weight.
Pao de Acucar
Silixas Intelligent
Zafarani/Lavani
Distributed Acoustic
50
Sensor (iDAS) and ULTIMA Distributed Temperature

Sensor provide the opportunity to connect borehole
measurements to the reservoir by means of a single
unobtrusive sensor (i.e. fiber-optic cable) installed in
the wellbore.
The fiber-optic sensor assembly typically includes a
single-mode fiber used to measure acoustic responses
from seismic sources. Silixas iDAS data acquisition system has the ability to sample a 10-km (6-mile) fiber at
10 kHz, which equates to one acoustic measurement
per 1 m (3 ft) of fiber, creating up to a 10-km long fiberoptic acoustic array. The fiber-optic acoustic array has
Size
Location
Operator
20 Tcf
Mozambique
Eni
30 Tcf to 60 Tcf
Mozambique
Anadarko
5 Tcf
Mozambique
BG
unknown
Brazil
Petrobras
400 MMbbl to 500 MMbbl
Mexico GoM
Pemex
500 MMbbl to 1,000 MMbbl
Brazil
Petrobras
700 MMbbl oil/3Tcm gas
Brazil
Repsol
5 Tcf
Tanzania
Statoil
EXPLORATION
MILESTONES
Poissons ratio, which in turn are used for describing

brittleness and ductility in reservoir rocks. Brittleness
and ductility are of chief interest in organic shales
where hydraulic fracturing is necessary to produce
hydrocarbons.
the potential to be used like a continuous string of

mechanical geophone receivers placed along the entire
length of the well to measure changes in formation
fluid saturations or image subsurface geologic structure.
Standard seismic sources are used to generate the
acoustic signal in a nearby well or at
surface and are detected by the distributed fiber-optic sensor assembly.
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The high-density fiber-optic array has
an order of magnitude greater spatial
resolution than is typically recorded
using standard seismic receivers,
because of cost limitations. Once the
fiber-optic assembly is installed, crosswell seismic, vertical seismic profile,
and 2-D seismic surveys can be performed on demand as required.
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Processing
The Wiband seismic data processing
technology developed by ION Geophysical Corp.s GX Technology
group provides structural and stratigraphic high-resolution images
through the use of conventional
towed streamers. According to ION,
the new Wiband broadband solution
is not deterred by source or receiver
notches (or ghosts) in the frequency spectrum that typically limit
image resolution in marine exploration. The technology does not
introduce phase distortion and
instead improves images by reprocessing legacy or new acquisition data.
We take advantage of the properties of the ghost, said Nick Bernitsas,
senior vice president of IONs GX
Technology group. These properties
are somewhat predictable. We can
use those properties to then eliminate the ghosts. He added that the
new processing technology will give
operators the opportunity to
reprocess legacy data.
Using a model-based inversion,
Geotrace is computing accurate compressional velocity (Vp), shear velocity (Vs), and density. From these
quantities, it is further possible to
calculate Youngs modulus and
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51
EXPLORATION
MILESTONES
Model-based inversion uses a global

optimization algorithm to solve the
least-squares problem by minimizing
the difference between the recorded
seismic data and modeled seismic
responses of an initial earth model
with rock properties Vp, Vs, and density. The initial earth model is created
from Vp, Vs, and density logs, as well
as calibrated seismic velocity fields,
which are propagated through layers
that define zonal boundaries identifiable in the seismic data. The inversion
then computes the initial modeled
responses based on full Zoeppritz equaA sealed 3-D framework allows geologists to define intervals of interest. (Image courtions and its linearized approximation
to model the seismic wave energy parti- tesy of Landmark Software and Services)
tioning between two layers of different
optimizing petroleum exploration and field developrock properties. The final earth model is obtained
ment decisions.
through optimized iterations until the convergence
AIM is powered by TerraSuite, Transforms multiuser,
criteria have been met. Once the model is final, other
multidiscipline E&P software platform. Transform has
elastic moduli, Youngs, shear, bulk, Poissons ratio,
leveraged the capabilities of analytics seen in financial,
Lams, and P-wave modulus can be computed for
sports, and consumer markets to create streamlined
rock and fluid prediction, prospect evaluation,
workflows specifically designed to address the complexreservoir characterization, and fracture description.
ity and subtlety of modern conventional and unconvenInterpretation
tional reservoirs.
Transform Software and Services launched its analytic
By taking a unified approach to statistics, pattern
interpretation and modeling (AIM) system. Built on a
recognition, automation, visualization, and more, AIM
variety of proprietary algorithmic and technological
contributes to several business efficiencies, including
enhancements, AIM represents a new approach to
reduced cycle times, better use of human and capital
resources, and superior understanding of subsurface
characteristics and reservoir performance.
Landmarks DecisionSpace Geology software gives
mainstream geologists access to tools that promise to
revolutionize operational geology workflows. In addition
to traditional correlation, cross-section, and mapping
tools, DecisionSpace Geology combines classic geologic
concepts in sequence stratigraphy and structural geology with automated processes that enhance quality
and efficiency. New Dynamic Frameworks to Fill
capabilities enable geologists and geophysicists to
build a geometrically correct 3-D framework model
while they are interpreting. All geological and geophysical workflows leverage this integrated, multisurface
framework, which incorporates tools such as conformance technology, an advanced topology engine, and
dynamic updating.
Paradigm has developed EarthStudy 360, a method
Stress is determined from full-azimuth reflection data recovered
to recover azimuthal seismic data in situ, in depth, and
from an Eagle Ford shale play. (Image courtesy of Paradigm)
with full amplitude coverage of more than 360. The
52
EXPLORATION
MILESTONES
tool recovers full-azimuth data at subsurface

locations in a similar way to how borehole
tools sample formations. Two distinct
decompositions of the recorded wavefield
(full-azimuth reflection angle gathers
and full-azimuth structural gathers) produce images of the subsurface that can be
used by interpreters to better understand
anisotropy, stress and fractures, small-scale
discontinuities, and even geomechanical
properties derived from transformations
of amplitude data.
Hampson-Russell Software and Services
HRS-9 software suite features new architecture that includes a common intuitive interface and data management system to
The ability to differentiate facies type along with its probability of occurrence
improve custom workflows. The software
using the enhanced HRS-9 software suite can yield much more refined risk
interface acts as a dashboard, integrating
analysis. (Image courtesy of CGGVeritas)
all functionality from previously separate
programs into a single application. Addimation dynamics tester. With the Saturn probe, custional advancements include multi-threaded 64-bit
tomers can now obtain pressure measurements and
computing, allowing for the managed use of multiple
fluid samples where they were not previously possible,
CPU cores; batch processing for optimum resource
due to reservoir conditions.
scheduling; and the ability to crosslink output and
The Saturn probe is comprised of four elliptical sucinput processes.
tion probes mounted at 90 intervals circumferentially
ffA has released the GeoTeric seismic interpretation
around the tool, providing the largest surface flow area
workflow software to improve decision-making while
of any probe in the industry more than 500 times that
processing, interpreting, and modeling large volumes
of a standard probe.
of seismic data in less time. The 3-D seismic software can
be applied in conventional and unconventional reservoir analysis to directly translate geophysical data into
geological information, while making interpretation
workflows more efficient. The GeoTeric suite features
the Adaptive Geobodies technology used to extract 3-D
geobodies in areas such as braided channels or karst systems, where it would be impossible for other conventional seismic interpretation techniques.
Petrophysics
Schlumberger added the Litho Scanner high-definition
spectroscopy service to its Scanner Family rock and fluid
characterization services. The Litho Scanner service
measures an enhanced suite of elements, including carbon, magnesium, and aluminum, in real time to help
provide a detailed description of complex reservoirs,
including unconventional, shaly sand, and carbonate.
In addition, this latest wireline service provides a standalone quantitative determination of total organic carbon, critical for the evaluation of shale reservoirs.
Schlumberger also introduced the Saturn 3-D radial
probe as the newest module for the MDT modular forEPmag.com | December 2012
A Geoteric RGB blend is imaged to show detailed channel morphology. (Image courtesy of ffA)
53
DRILLING
REVIEW
Arctic and drilling efficiency

stretch drilling technology
With the industry focusing its efforts on drilling and completing wells
under harsher conditions, innovations have targeted improving downhole operations
in Arctic, deepwater, and HP/HT operations.
Compiled by Scott Weeden, Senior Editor, Drilling
ith Shell Oil beginning its drilling operations in

the Chukchi and Barents seas offshore Alaska and
ExxonMobil tying up with Rosneft for Arctic research, the
industry is moving into even more harsh climates in pursuit of oil and gas reserves. Innovators are trying to anticipate what the industry will need for the Arctic climate. At
the same time, deepwater drilling and production is escalating in areas offshore West Africa, East Africa, Brazil, and
the US Gulf of Mexico (GoM). Safety is being emphasized
in these regions with the best exploration targets.
In many of these areas, deeper reservoirs bring added
challenges with high temperatures and high pressures.
The industry is tackling these problems with new downhole tools designed to improve operating efficiency in
harsher environments.
Also, the increased interest in shale plays worldwide has

the industry devising new tools and techniques for maximizing production from those formations.
Arctic drillship
The first ice-class drillship was built for Stena Drilling by
Samsung Heavy Industries at its Geoje shipyard in South
Korea. Stena was awarded a five-year worldwide drilling
contract by Shell for the newbuild Stena IceMAX, which
will be the worlds first dynamically positioned, dual-mast
ice-class +1A1 drillship.
The vessel is designed for safe and efficient operations
in Arctic conditions. It has a displacement of 98,000 metric tons, an overall length of 228 m (752 ft), and a breadth
of 42 m (138.6 ft). The unit is capable of drilling to a total
depth of 10,700 m (35,310 ft) in water depths of 3,030 m
(10,000 ft) and has accommodation for 180 people with
state-of-the-art facilities.
Shell contracted the vessel for five years. The rig drilled
its first well in deepwater offshore French Guiana.
Drilling fluids
The worlds first ice-class drillship, Stena IceMAX, drilled its first
well offshore French Guiana for Shell Oil. (Image courtesy of
Stena Drilling)
54
Guar substitute developed. A guar substitute that addresses

two problems residue from the guar bean and guar supply uncertainty was developed by Halliburton. The company went to the marketplace and found a polymer that is
effective, mimics the behavior of guar systems, and leaves
no residue, which is the basis of a product called
PermStim.
Ward Dempsey, product champion, Production
Enhancement, Halliburton, said, We also needed good
proppant transport because we need to place a lot of
sand in those fracture networks. We needed low fluid
leak-off to get the frac width. And we needed a good
source of supply.
Halliburton began a controlled introduction of
PermStim, starting in the Rocky Mountain region with
29 vertical wells in the DJ basin followed by 40 horizontal
wells in the Williston basin and 20 wells in the Green
River basin.
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DRILLING
REVIEW
The polymer was used by Halliburton in Magnum

Hunter Resources Corp.s wells in the Eagle Ford, resulting in higher flowback and improved production. H.C.
Kip Ferguson III, executive vice president, Exploration,
Magnum Hunter, said, In adding a PermStim system, we
are able to document and figure out how much added
advantage we get with clean fluid and less residual fluid.
Bottom line, we added about a 20% increase over our
average IP [initial production] for our operated wells,
which is amazing.
High-temperature drilling fluid. Another drilling fluid was
introduced this year that comes from Schlumbergers M-I
SWACO for new ultra high-temperature applications. The
Rhadiant ultra high-temperature nonaqueous drilling fluid
system eliminates drilling fluid product degradation, prevents wellbore control issues such as barite sag, and provides a thin filter cake for enhanced logging conditions.
With wellbores approaching the 260C [500F]
threshold, there is a need for a drilling fluid that can
remain stable and deliver consistent performance
throughout the processes of well construction and openhole logging, said Joe Bacho, president, M-I SWACO.
The Rhadiant drilling fluid system is specially formulated to maintain a stable rheological profile with little
maintenance required. This drilling fluid system maintains extreme temperature stability even during prolonged static conditions. Stable rheologies in tandem
with ultra-thin and slick filter-cake deposits clear the
path for logging, casing, and cementing operations,
according to the company. These characteristics enable
accurate perforation placement, optimized completions,
and quality reservoir characterization.
Coiled-tubing drilling
The final two wells of a five-well coiled-tubing drilling
(CTD) campaign in shallow reserves of the Kansas Niobrara formation on the Kansas-Colorado border were
successfully drilled using drilling mud in the vertical
bore and air in the horizontal lateral, according to
AnTech Ltd.
The build sections of the final two horizontal wells were
drilled with mud using an 8-in. bit. The horizontal sections were drilled with an air mist using a 6-in. bit. Air
was used for these wells because the formations were
highly fractured and were unable to hold the pressure
of a liquid column.
The first horizontal well was drilled to 332 m (1,090 ft)
true vertical depth (TVD) with more than 442 m (1,450
ft) of lateral displacement. Another horizontal well was
drilled to 334 m (1,096 ft) TVD with a lateral displacement of 336 m (1,103 ft).
56
The drillable casing bit is part of a DWC system for medium to

medium-hard formations and over short sections in hard formations. (Image courtesy of Weatherford International)
This is the first time that a solid-state gyro has been

used for directional measurement while drilling, providing reliable data at all inclinations (vertical, horizontal,
and during the build section), which allows orientation to
be carried out accurately even while in the casing, according to the company.
Downhole tools
Combination directional accuracy. For optimizing well placement in target zones, PathFinder, a Schlumberger company, introduced the iPZIG at-bit inclination, gamma ray,
and imaging service for early bed boundary detection.
Developed specifically for unconventional oil and gas
markets and high-efficiency drilling applications, the service allows greater directional control and accuracy while
drilling with sensors placed directly behind the drill bit.
Changes in lithology and bottomhole assembly orientation are identified, and steering decisions are made to
stay in the production zone longer.
The iPZIG service is the only tool to provide total and
imaged natural gamma ray data with dynamic inclination
measurements at the bit, said Derek Normore, president, PathFinder. Geosteering adjustments in the well
trajectory can be made quickly, which reduces directional
drilling risks and allows optimal well placement in critical
hole sections.
The service has been successfully field-tested in coalbed
methane, heavy oil, and shale plays in North America and
Australia. Geological features identified from the realtime images aid in the geosteering interpretation, the
company said.
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DRILLING
REVIEW
Controlled frac initiation. By using openhole packers to

isolate multiple stages and ball-activated sleeves to divert
the fracing treatment into the formation, Baker Hughes
developed its DirectConnect to control hydraulic frac
initiation points and allow increased contact with the
reservoir.
A single ball opens five sleeves per stage, with each
sleeve including eight DirectConnect ports that are
placed 45 apart. After the ball is dropped, the sleeves
open, and hydraulic pressure pushes the telescoping
ports into the formation at high velocity. The ports act
like chisels to initiate fracs at controlled points along the
wellbore. Operators can frac through five sleeves per
stage with as many as 17 stages per well, connecting the
well with the reservoir through as many as 85 sleeves and
680 ports, Baker Hughes said.
Drill bits
Drillable casing bit. As part of its drilling-with-casing
(DWC) system, Weatherford designed its new Defyer DPA
drillable casing bit specifically for operators charged with

overcoming drilling hazards in hard, abrasive formations.
The drillable bit helps extend drilling operations to
deeper, harder formations at longer intervals without
compromising ease of drilling out the casing bit.
The bit eliminates the need for both dedicated drillout trips and deployment of a special drill bit for the
next hole section. The DPA series incorporates polycrystalline diamond compact (PDC) cutting elements
mounted on steel-alloy blades and is suited for drillingwith-liner and DWC systems in extended intervals. It is
constructed with 80% less steel in the drill-out path
compared to its conventional counterpart, imparting
additional damage protection.
The system increases efficiency, reduces cost, provides
hazard mitigation, increases safety, and is extended to
a wider range of formation types, the company said.
Applications for the DPA include DWC in medium to
medium-hard formations and over short sections in
hard formations.
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DRILLING
REVIEW
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The bit also is well suited for drilling or reaming through trouble zones such
as unstable formations or intervals with high-pressure transitions. The system
can be used to drill through cement plugs and ream casing or liners through
swollen or mobile formations while achieving higher rates of penetration and
reduced trip time.
Next-generation shale bit. Smith Bits optimized its steel-body PDC bits for
curve and lateral drilling performance. The next-generation Spear PDC
drill bit is tailored for unconventional shale plays.
Based on the experience of more than 6,000 Spear bit runs to date, We
incorporated specific design elements into the next-generation bit to deliver
an even higher rate of penetration [ROP], further lowering drilling costs in
unconventional wells, said Guy Arrington, president, Bits and Advanced
Technologies, Schlumberger.
The range of application-specific features includes improved body geometry
and hydraulic enhancements that were engineered to minimize blade packing, improve cutter cleaning, increase ROP, and ensure smooth directional
control.
For one customer in the Eagle Ford shale, the next-generation Spear bit
design was introduced successfully and set a new performance record. The
new bit drilled the entire lateral at an average rate of 24 m/hr (79 ft/hr)
compared to median performance of 20 m/hr (65 ft/hr), representing a
22% improvement in ROP.
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Mud motors, MWD tools steer systems

As an economic alternative to rotary-steerable systems, Weatherford developed the MotarySteerable system to capitalize on two well known directional
drilling tools mud motors and MWD tools while still offering many of the
inherent benefits of rotary-steerable systems (RSSs).
The system consists of a mud motor with a bent sub and standard hostile
environment logging/MWD system. A novel technique called targeted bit
speed (TBS) is used to achieve the results. This technique controls the bit
speed by modulating mud flow.
TBS essentially reduces the sliding commonly required for directional
drilling using conventional mud motors, thus reducing hole-cleaning challenges and limiting the creation of ledges that reduce drilling efficiency. In
addition, TBS enables full 3-D directional control and near-continuous rotation of the drillstring in much the same manner as an RSS.
Designed for wells ranging in size from 6 in. to 1214 in. and with low build
rates on the order of 0 to 3 per 30 m (100 ft), the system helps ensure a
higher quality and smoother borehole, even in extended-reach drilling scenarios. The system accomplishes this at a lower lost-in-hole cost risk compared to
an RSS. An auto-inclination feature allows automatic switching between conventional and TBS drilling modes.
An operator in the Eagle Ford shale play in South Texas selected the system
to provide vertical control in a 9.875-in. horizontal hole section while minimizing rig and nonproductive time. The system drilled from 1,125 m to 2,469 m
(3,691 ft to 8,100 ft) in a single run, with an average ROP of 45 m/hr (149
ft/hr). The vertically controlled drilling operation required minimal sliding
(less than 4% over the entire well section) and saved the operator more than
US $200,000 in rig time, Weatherford said.
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DRILLING
REVIEW
LWD
Petrophysical measurements. A sourceless LWD formation
evaluation service based on pulsed-neutron generator
technology that eliminates the need for chemical sources
was introduced by Schlumberger. The NeoScope technology provides real-time measurements close to the bit to
guide interpretation and decision-making in all drilling
environments.
With its compact design and neutron-on-demand
technology, this service saves rig time, reduces risks, and
provides a comprehensive suite of petrophysical measurements, said Steve Kaufmann, president, Drilling and
Measurements, Schlumberger.
Schlumberger has field-tested the NeoScope service in
more than 200 jobs in more than 30 countries in a wide
range of formations and environments from tight carbonates to conventional clastics to validate the measurement
response. For example, the service was used to acquire a
Using a mud motor with a bent sub and a standard hostile environment logging/MWD system, Weatherford International devised
a technique called targeted bit speed, which controls the bit
speed by modulating mud flow. (Image courtesy of Weatherford
International)
62
full suite of petrophysical measurements in a directional

exploration well in Africa, where poor borehole conditions prevented wireline tools from reaching the entire
interval of interest.
The NeoScope measurements acquired helped save
the customer seven days by eliminating the time and cost
associated with chemical source deployment while providing the data required to successfully evaluate the well.
LWD sonic tool. Because of shales ultra-low permeability,
achieving economically viable production rates requires
horizontal drilling and hydraulic fracing. Horizontal
drilling in complex shale reservoirs requires real-time
access to downhole data for successful well placement
and maximum hydrocarbon recovery, said Weatherford
International.
Operators rely on data from LWD tools to identify sweet
spots, optimize wellbore placement, and plan the fracing
and stimulation programs.
Understanding the geomechanical properties of the
shale, which control both the occurrence of natural
fracs and the creation of hydraulically induced fracs, is
key to successful stimulation and completion of wells in
a shale reservoir. Most organic shales exhibit significant
anisotropy in the geomechanical properties, showing
variations in both the horizontal plane due to variations
in tectonic stress and variations in the vertical plane due
to intrinsic bedding features of the formation.
The CrossWave LWD sonic tool provides 360
azimuthally focused measurements of compressional
and shear wave velocities that allow 3-D characterization
of geomechanical properties (Poissons ratio, Youngs
modulus, etc.) along the length of the horizontal wellbore in mechanically anisotropic shale reservoirs,
according to Weatherford. This allows the operator
to select the best areas for frac stage placement while
optimizing the frac design and execution.
The LWD azimuthal sonic technology has been successfully tested in horizontal shale reservoir wells in the
northeastern US, where vertically transverse isotropic
shear wave anisotropy of 5% to 50% was clearly measured
in the horizontal sections. Borehole images constructed
from azimuthal shear slowness data provided a clear
visual indication of the orientation and magnitude of the
shear wave anisotropy. Compressional slowness borehole
images compared with conventional images from LWD
azimuthal gamma ray and density tools can provide information on formation dip and the stratigraphic position of
the horizontal wellbore, the company said.
Additionally, the measurements provide geophysicists
with key anisotropy parameters, complementing data
available from vertical wells to provide a complete 3-D
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DRILLING
REVIEW
compressional and shear velocity model to enhance seismic data processing and interpretation.
Imaging-while-drilling service. High-resolution laterolog
resistivity and full-borehole images in conductive mud
environments are provided on a single collar as part of
the MicroScope imaging-while-drilling service from
Schlumberger.
This service, already successful in more than 150 jobs
across 10 countries, addresses the challenges in unconventional shale plays, carbonates, and clastic reservoirs.
The MicroScope technology was used in a tight gas carbonate reservoir in Asia; measurements facilitated formation evaluation and clearly identified and defined the
structural dips, faults, and fracs along the horizontal section in a complex thin dolomite gas reservoir. The well
was completed with an IP rate of gas of 4.2 MMcf/d,
which exceeded the production goal.
The MicroScope tool acquires
focused laterolog resistivity measurements and images at four different
depths of investigation with
azimuthal sensitivity. These measurements are essential for calculating
reserves estimates, placing horizontal
wells, facilitating well placement and
frac analysis to optimize hydraulic
fracing stage designs, and optimizing
completion design, the company
added.
BOP actuators
Internal BOP actuator. Global Drilling Support International designed an advanced, remote, internal BOP
(IBOP) actuator based on a design philosophy that
emphasizes a simple compact structure with fewer
moving parts. The compact footprint of the actuator
allows ample room for elevator links to pass. Its threecylinder design provides uniform actuation.
The proprietary actuator can open and close the
IBOP while in rotation, eliminating problems often
associated with having to stop rotation before opening
and closing. The unit also provides manual operation
through actuation cameras.
ROV actuates subsea BOP. A subsea BOP actuation tool
was successfully tested offshore West Africa in more than
1,000 m (3,300 ft) of water by Forum Energy Technolo-
Drilling riser
Two syntactic foams have been developed by Balmoral Offshore Engineering for use in drilling risers with
operating depths to 4,545 m (15,000
ft). The new foams were designed
by the companys technical and
A technician works on the MicroScope imaging-while-drilling service from Schlumberger,
engineering teams in Aberdeen
which addresses challenges in unconventional shale plays, carbonates, and clastic reseras part of an R&D investment provoirs. (Image courtesy of Schlumberger)
gram. Drilling operations in waters
of great depths and high currents,
such as the GoM and offshore Brazil, demand the
gies. The tool closes the BOP remotely using a workdeployment of ultra-heavy riser strings, said Jim Hamilclass ROV when the BOP cannot be operated by
ton, Balmorals international business development
conventional means.
director. The essential increase in mechanical performThe actuator can be fitted to an ROV skid assembly
ance demanded to operate at these depths cannot be
or directly to the BOP. It is reportedly able to actuate
accompanied by reduction in available buoyancy. So
most BOPs in less than 45 seconds to seal the wellbore,
foam density reduction was targeted alongside mechaniaccording to the company. It can deliver more than 79
cal performance improvement.
gal/min of hydraulic fluid at pressures up to 7,500 psi.
The foams are called Durafloat Superlite and
Fluids such as seawater, mineral oils, or glycol fluids can
Durafloat Superlite-X.
be used.
64
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PRODUCTION
REVIEW
Production 2012 a year in review

A big bundle of new oil and gas tools released to the market in 2012
looks to increase production and decrease headaches in 2013.
Compiled by Jennifer Presley, Senior Editor, Production
host of new products made 2012 an exciting year of

innovation in the production technologies market.
Well completion and stimulation

In June Schlumberger released SPARK, its new stimulation technology delivery platform. SPARK works with
third-party services to leverage high-pressure pumping
equipment. The platform includes the companys HiWAY,
OpenFRAC, and ClearFRAC technologies, which create
infinite conductivity channels, provide high performance,
and increase fracturing efficiency with less reservoir damage, according to the company.
The platform was used in the Eagle Ford formation by
an operator that had already had a third-party frac fleet.
It was able to use its frac crew in conjunction with the
HiWAY technology through the SPARK platform. The
operators production was increased by more than 20%,
water usage was reduced by 25%, and proppant consumption was reduced by 42%, according to the company.
In addition to SPARK, Schlumberger released Mangrove,
its new completion and stimulation design software. It
allows custom staging and perforation designs to be engineered beyond a geometrical approach, which in turn
would enhance stimulation coverage, flow rates, and
return on investment. Developed on the companys
pre-existing Petrel E&P software program, the technology
allows users to access a shared earth model, which the
company said eases the process of program designs.
The software offers a completion advisor workflow for
perforation picking and staging and includes predictive
models for hydraulic fractures and conventional planar
fractures. It also can integrate seismic, geological, geomechanical, and microseismic measurements and data, providing an integrated seismic-to-simulation workflow. The
software was recently used in the Marcellus shale, where it
eliminated screenouts and increased production by more
than 50%, according to the company.
An extended range of SIM System technologies for flow
control by Peak Well Systems offers improved flexibility
for well intervention and production operations. Built
around the companys SIM Running Tool, the new prod66
Mangrove softwares unconventional fracture model (UFM) uses

pre-existing natural fracs and a mechanical earth model to simulate frac geometry. Microseismic data is superimposed over the
UFM results for comparison. (Image courtesy of Schlumberger)
uct line includes retrievable and permanent plug systems,

mechanical leak detection tools, gas lift straddles, and
large-bore gauge hangers. According to Peak, these
downhole tools complement an existing range that, when
combined, can be successfully deployed in both large
(512-in.) and slim (238-in.) wells. The new SIM products are
designed to be set anywhere in the tubing as they do not
require a nipple profile. They also can be set mechanically
on slickline, eliminating the need for complex setting
tools, pyrotechnics, or explosives, which makes deployment safer and more cost-effective, the company said.
A new openhole multistage completion system offering
an alternative to conventional plug-and-perf (PNP) completions is now offered by Superior Energy Services. The
system incorporates a ball seat design that can facilitate
easier milling and lower pop-off pressures for production
initiation, according to the company. The product is
designed for use in land-based completions in unconventional tight sand, shale, and carbonate reservoirs. The system includes a ball-actuated isolation valve, ball-actuated
frac sleeves, a pressure-actuated frac sleeve, and single-element openhole isolation packers. To prevent the packer
from being set while going in-hole, the PNP system comprises single-element openhole isolation packers with
metal element support. It also includes a permanent
PERFORMANCE MATTERS
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Gas and fluid channeling can be
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casing annulus packer (CAP) above

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Thousands of casing annulus
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PRODUCTION
REVIEW
hydraulically set hanger packer with hydraulic running

tool release.
Weatherfords ClearWELL scale-treatment technology
was upgraded recently to improve scale control in a variety
of applications. The new R-series technology works by
sending an AC electromagnetic signal through the pipe
and production equipment to control the size of scale
crystals and where they form. The charged ions in the saturated aqueous phase respond to this electromagnetic signal by absorbing energy and migrating to form areas of
slightly higher concentration. Homogeneous nucleation
begins at these more concentrated regions, and small crystallites form in the fluid phase rather than at the pipe wall.
The small crystals remain suspended in the fluid and exit
the system without collecting on the pipe and production
equipment internals.
Water solutions
To simplify complications caused by
large quantities of produced water,
water solutions companies have
found ways to simplify the purification process to save operators time
and costs. Aquatech released its new
SMARTMOD modular evaporator
technology. The system uses a vertical-tube falling film evaporator
design that treats difficult produced
water sources. According to the
company, the technology can
reduce in-field installation costs up
to 75% by eliminating the need to
build a large evaporator building or
spend exorbitant costs on foundation labor and materials. This is
accomplished through a new design
that has reduced the tools center
for mass and evaporator weight.
The design also reduces freight
costs during transportation, the company said.
With its new Hydrolutions water management system, Swire Oilfield Services has, in its words, revolutionized the way water is transferred during the
hydraulic fracturing process.
The HydroDrive system features high-volume
pumps; discharge manifolds; a specially designed
retrieval and deployment system; and a leak-free,
flexible pipe. The pipe, available in multiple sizes,
can be manipulated to curve around obstructions,
does not leak like traditional aluminum pipes, and
produces 140 bbl/min flow rate. The product has
68
seen success in the field, with Apache Corp. being one of

the first to adopt it.
Halliburtons Total Water Management Solutions initiative provides new water management services to operators
in the Permian basin, Niobrara, and Eagle Ford shale
plays that reduce the amount of fresh-water used for
hydraulic fracturing as well as overall costs for waterrelated services in unconventional developments. The
company deployed its CleanWave technology, which uses
electrocoagulation to remove suspended solids from water
and make it into clear brine for fracing, to recycle flowback and produced water and to improve wellsite economics. According to Halliburton, the eventual goal is to
eliminate the need for freshwater use in fracing operations. Toward that end, the company is investing in additional technology, water-related equipment and facilities,
and development of high-performance fracing fluid systems that can be formulated with recycled or produced water.
Osorb field water treatment offered
by Produced Water Absorbents Inc.
(PWA) is a swellable, molecularly modified silica capable of absorbing
volatile organic compounds, including
LEFT: The extended SIM System product
range features tools that do not require a
nipple profile and can be set on slickline.
(Image courtesy of Peak Well Systems)
BELOW: A technician works on Red Spiders eRED-FB on the production line. The
technology effectively eliminates the need
for wireline runs during completions operations. (Image courtesy of Red Spider)
PRODUCTION
REVIEW
tion waters in the Clinton, Bakken, Utica, and Wamsutter

formations.
Software
Purified water is fed to the boiler for steam generation and

injected again into the formation, continuing the cycle.
(Image courtesy of Aquatech)
formation hydrocarbons and upstream production chemicals. In this closed-loop system, the captured hydrocarbons
are recovered with little or no waste stream, and the regenerated Osorb can be reused. Absorbed contaminants are
removed using a mild thermal treatment or rinsing.
Recent field tests conducted by Texas A&Ms GRPI
and pilot-testing of trailer-mounted units by E&P firms
found that, according to PWA, 90% to 99.9% of soluble
and micro-droplet volatiles were removed from produc-
Knoesis, Halliburtons new production enhancement

engineering and analysis service, assists operators in optimizing completion efficiency and asset development. The
applications provide improved knowledge of the reservoir
and its stimulation characteristics. Two of four components are currently available: Foray and Delve.
Foray enables Halliburton technical advisors to provide
operators with insight into the frac network created by
generating a 3-D representation based on the microseismic events observed during the treatment. The representation allows design decisions to be made to control the
nature of the frac network generated in the reservoir.
Delve enables access to both historic and current job
design data and operating experience that can be leveraged to the operators advantage through enabling
improved stimulation job design and execution.
Innovative Oil and Gas Technology

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PRODUCTION
REVIEW
Schlumbergers Avocet 2012 production operations software platform features advanced workflow automation,
online artificial lift management, predictive data analysis
for candidate selection, and web-based key performance
indicators (KPIs) visualization for a complete view of
operations. It also connects directly to engineering simulation models and analytical applications, providing
insight into the root causes of production shortfalls and
further improving production operations management
in a broad range of asset disciplines, the company said.
The engineering analysis platform effectively integrates well operations and production management
systems, including capturing and validating field data,
production, and equipment surveillance and tracking
specialized oilfield operations. According to Schlumberger, this unification of data and engineering models
in a single environment allows users to identify problems more quickly, minimizing downtime and enabling
continuous production optimization.
Regardless of asset location, the Avocet platform offers
a view of asset performance and KPI monitoring as well
as visualization of relevant information that can ultimately
affect production and impact performance.
Reservoir monitoring
For decades, operators have relied on pulsed-neutron
tools to quantify and locate hydrocarbons in a reservoir.
The first pulsed-neutron tool, introduced to the industry
in 1964, had one detector. In 1969, two-detector arrays
were introduced. For decades, two-detector arrays were
the industry norm until the first three-detector array was
introduced in 2004.
Increased interest in gas has prompted demand for a
new approach to behind-casing evaluation. Weatherford
tweaked the design of the detector array further, introducing a novel, five-detector-array tool, the Raptor, in
2010. The large detector array enables it to sense more
formation volume. Beyond its hardware features, the
Raptor tool is equipped with proprietary algorithms and
incorporates automated characterization techniques
that overcome drawbacks typically associated with
more conventional pulsed-neutron tools. The tool
also can obtain high-value behind-casing measurements in gas and mixed-salinity reservoirs.
Raptor cased-hole reservoir evaluation technology is a pulsed-neutron system offering

high-fidelity carbon, oxygen, sigma, and
formation gas measurements. (Image
courtesy of Weatherford)
70
The Avocet software platform provides a wide range of solutions

for integrated operations-to-engineering surveillance and analysis, such as delivering KPIs on the performance and analysis of
PhaseWatcher permanent multiphase flowmetering with Vx technology. (Image courtesy of Schlumberger)
Artificial lift
Red Spider is expected to deploy its new eRED-FB downhole valve products on a series of subsea dual-electrical
submersible pump (ESP) wells this summer in the UK
North Sea. The technology will allow the removal of all
wireline runs from the completions operations, offering
significant savings and risk reduction, the company said.
The eRED tool is the companys first to implement its
patented ROCT 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 close to US $500,000 during a single subsea completion operation, typically reducing slickline runs
from eight to one. In deepwater workover operations, for
example, savings of up to 36 hours and approximately
$801,600 have been recorded in a single job.
Artificial Lift Co. has installed the first rigless ESP sting
at a Saudi Aramco-operated field in the Middle East,
resulting in cost savings on rig utilization and electricity
expenditures, decreased downtime, and less oil deferment, the company said.
The operation comprised a 134-hp, rigless ESP system
with a 6,000 b/d pump. The system, which includes Artificial Lift Co.s Permanent Magnet Motors and Wet Connect system, was installed at a depth of 1,865 m (6,119 ft)
and also included the installation of a downhole ESP
gauge, packer, and subsurface safety valve assemblies to
optimize production at the well site.
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WELL FLOW MANAGEMEN
UNCONVENTIONAL:
EAGLEBINE
Eaglebine producers bring new

technology to the historic Woodbine
A liquids-rich play emerges from the tight Woodbine sands
at the eastern edge of Texass Eagle Ford shale.
Jennifer Presley, Senior Editor, Production
short time before the Eagle Ford shale play took

flight, several companies had quietly set about writing a new chapter for the petroleum history books on
what would become known as the Eaglebine play. For
their efforts, the production numbers from wells drilled
in the play are starting to show a significant return.
Geology of the play

Current activity in the Eaglebine is focused in Brazos,
Grimes, Leon, Madison, Robertson, and Walker counties.
The Eaglebine is the East Texas extension of the Eagle
Ford. The name was coined to encompass both the
Woodbine Group and the Eagle Ford Group. Bounded
by the Austin Chalk and Buda limestone formations,
the Eaglebine comprises conventional and unconventional reservoirs.
Formed during the Cretaceous period from fluvial flow
deposition and marine sediments, the formation is widely
spread across East Texas. The sands thicken between the
San Marcos arch to the west and Sabine uplift to the east.
The play is more shallow and oily to the northwest and
becomes deeper and gassier to the southeast.
A rig drills into a Terrace Energy
In remarks at the recent Hart Energy DUG Eagle

Ford Conference, Thomas D. Bowman, vice president,
Evaluation, Geology, and Geophysics for ZaZa, said that
silica-rich sands and silts are intermixed in the entire
Eaglebine section. The very thick interval contains
more than 305 m (1,000 ft) of mixed-lithology sediments. Within the Eaglebine, there are two broad divisions: The upper Eaglebine has numerous sandstone
packages interbedded with organic-rich shales, and
the lower Eaglebine is more of a shale resource play.
Additionally, deeper Lower Cretaceous targets such as
Buda, Georgetown, Edwards, and Glen Rose exist
in the area.
With all of the different formations that operators
have to choose from in this area, I expect to see plenty
of growth, said Nicholas Hopkins, district engineer for
Weatherford. Operators are able to use one well site
and drill multiple wells to multiple formations instead
of multiple wells to a single formation.
Since 2007, about 100 horizontal wells targeting the
Woodbine sands have been drilled. Through the application of technologies like horizontal drilling and hydraulic
fracturing, producers are seeing success in the tight sands
of the Eaglebine play. In remarks made at the Enercom
Oil and Gas Conference in Denver in August, Floyd Wilson, chief executive of Halcn Resources, said that horizontal drilling and modern completion techniques were
the game-changer in the play.
and JBL Energy Partners

prospect in Leon County.
(Image courtesy of
JBL Energy Partners)
72
Eaglebine producer roundup

Several companies, both large and small, are operating
in the area. Heres a look at the activities of a few.
Crimson Exploration. Crimson Exploration has been
actively developing the Woodbine in the 18,500 net
acres the company holds in Madison and Grimes counties, which are divided into three areas: the Force, the
Iola-Grimes, and the Chalktown. In an operations
update, the company said that each area has slightly
different characteristics, including different sand lobes
within the overall Woodbine section, significant in
that it will require more than one well in each area
to optimize production.
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UNCONVENTIONAL:
EAGLEBINE
The company estimates that there are approximately

115 net potential drilling locations based on 160-acre
well spacing, with a total net potential of more than 34
MMboe in the three areas.
In Crimsons Force area, located in Madison County, the
company has approximately 5,750 net acres and has been
operating there since early 2009. According to the company, there have been more than 50 wells completed in
the Madisonville-West field (Force area) using modern
horizontal drilling and fracture stimulation completion
techniques.
Two wells of note in the Force area are the Mosley #1H
and Payne #1H. As the companys first horizontal well in
the Force area, the Mosley was spudded in January 2012.
In its first four months of production, the well produced
128,000 boe.
The Payne well was completed and placed online in
July. The well tested at a gross initial production rate
of 1,332 boe/d on a 4064-in. choke and 328 psi of tubing
pressure, the company said. The well was drilled to a
total measured depth of 4,916 m (16,130 ft), including
a 2,274-m (7,460-ft) lateral, and was completed using
26 stages of fracture stimulation.
Crimsons Iola-Grimes area, located in northwest
Grimes County, covers approximately 7,650 net acres.
A stratigraphically older Woodbine sand that is present
in this area but not in the Force area is what caught the
companys interest. The nearest offset horizontal well to
produce from this Woodbine objective is approximately
1.6 km (1 mile) northwest of the A. Yates #1H and has
produced 179,000 bbl of oil in 10 months.
The Yates #1H began production in July at a gross initial production rate of 472 boe/d. The well was drilled to
a total measured depth of 4,670 m (15,320 ft), including
a 1,849-m (6,065-ft) lateral, and was completed using 22
stages of fracture stimulation.
The companys Covington-Upchurch #1H well, also
in the Iola-Grimes area, was drilled to a total measured
depth of 4,642 m (15,228 ft), including a 1,582-m
(5,190-ft) lateral. The company recently said that in
preparation for completion operations it perforated
the toe stage only of the lateral section, and during a
24-hr period the well produced naturally at a rate of
approximately 6.9 MMcfe/d.
The well has yet to be fracture-stimulated, and the
reported rate represents production from only one of the
15 planned perforation stages. The rate is, according to the
company, anticipated to improve upon completion of fracture stimulation operations along the entire lateral. Additional capacity to handle the full gas volumes from this well
are expected to be developed in the area by year-end.
74
Encana Oil and Gas has found success in its wells located in
Robertson and Leon counties. (Image courtesy of Encana Oil
and Gas USA)
The companys Chalktown area covers approximately

5,100 net acres in Madison County. This area tests the
Lewisville Sand, a lower Woodbine objective that has
produced from vertical wells in the immediate area.
The Vick Trust #1H well was drilled to a total depth of
4,468 m (14,660 ft), including a 1,756-m (5,760-ft) lateral, and completed using 21 stages of fracture stimulation. Reported production rates of the well to date have
been as high as 225 boe/d.
Encana Oil and Gas USA. Encana Oil and Gas USA has
leased 115,000 net acres in the play, with an estimated 8.6
Bboe of petroleum initially in place. The company said
that it has drilled eight wells to date, with plans to drill
and complete another six in the coming year. Out of the
eight drilled, two wells of note are the Clyde Williams
#2H and the Loraine McMurrey #1H.
The Clyde Williams #2H well, located in Robertson
County, was drilled to total depth in 12 days and from
spud to rig release in 16 days, making it one of the fastest
wells drilled in the play, according to the company. Total
depth of the well is 2,173 m (7,130 ft), including a 1,908m (6,261-ft) lateral, and the well was completed in 21
stages. The reported average daily production from the
well is approximately 198 boe/d.
The Loraine McMurrey #1H well, also located in
Robertson County, was drilled to a total depth of 2,743
m (9,000 ft) and is reported by the company to have the
UNCONVENTIONAL:
EAGLEBINE
longest lateral in the play at 2,545 m (8,349 ft) with a

two-casing string program.
Halcn Resources Corp. With approximately 200,000 net
acres prospective for the Woodbine, Eagle Ford, or other
formations leased or under contract in Leon, Madison,
Grimes, and Polk counties, Halcn Resources Corp. is
the leader of the pack in terms of leased acreage in the
Eaglebine.
According to Halcn, its first Woodbine completion,
the AM Easterling-Gresham A #1H well in Leon County,
was drilled to a total depth of 4,348 m (14,265 ft), including a 2,051-m (6,730-ft) lateral, and completed with 24
stages. The reported initial gross production rate of the
well was approximately 942 boe/d on a 3264-in. choke.
Over the first 30 days, the average daily production from
the well was approximately 706 boe/d.
In a recent 3Q 2012 operations outlook, the company
said it has 15 horizontal wells producing, six wells being
completed or waiting on completion, and five wells being
drilled.
JBL Energy Partners. JBL Energy Partners has two different areas in the Woodbine play where it is actively
involved. In June, the company said that it entered into a
joint venture agreement with Terrace Energy LLC on one
of its Woodbine prospects. Terrace acquired at 75% leasehold interest in approximately 13,500 acres. The first horizontal well on the prospect was spudded in August.
JBL Energy sold its interest in 17,000 acres in Leon
County to Halcn in August. Of that sale, Jason Lane,
CEO of JBL Energy Partners, said, JBL Energy Partners
has over 10,000 acres in the Woodbine that we are currently mocking up a drilling program for, and [we] are
using the funds from this sale to further develop multiple
projects in both East Texas and the Gulf Coast region.
In October, the company and its partners, which
include Furie Petroleum, Amerrill Energy, and Sun
Resources NL, outlined a horizontal drilling program
for a 3,800-acre prospect in Leon County. The program
calls for drilling in 16 locations over the next two years
with the first two wells scheduled to be spud in 1Q 2013.
The company said that total reserves are estimated at
roughly 7 MMbbl for the play.
ZaZa Energy. ZaZa Energy has a reported 90,000
net acres leased in the Eaglebine play. The company
recently said that it has completed drilling and running
production casing on its Stingray A-1H well in Walker
County to a true vertical depth of 3,590 m (11,780 ft),
and a 1,433-m (4,700-ft) lateral was drilled in the objecEPmag.com | December 2012
tive section. A pilot hole through the objective section

was drilled with sidewall cores collected, and a full suite
of logs was run, including a post-processed ELAN Shale
Oil Evaluation (ELAN) for the empirical measurement
of hydrocarbons in place. ZaZa said that the results from
the technical evaluation of the well were very encouraging, with the ELAN analysis estimating 21 Bcf and 29
[MMbbl of oil] per section in place. The company
noted that estimates are preliminary and subject to
revision. Initial production is planned to begin in late
November 2012. The company said, based on initial
information gathered from the well, it has entered into a
multiwell rig contract with Nabors Drilling USA, plans to
install production facilities, and has entered into a multiyear lease for a field office and yard in Walker County.
Regarding its operations, Todd A. Brooks, CEO of
ZaZa, said, The Eaglebine play is one of the most
exciting emerging liquids-rich resource plays in the
country, and the data we have in-house supports this
sentiment.
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75
OFFSHORE
2013
Offshore tide rising in 2013

As wartime British Prime Minister Winston Churchill once said, It is always wise to look ahead
but difficult to look further than you can see. Bearing those wise words in mind, what are the
key trends and events likely to rise over the horizon as the industry moves into 2013?
Compiled by Mark Thomas, Senior Editor, Offshore
he offshore industry has always been an integral part of

the global oil and gas supply mix. The increasing contribution from deepwater and ultra-deepwater projects
on a steep growth curve and forecast to stay that way for
the next decade and beyond is playing a key role in raising the level of offshore production required to help meet
world demand, itself rising at around 1% per year.
Total offshore oil production has been gradually rising for decades, but in recent years its pace of growth
has picked up. It currently accounts for around 35% of
global crude production, with deep and ultra-deepwater
output making up around 9% of the figure.
Naturally, the level of total capital spending offshore is
also soaring. Despite the headline-grabbing nature of
the booming deepwater market, the shallow-water sector, up to 300 m (1,000 ft) water depth, is still expected
to account for the larger share (around 60%) of the
total figure forecast for 2013 of circa US $275 billion,
according to recent figures from PFC Energy.
The deepwater segment will, however, continue to
grow at a higher rate. The segment is expected in the
longer term to overtake shallow-water spending by
around 2020, driven by the ongoing surge in exploration and development spending in Brazil, West Africa,
and the Asia Pacific regions.
The economics for individual offshore oil projects are
expected to remain healthy over the coming year, with
crude prices forecast (as well as they ever can be) to
remain above the $75/bbl mark. This is a price level at
which all but the most marginal field developments are
economic.
Most experts can safely predict that significant discoveries will continue to be made in the emerging frontier
provinces such as the east coast of Africa, the eastern
Mediterranean Sea, and the west coast of Australia in
addition to the established offshore hotspots of Brazil,
the Gulf of Mexico (GoM), and West Africa.
New offshore frontiers: the Arctic

In offshore terms, it is the emergence of the Arctic as a
realistic province for new oil and gas exploration and
development driven largely by Russia that is expected
to increasingly influence the strategic thinking of the
supermajors and national oil companies. Most of the
major players have been involved in the worlds established deepwater producing plays for at least the past two
decades, while they have also been busy in the past two to
With economics for individual oil projects to remain healthy over the coming year and a crude price expected to remain above $75/bbl, investment
in both offshore exploration and development activity is forecast at US
$275 billion for 2013. (Image taken by Harald Pettersen from onboard the
Aker Barents rig, courtesy of Statoil)
76
OFFSHORE
2013
by Russias Gazprom under its own steam. The first commercial offshore oil drilling in the companys Arctic
waters is expected to get underway from its Prirazlomnaya platform in the Pechora Sea in 3Q 2013. If this
project does hit its schedule and drilling gets underway
from the platform which has been on location for at
least a year while the operator has addressed various
technical concerns it will signify the practical start
of a major new era for the Arctic offshore.
The global picture

Gazproms Prirazlomnaya platform in the Pechora Sea is on location and expected to start commercial drilling in 3Q 2013. If it
goes to plan, Prirazlomnaya will herald the practical start of a
major new era for the Arctic offshore sector. (Photo courtesy of
Gazprom)
five years building positions in the newly emerging areas.

So essentially there is nothing new happening there.
The Arctic Circle, however, is very much a newcomer for
the offshore sector despite the projects in sub-Arctic areas
such as Sakhalin off Russias east coast. Many within the
E&P business had very real doubts up until the past year
or so as to whether this harshest of environments could be
truly overcome, both in terms of the technological challenges and the weight of public opinion following environmental disasters such as Macondo in the GoM.
But the continuing advances in remote and subsea
field development solutions; ice-resistant platforms;
long-distance pipeline tiebacks; flow assurance innovations; ROV capabilities; and heightened regulatory
regimes and environmental safeguards, largely due to
the industrys deepwater activities, mean that from a
technical and commercial perspective, fields today are
able to be considered for development.
Most of the activity planned for the high northern seas
within the Arctic this coming year will revolve around
longer term plans by those companies who have had the
foresight to form strategic joint ventures (JVs) with Russian companies such as Rosneft and Gazprom. In terms of
actual offshore activity, Eni, ExxonMobil, BP, Shell, and
Statoil are all in the early stages of planning seismic activity
in areas such as the Barents Sea and Kara Sea in partnership with Rosneft, although any drilling activity under the
umbrellas of these JVs remains several years away. All, however, will largely spend the coming year putting in place
the elements required to ramp up the technology
exchange elements of their respective deals.
However, the Arctics flagship event in 2013 to watch
out for is likely to be one that has been entirely driven
So what about the less icebound parts of the world?

As usual, for the closest insights into the likely offshore
business environment for next year, it is often best to ask
the contracting community. According to Technip of
France, the regional breakdown goes as follows for 2013:
North America:
Upswing in US GoM; and
Increasing activity offshore Mexico.
Latin America:
Good visibility in Brazil, with a ramp-up of presalt
developments.
North Sea:
High level of subsea awards continuing;
Step change in size and complexity of offshore
developments; and
Increase in platform activity.
Middle East:
Sustained volume of activity; and
Good opportunities offshore.
Africa:
New discoveries to drive future offshore developments, including in new areas; and
Project timing remaining uncertain.
Asia Pacific:
Australian gas projects continuing to progress.
Fellow offshore contractor Aker Solutions is forecasting strong demand in most regions, with high levels of
tendering activity expected to continue well into 2013.
The increasing number of complex and deepwater
fields is a strong trend in the global offshore industry,
the company said in its latest results presentation. The
company also flagged the subsea market as returning to
high growth, with major opportunities in the North
Sea, Brazil, Asia Pacific, and West Africa.
With around 95 deepwater drilling vessels currently
on order worldwide, Aker said that between 20 and 30
newbuild rigs could be delivered each year until 2020.
The company also flagged the floating production
market as being at a historical high, with 74 units on
order and approximately 230 in either final design,
77
OFFSHORE
2013
planning, or study phases. According to the latest figures from analyst Douglas-Westwood, the value of floating production installations in 2013 is forecast to be
around $10.2 billion, growing to a figure of more than
$26 billion in 2017 and largely dominated by expenditure on FPSO developments.
Aker Solutions also said the Brazilian markets are
moving from heavy oil, sandstone, and post-salt towards
light oil and carbonated presalt, while in North America offshore activity is picking up with developments
moving to increasingly deeper waters.
A developing rig trend

In terms of the offshore rig market, a number of players,
including deepwater-focused Seadrill, are forecasting
the increased importance of development drilling programs where activity is expected to further increase
throughout 2013 and beyond.
Industry fundamentals remain strong, said the Norwegian driller, with overall spending on E&P the key
demand driver for offshore drilling services having

grown by more than 10% each year since 2009. This
trend is widely expected to continue in 2013, the company added.
Because of this, oil companies are securing capacity
earlier and on contracts with longer terms, Seadrill said.
Consequently, the deepwater rig market already essentially
is sold out for 2013, with 2014 going very much the same
way. Seadrill Chairman John Fredriksen said in the companys latest results webcast, The deepwater drilling
industry is transforming from an exploration to a development industry. Such a transformation will trigger a significant increase in the need for the drilling of production
wells to connect the fields that have been successfully
explored in the recent years. His company has positioned
itself to meet this need, with nine ultra-deep, ultra-harsh
environment units due for delivery from next year
through 2015 (plus options for several more).
Seadrills fellow Norwegian rig player Sevan Drilling
said that around half of the demand for deepwater
now
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2013
drilling rigs going forward will be for development

drilling programs, requiring mobile units and more
specialization in rig designs.
This increased call for newbuild, high-specification
deepwater rigs is being largely driven by the US GoM,
where operators are demanding units with higher safety
standards and greater drilling efficiency.
According to analyst Quest Offshore Resources, units
such as the Pacific Santa Ana drillship are becoming
increasingly typical. The drillship mobilized this year for
Chevron under an initial five-year contract, with the rig
the first to be built with dual-gradient drilling (DGD)
capabilities designed to Chevrons specifications. The
DGD system uses two weights of drilling fluid one
above the seabed and a second below the seabed allowing drillers to more closely match well pressures. Benefits of a DGD system include the elimination of water
depth as a consideration in well design as well as the
ability to detect and react more quickly to changing
downhole pressures.
Flagging this trend further in 2013 will be the Noble

Bob Douglas drillship, coming to work for Anadarko
Petroleum in the GoM with two complete six-ram
BOP stacks. The $600 million rig is currently under
construction at Hyundai Heavy Industries and is
expected to go into service by the end of the coming
year.
Higher specifications
While the value proposition of a second BOP stack on
newbuild drillships has become a topic of debate among
drilling contractors, Anadarkos decision to take on the
added cost will likely result in more units with dual BOP
systems, said Quest in its latest GoM deepwater market
report. Additional types of upgrades in the newer generation rigs being ordered for the GoM include increased
crane capacity, increased variable deckload, and higher
shear rams in the BOP.
Higher specification rigs, of course, command higher
day rates, leading to a significant increase in the average
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2013
rate for rigs under contract in the GoM. The average

day rate among the 38 floating rigs currently under
contract in the GoM is a global high of $485,000. The
leading day rate being paid in the region (as of midNovember) is $672,000. With 92% of the fleet made
up of ultra-deep rigs, the US GoM has the highest average day rates among the golden triangle regions,
where more than 70% of all ultra-deepwater rigs are
deployed.
Looking outside the US rig market, driller Enscos
chairman and CEO Dan Rabun said in the companys
latest webcast that the African ultra-deepwater market
remained extremely strong, with uncommitted time virtually nonexistent until 2015. He also said Ensco
believes that in the Asian and Australian markets the
demand for deepwater floaters will increase in 2013.
There are a few multiyear programs that have yet to be
awarded, and our customers are also talking about
potential ultra-deepwater work commencing in 2014,
he said.
His colleague Kevin C. Robert, senior vice president of

marketing, added that looking at both the jackup and
floating rig markets, 2012 was already looking like the
fourth busiest year for contracting rigs in the last 10 years.
This, he said, meant that a lot of clients have expanded
their tenders to look for rigs until year-end 2014 because
of the strength of the market. So if you try to project that
out and make some assumptions, if we continue at this
pace, I think were going to see 2014 availability disappearing as quickly as we saw 2013, he said.
Outside of just the rig market, Quest also said in its
report that 2013 will be at the forefront of a new era
for the GoM, when overall offshore spending in total is
forecast to soar to $40 billion (from $31.6 billion in
2012). This rise is significant in that it will also be the
first time in the GoMs history that overall deepwater
spending (including deepwater capex and opex) overhauls and rapidly races away from shallow-water spending levels, a trend that is expected to continue for the
foreseeable future.
Ow e
OFFSHORE
2013
Subsea milestones
In the subsea sector, the market is continuing to expand
at a rapid pace, with this technology often the only economically viable recovery solution for increasingly
remote or ultra-deepwater fields.
With the reliable indicator of subsea tree awards forecasted by Quest Offshore to total around 640 in 2013,
the coming year is expected to see further substantial
commitments made by operators around the world.
However, it is the emerging area of subsea processing
that will catch the eye of many during the coming year.
Bidding and tendering activity for subsea processing
projects is set to shoot upwards over the course of the
next two years, with at least eight in the pipeline for
2013 and a similar number likely for 2014, said John
Gremp, FMCs chairman and CEO. This is compared
to a relative handful previously.
In the companys 3Q 2012 results webcast, Gremp said,
Looking further out in 2013, there are more than eight
named subsea processing projects. The ones that are
coming up in 2013 are more boosting-oriented as

opposed to separation although there are a couple of
separation projects. But looking beyond that into 2014,
you get another eight to 10 named projects, and it swings
back to the majority of those involving separation.
He said that not all of these would necessarily go
ahead but it is very encouraging that the market is
developing as FMC expected. Id say the market is
developing even better than what we hoped, he added,
saying that 2013 and 2014 should be very strong for
subsea processing.
The innovative Marlim separation system for Petrobras offshore Brazil the worlds first such system for
deepwater subsea separation of heavy oil and water,
with the water to then be reinjected also was flagged
by Gremp as being close to the startup of operations.
The well in which the oil-water separation system is
installed is currently flowing in a bypass mode, he said.
The separation system will be activated once the well
flow reaches a higher water cut, currently expected to
Make it happen.
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OFFSHORE
2013
be around year-end 2012 or early 2013. The water will

be reinjected into the formation. We think Marlims
success will be a critical industry milestone, promoting
wider acceptance of this technology while advancing
further oil-water separation solutions, he said. The
subsea separation module is sited in a water depth
of 900 m (2,950 ft).
Gremp also said that, looking at the overall market,
subsea industry tree orders up to the end of 3Q 2012
had already exceeded the 2011 total. The number of
large projects continues to grow, and over the next 15
months, we should see a large number of awards
announced, he said.
Jack B. Moore, CEO and president of Cameron International, echoed this train of thought in his companys
own 3Q 2012 presentation. While West Africa and
Brazil will support near-term opportunities for major
awards, the re-emergence of the Gulf of Mexico, continued expansion in the gas monetization activities in
Australia, and expanding markets in East Africa and
the Mediterranean will drive new projects, he said.
the ultra-deep subsea sector is one example; the linkup

between Keppel Shipyard and Golar LNG aimed at the
emerging floating LNG market is another.
Cameron and Schlumbergers formation of their
OneSubsea JV, marrying their combined expertise
from the reservoir itself through the subsea production and export system, has further raised the competitive bar.
The overall feeling as the offshore industry prepares
to enter 2013 is markedly different from last year.
Throughout 2011, the global E&P sector was clearly
struggling to emerge with any sureness of direction
following the immediate ramifications of the Macondo
disaster. As it enters a new year, however, the offshore
industry is now giving strong signals that it knows exactly
where it wants to go.
Industry alliances
This wave of new offshore projects also will drive the
growing number of strategic JVs and partnerships
being formed between offshore contractors as they
combine capabilities to position themselves for their
targeted market sectors.
The recently announced five-year alliance between
Heerema and Technip specifically targeting projects in
LEFT: The separation system now in place on Petrobras Marlim field offshore Brazil is expected to be
in operation by early 2013. It will be the worlds first
such system for deepwater subsea separation of
heavy oil and water, with the water to then be reinjected. (Image courtesy of FMC Technologies)
ABOVE: With oil companies securing rig capacity
earlier and on contracts with longer terms, rig contractor Seadrill said the deepwater market is essentially sold out for 2013, with 2014 heading the same
way. (Photo courtesy of Seadrill)
82
DEVELOPING UNCONVENTIONALS
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WATCH
Sourceless formation evaluation

reduces HSE risks
Avoiding chemical sources saves time and money logging a directional
well in Egypt.
Gabe Artigas, Apache Corp.; and Zeyad Juma
Ramadan, Islam El-Fouly, Ahmed Bahgat,
and Jean-Marie Degrange, Schlumberger
ulsed neutron generator (PNG) technology has

been successfully used by the well logging industry
for years to acquire a variety of measurements. This
radioisotope-free source of high-energy neutrons has
been used in wireline-conveyed logging tools for various commonly used measurements such as neutron
porosity, spectroscopy, and thermal neutron capture
cross section (also known as sigma). These are all
acquired without the need for chemical sources such
as americium-beryllium. Recent developments have
extended the suite of measurements to include a
radioisotope-free bulk density measurement, eliminating the need for cesium sources. This density is referred
to as the sourceless neutron-gamma density (SNGD).
Radiation sources
Radioactive materials present HSE risks, whether through
direct contamination or extended close contact with the
human body. Abandonment of a chemical source downhole can present a potential environmental risk that can
last hundreds or thousands of years. Government regulations rightly consider that the industrial use of these
materials requires stringent control. Service companies
apply tight controls and comprehensive training programs to ensure strict adherence to procedures that minimize operational risk. These are particularly important in
LWD operations due to the severity of the drilling environment and because rig personnel often assemble the
tools in the bottomhole assembly (BHA) onsite.
Several technologies have been implemented to
minimize human exposure to radioactive materials and
maximize the ability to safely retrieve sources when tools
become stuck downhole. Nevertheless, the use of chemical sources inherently poses a risk, and the opportunity
to entirely eliminate the need for them provides benefits
not only for HSE risk reduction but also for improving
operational efficiency and avoiding restrictions and
delays related to compliance with local legislation.
84
FIGURE 1. The PNG in the NeoScope

LWD tool can only be powered when a
sequence of safety interlocks is satisfied, including the supply of power from
the turbine of the MWD system, which
requires mud circulation. (Images courtesy of Schlumberger)
tech
WATCH
FIGURE 2. This log compares conventional wireline data with
measurement of sigma and spectroscopy (for elemental

concentrations and formation mineralogy). These measurements are now available in both LWD and wireline
applications.
The principal operational hazard of PNG-based tools is
the emission of large numbers of high-energy neutrons
when these are powered. Wireline tools have software
locks on the power supply that can only be released by
human control and also only when depth measurements
confirm these are a safe distance below the surface.
Schlumbergers NeoScope LWD tool and its PNG can
only be powered when the turbine from the MWD system
is energized by mud circulation (Figure 1). Therefore,
the PNG generates neutrons on demand and ceases emission when turbine power stops. Additional hardware and
software safety control mechanisms include pressurecontrolled shutdown, a physical field neutron plug
required to enable the PNG, passwords, and sequential
logic. The combination of safety interlocks prevents accidental operation at the rig floor and ensures zero emissions if the tool has to be abandoned downhole.
The use of the sourceless LWD service reduces risk
if tools are lost in-hole as chemical sources incur costly
abandonment measures and require sidetracks to deviate
a safe distance from the lost tool. With a PNG source,
tools can be handled or abandoned without special safety
considerations, and sidetracks can be resumed closer
to the originally planned trajectory.
sourceless LWD data through an overlap section of the well.
Nonchemical alternative
New sourceless neutron-gamma

density measurements
A PNG can provide a safe alternative to chemical sources.

A PNG is, in effect, a miniature particle generator producing neutrons by accelerating hydrogen ions across a
minitron. PNGs do not emit any external radiation when
not electrically energized, so there are no restrictions on
wellsite manipulation of unpowered PNG-based tools.
There is no need to take any special precautions when
assembling the tool into a BHA and no operational delays
for source loading and unloading. Authorities such as the
US Nuclear Regulatory Commission have exempted them
from any special precautions for abandonment in oilfield
wells.
PNGs have been used in wireline tools since the late
1980s to provide sourceless openhole neutron porosity
measurements, and the technology has subsequently
been used to provide measurements of physical properties beyond those that can be made with chemical sourcebased tools. Neutrons are generated in carefully timed
pulses, and the measurements are acquired in specific
time-gates using an interlaced timing sequence, enabling
Using the PNG and a suite of detectors, the NeoScope

tool determines SNGD from the gamma rays induced by
the interaction of high-energy neutrons with the formation. The SNGD can be used to replace the traditional
gamma-gamma-density measurement. Throughout the
past decade, extensive studies have characterized the
SNGD measurement in a wide range of formations and
environments. The new measurement enables a comprehensive sourceless petrophysical description of the formation using the shortest multifunction LWD tool available.
A single 7.6-m (25-ft) collar provides azimuthal natural
gamma ray; array resistivity; dual ultrasonic calipers; a full
drilling mechanics package, including annular pressure
and near-bit inclination; and sourceless PNG-based measurements such as capture spectroscopy, sigma, neutron
porosity, and neutron-gamma density. All of these measurements are acquired within 5 m (16 ft) of the bottom
of the tool, providing the full suite of data close to the bit.
This compact design reduces the amount of rathole by
providing comprehensive formation evaluation measure-
85
tech
WATCH
FIGURE 3. High-resolution geoVISION LWD resistivity images were used to identify faults and resistive fractures.
ments close to the bit. Collocation ensures that the measurements are acquired under the same environmental and
formation invasion conditions, reducing uncertainty in
data interpretation. Since there is only one collar, flat time
associated with making up and breaking down the BHA is
reduced. Having fewer connections also enhances BHA
reliability. The services large memory capacity allows the
recording of two samples per foot at an ROP of up to 61
m/hr (200 ft/hr) while providing accurate formation evaluation measurements. High real-time data transmission
rate, provided by a high-speed telemetry-while-drilling service and its data compression telemetry platform, ensures
that the full suite of measurements is available in real time
to improve decisions and mitigate risk.
Case study: Egypt

While running an exploration program to evaluate the
West Kanayes concession in the Western Desert of Egypt,
Apache Corp. encountered a zone with wellbore stability
issues in a directional well. Wireline formation evaluation tools were able to log the upper target zone but
were prevented from reaching the lower interval of
interest. Deploying LWD tools was selected as the best
alternative for evaluation of the complete interval; however, due to local permitting requirements, shipping
chemical sources to the rig usually takes seven days. It
was decided to use the sourceless LWD service to
86
acquire a full suite of petrophysical measurements,

primarily because it could be mobilized to the well
site faster than a chemical nuclear source.
Using PNG-based neutron porosity and its unique
SNGD measurement, the NeoScope service provided
high-quality data over a 540-m (1,774-ft) interval, which
included the oil-bearing sandstone reservoir section. The
PNG-based measurements were compared to wirelineconveyed conventional chemical nuclear source-based
neutron porosity and density measurements in the shallower section. The SNGD data and other LWD measurements compared favorably in the interval where both sets
of data were available, providing confidence for use of the
PNG-based measurements for formation evaluation over
the entire interval logged with the NeoScope tool.
Laterolog resistivity measurements also were acquired,
providing quantitative, high-resolution array resistivities
in addition to high-quality images. The images were used
to pick bedding planes and identify natural and drillinginduced fractures and faults.
The combined LWD services provided detailed formation evaluation across the full openhole section despite
poor borehole conditions. In addition to eliminating
the expected seven-day delay related to nuclear source
transportation, the sourceless service also saved rig time
related to loading and unloading of a chemical nuclear
source.
expert observers
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TRENDS
Wireless remote unit added

to seismic data acquisition system
Targeted at the buried array market for hydraulic fracture and reservoir monitoring, Wireless Seismics fourchannel version of the companys RT System 2 operates
without cables and with ultra-low power consumption.
A proprietary 2.4-GHz radio relay technology that operates at internode distances of 1 km (0.6 miles) or more
allows large areal arrays of instruments to deliver a continuous flow of passive seismic data to a central recording system in real time.
RT System 2 supports the integration of hundreds
of one-channel or four-channel buried array recording
units and surface-based recording units, all simultaneously controlled from a single central recording system.
The entire array can be monitored continuously from
the central recording location; wake-up commands, system and performance tests, battery status, and seismic
noise level metrics are transmitted between the recording units and the control center.
The four-channel RT System 2 also can be employed
for conventional multicomponent seismic surveys, providing real-time seismic data without cables or the uncertainty of autonomous recording systems, according to
the company. wirelessseismic.com.
BOP secures wellbore

within three seconds
The IVR system can be

retrofitted on jackup and
deepwater drilling rigs.
(Image courtesy of Managed Pressure Operations)
88
The new Influx Volume

Reduction (IVR) System,
developed by Managed Pressure Operations, introduces a
way to facilitate the handling
of unscheduled influxes in a
wellbore. Conventional BOP
technologies allow wellbore
pressures and kick volumes to
significantly exceed safe handling ranges due to their slow
actuation times. According to
the company, conventional
BOPs allow enough time
after detection of a kick for
a considerable influx of volume and pressure to find its
way into the wellbore.
The companys IVR System,
with its patented quick-close
annular, has been developed
to close within five seconds,
compared to a conventional BOP closing time of 40 to

60 seconds. This minimizes the initial kick volume by a
factor of up to 10 times. The system introduces considerable safety factors that facilitate the handling of well
control incidents, protecting a rig through all phases
of operations, according to the company.
The IVR accomplishes this by using a 20-in. spherical packer within a proprietary housing design suited
for riser deployment similar to a standard spherical
annular. With an outside diameter of 46 in., the housing is slim enough to drift through a 49-in. rotary
table, eliminating below-rotary-table lifting maneuvers,
which increases safety and minimizes installation time.
managed-pressure.com.
Water recycling service allows use

of produced water in fracturing fluids
The H2prO water management service by Baker Hughes
enables operators to design high-performing hydraulic
fracturing fluids using produced and flowback water. The
service treats water to maximize production; minimize
reservoir damage; and reduce freshwater sourcing, storage, and transportation costs, according to the company.
The service includes a pre-treatment analysis so that the
operator is able to fully understand the waters chemistry
to ensure selection of the appropriate treatment, as each
reservoir contains different water compositions. This
analysis is provided by a team of scientists and engineers
who use their expertise in production chemistry, pressure
pumping, and water treatment to determine the constituents in the water that is to be treated to meet the
completion requirements of the operator. Then, based
on the analysis and requirements, application engineers
choose the best treatment from the service portfolio. This
portfolio includes options to address all major produced
and flowback water contaminants, including total dissolved solids, heavy metals, total suspended solids, hydrogen sulfide, and other organic compounds. This will, in
turn, enable operators to reduce the cost of sourcing,
transporting, and storing freshwater and transporting,
treating, and disposing of wastewater by as much as 90%,
said the company. bakerhughes.com.
Water cut monitor is accurate

in low ranges, ignores coating buildup
The Universal IV CM Model Water Cut Monitor by
AMETEK Drexelbrook, which measures the percentage
of water in oil, provides water cut measurement accuracy
in low ranges (0% to 1%, 0% to 5%, and 0% to 10%
tech
TRENDS
water). The technologys accuracy is 0.03% water and

measurement resolution is 0.0002% water. Compared
to the companys previous monitor, this technology is
more compact, with a smaller housing. It is able to
ignore coating buildup on the probe and puts the sensing area of the instrument directly into the process
stream, according to the company. The monitor also
has a built-in LCD display and keyboard.
The technology includes a Perm-A-Seal sensing element that installs directly into a main process line without requiring spool pieces, side-arms, or slipstreams.
The sensing element uses a polyether-ether-ketone
material and stainless steel sensing rod that is extremely
durable and requires no epoxy coatings. It is able to
extend a minimum of 15 in. into a main process line.
The probes are designed to handle pressures up to
1,500 psi and temperatures up to 232C (450F). The
instrument comes precalibrated to one of 11 preset
ranges for light oil (API gravity greater than 25) and
heavy oil (API gravity less than 25). drexelbrook.com.
Oil detection system can be

installed on seabed pipeline
Cambridge Consultants has used its fertility monitoring
technology to develop a new early warning system of oil
leaks at sea. The naturally fluorescent characteristics of
crude oil are the basis of most oil detection systems. The
device is capable of detecting the natural fluorescence
of small amounts of oil in or on water. Unlike contemporary methods of detecting oil that are not consistently
accurate, according to the company, this technology
gives oil companies a simple, compact, and accurate
system that can be permanently installed on seabed
pipeline. By distributing the sensors along the seabed,
oil can be detected that is not yet able to be seen by the
human eye on the surface. According to the company,
this will provide a more cost-effective solution than previously offered in the conventional method of employing aircraft equipped with radar and scanners to detect
oil fluorescence. cambridgeconsultants.com.
Cone-shaped flowmeter
requires no maintenance
McCrometers no-maintenance wafer-cone flowmeter,
used for measuring gas or steam, is a differential pressure flowmeter with a design that conditions the flow
prior to measurement. Differential pressure is created
by the cone, which is placed in the center of the pipe.
It creates a more stable signal across wide-flow downEPmag.com | December 2012
Flow rate is calculated by measuring the difference between the

pressure upstream of the cone at the meter wall and the pressure downstream of the cone through its center. (Image courtesy of McCrometer)
turns due to its shape and design, which flattens the

fluid velocity profile in the pipe, according to the company. The cone is interchangeable for flexibility to
accommodate changing flow conditions without the
need for recalibration and requires little to no maintenance. The system can be configured with a direct
mount, which minimizes installation labor and eliminates impulse lines. This reduces potential leak points
by more than 50%, said the company. Applications
include natural gas wellheads; gas, water, and CO2
injection; gas lift; and compressor antisurge. It is
ideal for liquid, gas, or steam service in line sizes
from 1 in. to 6 in. mccrometer.com.
Grant for rotary traction system prototype

Paradigm Drilling Services has secured a US $400,525
grant from the Technology Strategy Board to develop
novel rotary traction systems. This prototype will be used
in extended-reach horizontal drilling and completion
applications. According to the company, the technology
will increase the ROP by translating rotary motion into
forward traction, giving more consistent weight on bit,
and by removing stick slip, which will facilitate horizontal drilling. The company also wants to address the issue
of running and retrieving ultra-long complex horizontal
completions more effectively, which will rule out the
possibility of string rotation. paradigm.eu.
Cody zcan, Assistant Editor
89
REGIONAL REPORT:
ARCTIC
Arctic drilling plans heat up

Companies are devising strategies to tackle harsh Arctic conditions in hopes of making
massive finds in an area that could hold significant undiscovered oil and gas resources.
Velda Addison, Associate Online Editor
ith an estimated 90 Bbbl of oil, 1,669 Tcf of natural gas, and 44 Bbbl of NGL that may remain
undiscovered in the Arctic, its no wonder companies
are getting fired up about this chilly region.
Said to hold about 22% of the worlds undiscovered
conventional oil and natural gas resources, according to
the US Geological Survey, the Arctic continental shelf
may be the largest unexplored area for petroleum left
in the world. Already, more than 400 oil and gas fields
have been discovered north of the Arctic Circle, mostly
onshore. However, colossal finds remain hidden amid
an area of more than 7 million sq km (3 million sq miles)
in less than 500 m (1,640 ft) water depth offshore.
And with eight countries having territory in the Arctic
Canada, Finland, Greenland, Iceland, Norway, Russia,
Sweden, and the US there is plenty of opportunity to
get involved if companies have the money. The US also
has plans to open additional acreage for oil and gas
development in the National Petroleum Reserve in
Alaska. The 22nd license round on the Norwegian
Continental Shelf also will make more Arctic territory

including 72 blocks in the Barents Sea available.
The Arctic region is not without its challenges. Among
these is development of infrastructure, which has left
some areas with known natural gas resources void of
exploration. Moreover, limited transportation access
could reduce options and increase costs. Equipment
must be designed to endure extremely cold temperatures. Pack ice can damage offshore facilities and equipment. Then there are possible supply delays and
courtroom challenges from environmentalists seeking
to protect the areas fish and wildlife resources.
However, if past success stories hold any insight into
what is possible, discoveries could be made like Alaskas
Prudhoe Bay field, which has 13.6 Bbbl of recoverable oil,
according to the US Energy Information Administration
(EIA). Prudhoe is the largest oil field in North America.
A payoff of oil or gas depends on the location, according to a study on Arctic oil and natural gas potential by
the EIA. The North American side of the Arctic could
have about 65% of the Arctics undiscovered oil; however,
it could hold only 26% of the areas undiscovered natural
gas. By contrast, the Eurasia side possibly holds about
63% of the total Arctic resource base, while North America could have only about 36%. Most of Eurasias undiscovered Arctic resource is expected to be oil, at 74%.
While the Arctic is rich in undiscovered oil and natural gas resources, the resources are concentrated in just a
few sedimentary provinces, the study said. The three
largest Arctic provinces account for 65% of the total Arctic oil and natural gas resources, and the largest 10 oil
and natural gas provinces account for 93% of the total.
Arctic Alaska could hold the largest undiscovered oil
deposits, with about 30 Bbbl, the study said, while the
Amerasia basin north of Canada likely has the second
largest oil province with an estimated 9.7 Bbbl. The East
Greenland Rift rounds out the list with the third largest
estimated oil province with about 8.9 Bbbl.
Action in the Arctic

Well 7220/7-1 in the Barents Sea, drilled by the drilling rig Aker
Barents, has proved a 48-m (157-ft) gas column and a 128-m

(420-ft) oil column. The presence of snow illustrates some of the
Arctic conditions in which workers carry out their jobs. (Photos
by Harald Pettersen, courtesy of Statoil)
90
The industrys big players are bringing out big bucks in

hopes of making huge discoveries as climate change
slowly warms the region.
With extensive experience in the Arctic, Statoil has
plans to drill nine wells in 2013 as part of its Norwegian
REGIONAL REPORT:
ARCTIC
the September cruise, Pederson pointed out that each

area Statoil plans to drill in including Canada/Newfoundland, the North American Arctic, and Greenland
presents obstacles.
But the main challenge when operating in the Arctic
is ice. This could mean icebergs floating by, thin firstyear ice, or thicker multiyear ice, Pedersen said. In
some areas like the Beaufort Sea, the operational season
is short due to the water freezing up. Short operational
seasons and the logistics required drives costs, and this is
something [we] have a strong focus on. With our stepby-step approach, we will only move to the more challenging areas when we know we can do it safely.
Safety is a top concern

Workers climb stairs aboard the Aker Barents drilling rig in the
Barents Sea.
Barents exploration campaign. The company pumped

an additional US $30 million (NOK 170 million) into its
Arctic research budget, bumping the budget to $44 million (NOK 250 million) for 2013.
We believe that taking a stepwise approach is the key
to our success. Our history is one of taking one step at a
time, developing technology, competence, and experience, said Statoils Brd Glad Pedersen. This approach
we bring with us to the wider Arctic as well. Having operated in harsh environments for 40 years, we believe that
we are well positioned to take on new challenges.
The company anticipated commencing drilling activity
in December in Nunatak in the Skrugard area with hopes
of completing four wells there in six months. Further
drilling is set to take place in the Hoop frontier exploration area in the Barents in summer 2013. The company
said these will be the northernmost wells ever drilled in
Norway. The campaign will wrap in the Hammerfest
basin near the existing Snhvit and Goliat discoveries.
A three-well campaign offshore Newfoundland,
Canada, also is on tap.
Through this, we hope to prove up new resources
and discover resources that could lead to new development projects, Pedersen said.
In preparation for harsh Arctic conditions, Statoil
delved into creating a tailor-made Arctic drill unit
(currently in the concept phase). The company also
researched properties and quantified characteristics of
the drift of sea ice and icebergs and evaluated technology
such as satellite sensors and laser scanners in northeast
Greenland with the Norwegian University of Science and
Technology during a cruise.
Although it was too early to evaluate the findings of
Safety of the people and the environment remain keys

to successful operations, with the Deepwater Horizon disaster still fresh on minds and the Exxon Valdez oil spill in
1989 as evidence of devastation in Arctic waters.
It starts with prevention, Curtis Smith, a spokesman
for Shell in Alaska, said to E&P earlier this year. We are
working in known areas that are relatively low-pressure
and are extremely shallow compared to what you might
typically see in the deepwater Gulf of Mexico [GoM].
Were treating them as the most complicated wells we
have ever drilled.
The 22nd Norwegian licensing round will open up 72 blocks in

the Barents Sea.
91
REGIONAL REPORT:
ARCTIC
Plans include use of BOPs to seal off wells, with capping stacks modeled after the one that stopped the
blowout of the Macondo well in the GoM. We have
made it Arctic-ready, and we look forward, frankly, to
never using it, Smith said.
Shell also has buried pipelines several meters below
the seabed to avoid potential damage from floating ice.
Detection systems also monitor any drop in pressure,
activating valve systems to halt oil flow, according to the
companys website. In addition, the company will have
an onsite, near-shore, and onshore oilfield response system that is Arctic-built.
Shell set out to drill up to five wells total in the Chukchi
and Beauforts seas in 2012 but had to scale down its
drilling plans to two wells one in each sea due to sea
ice as well as permitting and regulatory setbacks. Eventually, Shell gave up on plans to drill into potentially hydrocarbon-bearing zones in the Arctic this year because of
the setbacks. Among these was a damaged containment
dome for the Arctic Challenger containment barge. Without the barge, which would carry the containment dome
capable of being lowered to a wellhead if a spill occurs,
the federal government would not give the company the
go-ahead to tap into potentially oil-bearing zones.
Certification of the barge was needed to trigger the
final permits needed for the drilling program. That certification finally came Oct. 11, weeks after the window for
drilling in the Chukchi Sea and just before the window
closed for Beaufort Sea drilling.
The ABS classification and recent Coast Guard certification of the Arctic Challenger containment barge is welcome news and means Shell will have the necessary assets
in place to drill and evaluate hydrocarbon zones in 2013.
Until then, we will continue to make the most of the time
that remains in the 2012 open-water season by drilling
top-hole sections on our prospects in the Chukchi and
Beaufort seas, Pete Slaiby, vice president of Shell Alaska,
said in a prepared statement.
Shell announced the end of its 2012 exploratory
drilling programs in the Beaufort and Chukchi seas on
Oct. 31, touting several weeks of safe and responsible
Arctic drilling. The work we accomplished in drilling
the top portions of the Burger-A well in the Chukchi Sea
and the Sivulliq well in the Beaufort Sea will go a long way
in positioning Shell for another successful drilling program in 2013, the company said.
To drill or not to drill?

Not every oil and gas company is keen on drilling
specifically for oil in the Arctic. Christophe de Margerie, CEO of Total, told the Financial Times this year that
92
the risk of an oil spill was too high in such an environmentally sensitive area. Gas leaks are easier to cope with
than oil spills, he said, noting he didnt oppose Arctic
exploration in principle.
Yet oil is just what Statoil hopes to find in the North
American Arctic. In response to Margeries comments,
The Arctic region is divided into territorial waters for eight

nations.
Pedersen said Statoils strategy stands firm. We believe

in the resource potential in the Arctic and that we can
develop resources in the region in a safe and sustainable
way, he said. It is not without challenges, but taking a
stepwise approach, we choose to develop competence,
technology, and experience before we take the next
step. The Arctic is a long-term play, and we will not
rush into activities before we are ready.
Other companies with Arctic exploration programs
include BP, ExxonMobil, and Rosneft.
Rosneft and ExxonMobil have partnered to form the
Arctic Research Center for Offshore Developments. The
center, announced in June, will provide services such as
ice monitoring and management; design of ice-resistant
offshore vessels, structures, and Arctic pipelines; logistics; and safety, according to ExxonMobil. The center
also will feature a marine incident warning and prevention department that will work to prevent and respond
to emergencies.
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NORTH AMERICA
Shell ends 2012 Arctic campaign
Shell reported that after several weeks of drilling offshore Alaska, the company has concluded its 2012
exploratory drilling programs in the Beaufort and
Chukchi seas. The mandatory close of the offshore
Alaska drilling window brings to an end a season in
which we once again demonstrated our ability to drill
safely and responsibly in the Arctic, Shell said. The
work we accomplished in drilling the top portions of the
Burger-A well in the Chukchi Sea and the Sivulliq well in
the Beaufort Sea will go a long way in positioning Shell
for another successful drilling program in 2013. The
company plans to pick up where it left off when the sea
ice retreats next summer.
North Slope nod for Exxon
A record of decision was issued by the US Army Corps of
Engineers approving a Section 404 wetlands permit for
an ExxonMobil-led Alaskan North Slope project for an
NGL development in the Point Thomson field. The US
major will begin construction on the project during winter 2012 to 2013. Point Thomson is the states largest
undeveloped oil and gas field, containing 25% of the
North Slopes known conventional natural gas. ExxonMobil will build an initial production system at the field
to process 10,000 b/d to be shipped through the TransAlaska Pipeline System. The Corps of Engineers said
that the development project will include three drill
pads, 16 km (10 miles) of road, a gravel mine, an
airstrip, a barge-docking facility, and gathering and
export pipelines.
94
1,949 m (6,394 ft). Ecopetrol America has a 30% interest in the prospect, with the operator being Murphy
Exploration and Production Co. The Dalmatian South
lease (DC 134) covers an area of 23.3 sq km (5,760
acres) and is located approximately 113 km (70 miles)
offshore Louisiana. The discovery also is located approximately 9.5 km (6 miles) southwest of the main Dalmatian field (operator Murphy 70%, Ecopetrol 30%) in DC
4, 47, 48, and 91. Production from the main field is
expected to start in 1Q 2014.
ExxonMobil farms into Phobos
ExxonMobil has acquired a 20% stake in Anadarko
Petroleums deepwater Phobos prospect in the GoM
and expects to spud a well before the end of the year.
The prospect is 8 km (5 miles) south of the companys
Hadrian South discovery, the company said in its thirdquarter earnings call. ExxonMobil also drilled two
appraisal wells on its Hadrian North discovery in 3Q
2012, which the company is lining up for development
via a 100,000 b/d deepwater semisubmersible production platform, it said.
Chinook field producer completed by Petrobras
In Chinook field on Walker Ridge Block 469, Petrobras
completed well 2CH (BP2) OCS G16997. The well was
drilled to 8,040 m (26,378 ft) in the Lower Tertiary. It
was initially tested as flowing an unreported amount of
oil through perforations at 7,666 m to 7,916 m (25,150
ft to 25,970 ft). According to the company, commercial
production started flowing from the well to the BW Pioneer FPSO in early September 2012. According to IHS
Inc., the well is 21 km (13 miles) south of the FPSO and
connected to it via a system of subsea equipment. Water
depth in the area is 2,697 m (8,850 ft). Petrobras
recently received exploration plan approval for its
Ipanema prospect on Walker Ridge Block 376 (OCS
G33375). The plan outlines the drilling of up to three
tests on the tract.
GULF OF MEXICO
SOUTH AMERICA
Ecopetrols Dalmatian South discovery

Ecopetrol SAs US subsidiary Ecopetrol America Inc. has
confirmed that its latest ultra-deepwater exploration
well in the Gulf of Mexico (GoM) has hit oil. The
Colombian company said the DC 134-1 well and a resulting sidetrack on the Dalmatian South prospect in the
DeSoto Canyon area confirmed the presence of oil via
wireline logs. The well was drilled in a water depth of
Third Sergipe-Alagoas find

A third ultra-deep discovery in a frontier Brazilian basin
has been confirmed by Petrobras just 21 km (13 miles)
southeast of the first find in the area. The state-owned
major said it had confirmed the presence of light hydrocarbons in Block SEAL-M-426 in the Sergipe-Alagoas basin,
part of concession BM-SEAL-11, which the company operates with a 60% stake. The companys partner is IBV Brasil,
international
HIGHLIGHTS
which has a 40% stake. Well 1-BRSA-1083-SES (1-SES-167),

informally known as Farfan, is the latest find and will add
momentum to Petrobras emerging plans for an ultra-deep
production hub in the Sergipe-Alagoas basin. The operator
also revealed its 100%-owned Moita Bonita discovery in the
adjacent BM-SEAL-10 block in August, some 35 km (22
miles) southwest of Barra. The Farfan well was drilled in a
water depth of 2,720 m (8,924 ft) and hit a hydrocarbon
column of 44 m (144 ft). Petrobras will drill the well to a
planned total depth of 6,000 m (19,686 ft) and analyze the
rocks and fluids obtained with the aim of submitting an
appraisal plan to the National Agency of Petroleum, Natural Gas, and Biofuels (ANP).
Apache and Staatsolie sign in Suriname
Staatsolie Maatschappij Suriname NV and Apache Corp.
have signed a production sharing contract (PSC) for a
deepwater block off the northern coast of South America.
Block 53 lies about 130 km (81 miles) off the northwest
coast of Paramaribo, Suriname, with the PSC divided into
exploration, development, and production phases, valid
for 30 years. The parties have agreed to a minimum working program for the exploration phase, including geological surveys and exploration drilling. Apache will take full
responsibility for all costs during the exploration period,
which is divided into two phases with combined potential
investment of up to US $230 million. The first phase is
scheduled for three years with an optional second phase
of two and a half years. In addition to a large planned 3-D
seismic survey, two wells will be drilled in the first phase,
with a third well to be drilled in the optional second phase.
In 1Q 2013, Staatsolie will formally open its fifth international bidding round, with four blocks up for grabs
blocks 54, 55, 56, and 57 on the Demerara Plateau.
Peru gas prize for Petrobras
Petrobras has hit gas and condensate with three wells
onshore Peru, with a further well still ongoing. The
Brazilian major said that the Urubamba, Picha, and
Taini wells in Lot 58 in the Madre de Dios basin contain
natural gas and condensate totaling 56.6 Bcm of recoverable natural gas and 113.7 MMbbl of recoverable condensate. The Paratori well being drilled in the same lot
is expected to be completed in December, the company
said, along with other exploratory studies on the southern area that could reveal additional volumes. A 3-D seismic survey conducted to support the delimitation and
development plans for the area also has been completed
and is being analyzed. Petrobras Energia Peru S.A., a
wholly-owned subsidiary of Petrobras, is the operator
with a 100% stake.
EUROPE
Tullow takes Greenland block stake
Tullow Oil has farmed into a frontier deepwater block offshore Greenland operated by Maersk Oil of Denmark.
The Greenland government has approved the deal
between Maersk and Tullow for the latter to take a nonoperated 40% equity position in Block 9 (Tooq license) in
Baffin Bay, northwestern Greenland. Maersk will continue
as operator of the license with a 47.5% interest, with
Nunaoil, Greenlands state oil company, to hold a 12.5%
interest. The Tooq license covers an area of 11,802 sq km
(4,557 sq miles), and the work program for 2012 to 2014
includes the acquisition and processing of 3-D seismic
data. Seismic
acquisition of
some 1,850 sq
km (714 sq
miles) has been
completed following the submission and
approval of a
full environmental impact assessment, and the
results are being Irish independent Tullow Oil has farmed
into Maersk Oils deepwater Tooq block in
evaluated.
Baffin Bay offshore Greenland. (Image
A decision
courtesy of Maersk Oil)
whether or
not to enter the
next phase and drill an exploration well on the license will
be made after the seismic evaluation has been completed.
UKs 27th round success
The UK government awarded a total of 167 new licenses
in its 27th licensing round, with the Department of
Energy and Climate Change (DECC) offering 330
North Sea blocks. A further 61 blocks are under environmental assessment. The DECC said interest in the
North Sea is at record-breaking levels, with the round
attracting a total of 224 applications covering 418
blocks, the most ever received. Energy Minister John
Hayes said, Our fiscal regime is now encouraging small
fields into production, and our licensing regime supports new faces as well as the big players to invest.
Importantly, we are guaranteeing every last economic
drop of oil and gas is produced for the benefit of the
UK. The UK remains a favored destination, he added,
with the energy industry seeing lots of potential and
new opportunities.
95
international
HIGHLIGHTS
Faroe to exit West of Shetland license

Faroe Petroleum is to cease operations in a frontier
exploration license west of Shetland in the UK sector
after deciding the economics are not good enough for
a development to take place. The Atlantic Marginfocused independent said the P1161 license containing
the Freya and Fulla discoveries, which the company
operates with a 50% interest, will be relinquished. The
company is partnered in the license by Canadian Overseas Petroleum. In July 2011, the company drilled an
exploration well (206/5a-3) on the Fulla prospect, and
the targeted Clair and Whiting reservoir sands were
found to be oil-bearing. Further modeling of Fulla and
Freya, located immediately to the south in adjoining
Block 206/10a, showed, however, that there was relatively poor oil quality, smaller than expected resource
size, and limited access to infrastructure. Therefore,
they were not economically viable for development.
Faroe did say it was also awaiting the results of two UK
exploration wells being drilled: the deepwater North
Uist well west of Shetland, in which the company has a
6.25% stake, and the Spaniards East well (8.4% interest)
in the UK North Sea.
MIDDLE EAST
DNO goes with the flow in Oman
DNO International ASA has confirmed a flow rate of
7,000 b/d of 39 API oil and 15 MMcf/d of gas from its
latest well offshore the Sultanate of Oman. The West
Bukha-4 well in Block 8 was flowed via a 5464-in. choke
through a test separator. The well will be connected to
the export pipeline system within days and, at the initial
test rates, is expected to nearly double current oil production from the West Bukha field to 15,000 b/d. The
longest-reach well drilled offshore Oman at nearly 6,000
m (19,686 ft), West Bukha-4 targeted an area not penetrated by previous drilling and is the second of a threewell drilling campaign initiated last year in the block.
Oslo-listed DNO holds a 50% interest in and operates
the block containing the West Bukha and Bukha fields
and their respective platforms. Koreas LG International
holds the remaining 50% interest.
GeoGlobal drills second Israeli duster
GeoGlobal Resources has suffered a second consecutive
deepwater disappointment with its exploration program
offshore Israel in the eastern Mediterranean Sea. The
Canadian independent said the Sara-1 wildcat reached a
final subsea TVD of 3,928 m (12,888 ft). Based on the
96
cutting samples
and logging performed, the well
encountered
approximately 98
m (322 ft) of highquality reservoir
sands in the lower
Miocene/upper
Oligocene, with
good porosity and
permeability. HowGeoGlobals Sara-1 wildcat was
ever, although
another disappointment for the operathere were indicator offshore Israel. (Image courtesy of
tions that gas has
Noble Drilling)
migrated through
the system,
GeoGlobal said that the sands were wet, with no commercial quantities of hydrocarbons present. The Noble
Homer Ferrington semisubmersible rig has been released.
AFRICA
Vaalco buys into Equatorial Guinea block
Vaalco Energy Inc. has acquired a 31% nonoperating
working interest in a production and development
area (PDA) in Block P offshore Equatorial Guinea
from Petronas Carigali Overseas SDN BHD. The US
independent paid US $10 million for the stake. The
PDA, operated by Equatorial Guineas state-owned
GEPetrol, contains the Venus field, discovered in 2005.
The field is estimated to hold between 15 MMbbl and
30 MMbbl of gross recoverable oil. The PDA also contains a number of exploration prospects that Vaalco
believes are highly attractive, including the SW Grande
and Marte prospects. The company expects to drill
exploration wells in 2013 on both prospects. Partners
in the PDA are GEPetrol (38.4%), Atlas Petroleum
International Ltd. (5.6%), and Crown Energy Ventures
Corporation (5%). The government of Equatorial
Guinea has a 20% carried working interest.
Tullow hits oil onshore Kenya
Tullow Oils Twiga South-1 exploration well onshore
Kenya in Block 13T has encountered oil. Drilling is continuing, with partner Africa Oil Corp. to give further
details on the drilling results after target depth has been
achieved and necessary sampling and analysis completed.
The Twiga South-1 structure is the second prospect to be
tested as part of a multiwell drilling campaign in Kenya
international
HIGHLIGHTS
and Ethiopia and is the first discovery in Block 13T following the Ngamia-1 find earlier this year in Block 10BB.
Tullow is the operator with a 50% interest in Twiga South,
with Africa Oil holding the remainder.
Addax success in Cameroon
Addax Petroleum and its partners have made a discovery with their latest wildcat well in the Iroko block offshore Cameroon. The executive general manager of the
National Hydrocarbons Corp., Adolphe Moudiki, and
the CEO of Addax, Yi Zhang, jointly stated that the
Padouk-1X probe in the Rio Del Rey basin hit 38.6 m
(127 ft) total vertical depth (TVD) net oil and 65.1 m
(214 ft) TVD net gas in six sands. Provisional contingent
resources are 20 MMbbl of oil and 200 Bcf of gas, with
further upside potential to be assessed during an
appraisal program next year. The Padouk-1X well was
drilled in a water depth of 42 m (138 ft). The well was
temporarily suspended, with a possible reentry to be
considered during the full development study already
underway.
374-P1 permit area approximately 120 km (75 miles)

northwest of Barrow Island. The well was drilled in 1,088
m (3,570 ft) of water to a total depth of 4,579 m (15,023
ft). Chevron Australia is the operator of WA-374-P with a
50% interest, with its partners being Shell Development
(Australia) Pty Ltd. and Mobil Australia Resources Company Pty Ltd. (25% each).
Shell kicks off Palta probe
Shell is underway with its latest deepwater wildcat off the
coast of northwest Australia. The operators Palta-1 probe
is located approximately 70 km (43 miles) off the coast of
the North West Cape in permit WA-384-P. The well, spudded mid-October by the Noble Clyde Boudreaux semisubmersible rig, is expected to take approximately 75 days
to drill. The rig is working in a water depth of 1,350 m
(4,429 ft). The large Palta prospect in the Exmouth subbasin is estimated to hold up to 13.5 Tcf of gas in place.
Shell announced that the well will allow the company to
better understand the gas resources present in the area
and that any future activities will be dependent on the
results and be subject to a new approvals process.
CENTRAL ASIA
Petrobangla raises Titas reserves
State-run Petrobangla has discovered a new onshore gas
reserve with total reserves in place of up to 800 Bcf in
the existing Titas gas field area. Around 560 Bcf of gas
is believed to be recoverable, bringing the Titas fields
remaining known recoverable reserves up to an estimated 2.75 Tcf. Petrobangla chairman Hussain Monsur
said a 3-D survey conducted by Bangladesh Petroleum
Exploration and Production Company Ltd. (Bapex)
with CGGVeritas also had raised the Titas fields gas
reserve potential to an estimated 8.05 Tcf, of which 6.19
Tcf is recoverable. Within the 3-D survey Bapex detected
eight new gas layers in the field, the company said, and
is planning up to 11 new wells to further assess and produce the gas. The Titas field is Bangladeshs largest gasproducing state-owned field, with gas output of
approximately 450 MMcf/d.
ASIA PACIFIC
Chevrons Gorgon gas riches grow
Chevron has further added to its giant gas riches off
western Australia with more drilling success in the deepwater Greater Gorgon area in the Carnarvon basin. The
US major said its Satyr-4 exploration well confirmed
approximately 67 m (220 ft) of net gas pay in the WAEPmag.com | December 2012
Shell is drilling its Palta wildcat off the northwest coast of

Australia in 1,350 m (4,429 ft) of water, with potential reserves
put at up to 13.5 Tcf of gas in place. (Image courtesy of Shell)
Carnarvon basin exploration well hits 30 m of net gas pay

Chevron reported another discovery in its Greater Gorgon area offshore western Australia at exploration well
Satyr-2. The Carnarvon basin well was drilled in the
WA-374-P permit area to 3,796 m (12,454 ft) in 1,088 m
(3,570 ft) total water depth. According to Chevron, the
well confirmed approximately 39 m (128 ft) of net gas
pay. The Satyr-2 well is Chevrons 15th discovery in Australia since mid-2009. Chevron Australia is the operator,
with a 50% interest in WA-374-P and Satyr-2 discovery
well in partnership with Shell Australia and ExxonMobil, each of which holds a 25% interest.
97
on the
MOVE
PEOPLE
In Memoriam
Hart Energy joins family and friends

in mourning the loss of Jerry
Greenberg, who died in Houston
Nov. 5. Jerry was a valued contributor to many Hart Energy projects;
most notably, he used his extensive
knowledge of the oil and gas industry to write the technology articles for
Hart Energys unconventional playbook series. Jerry always went the
extra mile to deliver an assignment
beyond the scope of what was
expected, said Peggy Williams, Hart
Energy editorial director. He was a
true professional and a pleasure to
work with. He will be greatly missed
by us and his many colleagues in the
industry.
Ursula M. Burns was recently elected

to ExxonMobil Corp.s board of directors. Burns currently serves as CEO
and chairman of Xerox Corp.
Richard White has been appointed as

president and CEO of Global Geophysical Services Inc., succeeding Richard
Degner in the position. Degner will
continue in his roles as president of
Autoseis Inc. and non-executive chairman of the board of Global.
The Lucas Energy Inc. board of directors has selected Anthony C. Schnur as
CFO, treasurer, and secretary.
Glenn Hauer (left) has been
appointed president and
CEO of Inova Geophysical
Equipment Ltd.
Scotland-based Flexlife
recently announced that
Calum Buchanan (top right)
has been named projects
director. The company also
selected Philip Surtees (bottom right) as integrity management director.
Robert Cobb recently assumed responsibilities as director of North American
shales for SOR Inc.
Richard Williams (left)

recently assumed responsibiliBureau Veritas has appointed
ties as president, US region of
Philippe Donche-Gay (left)
Baker Hughes Inc. He will
as executive vice president of
direct efforts in the Gulf of Mexico and
the companys marine and
US land markets.
offshore division.
Greg Lanham has been appointed
CEO of FTS International after having
served on the companys board of
directors since 2011. Lanham succeeds
Marc Rowland, who recently retired.
Bill Smart (right) was

recently selected as business
development manager,
North America, for Aquatic
Engineering and Construction Ltd.
Ryan France has been named development director of WellEz. Overseeing a

team of software programmers, he will
lead new application development.
Bibby Remote Intervention Ltd. has

named Lloyd Duncan as senior inspection repair and maintenance consultant. The company appointed Andy
Inglis as inspection manager.
Eric Khan has been selected to serve

as vice president and CFO of Rand
Group, where he will oversee efforts
for continued and future growth.
98
Dr. David I. Groves was recently

appointed to serve on the advisory
board of Ultra Lithium Inc.
Craig International
Supplies has tapped Steve
McHardy (top right) and
Jill MacDonald (bottom
right) as joint managing
directors to grow and
expand current operations.
EXPANSIONS
Weatherford International has
announced the opening of a new
facility in Singapore, which will house
repair and maintenance, assembly and
test, manufacturing and technology,
administrative, and warehouse divisions
for the Asia Pacific region.
UTEC has opened a new office in
Naples, Italy, to better serve the
Mediterranean and African markets.
Science Applications International
Corp. has expanded its presence in
Dickinson, N.D., with the opening of
a new office to serve E&P efforts in
the Bakken shale play.
Ikon Science recently expanded operations in Norway with a new office that
will focus on providing quantitative
interpretation services.
Aker Solutions recently expanded its
oil services presence to Malaysia, opening a new subsea lifecycle service base
to support the Asia Pacific region.
ABS recently opened its new Korea
Energy Technology Center in Busan,
South Korea, to support technology
development for the areas energy and
offshore industries.
Dover Corp.s Pump Solutions Group
has expanded its manufacturing operations to Shangai with the opening of a
new facility.
Centek Group recently announced the
opening of a manufacturing facility in
EP
MARKETING | SALES | CIRCULATION
on the
MOVE
Oklahoma City, which will serve markets in the US, Canada, and Mexico.
cation facility to serve operations in

northern Norway.
Bowtech Products Ltd. announced plans

to relocate its headquarters to the ABZ
Business Park in Aberdeen, Scotland.
Lankhorst Ropes Offshore Division

recently moved to a new factory at
Viana do Castello, just north of Porto,
Portugal. The facility will house the
companys rope production facility for
deepwater mooring ropes and singlepoint mooring.
Group Publisher
RUSSELL LAAS
Tel: 713-260-6447
rlaas@hartenergy.com
Associate Publisher
DARRIN WEST
Tel: 713-260-6449
dwest@hartenergy.com
United States
Canada / Latin America
1616 S. Voss Road, Suite 1000
Houston, Texas 77057 USA
Tel: 713-260-6400
Toll Free: 800-874-2544
Fax: 713-627-2546
Regional Sales Manager

JULIE B. FLYNN
Tel: 713-260-6454
jflynn@hartenergy.com
United Kingdom / Europe

Africa / Middle East
Eden House
64-66 High Street
Chobham
Surrey GU 24 8AA, UK
Tel: 44 (0) 7930 380782
Fax: 44 (0) 1276 482806
Sales Manager
Eastern Hemisphere
DAVID HOGGARTH
Tel: 44 (0) 7930 380782
Fax: 44 (0) 1276 482806
dhoggarth@hartenergy.com
Advertising Coordinator
CAROL NUNEZ
Tel: 713-260-6408
cnunez@hartenergy.com
Subscription Services
PO BOX 5800
Harlan, IA 51593
Tel: 713-260-6442
Fax: 713-840-1449
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List Sales
MICHAEL AURIEMMA
Venture Direct
Tel: 212-655-5130
Fax: 212-655-5280
mauriemma@ven.com
Reflex Marine will soon be relocating

to its new headquarters in Shortlanesend, Cornwall, England. The company, which specializes in safe marine
transfer solutions, will work to convert
a 19th-century, grade-two historic
building into office space.
TAM International Inc. recently
expanded operations to Dickinson,
N.D., where the company opened a new
office to serve the Bakken shale fields.
Aker Solutions has expanded operations to Sandnessjoen, Norway, where
the company recently acquired a fabri-
To better serve the growing market need

for technical support in the San Antonio
area, VAM USA recently opened a new
field service office there.
Correction
In the October 2012 issue of E&P,

in an article titled Economic
method improves conformance
in CO2 flood, Lanny Shoeling
was incorrectly listed as a coauthor.
ADVERTISER INDEX
Australian American
Chamber of Commerce . . . . 73
Baker Hughes
Incorporated . . . . . . . . . . . . 33
Bluebeam Software, Inc. . . . . .19
Cameron . . . . . . . . . . . . . . . . IFC
CUDD Energy Services . . . . . .39
Dragon Products, Ltd. . . . . 78-81
E&P . . . IBC, 2-3, 46-47, 83, 87, 93
Expro Group . . . . . . . . . . . . . .71
Frontier Energy Group, Inc . . 57
Fugro Jason . . . . . . . . . . . . . . . 51
Great Wall
Drilling Company . . . . . . . . 24
Halliburton . . . . . . . . . . . . . . . . 6
K+S KALI GmbH . . . . . . . . . . . 59
LAGCOE 2013 . . . . . . . . . . . . .65
Magnum Oil Tools
International . . . . . . . . . . . . .41
Mewbourne College
of Earth & Energy . . . . . . . . . 14
M-I Swaco . . . . . . . . . . . . . . . . . 4
Momentive . . . . . . . . . . . . . . . 69
National Oilwell Varco . . . 26,60
PGS Exploration (UK) Ltd. . . . 22
Polarcus . . . . . . . . . . . . . . . . . .49
Precision Geophysical . . . . . . 28
Schlumberger . . . . . . . . . . 5, BC
Superior Drillpipe
Manufacturing Inc. . . . . . . . . 61
Statoil . . . . . . . . .Cover Gatefold
Strad Energy Services . . . . . . .37
TAM International . . . . . . . . . .67
Tenaris . . . . . . . . . . . . . . . . . . 58
United Electric Controls . . . . .75
U.S. Steel Tubular Products . . 55
Weatherford
International, Ltd. . . . . . 16-17
WellEz Information
Management, LLC . . . . . . . . .13
Welltec . . . . . . . . . . . . . . . . . . 63
October 2012 | EPmag.com99
last
WORD
Ensuring the quality of

next-generation geoscientists
A 70% or 80% geomodeling solution is not enough.
Duane Dopkin, Paradigm
e are now a few years into the surge of a new generation of geoscientists tasked with filling a huge gap
in petrotechnical professionals and expertise. This longawaited demographic change was a correction to years of
uncertainty, cyclical economics, and competitive economics, which saw the oil and gas industry falling short in
attracting students towards a professional career in the
geosciences. While this demographic change is greatly
welcomed, it is not without its challenges.
Unlike the previous population surge of the 1970s and
1980s, where geoscientists were exposed to extensive
training and mentoring on the fundamentals of a broad
range of exploration and development disciplines, this
new generation comes into the industry in an era where
specialization is the norm, mentoring resources are limited, and exploration and development technical problems are routinely and acutely challenging.
Oil companies, service companies, and professional
societies are addressing this educational gap with a careful balance of expert mentoring, classroom training, and
applied geoscience training against the rigorous schedules and deadlines of day-to-day activities that drive a
companys business. However, all too often when we
speak of equipping this next generation of geoscientists
with software technology, we speak of equipping them
with 70% or 80% solutions. While these solutions may
address deployment and information technology challenges, intuitively, this characterization is a downgrade in
requirements directly in conflict with the challenges facing the oil and gas industry, namely, replacing reserves
and understanding and reversing production declines.
This next generation of geoscientists requires and
deserves technology that fully contemplates the dependencies of the sciences that are the foundations of the
problems that we are trying to resolve. These dependencies are encapsulated in the names of the sciences (e.g.
geophysics, geochemistry, geomodeling, petrophysics,
rock physics) that we routinely deploy in the search for
and exploitation of hydrocarbons. When these dependencies are properly engineered into software applications,
100
geoscientists are able to elevate the quality of their work

and insights into the subsurface.
Today, a proper understanding of the types and sources
of anisotropy (velocity dependence on azimuth) can have
a huge impact on the quality of the seismic image and the
interpretation of that image. Here, the fabric and orientation of the geology governs the physics of wave propagation, which in turn governs the integrity of the seismic
image and the comprehensiveness of information that
can be extracted from the seismic method. Technologies
that not only consider these dependencies but implement
them for convenient access by this next generation of
geoscientists exist today.
Seventy to 80% geomodeling solutions, while addressing convenience and ease of use, generally cannot be carried out without significant compromises in geologic data
and geologic integrity. Cleary, this new generation of geoscientists should be schooled in generating geologic models without approximations or deformations induced by
the fitting of cells to an inadequate geologic framework.
Today, solutions that incorporate sound geologic rules
and mathematics into the fabric of geomodeling software
exist and should be the foundation of this generation of
geoscientists toolkit.
For many of us who belong to the population surge of
the 1970s and 1980s, a 70% outcome was considered substandard and an 80% outcome was considered an average
one. The oil industry and the
next generation of geoscientists deserve better than this.
DUG CONFERENCES - The largest unconventional resource events in t he world.
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DEVELOPING UNCONVENTIONALS
Hart Energy is once again proud to host our latest DUG ' Series
conference and exhibition. Together with the Canadian Society
for Unconventional Resources (CSUR), we will bring DUG
Canada - Changing Dynamics: Unconventional Resources
CA NAPA
Require Unconventional Capital - to Calgary in February 2013.

Canadian oil production is forecast to double between now and 2030, and the country 's light, tight
oil p lays will contribute mi ghtily to that growth.The Duvernay shale play is quickly emerg ing as a
world-class target , while powerhouse producers such as the Cardium and Montney are posting
impressive production gains. And classic oil-saturated reservoirs such as the Slave Point in the
Peace River Arch are in the midst of major rejuvenation.
Presented by:
The 2ND ANNUAL DUG CANADA CONFERENCE AND EXHIBITION
HART E N E R G Y
oil-rich unconventional plays. Beyond producer spotlights on the
CSUR
OP
Cenedlan
soaioty for
Unconventiona l
Resou rces
Sponsored by:
Investor MIDSTREAM
EW
ppNCONVENn AL
OILaGAS CE ER
will look at the depth and breadth of Canada 's rapidly-developing

Duvernay, the Montney and "the two Bakkens;
' confe rence
agenda topics include:
> Breakeven and F&D costs

> JVs, Corporate & Asset Deals
> Optimal Drilling & Completion Strategies
> Social & Environmental Challenges

> Midstream Infrastructure
If your company is involved in Canada 's resource plays, or if you
want to explore the opportunities in Canada now and into the
future, plan now to attend this conference.
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EXPLORATION & PRODUCTION

ASSET INTEGRITY MANAGEMENT

Making partnership a priority

Offshore asset integrity: lessons learned from

Arctic and drilling efficiency

COVER STORY: EXPERTS PREDICT

Explorers get bigger toolkit

Production 2012 a year in review

Offshore tide rising in 2013

A liquids-rich play emerges from the tight Woodbine

EXPERT UPDATES ON THE

At the Marcellus-Utica Midstream Conference & Exhibition , all of the

REGISTER TODAY AT MARCELLUSMIDSTREAM.COM

OIL & GAS CENTER

Preliminary Conference Program

Welcome & Opening Remarks

Hinds Howard,Chief Investment Officer ,

Guzman Investment Strategies

Midstream Operator Spotlight:Getting the

Liquids Monetization :A S potlig ht on NGL

David Deckelbaum, Senior E&P Anal yst ,

The Economics of NGLs-Processing

KeyBane Cap ital Markets

Heavy NGLs Spotlight:Where Will All the

Ohio River Valley, Crosstex Energy Services LP

Lunch Keynote Address: A Shale-Side Chat on

Moving Supp ly to Market

Ohio Take -Away Spotlight:Solutions in

Steve Jacobs ,President , Harvest Pipeline Co.

Joseph Blount Jr.

President and C00

President and CEO

End-User Spotlight:Getting the C l to the Cracker

Pipeline Panel: Taking Northeast NGL Production to

the Gulf Coast

Closing Keynote,Day One:Exporting U.S. Gas

Bill Cooper,President, Center for Liquefied Natural Gas

Keynote Address: A Midstream Giant's

Take-Aways on A ppalachian Supp ly

Energy Transfer Partners LP/Sunoco Logistics Partners LP

S potlight:The Potential for Utica Oil Supply and

Oil Compares with Other Sources

Regulatory Spotli ght: EPA Regulations Overview

Midstream Spotli ght:Leveraging the

Producer/ Shipper Case Study: Collaboration

Toward Resource Monetization

Mark Casaday,Chief Operating Officer, PVR Partners LP

Head of Energy Research

Thursday,Jan. 31, 2013

Utica There , Too

Financing Utica and Marcellus Take-Away:

Cap ita l Access

Manuj Nikhanj ,Manag ing Director , Head of

Liquids Monetization:A Spotlight on NGL

and Recoverable Resource

(as of November 1, 2012)

DEPARTMENTS AND COMMENTARY