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 February 2010 Volume 11, Number 1
Contents
5 The Tide is Turning
Publication Mail Agreement No. :
40039458 6 CERI 2010 Natural Gas Conference Marketing Note

PUBLISHER 7 PSAC’s Public Outreach Program

John Robertsen
8 “Intelligent Optimization” for your Gas and Oil Field
Development and Planning

EDITORIAL ASSOCIATES 8 PFC Energy 50 Ranking of World’s Top Energy Companies

David Coll
9 Better Times Ahead in 2010
Seema D Dhawan
Joni Evans 10 Purpose Built Disposable Motors
Elizabeth Hak
Joe Perraton 12 PSAC’s Fundraiser Nets $458,000 for STARS

14 Customized Isolation Solution Smoothes Path for Safe

DESIGN & LAYOUT
Repair of Damaged Riser in North Sea
millstonecommunications.ca 14 R&M Energy Systems Improves Down-hole Drilling with
amanda@oilgas.net
Even Rubber Thickness Stator
15 IHS CERA: Falling Costs for Upstream Oil and Gas
ADVERTISING SALES Facilities Appear to be Bottoming Out
John Robertsen
403.503.0460
16 Ziff Energy Commences 1st International FPSO
jrr@oilgas.net Operations Benchmarking Study to Assist Operations
Enhance Efficiency
16 Enventure Successfully Installs New High-Performance
OIL & GAS NETWORK
Suite 300, 840 6th Ave SW
Expandable System
Calgary AB T2P 3E5
17 Future to bring continued price disparity between
Phone: 403 503 0460
Canadian oil and natural gas

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Oil & Gas Network, February 2010 3

 Coll’s

Corner
The Tide
is Turning
Canada’s oilsands may be starting to win
the battle of public opinion
By David Coll

hen gazing into the crystal ball to determine what lies ahead for the Canadian oilpatch in 2010 and be-

W yond, it comes as little surprise that the sector’s bright spot remains the oilsands and, to a much lesser
extent, shale gas.
From this point forward, if it wasn’t already abundantly clear, ‘unconventional’ is now the norm.
In November, the Paris-based International Energy Agency (IEA) predicts a gradual revival for Canada’s oilsands
sector, which it dubs “one of the few growth areas” among non-OPEC countries.
“Providing that current challenges can be overcome, Canadian oilsands have the potential to make a significantly
greater contribution to global energy security for decades ahead by increasing the diversity of supply,” the IEA says.
“However, as an industry whose profitability currently relies on oil prices of $75 to $80 US per barrel, the outlook
for the medium term is less certain.”
Surely, the “challenges” referred to by the IEA relate not only to technical production issues but also to the con-
tinuing strident, worldwide opposition to oilsands development.
If the oilsands industry is to make a full recovery, it will not only have to resolve complex technical issues like
how to reduce greenhouse gas emissions but it will also have to win the battle of public opinion.
Perhaps it’s blind optimism on my part associated with the turning of another calendar year, but I do get a sense
that the industry may have weathered the worst of the environmental storm. I sense that, as the irrefutable num-
bers become better known, that maybe (just maybe) the public is starting to doubt what they’ve been hearing from
the likes of Eco Justice, the New Democrats, et al.
On the other hand, the attacks have been relentless and the recent protests of Greenpeace are indicative of a
new level of frustration and desperation with what they view as government inaction on climate change. Many ex-
pected damaging oilsands headlines out of December’s UN Conference on Climate Change in Copenhagen, but
other than embarrassing internecine fighting among the provinces, these didn’t really materialize.
I think also that the media may also be tiring of the same shopworn story from those who earn a living by op-
posing the industry. Instead of merely trumpeting opposition viewpoints that are lacking in completeness or sim-
ply inaccurate, more and more articles of late appear to also be presenting a balanced point of view.
But some feel the damage is already done – how do you change the negative perceptions about oilsands de-
velopment and all the misinformation floating around out there? How do you correct all the mythmaking?
There’s only one way – by continuing to supply the facts, one stakeholder at a time. Here are some key ones,
courtesy of the Oil Sands Developers Group and the Alberta Chamber of Resources – memorize them!
0.1 per cent or 500 sq. km, area of surface disturbance to Canada’s boreal forest created by oilsands mines
0.1 per cent, Canadian oilsands’ share of total global greenhouse gas emissions
2.6 million tonnes of GHG reductions achieved thusfar, equivalent to removing 550,000 cars from the road
4 billion, amount set aside by Alberta for climate change initiatives, including public transit and carbon
capture and storage
4.5 per cent, area of Canada’s total boreal forest in which oilsands are located below the surface
5 per cent, oilsands’ share of Canada’s total GHG emissions
20 per cent, reduction in surface disturbance since 2001 through cooperative initiatives such as Integrated
Landscape Management
27 per cent, per-barrel reduction in oilsands industry emissions since 1990
80 per cent, amount of total water currently recycled by oilsands mines
80 per cent, oilsands projects that will be developed using in-situ technologies

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Oil & Gas Network, February 2010 5
CERI 2010 Natural Gas Conference Marketing Note
O
ne minute you are playing checkers; a nice predictable game.
The next minute you are being handed a new set of game
pieces but the game rules are TBA. That is what the current
North American natural gas sector feels like. The 2010 CERI Natural
Gas Conference will try to make sense of the new game prices and
maybe, just maybe, offer some insight into how the new rules gov-
erning play will unfold.
Since one of the biggest game changers is shale gas the
Conference will open with an address from Alex Ferguson of the BC
Oil and Gas Commission on BC’s gas management plan. From there
delegates will hear two well respected experts, Chris Theal and Paul
Ziff, present their respective views on how the North American gas
market will unfold over the next 24 months.
The Conference will look at all aspects of natural gas supply; from
shale to syn and everything in-between. Of course what is a market with-
6 Oil & Gas Network, February 2010
out demand? The Conference will take a hard look at what the prospects
for demand growth are, and what policy and regulatory factors will
assist in shaping it.These discussion will be lead by Mike Cleland of the
CGA, Michael Harcourt of QUEST, Gary Holden of ENMAX, Anthony
Damiano of Wood Mackenzie, and Wayne Geis of EnCana.
CERI has saved the best for the last. The Conference ends with a
CEO Panel discussion on the challenges that the industry will face
in the near future. Moderated by Deborah Yedlin this session prom-
ises to be the highlight of the Conference and one that all delegates
will not want to miss.
In addition to the outstanding program there is not better oppor-
tunity for networking with colleagues in the natural gas industry
than that offered to delegates at the CERI Conference.
To register for, or obtain more information on, the Conference please
contact Capri Gardener at 403-220-2365 or cgardener@ceri.ca.
CSA Standards Announces
North America’s First Oil
& Gas Pipeline Security
Standard
C
SA Standards today officially announces a
new, comprehensive publication designed to
help manage the security of land-based
pipeline systems and assets from vandalism, sabotage
and other security threats. Transnational pipelines
connect across much of the Canada-U.S. border with
more than 540,000 km of pipelines in Canada and
nearly 805,000 km of oil and gas pipelines in the
U.S. The first standard of its kind in North America,
Security Management for Petroleum & Natural Gas
Industry Systems is designed to help protect and
secure industry systems located in Canada.
Canadians recognize the importance of a safe,
secure and reliable energy supply and that any pro-
longed interruption in the supply of energy due to
sabotage or vandalism, would undoubtedly harm the
economy. Even more important is protecting the well-
being of workers, families and surrounding commu-
nities. With six bomb attacks on pipelines in B.C.
occurring last year alone, vandalism, sabotage and
attacks on oil and gas assets here in Canada have
illustrated the need for a national security manage-
ment standard.The new CSA standard takes all of these
factors into account and applies specific security risk
reduction measures to help reduce potential harm.
“The CSA Security Management for Petroleum and
Natural Gas Industry Systems standard is designed to
help ensure the safety and security of Canadians,” says
Suzanne Kiraly, President, CSA Standards. “Together
with the National Energy Board and leading security
experts, CSA developed this innovative standard to
help mitigate threats to the energy supply systems.
Organizations that implement this standard can con-
fidently say that they are on the forefront of work-
place health, safety, and security management.”
The development of the standard was initiated
when the National Energy Board Act was expanded
to include “security” within the Board’s mandate.The
NEB then approached CSA to develop a consensus-
based standard which would outline the require-
ments of a security program.
“The NEB is proud to be partnering with CSA
Standards in developing a security standard that is
comprehensive, thorough and incorporates estab-
lished best practices in the pipeline industry,” said
NEB Chair and CEO Gaétan Caron.
“Having said that, I think it’s important to remem-
ber that at the heart of this standard is our shared com-
mitment to protecting what Canadians value most: our
families, our homes and our businesses,” he said.
CSA’s Security Management for Petroleum &
Natural Gas Systems standard uses a risk manage-
ment and performance-based approach to help iden-
tify and reduce threats to oil and gas industry assets.
It assists in enabling owners and operators to estab-
lish governance, conduct planning, implement secu-
rity operations (including detection and mitigation
practices), and refine the security program through
change management and audit processes.
The standard applies to land-based pipeline sys-
tems for oil and gas, as well as liquefied gas produc-
tion, storage and handling facilities, underground
hydrocarbons storage, petrochemical installations, oil
and gas treatment, production processing, storage
operations and related assets. To help introduce this
new approach to industry, CSA Standards is offering
seminars that will provide users with a solid foun-
dation of the full range of security and risk manage-
ment considerations.
Further information on training is available at
https://learningcentre.csa.ca/
PSAC’s Public
Outreach
Program

W
hen oilpatch activity slows,
all companies – particularly
those in the service sector –
tighten their belts. Programs seen as
“extra and “nice to have” are cut, as companies keep a firm eye on the bottom line. But in
some cases, what might be considered as an “extra” by some is seen as a critical part of
doing business by others. Case in point: PSAC’s Public Outreach Program (POP).
The POP is PSAC’s contribution to strengthening industry’s social license to operate.
That may seem like a low priority when companies are struggling to keep their people
employed, but when the industry swings upwards again, as it is bound – and perhaps start-
ing – to do, negative public opinion could impede industry activity and growth.
This is why the PSAC Board of Directors recognizes the POP’s value over the longer
term and has directed PSAC to press ahead with the program this year. In fact, the Board
recognizes this temporary economic slowdown as a golden opportunity for our industry
to win over Canadians, many of whom may now be more open to recognizing the bene-
fits our industry provides. Further, the slowdown allows PSAC the time to create and im-
plement a top-notch program, in advance of the industry’s next boom.
PSAC President Roger Soucy commented: “In the last upswing, when we were drilling
and completing more than 20,000 wells each year, our industry was focused on meeting
the world’s demand for oil and gas. Then the Alberta Royalty Review gave us a wake up
call, telling us that we didn’t have quite the level of public support we thought we had.
It’s clear now that going forward, we need to pay much closer attention to the people who
live in our areas of activity. That’s what our POP is all about.”
A public survey conducted by PSAC last year uncovered a number of ways the oil and
gas industry can build community support for its activities. From that data, PSAC is build-
ing a program based on two key elements: knowledge and behaviour. PSAC’s member com-
panies employ approximately 60,000 people, each with the opportunity of influencing the
views of their families, friends and community members. To be effective spokespersons
however, workers need to know the basic facts about the industry, how it operates and
what it provides to Canadians. PSAC is currently developing the information workers need
to be good ambassadors for the industry and will soon be sharing that information directly
and regularly with its member company employees.
On the behaviour front, PSAC has identified a number of “nuisance issues” that cause
friction between industry and communities, such as leaving gates open and letting garbage
fly out the back of a truck. PSAC is creating materials to remind workers to avoid these
types of actions and to encourage workers to treat our community partners with respect.
Mr. Soucy summarized: “This combination of knowledge and behaviour materials will
make our POP a complete package. By launching our program this year, we will be well
prepared for when our industry ramps up again.”
PSAC’s POP information and materials will be launched throughout 2010. For more on
the POP, go to www.psac.ca.

Oil & Gas Network, February 2010 7

“Intelligent Optimization” for your Gas
and Oil Field Development and Planning
F
ORGAS 10.1 has many new enhanced capabilities for inte-
grated reservoir to sales line forecasting. FORGAS now allows
users to optimize the entire system by defining certain cri-
teria which are specified as plant constraints. For each plant con-
straint, the user defines an action or series of actions that FORGAS
may perform to satisfy that constraint. For example, the user can
tell FORGAS to limit the maximum CO2 mole fraction at the plant
inlet to 10% by adding the well which will have the most benefit
relative to this constraint and/or choking the most offending well.
Other plant constraints might include setting a minimum sales gas
rate or meeting a minimum gross heating value at the plant outlet
which can be enforced by either adding compression, adding
8 Oil & Gas Network, February 2010
zones, shutting in wells, etc.
FORGAS implements these actions as required to meet the con-
straint, ensuring that the actions done for lower priority constraints
do not interfere with satisfying higher priority constraints. Any con-
straint and the resulting actions can be changed over the forecast.
Another significant workflow enhancement in FORGAS is the
capability to import GIS pipeline and well data. FORGAS reads
this information, automatically connects the pipeline endpoints,
and removes redundant elevation points. Using the UTM coordi-
nate data to define the entire network means that the gathering
system—wells and pipelines (including detailed elevation pro-
files)—can be constructed in FORGAS in mere minutes. Also new in FORGAS is the extension of the dynamic
linkages with the reservoir simulators ECLIPSE (from
Schlumberger) and IMEX and GEM (from the Computer
Modelling Group) to model oil fields.
For more information please contact info@
NEOTEC.COM or visit www.Neotec.com.
PFC Energy 50
Ranking of World's
Top Energy Companies
T
he combined value of the 50 largest publicly trad-
ed energy companies increased 35% in 2009 to
$3.9 trillion, according to energy consultants PFC
Energy. That value remains 26% below its $5.2 trillion
high at the end of 2007. The 35% gain compares with
increases of 71% in oil prices and 20% in the S&P 500
over the same period.
“Many long term trends that were underway before
the financial crisis have reasserted themselves,” said J.
Robinson West, Chairman and CEO of PFC Energy. “We
are witnessing the continuing transformation of the in-
dustry. Investors see more potential in companies with
growing end-user markets and preferential access to re-
sources, and they have soured on the refining business
in mature markets.”
One year ago, five of the top six positions on the
PFC Energy 50 were occupied by ExxonMobil, Royal
Dutch Shell, Chevron, BP and TOTAL. ExxonMobil had
also reclaimed its long-standing leadership of the PFC
Energy 50 list from PetroChina.
This year, PetroChina tops the list again, with a mar-
ket capitalization of $353.1 billion, 9% larger than
ExxonMobil’s $323.7 billion and Brazilian company
Petrobras at #4 with a value of $199.2 billion that was
larger than either Royal Dutch Shell or BP.
In the past twelve months, the combined value of
the list’s nine traded national oil companies (NOCs) rose
by 66%, while the six SuperMajors, ExxonMobil, Royal
Dutch Shell, BP, Chevron, TOTAL and ConocoPhillips in-
creased their combined value by less than 1% and OECD-
based integrated companies gained only 6% in value.
2009 was a turnaround year for countries as well as
companies. Russian companies, last year’s worst per-
formers, posted a combined 88% value gain and the
value of the Chinese companies grew 52%.
Also visible this year are early signs of industry re-
structuring and consolidation. After spinning off its
integrated oil sands operations as Cenovus, a smaller
Encana fell from #22 to #44, the list’s largest drop. The
Petro-Canada merger helped Suncor increase its market
capitalization by 91% to climb from #37 to #22.
ExxonMobil’s acquisition of XTO was not completed at
year end, but the combined value of the two companies
fell short of displacing PetroChina from the list’s #1 po-
sition. Consolidation will also affect values in the serv-
ice sector: Cameron’s value reflects its $1 bn acquisition
of Natco and Baker Hughes’ pending acquisition of BJ
Services will create an $18 bn company that would be
in third place on the Top 15 Oilfield Service companies
list.
Better Times Ahead in 2010
B
etter times are ahead for the energy industry, but it won’t be a speedy recovery. “The year
ahead is still going to be tough,” says Greg Stringham,Vice President, Markets and Oilsands,
for the Canadian Association of Petroleum Producers.“We hope at the end of 2010, things
will balance.”
Technology has unlocked supplies of shale gas across North America, so that sector may see
more action in the coming months, according to CAPP.
“The development of new technology is a bright spot for the new shale gas supply. Alberta
and B.C. will have to be competitive with the U.S. It looks like shale gas is primed to be one of
the first back in. We need to ensure we’re ready for it when things do come back around,”
Stringham says.
In December 2009, Nexen Inc. announced it will spend $200 million on its Horn River shale
gas play in British Columbia over the next year. The company plans to drill eight 1,800-metre
horizontal wells this winter. Nexen’s objective is to produce 150 to 200 million cubic feet of gas
per day (mmcf/d) at Horn River by September 2011, up from the current 15 mmcf/d, CEO Marvin
Romanow says.
The unconventional oil and gas sectors will have an easier time in 2010 than conventional
plays, which will take longer to rebound. “The conventional gas side is still significantly chal-
lenged,” Stringham says, mainly due to an abundant supply.
The Petroleum Services Association of Canada (PSAC) forecasts low drilling activity in 2010,
with it picking up and peaking in the last quarter of the year. In Alberta, PSAC estimates 5,095
wells will be drilled, a five per cent drop from 2009.
The Canadian Association of Oilwell Drilling Contractors (CAODC) anticipates a slight
improvement in 2010 over 2009. During the first quarter of 2010, only 40 per cent of the fleet
is expected to be employed, followed by a significant decrease during spring breakup. A
utilization rate of 27 per cent is expected in 2010, the CAODC forecast states, up from 23 per
cent in the first three quarters of 2009.
The oilsands will fare the best of all the energy sectors in the upcoming year, says David
McColl, research director of the Canadian Energy Research Institute (CERI). “Conventional gas
within Alberta and Canada in general is in rough shape. The oilsands industry is poised to
recover more quickly and smoothly,” he says.
CERI’s recently released Oilsands Supply Cost and Develop- ment Projects Update estimates
$16 billion in investment will take place in the oilsands in the next two years. The CERI study
says that rising oil prices will combine with lower costs to put some cancelled oilsands projects
back on the agenda.
CERI forecasts oilsands spending will increase from $3.9 billion this year to about $8 billion
in 2010, largely due to spending on the planning and construction of Imperial Oil’s Kearl oil-
sands mine.
“We’re really not going to see any major growth in the oilsands in the next couple of years,
however we will see lots of investment,” says McColl.“It’s going back to historically where we’ve
been.”
Since oilsands companies need to plan so far into the future, an economic slowdown does-
n’t affect their long term planning as significantly, McColl explains.“Imperial Oil is looking 30 to
40 years into the future, so for them, it’s not an issue of the recession getting in the way of their
spending. In fact, it can be taken as a huge opportunity.”
Suncor Energy has also put its Firebag expansion back on the books. The company has
approved $5.5 billion in capital spending plans for 2010, with $1.5 billion allocated for growth
spending. The majority of growth spending will be directed toward the Firebag Stage 3 in-situ
expansion, which was roughly 50 per cent complete before being deferred in early 2009. Suncor
now expects the project to begin production in the second quarter of 2011.
“We’ve said that sequencing of our growth projects would be based on highest expected
return on capital, near-term cash flow and lowest risk,” says Rick George, Suncor President and
CEO. “Expansion work at Firebag clearly fits all the criteria to be first out of the gate.”
Oil & Gas Network, February 2010 9
Purpose Built Disposable Motors
Positive Displacement Motors have a long and varied history in the Canadian Oilpatch. They are
used for a number of purposes including directional drilling, performance drilling, river crossings,
completions and utilities installations.

I
n recent years the “Disposable Motor” has become more and more commonplace, particu-
larly in applications with high cost day rates, ie: offshore. In the offshore industry we see
operators running “Disposable” motors on the end of their production string to ensure they
get the casing to bottom. The motor allows the operator to drill or circulate through tight spots
and bridges thus eliminating the need to trip casing and perform cleanout trips. In such appli-
cations where day rates are high, the cost of running a motor is very economical insurance.
Historically, utilization of “Disposable” motors has been very limited in Alberta due to cost. In
past situations where an operator did require a “Disposable” motor for whatever purpose the ven-
dor would send out a used, usually worn out motor. The thinking behind this development was
to offer the client an affordable alternative in situations where a motor would be the practical
solution.
Where we see the most practical utilization in our local market is in the area of liner instal-
lations. In problematic areas and also to allow further/extended horizontal reach a “Disposable”
motor on the end of the liner provides a viable and economical solution.The ability to run these
motors with slotted liners is also available.
Excerpt from a major Canadian Exploration firm drilling in NE British Columbia with a TMC
“Disposable” motor: “Operator had drilled and landed 7' intermediate casing at 2582m (90
degrees). 6 1/8" hole was drilled to 3900m. Problems were incurred open hole logging the well
due to cuttings bed settling and deteriorating hole conditions. Decision was made to run a mud
motor on the end of the liner string to allow us to circulate the liner into place to ensure the
liner made it to bottom. Operations were successful as the mud motor was used to circulate the
liner to bottom right from outside the intermediate casing to liner TD. It is our opinion that the
liner would have not made it to bottom without the assistance of the mud motor.”
In this case a 5”“Disposable” motor was run.The operator was impressed with the results and
the costs and maintains that this well would have been lost without the use of the motor.
In addition to conventional drilling hole sizes, “Disposable” motors are also available in
smaller sizes, usually 2-7/8” or 3-1/8”. These are most commonly used in snubbing operations

where the operator wishes to drill out plugs and drop the motor on bot-
tom thereby eliminating the need for additional snubbing in and out of
the wellbore. Small motors have a history of being used for sacrificial pur-
poses. Where we differentiate ourselves is by offering “Main Hole” size
“Disposable” motors to the market.
The “Disposable” motor is a proprietary tool purpose built for these
applications. It can be provided in most sizes. Many components have been
redesigned to lower the total cost thus making it an affordable alternative.
Although these motors are labeled “Disposable” they have gone through
rigorous testing and are built with only new components. In testing these
motors easily drilled in excess of 100 hours.

For further information please contact: Todd Brown or Dan Gretener @

(403) 230-3055 www.themotorcompany.ca

10 Oil & Gas Network, February 2010

PSAC’s Fundraiser Nets $458,000 for STARS
A
lmost 1,000 enthusiastic guests, repre-
senting all sectors of the oil and gas
industry, attended PSAC’s 16th annual
STARS & SPURS Gala in Calgary in January. This
year’s event raised a whopping $458,451, an
astounding amount, particularly given the cur-
rent economic slowdown. Over the past 16
years, PSAC has raised a cumulative total of over
$4.1 million for STARS.

PSAC credits all sectors of the industry – pro-

ducers, services, drilling and pipelines – for
working together to make the gala such a long-
time success.The event’s live auction showcased
the strong collaboration between producers and
service companies. Two major producers
bought the cement job donated by Trican Well
Service and set of bridge plugs donated by
Halliburton. Darian Resources and KOS Oilfield
Transportation joined together to donate a golf
trip for two for Fox Harb’r Resort and a service
company snapped up a wine cellar dinner for 12
at the Calgary Petroleum Club, donated by
Advantage Oil & Gas.

Then in a stunning, last-minute deal, Ken

McCagherty, CEO of West Energy, having been
outbid on the cement job, asked Stream-Flo
Industries to donate a sour gas wellhead assem-
bly. Doug McNeill, Stream-Flo’s Executive Vice
President, Business Development, agreed. West Above: Gala guests checked one of the five STARS
Energy bought it on the spot, as a final, unplanned helicopters, all of which display the PSAC logo.
auction item. All together, the live auction gener-
Right: Jessie Farrell put on an energetic
ated an astounding $246,200 – a STARS & SPURS
Gala record! performance.

“This level of support from all sectors demonstrates how our industry can work together to
achieve shared goals and underscores the value the entire oil and gas industry places on STARS,”
said Brian Coston, Chair of the gala organizing committee and PSAC First Vice Chair.“The STARS
& SPURS Gala gives everyone a chance to network and helps ensure that STARS’ emergency
medical response services remain available to oilpatch workers across Alberta and beyond.”

The 16th annual gala also celebrated STARS’ 25th anniversary, toasting the 12
Founding Directors of STARS. Gala guests enjoyed dinner with birthday cake, a per-
formance by rising country music star Jessie Farrell, raffles, a silent auction, danc-
ing and the chance to network, all with the help of guest emcee Dave Rutherford
of QR77. Special guests included the Hon. Ronald Liepert, Alberta’s Minister of
Energy.

One of the STARS helicopters was also on site, along with crew members who
showed guests the tight but efficient space in which the medical team works on
board. Because of its annual contributions to STARS, PSAC has its logo proudly dis-
played on all five of the STARS helicopters.

PSAC presented a cheque for $458,451 to STARS. From left to right: Dr. Greg Powell, STARS CEO; Roger Soucy,
PSAC President; Brian Coston, Gala Committee Chair and PSAC First Vice Chair; and Al Buchignani, STARS Chair
PSAC President Roger Soucy commended all sectors of the industry for their
unwavering support of STARS and the gala. “We could never have generated over
$4 million for STARS without the collaborative efforts of the entire oil and gas in-
dustry. On behalf of PSAC, I would like to thank the sponsors, guests and volun-
teers who have worked so hard over the past 16 years to make the STARS & SPURS
Gala such an enduring success.”

12 Oil & Gas Network, February 2010

Customized Isolation Solution Smoothes Path for Safe Repair
of Damaged Riser in North Sea
TDW Offshore Services AS has successfully completed an innovative low pressure isolation operation
on an export pipeline riser in the North Sea.

I
n 2007, a passing vessel collided with the southeast face of a satel-
lite platform jacket, damaging the 12-inch export riser. Production
from the platform was immediately shut-in via the emergency
shutdown valves, leaving the pressure in the pipeline at approxi-
mately 4 barg.
Monitoring Pressure During a Low Pressure Isolation
Before production could resume, the operator needed to repair the
riser. The objective was to cut and remove the damaged riser section,
and replace it with a new one. To facilitate the repair process, TDW
Offshore Services (TDW) was retained to formulate a low pressure iso-
lation solution in order to isolate the damaged section of the pipeline
riser from the export pipeline gas inventory. By doing so, the damaged
riser section and associated topside pipework production system could
be replaced, safely and efficiently.
Following intensive analysis, engineering and testing, TDW developed a solution using its range
of specialist pipeline pigging, pig tracking and remote communications technology. The unique
approach involved using multiple high friction pigs in order to seal off and replace the damaged riser
section and pipework. The solution consisted of the following elements:
• A custom-designed TDW pig trap and pigging spread.
• A high friction pig train furnished with the SmartTrack™ remote tracking and pressure-
monitoring system.
• A SmartTrack subsea remote tracking and pressure-monitoring system.
• A SmartTrack topside tracking and monitoring system with radio link to the dive support
vessel.
• A pipeline isolation ball valve.
Following installation of the new riser section, TDW verified that the ESDV and new
12-inch valve were operating properly and fully open. After purging the riser and topside
pipework,TDW used its pigging pump to slowly increase the water pressure to begin pig-
ging the HFIPT downstream away from the platform to the launcher. The ESDV and 12-
inch valve were then closed, and the pipeline gas inventory pressure was increased to
keep the HFIPT moving forward. After all pigs were recovered in the temporary pig trap,
the ESDV and new valve were closed. Using the platform crane and remotely-operated
vehicle ROV, all pigging equipment was removed and the TDW crew demobilized. All off-
shore operations were carried out in about 10 weeks, from May 20 – August 2, 2009.
By using its remote tracking and pressure monitoring technology, TDW made it pos-
sible for repairs to the damaged riser to be made while maintaining a continuous flow
throughout the duration of the operation. “Not only did TDW isolate the affected riser
section effectively and efficiently, the innovative solution meant that the operator expe-
rienced reduced downtime,” said Rune Haddeland, General Manager of TDW Offshore
Services. “The fact that this was achieved in an environmentally safe manner, in keeping
with our high level of environmental standards makes it all the more impressive,” he
added.
R&M Energy Systems Improves
Down-hole Drilling with Even
Rubber Thickness Stator

A
n even rubber thickness stator, the Moyno® ERT™ Power Section from R&M Energy
Systems significantly improves the overall performance of power sections used in
During August 2009,TDW used its remote- down-hole drilling applications.
controlled SmartTrack technology to suc- R&M Energy Systems’ extensive experience in stator engineering, manufacturing,
cessfully isolate the damaged riser section and product application enabled the Company to develop stators with internal contours
from the gas inventory in the export pipeline that are precision-machined, rather than hydraulically formed. The resulting tubes fea-
without venting or flooding the pipeline, or ture excellent durability and tolerancing that optimizes the benefits of even rubber
displacing the pipeline inventory. A three- thickness technology.
module high friction pig train created an Applying an even thickness of rubber to the stator contour and supporting each lobe
isolation against the gas pressure in the with steel minimizes the rubber’s degree of dimensional change during use due to tem-
pipeline. The first step was to verify and perature, chemical attack and loading. This design allows Moyno ERT Power Sections to
record the pipeline inventory gas pressure, reliably produce up to 100% more power output compared to conventional stators. For
and close and isolate the Emergency Shut the user, this higher power density and improved reliability translate to higher ROPs.
Down Valve (ESDV) 050. The redundant top- An additional benefit of the ERT’s high power density is the ability to use shorter
side pipework located upstream of the ESDV power sections with performance outputs comparable to that of longer conventional
was removed, and a temporary spool and 12- A pipeline of this type is not traditionally pigged. product. This can improve the motor’s directional response as well as MWD and LWD
inch valve were installed upstream of the As a result, the low pressure isolation solution had measurement quality by placing their sensors closer to the bit. Moyno ERT Power Sections
ESDV. Leakage over the ESDV was monitored to be pigged through non-standard construction are also a perfect choice to drive RSTs.
closely, with a view to minimising pressure pipework fittings.
build-up in the spool.
“Through Pipe Wall” Communications Technology Plays Key Role Using the pig trap and pigging
pump, the high friction isolation pig train (HFIPT) was launched and pigged with water to the pre-
determined isolation position within as straight spool section of the vertical riser. Using TDW’s
remote tracking technology, technicians onboard the dive support vessel (DSV) tracked the position
of each pig to verify that the HFIPT was located below the damaged section of riser that was desig-
nated for replacement. Communication skids were positioned over the three pigs and connected to
the pig monitoring system.
By doing so, TDW was able to monitor the downstream pressure of each isolation pig continu-
ously throughout the operation using its
innovative “through pipe wall” communica-
tions technology that makes it possible to
send isolation integrity data by radio link to
a dive support vessel.
The existing topside pipework was
removed and replaced with new pipework.
Divers were deployed from the DSV.The sec-
tion was successfully cut and removed
using a crane onboard the DSV. A mechani-
cal connector was locked onto the existing
riser. The new riser was attached to a crane
on the platform and lowered down to rope
The non-standard construction pipepwork access workers who installed it on the top-
fittings consisted of two 1.5 D bends and a side pipework closing spool and to the exist-
narrow 45 degree traverse. ing riser located above the HFIPT.

14 Oil & Gas Network, February 2010

IHS CERA: Falling Costs for Upstream Oil and Gas Facilities
Appear to be Bottoming Out
Operating costs rise slightly and descent of capital costs’ slows, according to IHS CERA indexes

T
he costs of building and operating upstream oil and gas
facilities—which fell drastically in Q1 2009 after a prolonged
period of escalation—appear to be bottoming out, accord-
ing to two cost indexes developed by IHS Cambridge Energy
Research Associates (IHS CERA).
The IHS CERA Upstream Capital Costs Index (UCCI), which
tracks costs associated with the construction of new oil and gas
facilities continued to decline, down 4 percent over the past six
months, though costs are approaching their bottom, the report
finds. Its index score is now 202. The UCCI’s counterpart, the IHS
CERA Upstream Operating Costs Index (UOCI), which measures
operating costs for those facilities rose by 1 percent in the past six
months after falling 8 percent during the prior year.The UOCI index
score is now 168.
The indexes are proprietary measures of cost changes similar in
concept to the Consumer Price Index (CPI) and draw upon propri-
etary IHS and IHS CERA tools to provide a benchmark for compar-
ing costs around the world. Values are indexed to the year 2000,
meaning that capital costs of $1 billion in 2000 would now be $2.02
billion. Likewise, the annual operating costs of a field would now be
up from $100 million in 2000 to $168 million.
“The IHS CERA upstream cost analyses show that some confi-
dence has returned to the industry as oil prices have recovered and
expectations rise for a strong economic recovery in 2010,” said
Daniel Yergin, IHS CERA Chairman.“However, uncertainty related to
present low oil demand and large spare capacity continues to hin-
der many projects.”
OPEC spare capacity has tripled in the past 12 months to 6.4 mil-
lion barrels per day (mbd). Costs associated with land rigs declined 7 percent owing pri- ing costs for equipment operators and difficulties
The reduction in capital costs was driven by sustained lower marily to softening activity levels in the United States (28 percent obtaining financing fueled the drop.
levels of upstream oil and gas activities, which resulted in a sharp reduction) and the Middle East (10 percent reduction). Costs for off- Contrary to the decline seen in construction costs,
decline in the costs of drilling rigs and yards and fabrication. shore rigs fell 3.1 percent, respectively, due to continued weak the Upstream Operating Costs Index increased one per-
Upstream steel costs continued to fall through 2009, dropping demand for jackup rigs. cent since Q1 2009.This was driven primarily by a rise
12 percent from Q1 to Q3 2009 on top of the 25.2 percent over the Yards and fabrication, impacted by the sharp drop in general in personnel costs and increases in the consumables
previous six months but in the past quarter it now appears to have shipping construction saw costs decline 13 percent over the past market. Operating personnel costs rose 6 percent in
stabilized around the cost floor. six months.A decline in new orders compounded with higher fund- the past six months. But this is a somewhat confusing
picture as the increase was driven largely by foreign
exchange fluctuation when converting local man-
power rates into a weakened U.S. dollar. However, the
personnel market, always resilient to recessions, is ex-
pected to continue to increase as hiring freezes begin
to thaw out.
Consumables costs rose, driven by the rebound in
feedstock prices and recovery in the global demand for
chemicals. Fuel costs—which registered an increase
of 9 percent—were the largest factor in the rise in con-
sumables costs.
“Upstream capital costs continued to fall due to
lower oil demand easing pressure on rigs and oil field
related equipment and services,” said Pritesh Patel,
director for the IHS CERA Capital Costs Analysis
Forum. “But the slowing pace of the decline in index
suggests that costs are poised for a turnaround as com-
modity prices begin to recover and labor costs rise.”
“Looking at upstream operating costs over the last
6 months, a focus by operators on reducing rates for
services continues to be a pervasive theme,” said Jeff
Kelly, associate director for the IHS CERA Operating
Cost Analysis Forum.“But that was somewhat disguised
by higher manpower costs from a weaker U.S. Dollar
and rising fuel and chemical prices.”
Overall, the indexes project an increase in costs in
the near term, with relatively stable oil prices in and
recovering gross domestic product growth driving cap-
ital costs; and rising demand for services and vessels,
along with rising materials and feedstock prices
escalating operating costs.

Oil & Gas Network, February 2010 15

Ziff Energy Commences 1st International FPSO Operations
Benchmarking Study to Assist Operations Enhance Efficiency

Z
iff Energy Group, the leading upstream operations benchmarking firm, announces the
commencement of its first International FPSO Operations Efficiency study, evaluating
operating costs and uptime reliability for FPSOs in various regions of the world. FPSOs
(which stands for ‘Floating, Producing, Storage, Offloading’) are a principal method for
International oil production in areas where no pipeline is located (in contrast to Offshore
Platforms for Shelf-depth offshore waters around the world, and floating Deepwater Structures
that connect to fixed pipelines, such as in the US Gulf of Mexico and Brazil).
The world ‘nameplate’ capacity for FPSOs is an impressive 15 million Bbl/d, and will grow sig-
nificantly in the coming years. Moored offshore, the FPSO vessel gathers oil production from
Platforms or Sub-Sea well for fields in either Shelf or Deepwater water depth, and then stores
the crude oil for loading onto tankers for delivery to refineries for processing. Some FPSOs are
‘purpose-built’ (especially in the harsh North Sea environment, or Petrobras’s recent large orders
for the Tupe sub-salt play), while traditionally many FPSOs are converted oil tankers.
The first FPSO was Shell’s Castellon, dating back to 1977, over 3 decades ago. Like other pro-
duction systems, there is a wide variety of FPSOs. Some of the major variances are:
• capacity:
from as small as 15-40 MBbl/d
to as large as 200+ MBbl/d)
• vintage (several decades old to new)
• complexity of processing (amount of water handling, degree of liquids stripping, natural
gas re-injection)
• mooring system (internal or external turret, some disconnectable, or spread mooring).

As usual, Ziff Energy will be benchmarking the FPSOs within groups of ‘like kind’ of compa- Study participants receive confidential, blinded, asset-level comparisons versus comparable
rable (peer) assets. assets. There will be a detailed diagnostic report on each asset, compared on a ‘like kind’ basis
Ziff Energy has assessed FPSO’s operating in a number of countries in Asia and South America with peer assets and identifying potential savings in each cost category, as well as detailed cost
during the last couple of years. The new Ziff Energy multi-client study will include: driver analysis. Historically, Ziff Energy’s studies have helped Operators pinpoint areas to achieve
• 2 dozen vessels significant savings on operating costs.After the study is completed, Ziff Energy will meet privately
• operated by 9 operators, a diverse mix (Super-Majors; leading Independents; Contract with each FPSO client regarding areas for future action plans to assist them achieve the identi-
Operators) fied efficiency savings, as well as to enhance reliability and gain production. There is still time, if
• located offshore 11 countries in a variety of regions globally including the Atlantic Margin an operator acts quickly, to have their FPSOs benchmarked as part of the study.
(Brazil & West Africa) as well as the North Sea and Asia. For more information or to discuss participation, please contact or e-mail Richard
M. Tucker, VP Marketing & Client Relations, Houston Office: (713) 985-5183; richard.tucker@zif-
The ‘water’ breaking Ziff Energy study will assist the study participating operators enhance fenergy.com.
efficiency and counter the effects of rapid production decline, which has a big impact on unit
operating costs.
This will be Ziff Energy’s 182nd Upstream benchmarking study, which together have exam-
ined Operations Performance for over 3,750 oil and gas assets in 29 countries. Since the early
1990’s, Ziff Energy has delivered a series of offshore operations benchmarking studies, includ-
ing: Enventure Successfully Installs
• a dozen multi-client Gulf of Mexico studies
7 Deepwater
5 Shelf
New High-Performance
• a major multi-client study in Asia Pacific, completed in 2008, covering 7 countries (Australia,
China, India Indonesia, Malaysia, Thailand and Vietnam)
Expandable System
• plus custom offshore projects for operators in Brazil, India, and Trinidad & Tobago.

The FPSO study will focus on both Operating Costs and Production Uptime Reliability and
Operating Efficiency in 2009.The reliability metrics were first developed as part of Ziff Energy’s
Offshore Deepwater study, and enhanced with input from our Super-Major clients. These new
metrics include the value of lost oil production, the Mean Time Between Incidents (MTBI), and
the Mean Time To Recover (MTTR). Uptime is a prime driver of upstream ‘value add’. In the
Deepwater study, the value of the unplanned deferment far exceeded the total OpEx of the par-
ticipants. Study participants will obtain “best in class” production uptime targets that could help
validate the value associated with specific investments for improved reliability. In the graph
below, from an earlier Ziff Energy benchmarking study, it is apparent that the Uptime Reliability
‘Best in Class’ target for one type of asset (in this case, Onshore Oil) differs from the target for
another type of asset (Offshore Oil).
The Technical Project team includes veteran offshore operators based in Scotland and
Houston, with backgrounds with Major producers, together with Ziff Energy’s Upstream “Center
for Benchmarking Excellence” (CBE), based in Calgary. Key members of Ziff Energy’s Offshore
team include:
• David Richmond, former Offshore Installation Manager for a Major, with an extensive back-
ground knowledge in all aspects of FPSO Operations, from wells to market
• Tom Gray, an Offshore Operations specialist, who joined Ziff after a long and impressive
career at a Major where he served last as Director, Gulf of Mexico Deepwater Operations.
• Joe Kilchrist, Ziff Energy’s Director, Offshore Operations, who is an accomplished E&P
Management professional with hands-on oil and gas field operations experience encompassing
all phases of drilling and production operations.
E
nventure Global Technology, a pioneer in solid expandable technology, announced two
significant milestones: the successful installation of one million feet of expandable liner
with a new Cased-hole 3-½ x 4-½ in. high-performance expandable system. The 30-ft
(pre-expansion length) SET® System was installed in a North Dakota well as part of a three-
well remediation project for a major North American operator.
The operator planned-in Enventure’s high-performance SET System to repair a failed frac
sleeve. By utilizing a high-performance expandable system, the operator was able to finish
the planned completion technique.
“Expanding our one millionth foot of liner on the first commercial installation of a new
expandable system is significant on many levels,” said Ray Ballantyne, Enventure’s chief
executive officer. “It not only continues the company’s record-setting history, but it also
proves our technology’s reliability and the industry’s acceptance of expandables as a cost-
effective, high-performance solution compared with alternatives. We are extremely proud of
our accomplishment and look forward to helping the industry continue to achieve objec-
tives previously unimaginable 10 years ago.”
Enventure’s new, single-joint, high-performance system was designed to facilitate com-
pletion and production applications. It provides a 3-¼ in. pass-through and has been tested
to withstand up to 10,000 lbs per square inch (psi) at 325 degrees Fahrenheit.
“The growing breadth of expandable applications continues to demonstrate the diver-
sity of the technology and proves its value to the operator in each stage of the well’s life-
cycle,” said Kevin Waddell, Enventure’s technology and marketing vice president.“We expect
this latest application to springboard our efforts in bringing expandable technology to
unconventional and fracture enhancement projects.”

16 Oil & Gas Network, February 2010

Future to bring continued price disparity
between Canadian oil and natural gas

I
n its most recent Canadian domestic oil and gas price forecast, Calgary-based AJM Petroleum Consultants
documents a continuing divergence of crude oil and natural gas pricing in the Canadian energy indus-
try. Meanwhile, in his international forecast, AJM economist and Vice President Operations Ralph Glass
indicates the US-based West Texas Intermediate (WTI), which is strongly influenced by US dollar activity, may
be losing its dominance as the world’s benchmark for crude oil trading, citing as evidence a recent decision
by Saudi Aramco to adopt the Argus Sour Crude Index (ASCI) as the new benchmark for all grades of crude
oil sold to US customers.
“In the Canadian Domestic market,” says Mr. Glass,“crude oil pricing seems to have stabilized in the mid
seventies (CDN$ Edmonton Posted), while natural gas hovers around $4.50/mcf (CDN$ AECO).This equates
to a 16:1 oil-to-gas ratio compared to the prior five-year average ratio of 10:1. The futures market shows a
price increase to the US$8.00/Mcf range by 2019, reflecting future demand growth.”
Mr. Glass calls the pricing disparity “a tale of two commodities”. While the crude oil story is one of lim-
ited supply and growing demand – driven by such factors as the anticipation of an ongoing world economic
recovery, US demand recovery and the unyielding growth of China – the natural gas story is quite different.
Thanks to new technologies, North America appears to have an adequate supply of natural gas, resulting in
lower natural gas futures pricing.
On the international scene, Mr. Glass says the decision by Saudi Aramco (the national oil company of Saudi
Arabia) to drop the West Texas Intermediate (WTI) benchmark in favour of the Argus Sour Crude Index (ASCI)
is “a harbinger of change”.
“The London-based Intercontinental Exchange (ICE) and the US-based NYMEX CME Group began trad-
ing futures contracts for the Argus-based sour crudes on December 7, 2009,” notes Mr. Glass.“Mexico’s Pemex
has indicated it is studying the possibility of moving to the ASCI benchmark. Venezuela has also shown signs
it will consider moving to the new index. Rest assured, our future will be shaped by oil-consuming nations
other than the United States.”

Oil & Gas Network, February 2010 17

Pipeline Protection: Preserving the Petroleum Lifeline
New Dynatel locator designed to help oil and gas companies find underground assets quickly and easily.

B
elow the earth’s surface lies a vast network of pipelines and other essential utilities. Though
hidden from sight, these transportation vehicles can be found virtually everywhere, from oil
fields to city centres, moving the industry’s most valuable materials: the crude needed for
refining, and refined products, such as natural gas.
Accurate location, damage prevention, and damage avoidance of these utilities is critical when con-
ducting maintenance or infrastructure ex-
pansion projects to ensure the safety and
integrity of the system and the people work-
ing on and around them. Damage often
occurs due to direct hits to the pipeline by on-
site workers or equipment. It is important that
buried pipes, cables and wires are clearly
marked and delineated prior to excavation.
Failure to do so can lead to injury, death, loss
of service and require costly repair.
Several technologies enable companies to
accurately identify and mark existing infra-
structure prior to construction, excavation or
maintenance. Many companies use locating
devices that detect electro-magnetic fields to
find buried utilities.
As a worldwide leader, Dynatel is known
for its rugged, versatile and user-friend locat-
ing and marking solutions. Recognizing the
diversity of locating techniques in the utility
industry, 3M works closely with its customers
to learn more about their needs and develop
customized solutions.

Looking Deeper
In 2008, 3M Canada approached the oil and
gas industry in Western Canada to better un-
derstand the challenges and realities that are
faced when locating buried assets such as pipes,
cables and wires. These valuable voice of cus-
tomer discussions revealed extensive insight.
Due to a variety of factors, including the
large amount of buried infrastructure and the
natural landscape, locators used a combina-
tion of techniques to find and identify buried
assets. In many cases, locators rely heavily on
inductive locating, a technique of indirectly
applying an electromagnetic signal onto a
buried metallic conductor.
Although industry best practices indicate
direct connections to utilities or conductors
is the preferred method of applying a signal
to a buried utility, feedback indicated a suit-
able method of direct connect or application
of a locating signal is not always possible.
In these situations, inductive locating is
used which involves sending signal into the
ground directly from the transmitter to detect
and mark buried cables and pipes from the
surface. This inductive method, commonly
used on pipeline right-of-ways and oil battery
sites, can be highly effective under the right
conditions with equipment designed for
inductive-type locates. This is typically com-
pleted using a two-person team or a single
individual “blind sweeping” of the area.
Although products are available that spe-
cialize in direct connect or inductive locating,
input from the industry indicated locate pro-
fessionals would benefit from a single, cost-
effective device that could perform both
effectively. The industry wanted a solution
that could meet the advanced features, func-
tionality, accuracy and performance require-
ments of professionals who locate diverse
utilities both conductively and inductively.
18 Oil & Gas Network, February 2010
Exploration and Development
Over an 18-month period, 3M Canada and its distribution partners joined a project team
from the United States and worked closely with customers in Western Canada.Together, they
developed and field trialled the Dynatel Advanced Pipe Locator 2220M-PL (2220M-PL).
After receiving extensive feedback, the team modified the locator to include advanced
features and functionality, such as improved sensitivity, increased precision and enhanced
power output, the industry needed while combining the inductive and conductive capa-
bilities the industry demanded.
Since all utilities are different, locators require equipment that locate conductors of dif-
ferent sizes and material types, and at different depths. The 2220M-PL provides the option
to select the best frequency (8 kHz, 33 kHz, and 82 kHz) and power output for the utility
being located. It also provides enhanced inductive capability when performing induction
or “blind sweep” locates.
Additionally, the receiver can detect passive power (50/60 kHz), cathodic protection sig-
nals (120hz), and radio (15k-30 kHz) for damage avoidance, as well as remote transmitters
such as sonde and pipeline inspection cameras. This helps provide the operator the flexi-
bility to choose the frequency best suited for the situation, and allows maximum perform-
ance in direct connection or inductive locate applications.
The 2220M-PL’s new 12-Watt transmitter provides the maximum allowed inductive
power for locating deep, large diameter, or tracer wired lines with confidence and accu-
racy in even the most demanding locate environments.
“By listening to our customers and combining their field input with our time-tested
technology, 3M created a locator designed with the customer in mind,” said Drew McCallum,
sales and marketing manager, 3M Canada Dynatel locating and marking solutions.“Not only
is the locator exceptionally simple and intuitive for new users, but it also provides the
power and sensitivity needed for the most demanding applications.”
The 2220M-PL’s receiver provides a bar graph, signal strength and direction indication
to the utility which help the operator distinguish the target, even in congested areas. A
push-button digital depth readout, in inches, feet or centimetres, helps provide quick, easy
depth measurement in active, passive and sonde modes.
Continues on page 20

R&D Partnerships:
Connect, Collaborate, Prosper
C
anada is home to advanced
research communities with world-
class infrastructure and an excel-
lent base of highly trained people.
Connecting to the right opportunities for
partnerships can help R&D-performing
businesses capitalize on this tremendous
base to make Canadian firms more inno-
vative, productive and competitive.
The Natural Sciences and Engineering
Research Council of Canada (NSERC), is
one of the country’s leading providers of
grants for public-private R&D partner-
ships. In December 2009, we launched
the Strategy for Partnerships and
Innovation (SPI) with a mandate that will
see industry and academia connect, col-
laborate and prosper. This plan builds on
existing initiatives and introduces new
government programs designed to bring
together Canadian businesses with uni-
versity researchers to heighten their R&D.
NSERC has a long history of funding
public-private collaborations. It currently
invests over $310 million annually to sup-
port R&D partnerships and works with
over 1,400 Canadian companies every year, including 65 of the
top 100 R&D investment firms.
Our Industrial Research Chair and Collaborative Research
& Development Grant programs have been very well received
by companies that wanted to expand upon their potential and
bring new innovations and intellect to their industry. Among
the most sought-after academic resources by businesses are
highly-skilled researchers and students who bring specialized
expertise to advance company technologies and help find
novel business solutions. These programs have given busi-
nesses a pipeline to the highly qualified personnel being pro-
duced by our post-secondary institutions.
With SPI, NSERC is increasing its reach with a particular
focus on small and medium sized enterprises. To qualify, com-
panies must operate from a Canadian base, be engaged in R&D,
actively participate in the collaboration and exploit the results
within Canada.The Interaction Grant provides up to $5,000 in
funding to cover travel expenses and meeting costs for busi-
ness and academic parties to convene and explore the poten-
tial for a partnership.
When a partnership opportunity is agreed upon, the col-
laboration can apply for an Engage Grant. To help companies
proceed with new developments quickly, NSERC is promising
a decision on applications for the Engage program within six
weeks of receiving them. Through this program, the Council
provides up to $25,000 for new research collaborations that
will identify potential solutions to company-specific, short-term
R&D challenges. As with all NSERC programs, this funding sup-
ports the academic researcher’s direct project costs. After this
initial R&D partnership, businesses have a choice of subsequent
cost-sharing initiatives that can provide amounts in excess of
$500,000 for multi-year projects.
SPI is an initiative with ambitious, but achievable, goals.
Canada has a great research engine and the means to up its in-
novation output and productivity. It is time for us to step up
our game. The aim of SPI is to more than double the number
of NSERC-supported partnerships from 1,400 to approxi-
mately 3,000 by 2014. By continuously gauging the response
to the partnerships that are being formed and introducing new
elements to make it easier for industry to connect with aca-
demia, we will reach our target.
The oil and gas industries are fine examples of successes
that can be achieved through partnerships.The Alberta oil sands
have been the beneficiary of many technological innovations
that have helped establish those resources as the powerful
20 Oil & Gas Network, February 2010
Continued from page 18
Additionally, the new induction peak mode allows users to
get closer to their transmitters knowing the signal detected
by the receiver is focused on the electromagnetic field com-
ing from the buried conductor rather than through the air
from the transmitter which could cause false positives or
inaccurate readings.
energy producers they are today.
In the 1980s, University of Refining Technology
Calgary researcher Roger Butler, Leveraging knowledge gained while developing the
funded by NSERC, developed a 2220M-PL, 3M integrated the new features into existing
groundbreaking process to extract Dynatel products. Ideal for professionals who locate diverse
oil from the sands, the Steam utilities, the broader product family includes features like the
Assisted Gravity Drainage (SAGD). ability to efficiently locate conductor or sheath (earth return)
At the time, only 10 percent of the faults, trace the path of underground cables and pipes or son-
bitumen in the sands was accessi- des, and are available with various power output options and
ble through open-pit mining tech- expanded frequency ranges.
niques. The SAGD is now the most
widely used technology by the oil
extraction operations in Alberta
and is considered an industry stan-
dard. Dr. Butler’s breakthrough
made 100 percent of the reserves
accessible, and turned the Alberta
oil sands into an unrivaled energy
resource.
Potentially, 300 billion barrels
of oil in the Alberta oil sands can
be recovered using today’s tech-
nology, generating well over $100
billion in revenue. However, find-
ing a balance between minimizing
environmental impact and maxi-
mizing the economic benefits of the oil sands is the key to
Canada’s oil industry maintaining credibility in the eyes of the
world.
In 2007, the Imperial Oil-Alberta Ingenuity Centre for Oil
Sands Innovation (COSI), located at the University of Alberta,
was launched with funding from Imperial Oil,Alberta Ingenuity,
Alberta Energy Research Institute, NSERC and the National
Institute for Nanotechnology. Its mandate is to find and de-
velop efficient oil production practices that are environmen-
tally and economically responsible. COSI represents
leading-edge collaboration between government, industry and
the research community in pioneering practical solutions for
challenges in oil recovery.
Cross-discipline collaboration has brought oil sands research
to the cusp of other major breakthroughs. Successful collabo-
rations depend on partners sharing information, expertise and
developments to achieve results that improve industry and
academic knowledge and practices. For example, Shell, in col-
laboration with scientists from Natural Resource Canada’s CAN-
MET Energy Technology Centre in Alberta, have further refined
an earlier process that currently uses smaller machinery and
reduces energy and water consumption by an additional 10
percent, reducing greenhouse gas emissions by 40,000 tonnes
per year. The work being conducted by COSI and researchers
across the country will ensure that a further decline in extrac- Recognizing the industry’s continual focus on advance-
tion costs and CO2 emissions remains a viable goal. ments in technology related to enhanced utility locating, map-
These are examples of major partnerships that have been ping and asset management, this family of locators can also
very successful. Partners share information, expertise and detect all standard electronic markers, and write, read and
developments to achieve results that improve industry and lock programmed information onto 3M Electronic Marker
academic knowledge and practices. A commitment to keeping System iD Markers. Also, many locators and fault finders are
Canadian industries progressive will have a great impact on compatible with select GPS/GIS field mapping instruments
our country’s economy and make our industries world leaders. for real-time mapping of electronic markers or pipe and cable
The Strategy for Partnerships and Innovation is only just facilities.
underway, but NSERC has already received very positive sup-
port from industry leaders across the country and the first In the Pipeline
applications are under review.We have launched a website that As populations grow, the demand for essential services,
gives an overview of the opportunities available to businesses such as oil and gas, water, sanitation, power and telephone,
through programs for building collaborative relationships, will increase. These changes will greatly expand the existing
advancing R&D and finding highly qualified people.We are also underground network providing new challenges for locators
publishing a newsletter to keep companies informed of success and utility owners. They will be looking for devices that
stories, program updates and topics relevant to businesses that accurately locate, map and protect the system people depend
want to expand their R&D. on. Fostering collaborative relationships between customers
For more information on the Strategy for Partnerships and and technology providers will help ensure a healthy pipeline
Innovation and the opportunities it can provide, please visit of solutions that evolve with the ever-changing needs of the
www.nsercpartnerships.ca. industry.
Moyno® Gear Drivehead (MGD™)
Easily and Effectively Controls
Pump Speed
W
illis,Texas — The Moyno® Gear Drivehead (MGD™) uses an adjustable hydraulic gear
drive to quickly and easily control the downhole progressing cavity pump (PCP)
speed at the wellsite to maximize production without pumping off the well.

The MGD provides cost-effective operating efficiency as well as safe and reliable operation
throughout its long service life.This hydraulic drivehead features effective backspin control that
has been field-proven for operational safety.

Features and benefits of the MGD include:

• Rated to 70 HP at 1,200 PRM input speed
• High strength alloy shafts for rugged durability
• Accepts standard “C” mount 80 or 90 cc hydraulic motors for ready access to cost-
effective components
• Handles system pressures to 4,000 PSI for application versatility
• Eliminates external moving parts such as belts and sheaves
• Allows you to optimize production by easily matching pump speed to well conditions
• Easy maintenance

The integrated variable speed control and broad selection of speed and torque combina-
tions that are available make the MGD the ideal choice for an extensive range of downhole PCP
applications.
R&M Energy Systems, part of the Fluid Management Group of Robbins & Myers, Inc., man-
ufactures and markets a wide variety of products for use in the discovery and recovery seg-
ments of the oil and gas industry. R&M Energy Systems’ products include the following: Hamer®
Line Blinds; Hercules® Wellheads,Valves, Stuffing Boxes, and artificial lift accessories; Magnum®
Needle Valves; standard and customized Moyno® Down-Hole Pumps; Moyno® Guardian™
Variable Speed Drives; Moyno® Surface Pumps, Moyno® Tri-Phaze Systems; Moyno® and
Moyno® ERT™ Power Sections; Moyno® HTD™ High Temperature Down-Hole Pumps; New
Era® Rod Guides; Resun® Plug Valves; RODEC™ Tubing Rotators, artificial lift accessories and
down-hole tools; StayTite® Swing Joints; Yale® Closures and Hammer Unions; and SENTRY®
Closures. With facilities in the U.S., Belgium, Venezuela, Australia and Canada, R&M Energy
Systems readily serves customers worldwide.

Oil & Gas Network, February 2010 21

Artificial Lift RIGLESS ESP System
Achieves Successful
Commercialization from
ConocoPhillips
T
he Artificial Lift Company Ltd. (ALC), a leading artificial lift service company,
announced that its RIGLESS ESP solution developed in cooperation with
ConocoPhillips had been approved by the operator for commercialization. ALC has
been working closely with ConocoPhillips for more than five years to develop its ground-
breaking artificial lift solution for the oil and gas industry. The ALC RIGLESS ESP technolo-
gy met the commercial terms of the contract with ConocoPhillips and passed the final
acceptance test in September 2009.
The fully commercialized RIGLESS ESP system will undergo additional testing with
ConocoPhillips in Q1 2010 in West Texas, and the first commercial installation for
ConocoPhillips is scheduled for Q2/Q3 2010 in Alaska.
“Artificial Lift Company has been flexible and responsive to our specific needs, and pro-
vided us complete access in the technical development process,” said John Patterson,
ConocoPhillips Production Engineering advisor. “We believe ALC’s RIGLESS ESP technolo-
gy is a cost-effective solution for companies facing challenging ESP applications with high
intervention costs and in areas where securing a rig can require a long downtime. Our main
driver for Alaska was to have a RIGLESS ESP system to allow replacement of sanded pumps
and to clean out sand bridges in the casing below the ESP without using a rig.”
ALC’s RIGLESS ESP system significantly extends the life of a well and reduces mainte-
nance costs.
“ConocoPhillips has been great to work with in helping Artificial Lift to develop and
commercialize the RIGLESS ESP artificial lift technology,” said ALC President Geoff Kimber-
Smith. “The commercialization of this technology will allow us to introduce the product
to markets where there is real demand for alternative ESP solutions, especially in areas
where work-over costs consume a large part of the budget. We believe that there will be
many worldwide opportunities in key global regions as this system will radically change
the costs incurred in deploying ESPs.”
22 Oil & Gas Network, February 2010
Yale® SafeGuard Figure 500™ Lugless
Closures Provide Safe,Secure Sealing
of Pipelines and Vessels
R
&M Energy Systems now offers the Yale® SafeGuard Figure
500 lugless closure for safe, simple and reliable sealing of
pipeline and vessel applications.The Yale SafeGuard lugless
closure utilizes the field-proven threaded closure cap with O-ring
pressure seal design. The lugless feature of the SafeGuard closure
prevents in-field safety risks associated with hammering on the
closure cap lugs as well as the potential for damage to the closure
that could hinder its sealing capability and shorten the service life
of the closure. The Yale SafeGuard closure can be easily operated
with a standard 24-inch or 36-inch pipe wrench.
The SafeGuard closure provides significant benefits to end users that include an overall low total
cost of ownership. Other benefits include:
- Safety for the operators
- Secure sealing without leakage
- Quick and easy operation that saves time and effort on the part of the operators
- Long service life to optimize the return on your investment
Yale Figure 500 SafeGuard Lugless Closures provide productivity, durability and safety for the most
critical installations.
R&M Energy Systems, part of the Fluid Management Group of Robbins & Myers, Inc., manufac-
tures and markets a wide variety of products for use in the discovery and recovery segments of the
oil and gas industry. R&M Energy Systems’ products include the following: Hamer® Line Blinds;
Hercules® Wellheads, Valves, Stuffing Boxes, and artificial lift accessories; Magnum® Needle Valves;
standard and customized Moyno® Down-Hole Pumps; Moyno® Guardian™ Variable Speed Drives;
Moyno® Surface Pumps, Moyno® Tri-Phaze Systems; Moyno® and Moyno® ERT™ Power Sections;
Moyno® HTD™ High Temperature Down-Hole Pumps; New Era® Rod Guides; Resun® Plug Valves;
RODEC™ Tubing Rotators, artificial lift accessories and down-hole tools; StayTite® Swing Joints;
Yale® Closures and Hammer Unions; and SENTRY® Closures. With facilities in the U.S., Belgium,
Venezuela, Australia and Canada, R&M Energy Systems readily serves customers worldwide.