Beruflich Dokumente
Kultur Dokumente
COM
DECEMBER 2016
Basin Modeling
Cementing Advances
Pressure Pumping
Offshore Yards Report
Regional Report:
SOUTH AMERICA
HOPE
Glimmers
Innovative ideas are on the horizon.
A H AR T E N E RG Y P U B L IC ATI ON
BASIN MODELING
48
52
ISSUE 12
www . E P mag . co m
COVER STORY:
UPSTREAM CHALLENGES & SOLUTIONS
24
Hope on
the horizon?
CEMENTING ADVANCES
54
56
58
PRESSURE PUMPING
60
64
Unconventional approach to
conventional pressure pumping
66
82
REGIONAL REPORT:
SOUTH AMERICA
28
Diversity in
the C-suite
32
Upstream investment:
a contrarian strategy
36
40
Optimizing production,
economics in mature fields
IndustryPULSE:
Future industry turnaround
requires preparation now
10
WORLD VIEW:
The need for
transformation
68
UNCONVENTIONALS: U.S.
Recent shale activity trends
and the future outlook
AS I SEE IT
A disruptive influence
MARKET INTELLIGENCE
Treading water in the Eagle Ford
16
EXPLORATION TECHNOLOGIES
The next grand challenge
19
DRILLING TECHNOLOGIES
Drilling super laterals requires super rigs, technology
21
23
SHALE SOLUTIONS
Longer laterals drive demand for high-performance semi-premium connections 42
OFFSHORE SOLUTIONS
Unlocking the value of stranded and remote offshore gas assets
44
OPERATOR SOLUTIONS
Smart drillpipe technologies for the drillers toolbox
46
TECH WATCH
A2F on track at industrial scale
72
74
TECH TRENDS
78
INTERNATIONAL HIGHLIGHTS
84
86-87
LAST WORD
And now for a few words on safety
88
Other features will include processing and interpretation; HP/HT drilling; water management;
and subsea metering, monitoring and processing. The regional report will focus on Canada.
As always, while youre waiting for your next copy of E&P, be sure to visit EPMag.com for the
latest news, industry updates and unique industry analysis.
ABOUT THE COVER As a new day illuminates the night sky over
an equipment yard, the oil and gas industry continues its work on
developing potential solutions to the numerous challenges it faces
daily. Left, Exxon Mobils play-opening Liza discovery offshore
Guyana was drilled by the Stena Carron drillship, with the operator
now estimating minimum recoverable reserves of 1 Bboe, which
will initially be developed via an FPSO unit, subject to final sanction. (Cover image by QiuJu Song, shutterstock.com; left image
courtesy of Hess; cover design by Felicia Hammons)
E&P (ISSN 1527-4063) (PM40036185) is published monthly by Hart Energy Publishing, LP, 1616 S. Voss Road, Suite 1000,
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ACTIVITY HIGHLIGHTS
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MARK THOMAS
Editor-in-Chief
MARK THOMAS
Executive Editor
RHONDA DUEY
JO ANN DAVY
JENNIFER PRESLEY
RICHARD MASON
VELDA ADDISON
ARIANA BENAVIDEZ
ALEXA SANDERS
FELICIA HAMMONS
Production Manager /
Senior Graphic Designer
GIGI RODRIGUEZ
RUSSELL LAAS
CHRIS BARTON
Wood Group Mustang
KEVIN BRADY
Highway 9 Consulting
MIKE FORREST
Consultant
GARRETT FRAZIER
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DICK GHISELIN
Consultant
OLGA KOPER
Battelle
PETER LOVIE
Peter M Lovie PE LLC
ERIC NAMTVEDT
Namtvedt Energy Advisors
DONALD PAUL
USC
KEITH RAPPOLD
Aramco Services
EVE SPRUNT
Consultant
SCOTT WEEDEN
Consultant
TOM WILLIAMS
RPSEA
Editorial Director
PEGGY WILLIAMS
President & Chief Operating Officer
KEVIN F. HIGGINS
Chief Executive Officer
RICHARD A. EICHLER
As I
SEE IT
Editor-in-Chief
mthomas@hartenergy.com
EPmag.com
A disruptive influence
Identifying disruptive technologies is tricky,
but filtering out hype from reality is half the fun.
he digital wave that has impacted so many industries has been dubbed the
Fourth Industrial Revolution with justification. We are all aware of how
quickly it is reshaping how we work.
So whats next out there? 4-D printing or smart dust? For those wondering, 4-D printing could be the next step in 3-D printings evolution, leading
to printing clever stuff like expanding or contracting pipe valves. Smart dust
refers to tiny wireless microelectromechanical systems, mini-robot sensors that
would be able to monitor virtually everything.
A survey by Gartner named the hype cycle report offers insights into potential technologies like those above, and its worthwhile reading. The technology
specialists hype cycle is this: Innovation Trigger, Peak of Inflated Expectations, Trough of Disillusionment, Slope of Enlightenment and lastly Plateau of Productivity.
We can all probably recall instances of thesean initial breakthrough, an
avalanche of game-changer clichs, some early failures causing discontent, a
more realistic measured understanding of what the technology is and finally
general acceptance. Many dont get past the initial failures, of course, but
there are those that do.
Heres a real-world example: GE Oil & Gas said automation has dramatically
increased productivity, with new technologies and robotics enabling it to specifically achieve cladding operations seven times faster than before. Threedimensional modeling, meanwhile, helped it reduce manufacturing workstreams for gas turbine nozzles to a single lean line, sensor-enabled and robotically enhanced, cutting lead time by 25%.
It also uses virtual reality tools to validate product designs, immersing engineers into near-full-scale virtual assemblies to ensure parts and tools fit.
A consequence might be that there is too much datawith about 10 terabytes generated every half hour by an oil rig, the fear is we will drown in petabytes. But this is where machine learningsomething some of us are still not
sure aboutis likely to play its part in providing insight into emerging trends
to make better quick decisions.
Some of this might sound optimistic, but did we truly believe 3-D printing would
happen when we first heard of it a few years go, or, if youre a little more experienced, how about when you heard that horizontal drilling would be fully commercialized with better downhole motors and new telemetry kit by the early 1980s?
The impact of disruptive technologies like data-driven digitalization is by its nature difficult to put into perspective during the
early stages but, like so many, once they are in use, we cannot
imagine life without them.
5
industry
PULSE
he current market downturn has resulted in significant reductions in the head counts of service companies. As fallout, the big crew change that the industry
has been anticipating for years might happen a little
bit sooner than expected. When markets recover, it is
unlikely that companies will be rehiring the people that
left the organizations in the first place. Some people
have moved to other industries, while others have chosen to retire.
Service organizations have been through this scenario before and recognize that the loss of experienced
hands can lead to an increase in incidents. As the
industry begins to recover, companies will hire people
who lack industry experience, whether they are fresh
out of college or recruits from other industries. What
can companies do to prepare for the coming influx of
new hires? The industry should take the downturn as
an opportunity to make strategic impacts on safety.
Safety-service-quality connection
By streamlining all operational information into a single system, Weatherford can better understand what,
when and why employees engage in activities that pose
medium-to-high risks to the organization. As risks are
identified, the company ensures there are technical
training programs in place to address those risks. These
programs will become especially valuable as the big crew
change takes effect.
With an existing process in place to onboard employees, provide continued education and ensure competency, the challenge of increasing head count becomes
much more important to address head on. The very first
touch point in this process is the Right Start onboarding program, which is aligned to the International
Association of Drilling Contractors, Rig Pass and other
industry expectations.
Once employees complete Right Start, they become part
of the Short-Service Employee Program, which can last
anywhere from six months to one year. As they progress
December 2016
EPmag.com
industry
PULSE
December 2016
EPmag.com
world
VIEW
Present scenario
Lets rst recap the energy landscape. World demand is
on a steady, if moderate, course.
While its pace has been tempered by energy efciency
gains, demand will be impacted by global population
growth expected to pass 9.5 billion by 2050, and rising
living standards in developing economies. Meanwhile,
alternative energy sources are gaining ground.
Yet renewables and emerging technologies like electric
vehicles and fuel cells have technical, economic and infrastructure hurdles to pass. And that takes time.
So for years to come, the call on energy will be met by
oil and gas, and oils central position, especially in heavy
transport and petrochemicals feedstock, will remain
solid. But the oil and gas resources we have available, as
Resilience
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Expansion of the Shaybah Field, located in the northern edge of the Rub Al-Khali or Empty Quarter desert, is one of Saudi Aramcos large-scale
oil production projects designed to meet anticipated future demand. The expansion increased production of Arabian Extra Light crude oil by
250,000 bbl/d, raising overall production capacity to 1 MMbbl/d. Shaybahs NGL program delivers on gas production for fuel and feedstock for
domestic industries and displaces liquids as a source of generation. (Source: Saudi Aramco)
Top-notch talent
But investing in technology and research to solve E&Ps
big challenges also calls for investing in the people who
12
will develop and use these tools. The alternativeputting the recruitment, development and retention of top
talent on the back burner during a downcyclewill only
come back to haunt us. Now is the time to reboot our
approach to human resources [HR].
Thanks to technology, the deep functional expertise
of the past has given way to multidisciplinary skills for
cross-functional challenges. And the learning curve for
staying on top of new technologies, methods and standards is getting shorter.
Id like to highlight some talent solutions were implementing at Saudi Aramco. To switch gears from traditional training to a more immersive, hands-on approach,
we developed our Upstream Professional Development
Center. The center helps to compress the time for newer
engineers and geoscientists to hit the ground running
while capturing the knowledge and experience of more
senior professionals.
In another paradigm shift, King Fahd University of Petroleum and Minerals collaborated with us to establish its new
College of Petroleum Engineering and Geosciences. This
pioneering college seeks the best undergraduate and graduate students to pursue state-of-the-art studies and research
in a creative, multidisciplinary environment that integrates
classroom, lab and eld. Students are challenged to achieve
stretch targets with the overall objective of maximizing
discovery and recovery of hydrocarbon resources. Its rst
cohort of students graduated last spring, and we expect
research-oriented Ph.D. enrollment to grow tenfold.
Another urgent HR challenge facing the industry is
bringing more women into the upstream.
Increasing womens representation is a big focus for
Saudi Aramco, in our company but also through programs that develop their business potential in general.
December 2016 | EPmag.com
This diversity objective especially resonates in the Kingdom, where women are highly educated but underrepresented in the workforce.
Collaboration
The rst three aspects of industry transformation
through a new model converge in point No. 4.
And thats collaboration. As oil companies, service
providers, technology developers, higher education and
others come together in strategic cooperation, its clear:
Resilience, technology and talent integrate and overlap.
There are many areas in which the industrys interests are
aligned, and collaboration can pool resources, spread costs
and enhance the chances of success.
Enhancing our industrys reputation is one such area
where we have been historically lacking.
Partners can help tell our story and shed new light on
our strides in sustainability.
A recent example is the industrys joint efforts to
highlight its role in reducing carbon emissions and conventional pollutants, notably the Oil and Gas Climate
Initiative declaration. Another area where collaboration
can make a big difference is for oil companies, contractors
and service companies to radically improve project designs
and cut costs. Evolving energy and environmental policies
and creating a level playing eld among various energy
sources are also potential topics for strategic cooperation.
Transformation needed
Our sector is undergoing dramatic, complex shifts like
never before. Merely adapting or reacting to change is
only a stop-gap. These dynamics call for us to transform
through a holistic process that spans every dimension,
from technology and operations to HR and organization.
In my view, the new business model Ive sketched out
in part today [Sept. 26] can help us meet the challenges
ahead, with:
Greater resilience through better nancial management, improved project designs, major cost reductions and other efciencies;
Research, technology and talent as our long-term
success drivers; and
Cooperation that multiplies strengths and resources
toward mutual goals.
And to strengthen the new model, we as an industry can
work more closely with SPE both as a platform for discussion
and a catalyst for action. Innovating our business model in
this way can deliver the reinvention needed in disruptive
times and position us even better for the recovery.
Nassers full speech can be accessed at Saudi Aramcos website.
EPmag.com | December 2016
15
market
INTELLIGENCE
16
December 2016
EPmag.com
exploration
TECHNOLOGIES
RHONDA DUEY
ver since Ive covered the oil and gas industry, the
Executive Editor
concept of multidisciplinary integration has seemed
rduey@hartenergy.com
like the missing Holy Grail. Different disciplines need
to know complementary things about their reservoirs,
Read more commentary at
but their different jargons and data familiarity just
EPmag.com
have never seemed to match up very well.
This is truly the case with time-lapse seismic, also
known as 4-D seismic. Seismic measurements can tell
join as participants. Member companies select the
a lot about certain reservoir changes over time, but
scenarios and make all of the technical decisions. The
reservoir engineers are not always familiar with these
end result will be benchmark datasets to be used for
types of data, and geophysicists might not recognize
further R&D, software development and training. But
their implications in eld development.
the greatest value is in the collaboration to optimize
You get each expert from different disciplines,
workows on known models uninhibited by conand they know what theyre doing, said Mike Meldential data.
len, director of business development at The SociEarlier this year RPSEA, under contract from the
ety of Exploration Geophysicists (SEG) Advanced
U.S. Department of Energys National Energy TechModeling Corp. (SEAM). But when you pull it all
nology Laboratory, funded
together, you start to nd
SEAMs Time Lapse Pilot
inconsistencies in the way
Project. This short six-month
different disciplines make
proof-of-concept project was
assumptions and view the
a prelude to the current Life
subsurface. As you start to
of Field project. The results
gather more perspectives
were very promising and
and more data from more
helped identify a wide variety
viewpoints, the uncertainties
of multidisciplinary issues
start to narrow down.
that will be attacked in the
SEAM was formed 10 years
full Life of Field project, Melago to tackle just this sort
This is a schematic diagram of multicomponent
len said, adding that the full
of challenge. SEAM is the
ocean-bottom node acquisition over the SEAM
project has enough members
research arm of the SEG. Past
Time Lapse Pilot elastic model. Seismic, gravity,
to run several different geoSEAM projects have focused
electromagnetics and petrophysical simulations
logic/production scenarios.
on geophysical challenges in
were run in a time-lapse fashion along with
The hope is that more memland and marine seismic as
simultaneous geomechanical and reservoir ow
bers will join, increasing the
well as pore pressure predicmodeling. (Source: SEAM)
number of simulations that
tion and hazard avoidance.
can be run. Depending on membership interest, CO2
The current project, Life of Field, signicantly broadens SEAMs scope. With technical assistance from the
injection and sequestration or other EOR techniques
Society of Petroleum Engineers, SEAM will model
might be included.
geophysical, rock physics, petrophysical, geomechanSEAM focuses on grand challenges, Mellen said.
ical and reservoir ow responses over time in a numWere trying to pull together
ber of geologic and production scenarios.
larger groups of people from
The Life of Field project brings SEAM together
across the industry to attack
with experts from E&P and service companies that
these grand challenges.
19
drilling
TECHNOLOGIES
21
completions &
PRODUCTION
23
HOPE
on the horizon?
Despite a challenging environment, the oil and
gas industry still has a few tricks up its sleeve.
24
December 2016
EPmag.com
hat would solve the upstream oil and gas industrys problems? Many might simply respond, $100
oil. And they would be partly right. But dozens of challenges plague the industry that have little to do with low
commodity prices.
E&P talked to several experts, including many of our
editorial advisers, to address the challenges the upstream
faces and their potential solutions. While many of the
challenges are technical in nature, others are on a larger
scale and encompass everything from carbon capture to
the crew change. We also asked them to address how far
weve come technologically and some of the low-hanging technology fruit that, with a little tweaking, could
address these issues almost immediately.
Tough challenges
Many of the industrys largest challenges have nothing
to do with seismic acquisition or fracture fluid. Larger
challenges loom.
There is a loss of qualified, experienced workforce
and attrition in technical expertise within both operators
and service companies, said Olga Koper, energy business development leader for Battelle, pointing to a large
decrease in innovation within these companies coupled
with the bankruptcies of many small businesses and
decreased funding to academia and research institutes.
Dick Ghiselin, a consultant for Qittitut Consulting,
added, The big crew change has always been a threat,
but today because of the recession the threat is even
more critical. Who are the engineers and geoscientists
of the future? Where will they come from?
Of equal concern is the increased scrutiny of the
industry, particularly in light of climate change findings
and earthquakes resulting from induced seismicity. This
will impact the industrys social license to operate.
Concerns about climate change are becoming
more widespread along with pressure to do something
about it, said Eve Sprunt, a consultant. The carbon
tax can take many forms and will increase costs and
limit opportunities.
Koper listed several aspects of this concern, including
emissions reduction and the development of carbon
capture and sequestration technologies at a large scale.
And all of this leads to increased regulations. Tom
Williams, president of RPSEA, said that in addition to
the commodity cycle, companies are reeling due to
regulations that are politically driven rather than being
science-based. New regulations have contributed to a
EPmag.com
December 2016
Biggest advances
Few will disagree that multistage hydraulic fracturing
coupled with horizontal drilling has been the biggest
change in the last two decades, said Don Paul, executive director of the USC Energy Institute, William M.
Keck chair of Energy Resources and research professor
of engineering at the University of Southern California,
noting that the ability to apply a combination of horizontal drilling, hydraulic fracturing and advanced completion technology at scale has had a profound impact
on the industry.
Sprunt added that the recognition of shale as a reservoir opened the door to combining these technologies,
and Forrest said that overcoming preconceptions about
shales was a big step in the right direction.
25
Low-hanging fruit
While there are some fixes that, with a bit of extra time
and R&D, can add extra fuel to the fire, Lovie said, I
question if there are any trees with much of this mystical
fruit still around.
Still, data analytics continues to rear its head as an
almost endless opportunity. Digitization and data processing can shed a lot of light on the future at a relatively low investment cost, Ghiselin said.
Koper added, Proven case studies exist on how and
in which areas data analytics increase return on investment for oil and gas companies.
Additionally, the extension of smart oilfield technologies will help lower costs and operations, Paul
said. We also are seeing the growth in the application
of Big Data and analytics platforms to inform better
decision-making in a capital-constrained environment, he said.
Much of the new data revolution is guided by better
sensor technology. Sprunt said a greater use of remote
sensing technologies will aid the industry in finding
and producing oil and gas. And Sundararajan said
systems engineering, which the aviation industry has
been using for a number of years, has good value for
oil and gas. Already GE is working with Shell and BP
to advance this concept.
Another change GE is driving is standardization.
Thats a tougher problem, to bring customers
together, Sundararajan said. But Im happy if we
can standardize for a single customer.
Other low-hanging fruit revolves around water and
fluids, Sprunt said. Already technologies exist to process
produced water and recycle and reuse fracture fluids,
and these technologies are likely to gain traction as
concerns about freshwater use and disposal wells grow.
Game changers
In addition to the low-hanging fruit, there are some
game-changing technologies and ideas that have the
December 2016
EPmag.com
EPmag.com
December 2016
27
December 2016
EPmag.com
Future of work
In EYs ongoing study of these major trends and their
potential impact on the future of work, it has identified
seven major elements, or levers, companies in oil and
gas will need to address:
Purpose: Increasingly, corporate executives believe
an organization with a shared purpose, often one
that blends their corporate and social agenda,
is more successful in transformation activities.
Millennials are also more likely to choose a company with a commitment to community and/or social
motives if all other factors were the same;
Digital leadership: A majority of workers think their
job requires human abilities and interaction that
technology will never replace. Empathy is identified
as the most critical attribute for the next generation of digital leaders;
Teaming ability: The continuing need for innovation
is demanding more effective collaboration and teaming. Virtual and network teams will dominate the
new landscape. New ways of working, new mindsets
and new behaviors around work are required;
Mind clarity: The competition for talent is driving
companies to focus on employee experience and
employee wellness. Employees look to work as a
means of growth and fulfillment;
Performance and rewards: The nature of pay and
benefits is changing. Companies need systems and
structure to reinforce employee needs and priorities. High pay is no longer sufficient to attract talent. New approaches to driving behavior change
are required;
Technology experience: Employees increasingly want
the same seamless digital experience at work they
are able to get at home and on personal devices, and
they quickly get frustrated when their companies
cant make that happen; and
30
Physical environment: In addition to minimizing capital asset costs, companies increasingly view office
space as a value generator by locating offices near
talent pools and creating inspirational spaces that
drive collaboration and innovation.
EPmag.com
Upstream investment:
a contrarian strategy
Social risk should not be eliminated from the planning process.
their business models, safeguard operations throughout
the life cycle of the project, reduce their risk exposure,
take advantage of short-term depressed upstream asset
prices and position themselves to increase market share
ctions by oil and gas firms to divest from upstream
when commodity prices rebound.
assets are short-sighted. Upstream investments presThe 2014 commodity downturn significantly accelerent a golden opportunity for companies when social risk
ated an industry trend to divest from upstream assets.
analysis is applied to their risk portfolios. Social risk (e.g.,
Today divestments are employed as part of a strategy to
strikes, protest, litigation, sabotage and violence) are
address short-term cash flow gaps, remove riskier assets
increasing in frequency and magnitude. They cause profrom balance sheets and stabilize cash flow with more
duction disruptions and stoppages up and down the supreliable downstream operations. In addition, firms have
ply chain, especially in frontier markets where upstream
employed traditional financial methods (e.g., capital
investments are more prevalent. Social risk analysis
structure adjustments, employee layoffs and dividend
enables firms to introduce systemic improvements to
payment reductions) to stop the bleeding. This approach is rational for firms
focused on maintaining quarterly profExploration
Development and Production
its and reducing short-term risk. These
Surveys & Exploratory Drilling
Drilling, Separation & Compression
measures have failed, however, to
deliver a sustainable solution to protect
Land/Water
profits. For example, Exxon Mobil not
Contamination
Habitat
Habitat
Land/Water
Health &
traditional
financial
methods to the
Disruption of
Infrastructure
Strain on
Safety
Community
extreme.
Chevrons
cash
flow declined
Infrastructure
Cohesion
from $31.5 billion in 2014 to $19.5
billion in 2015. Instead of plugging
Site
Cultural/
Land
Land
Archaeological
Security &
the difference with a reduction in its
Acquistion
Acquistion
Heritage
Vandalism
$8 billion of dividends, Chevron raised
new debt, sold assets and executed
unprecedented layoffs. Changes to
Environmental
higher levered capital structures are eviPhysical
dent across the industry. Exxon Mobil,
Royal Dutch Shell, BP and Chevron
Administrative
have more than doubled their debt
Social
in the past two years. BP more than
tripled its divestment program from a
Social risk dominates upstream operations and intensifies environmental, physical
normal rate of $2 billion to $3 billion a
and administrative risks. (Source: Enodo Global)
Jim Sisco and Bryan Bloom, Enodo Global
32
December 2016
EPmag.com
million in damage. In the face of mounting public outcry, the federal government halted construction of the
$3.8 billion pipeline in September, which was due to be
completed by year-end 2016.
Events like these are becoming more frequent and
the new industry norm. Resistance to pollution, land
use and infringement on local livelihoods has led to
defiant actions that damage company property, halt
production and negatively impact profitability. Other
examples include protests by landowners over royalty
agreements with Exxon Mobil in Papua New Guinea,
environmental campaigners occupation of Infrastratas
site on Dorsets Jurassic Coast and months-long work
stoppages at Petrofacs gas plant in Tunis due to labor
disputes. Without a way to forecast and mitigate social
risk, these events make upstream investment cost-prohibitive and reinforce divestment strategies.
EPmag.com
36
EPmag.com
Falling to a low point in terms of demand in early 2017, the jackup rig sector is expected to
gently recover, although its longer term resurgence will depend on oversupply continuing to
be mitigated. (Source: McKinsey Energy Insights)
Offshore attrition
In contrast, the offshore rig
fleet is still experiencing significant declines. Since the
beginning of the year contracted rig counts have fallen
steadily, with 44 fewer jackups
and 51 fewer floaters under
contract in third-quarter 2016
vs. fourth-quarter 2015. At
the same time, older rigs are
being retired at a record pace,
with 21 floaters and 15 jackups
taken out of service this year
The number of active floaters should reach its lowest point in first-quarter 2017 before then
up to the end of September.
cautiously recovering by year-end 2018. Only about 40% of the floaters expected to be active
The number of new conin fourth-quarter 2018 are currently contracted. (Source: McKinsey Energy Insights)
tracts signed, including extensions, also continues to remain at historically low levels.
Rig owners response
Between the beginning of 2016 and the end of the third
Given this poor performance in the market, rig owners
quarter, 41 new floater and 80 jackup contracts were
have gone to great lengths to reposition themselves to
signed. Extrapolating this for the full year would give
survive low margins until the commodity upcycle brings
a run rate of 55 for floaters and 107 for jackups, which
a hoped-for recovery in activity.
is substantially lower than the 94 and 186 contracts,
Measures taken include aggressive cost-cutting initiarespectively, signed in 2014.
tives on both operational and overhead costs across the
As a result, the day rates for offshore rigs continue to
board as well as concerted action to ensure rigs remain
remain depressed. Day rates have declined about 50%
active as long as possible, with blend and extend conon average for new contracts between first-quarter 2014
tracts becoming increasingly common. Under these
and third-quarter 2016.
agreements immediate day rate reductions are granted
EPmag.com
December 2016
37
to the operator in exchange for extensions to the contract. This reduces costs for operators, while rig owners
can ensure their assets remain active for longer.
Rig owners also are delaying delivery of newly built
rigs from shipyards or refusing delivery in more extreme
cases. Examples include Seadrill refusing delivery of the
West Mira rig from Hyundai and Pacific Drilling refusing
delivery of the Pacific Zonda unit from Samsung.
In the most extreme cases, bankruptcies have been
used to either restructure debt (e.g., Vantage Drilling)
or wind up companies altogether, as was the case with
Hercules Offshore.
38
Editors Note: The author thanks Jeremy Bowden for his contribution to this article.
December 2016
EPmag.com
Optimizing production,
economics in mature fields
Single-treatment microemulsion remediation chemicals provide production
stimulation in wells damaged by a combination of factors.
Ramakrishna Ponnapati, Lirio Quintero and
Mary Jane Felipe, Baker Hughes
Damage mechanisms
Over the lifetime of a well, scale deposits, paraffin and
asphaltene deposits; sludge; fines; emulsions; oil-wet
solids; and microbial slime can build up in the near-wellbore area of openhole wells or anywhere from 0 in. to
24 in. from the perforations that serve as conduits from
the reservoir into a cased-hole well. Often these deposits
build up to the point of causing formation blockages, or
skin, that can restrict the flow of fluids and gases from
the reservoir and reduce productivity.
Standard industry practices to remediate near-wellbore damage have historically involved solvent washing,
acid treatments and hot oiling/watering, which typically deliver short-term production improvement. Many
solvents can remove hydrocarbon deposits, but they
leave the rock surfaces oil-wet, which is another type of
damage, and also could leave the heavy hydrocarbon
deposits to become more problematic and complex to
remove as the well matures. While acid treatments are
effective at removing inorganic carbonate scale, they
can cause asphaltene molecules to destabilize, which
leads to future organic damage. Similarly, hot oiling
and watering techniques help lower the viscosity of paraffin. But as the waxy fluid flows deeper into the reservoir, it cools and creates blockages in other areas.
Wettability
Another challenge to optimizing production from
mature fields is formation wettability. Wettability is the
ability of a fluid to maintain contact with a solid surface in
the presence of other fluids. A good example of wettability at work is liquid car wax. The liquid wax is spread over
the surface of the car. When a drop of nonwetting fluid
rainhits the waxed surface, the rain will bead up, minimizing its contact with the surface of the car. The normal
state of sandstone formation rock is water-wet. This is
what causes the oil to move into the wellbore rather than
adhering to the rock. Water-wet reservoirs are changed
December 2016
EPmag.com
December 2016
100
80
bbl/d of oil
Single-treatment solution
First well
Other three wells
60
40
20
0
1
10
20
30
40
process is more rapid and efficient than other stimulation methods (Figure 1).
The primary properties of the CND products are
ultralow interfacial tension, high oil solubilization and
high water-wetting of solids surfaces, often restoring
permeability to greater than 100%. Ultralow interfacial
tension of CND treatment means that no mechanical
energy is required for cleaning. High solubilization
enables the treatments to remove oil and to break
emulsions and sludge. Wettability reversal from oil-wet
to water-wet disperses and mobilizes the solids so that
residual organic deposits can be easily removed.
shale
SOLUTIONS
42
Faster makeup
Searching for ways to speed up casing jobs, producers looked to the industry to design an easier-to-run
connection that ensures rig reliability and simplified
operations. The DWC/C-IS, with its internal shoulder,
provides more reliability during the makeup process for
the rig crew and proper thread interference for superior sealing capability. Since backups are not applied
to the coupling, this allows the connection to be made
up without any external loads applied that could cause
improper makeup signatures. This makeup process
will result in fewer connections requiring breakout for
review and assessments.
EPmag.com
shale
SOLUTIONS
High-cyclic loads
When installing the string in the wellbore, the
pipe might be subjected to harmonic fatigue loads.
After installation in the wellbore, Marcellus operators may run 30 to 60 fracture stages. Therefore,
Quality control helps guarantee performance of the DWC/C-IS PLUS
the high-fatigue load is followed by a high number connections at the site. (Source: Vallourec USA Corp.)
of fracturing cycles and then by pressure-testing
to ensure the connection is physically capable of
performing in the manner used by operators in
the field. In every fracture stage internal casing
pressures can approach pipe burst strength prior
to rapid pressure reduction. It is a high-fatigue
load coming close to the limit of the pipe and
connection and then reducing pressure multiple
times. These high cyclic fracture stages generate
extremely high fatigue loading, and operators
demand strings and connections that will meet
their requirements. This new family of connections
has been fit-for-purpose-tested and validated, testing the connections through the rigors encountered in shale wells. The family also has been
successfully used in the field for years.
Complex wells in the Marcellus and Utica are
comparatively deeper and higher pressure and,
Strict manufacturing protocols ensure tighter tolerances. (Source: Vallourec
therefore, present operators with unknown variUSA Corp.)
ables. Rock pressures vary by area, and operators
Some of the shale operators are starting to see more
are still discovering the effect of the rock density variais not always better. They might have done 30 fractures,
tion on the strings. The casing string might encounter
then dropped down to 15 and then tried 20 or 25 to
collapse and get various loads on the pipe that operators
find the most efficient scenario. Unknown well condimight not expect because shale drilling has only been
tions can occur in new horizontals, and operators are
around for eight to 10 years in that region. Load conditrying to understand and establish best practices.
tions as a result of the formation are still in the infancy
Operators are improving their understanding of the resstages as a result of the new area of development. New
ervoirs and utilization of production casing, completion
drilling methods and new technologies help operators
and well stimulation techniques.
improve drilling efficiency and productivity.
EPmag.com
December 2016
43
offshore
SOLUTIONS
crude oil, lubrication oils and synthetic fuels. FischerTropsch synthesis originates back to the 1920s, when
German scientists Franz Fischer and Hans Tropsch
succeeded in producing hydrocarbons out of coal.
Seventeen coal-to-liquid plants were built in Germany
before and during World War II. At the time the technology was very expensive and yielded many byproducts.
Since then such companies as Shell and SASOL have
improved the technology efficiency and focused on converting natural gas into hydrocarbon products, known
as gas to liquids (GTL). The process continues to attract
attention primarily because it allows companies to add
value to natural gas and produce transportation fuels
and motor oils worth much more than the original feedstock. High-quality GTL products contain no sulfur, generate lower emissions and are readily biodegradable.
Having so many advantages, GTL technologies are
still plagued by high capital cost and a large footprint,
mainly due to the fact that the classical Fischer-Tropsch
process produces wax that needs to be sent to hydrocracking and other refining processes.
The new technology uses a pelletized catalyst that will produce liquid light synthetic fuel from
the Fischer-Tropsch reactor without wax or other byproducts. (Source: INFRA GTL Technology)
44
INFRA GTL Technology, an international company based in Houston, came up with a pelletized
catalyst where multicomponent
catalysts are impregnated by cobalt
nano-particles. The catalyst is highly
productive and very stable, offering
at least two years of useful life without rejuvenation. It is bifunctional;
the Fischer-Tropsch reaction is
accompanied by cracking and other
processes, which allows users to
produce liquid light synthetic oil
straight from the Fischer-Tropsch
reactor without a wax stage and
without any byproducts.
INFRAs GTL technology involves
only two stages: oxidation of natural
gas to synthesis gas and obtaining
clear synthetic crude oil.
December 2016
EPmag.com
offshore
SOLUTIONS
December 2016
45
operator
SOLUTIONS
time savings, providing a return on the technology investment, which doesnt take into account additional upside
benefits identified. These benefits included significantly lower geological uncertainties and reduced risk of
high-impact events such as well collapse or catastrophic
flow events, providing not only economic benefits but
also HSE benefits. Enabling the full use of LWD technology for improved well placement and the quality of the
drains drilled without compromising well integrity was
also a significant benefit of the WPD implementation.
EPmag.com
operator
SOLUTIONS
December 2016
Final results
Valuable rig time was saved due to the instantaneous
data transmission enabled by WDP, and at least three
dedicated reamer runs were saved by using the integrated dual reamer setup.
The wells were landed and navigated within the reservoir with real-time recorded quality formation evaluation, annular pressure and drilling dynamics data from
the BHA and annular pressure and drilling dynamics
data measured all along the string with ASM tools.
High-resolution images were available for real-time decision making, and images such as short-spaced density
images were used for wellbore breakout indicators.
This resulted in improved geological understanding
based on enhanced formation evaluation data acquired
in real time that led to subsequent improved wellbore
placement and increased reservoir section length. Netto-gross ratio was increased by more than 28% compared to expected and more than 200 m more reservoir
was drilled and completed. In total, the geosteering
optimized net sands by about 1,000 m (3,281 ft) measured depth over three horizontal sections.
This extension in drain length, together with the optimum wellbore placement within the reservoir, actually
saved the operator from drilling another well since
planned drain section length and quality already had
been achieved.
47
BASIN MODELING
FIGURE 1. This reservoir geomodel shows a) the underlying cellular structure and b) the 3-D geomodel of matrix permeability from the Eagle
Ford Formation in Texas. (Source: Halliburton)
48
December 2016
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BASIN MODELING
FIGURE 2. A 1-D basin model is the second step of the workflow. (Source: Halliburton)
Workflow
1. Analyze source rock samples. To obtain basic geological
and geochemical parameters from source-reservoir
EPmag.com
December 2016
formations, source rock samples must first be analyzed using standard methods. This provides information about vitrinite reflectance, total organic carbon
(TOC), hydrogen index, oxygen index, kerogen type,
rock types and mechanical properties of shale.
2. Perform 1-D basin modeling in several wells/pseudo-wells
located in the study area. Calibrated 1-D models will
provide information about the history and the
present-day state of pressure, maturity, heat flow,
erosion, hiatus, tectonic history and rock properties
like porosity.
3. Build a high-resolution 3-D model of the reservoir and import
results from the 1-D basin model. The geomodel captures
the geometry and architecture of the reservoir from
seismic and well tops. Petrophysical, geomechanical
and geochemical properties are distributed throughout the volume, enabling the identification of the
mechanical stratigraphy and associated best characteristics for stimulation and completion. Further, geostatistical methods can be employed to produce a variety
49
BASIN MODELING
FIGURE 3. This geomodel shows the distribution of brittleness collocated with seismic
acoustic impedance. (Source: Halliburton)
a)
b)
c)
d)
FIGURE 4. One layer in a 3-D basin model displays four stages of methane maturation in
the Eagle Ford: a) present day, b) 36 million years ago, c) 56 million years ago and d)
about 100 million years ago. (Source: Halliburton)
a)
b)
c)
d)
50
December 2016
EPmag.com
BASIN MODELING
Exploring tectonically
complex basins
Fully coupled structural restoration and petroleum systems
modeling improves exploration risk assessment.
accumulate. The elements are an effective source rock,
reservoir, seal and overburden, with the latter burying
the source rock to a depth where it can reach thermal
maturity. Processes include trap formation; source rock
xploration risk assessment is typically achieved by a
maturation; and generation, migration and accumulaholistic evaluation of the basin petroleum systems
tion of hydrocarbons. Elements and processes need to
and the combined risks identified for the reservoir, trap,
occur in a specific relation and order for organic matter
charge and seal. In structurally complex basins, strucin the source rock to be converted to petroleum, stored
tural segmentation can severely complicate the process.
and preserved. A dynamic model, one that evolves
Modeling a representative paleoenviroment often chalthrough geologic time, is essential to correctly assess the
lenges software technology and requires more time and
many interactions as process timing often determines
effort than can be justified by the business requirements.
exploration success or failure.
Conventional PSM uses vertical backstripping to
Conventional shortcomings
describe the structural evolution of a basin. However,
Exploration risk can be reduced by understanding the
this is not sufficient in structurally complex regions.
likelihood of hydrocarbon presence, type and potenLateral rock movements mean PSM should be pertial volumes. Seismic data can delineate the trap, and
formed using structurally restored models. This requires
high-quality 3-D seismic might reveal information on
a specific methodology to simulate physical parameters
reservoir quality or provide an indication of fluid consuch as rock stress, pore pressure and compaction withtent. However, seismic data alone is not adequate to
in a basin and then to correctly couple the resulting
reveal the complete geological story.
structures with subsequent modeling of the thermal
Petroleum systems modeling (PSM), a geological
history, source rock evolution and derived hydrocarbon
modeling technique that reconstructs basin evolution,
compounds. The PSM must be structurally consistent
can provide a solution. PSM incorporates all of the geothrough geologic time; if the geometric framework is
logic elements and processes needed for oil and gas to
inconsistent, the properties and processes simSOUTH
Surface leakage at faults
NORTH
ulated in this framework also will be incorrect.
An inconsistent structural framework will lead to
Gas
0 Ma
an incorrect thermal history, causing erroneous
Santa Barbara
oil eld
hydrocarbon generation results and spurious
Oil
Oil
migration pathways and accumulation locations.
12 Ma
Seal leakage
Andy MacGregor, Bjorn Wygrala, Martin Neumaier,
Alex Wilson and Juan Carlos Hidalgo, Schlumberger
Prospect
Gas
5,000 m
15 Ma
21 Ma
Transformation ratio
23 Ma
10 Km
FIGURE 1. Structural history and a 2-D petroleum systems model demonstrate the
oil charge history of the Santa Barbara Field in Venezuela and lateral variations of
hydrocarbon properties when approaching the main thrust. (Source: Schlumberger)
52
EPmag.com
BASIN MODELING
EPmag.com
December 2016
53
CEMENTING ADVANCES
54
December 2016
EPmag.com
CEMENTING ADVANCES
downhole to switch the CrossStream system to the subsurface reverse circulation flow path. Alternatively, the tools
can be cycled using a sequence of pressure pulses.
A key aspect of the system is its ability to continuously
rotate and reciprocate the liner during cementing, further enhancing hole-cleaning efficiencies and set-cement
integrity. Depending on well geometry, the system also
can reduce the operational time required for cementing.
Because reverse-cement placement stops once cement
has filled the annulus and shoe track, pumping the volume inside the liner for displacement is not necessary.
Conventional,
reverse flow paths
Engineered in a modular design for versatility, the
subsurface reverse-cementing system includes an
RFID-activated crossover tool, which is required for
any subsurface reverse-cementing operation, and two
auxiliary RFID-actuated tools that can be deployed
depending on job requirements. An RFID circulation
tool enables selective, continuous circulation into
the work string annulus without flowing fluid past
the depleted zone or displacing cement. An RFID
flapper valve isolates the running string when setting
an expandable liner hanger after cement placement.
In addition to the RFID components, a bi-directional
float collar allows flow in conventional circulation and
reverse circulation directions.
December 2016
CEMENTING ADVANCES
System installation
A critical part of any installation is getting the system to
the planned depth. During installation it can be helpful
at times to rotate the liner. Rotation breaks static friction
and allows the system to move through tight areas. However, not all liners are designed for rotation. The Packers
Plus Premium Liner Hanger has a high torque rating
that allows operators to rotate, push and pull on the liner
hanger without accidentally releasing the running tool.
Extended-lateral completions
For extended-lateral wells, ball-activated systems provide
a major advantage in accessing the toe of the well to initiate treatment without having to pump wireline or push
coiled tubing. Cemented ball-activated technologies,
including Diffusor for single-point entry and QuickFRAC for limited entry, enable both cost and time efficiencies for the toe stimulation of an extended lateral.
Eliminating trips in and out of the well at each stage is
particularly significant in extended laterals, where plug
conveyance and millout become riskier. It becomes increasingly difficult to put weight on the bit as the millout progresses toward the toe, increasing operational risk.
Stimulation treatment
distribution
56
EPmag.com
FIGURE 2. Overdisplacement is caused when excess fluid pushes proppant too far
into fractures, resulting in poor near-wellbore conductivity. (Source: Packers Plus
Energy Services)
are able to withstand high pressures and flow rates, facilitating consistent fluid
distribution throughout the clusters (Figure 1).
When high breakdown pressures require high fluid rates, single-point entry
completion systems such as Diffusor are more effective at stimulating some
formations compared to limited entry.
A study modeling the completion and reservoir data in the Wolfcamp Shale
estimates a 12% higher EUR over 30 years from wells completed with singleentry stimulation compared to traditional limited entry using plug and perf.
Finally, ball-activated systems can sidestep the potential for overdisplacing
proppant. Excess fluid can push the proppant near the wellbore deeper into
fractures, causing the near-wellbore fractures to close. This leads to poor
near-wellbore conductivity and lower production.
In ball-activated systems, overdisplacement can be controlled or avoided
because the ball can be pumped within the flush volume of the previous
stages treatment (Figure 2).
December 2016
57
CEMENTING ADVANCES
Uniform deposition
The GeoproHYDRA is a low-torque high-speed tool that
addresses cementing issues affecting high-angle and
horizontal wells. It disperses fluid uniformly by rotating
as cement passes through at very high rotational speeds.
The result is cement deposition at the top and bottom.
This more uniform deposition of cement around the
borehole significantly improves the quality of cement
at the shoe in all well types and thus the integrity of the
cement behind the casing or liner.
By rotating part or all of the tool at high speed, a
cyclone effect is created, which also helps to clear
the borehole of all debris and contaminants prior to
cementinga useful additional capability in sticky hole
conditions or through unstable formations. Rotation
of the entire tool is beneficial when working on a long
high-angle section, where rotation is needed at the bottom to work the string down.
Thanks to the high rpm achieved, the envelope of
application is widened. This tool also can be used as a
jetting tool or a core tripping cleanup tool. In addition,
well brushes can be installed to make it a cleanup tool
for cement. Alternatively, a bit can be put at the bottom
of it to clean the casing line before drilling out.
Cementing challenges
One such challenging area is cementing. The strength
of the cementing operation on a well depends on how
the cement is deposited. In a vertical well cementing
is usually relatively straightforward since the cement
comes up the sides evenly. The more inclined the well
is, however, the more likely it is that fluid will follow the
path of least resistancein other words, flow to the top
of the casing and not the bottom.
Furthermore, in high-angle and horizontal wells when
displacing cement, conventional technologies are not
designed to apply the slurry evenly around the casing
string, with more cement usually going preferentially
to the high side of the hole rather than radially around
the string.
58
Field trials
Trials of this dual cementing/reaming technology are
currently taking place on wells in Murmansk in northwest Russia, with positive results so far. On the first well
where the technology was trialed, previous attempts to
land 7-in. casing at the target depth had failed, costing
the operator 35 days of nonproductive time (at a monetary cost of more than $1 million) and resulting in the
entire casing string having to be pulled out of the hole,
resulting in broken centralizers and other accessories.
The formation was unstable, a significant proportion of
the hole was at high inclination and the casing shoe also
went through an azimuthal turn of more than 100 degrees.
Having used the tool described above, the cement at the
shoe was of good quality when tested, and debris removal
also was improved. The operator plans to use the tool on
two more wells this year and a further 20 next year.
December 2016
EPmag.com
PRESSURE PUMPING
60
December 2016
EPmag.com
PRESSURE PUMPING
December 2016
61
PRESSURE PUMPING
62
December 2016
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PRESSURE PUMPING
Unconventional approach to
conventional pressure pumping
The next generation of pressure pumping systems delivers a cleaner,
quieter solution to hydraulically fractured wells.
Additionally, using natural gas to fuel a turbine generator eliminates the environmental and personnel risks
associated with diesel use. Evolutions fleet emissions
are far below the Environmental Protection Agency Tier
IV standards for all categories of nitrogen oxides, CO2,
hydrocarbon and particulate matter.
Measured noise levels for conventional fracturing
fleets are typically in the +/-115 dB range. Evolutions
measured noise levels reside in the +/-80 dB range, providing the opportunity to work within highly regulated
and residential areas.
System technology
December 2016
EPmag.com
PRESSURE PUMPING
December 2016
65
OFFSHORE YARDS
REPORT
Korean shipyards
invest in automation
R&D efforts improve efficiency and construction execution.
Hyun-Buki Jeon, ABS; Manjoo Huh, DSME; San Ryong Shin
and Sang Hun Ryu, HHI; and DongSoo Kang, SHI
R&D investment
Construction of the Daewoo Shipbuilding and Marine
Engineering (DSME) shipyard began in 1973 at Okpo
Bay, Geoje Island, on the southeastern tip of the Korean
Peninsula. Completed in 1981, DSME has since grown
into a premium shipbuilding and offshore contractor
specializing in offshore platforms, drilling rigs and
FPSO units/floating production units.
To improve the construction process, engineers at the
DSME R&D center are focusing on product design and
production technologies fundamental to offshore assets.
The onsite Research Institute comprises two research
laboratories: a comprehensive test laboratory dedicated
to R&D for welding technology and testing of related
66
EPmag.com
OFFSHORE YARDS
REPORT
December 2016
UNCONVENTIONAL
REPORT: U.S.
Drilling activity
Figure 1 highlights the profiles of historical drilled and
completed wells as reported by the Energy Information
Administration. Clearly, the number of wells drilled
dropped after the price of oil fell in late 2014. Things
seemed to pick up a bit in mid-2015 before sliding considerably. Completions, on the other hand, reflected an
immediate change in activity and really didnt pick back
up until late 2015, building a relatively healthy balance of
uncompleted wells. In contrast to drilling, operators have
maintained a relatively strong appetite for completing
wells, reflecting a need to continue operating but doing
Production
December 2016
EPmag.com
UNCONVENTIONAL
REPORT: U.S.
US WELL INVENTORY
sidering global oil and gas marTotal Count
kets post-price collapse. While
1,200
reported figures have shown a
clear turn for the worse, espe1,000
cially in certain plays, the con800
solidated impact is markedly
600
less catastrophic than the dire
predictions for which many in
400
the industry had been bracing.
200
As illustrated in Figure 3, total
production in 2016 is expected
Q1 2014 Q2 2014 Q3 2014 Q4 2014 Q1 2015 Q2 2015 Q3 2015 Q4 2015 Q1 2016 Q2 2016
to close out at about 5% lower
Utica
Permian
Niobrara
Marcellus
Eagle Ford
Haynesville
Bakken
than 2015 levels. Compared to
the massive increases to which
FIGURE 2. The Permian Basin and Eagle Ford experienced the highest growth in overall well
the world had grown accusinventory during 2015. (Source: Stratas Advisors)
tomed, this drop is indeed
TOTAL PRODUCTION BY HYDROCARBON
material. However, given that
MMboe/d
prices have been cut in half, a
14.0
decline of a mere 5% is something to respect, if not applaud.
12.0
With respect to prices,
Stratas Advisors believes that
10.0
global demand will support
8.0
a gradually increasing price
for West Texas Intermediate
6.0
(WTI). Stratas Advisors believes
the price of oil in Cushing
4.0
Oil / FC
will average between $48/bbl
Wet Gas
and $55/bbl in 2017 and will
2.0
continue to slowly increase in
0.0
real terms thereafter. At those
2014
2015
2016
2017
2018
2019
2020
2021
2022
2023
2024
2025
prices there are several opportunities in shale for investors
FIGURE 3. The price collapse has brought production down from highs seen in 2015 and is
to capture value. Furthermore, expected to remain low until 2020. (Source: Stratas Advisors)
operators are continuing to
Figure 3 illustrates how the price collapse is anticmake impressive advancements in drilling techniques
ipated to take a toll on current and near-term proand methods, and they are making these improveduction for oil and gas. The major crude oil- and
ments at continually declining costs.
condensate-bearing regions are estimated to produce
The combination of a reasonably elevated price
about 4.9 MMbbl/d in 2016, which represents an 8%
deck and a lower cost per extracted barrel provides
decrease from the 5.3 MMbbl/d recorded in 2015.
sufficient support for a long-term production profile
Stratas Advisors expects crude and condensate producthat is increasing. Stratas Advisors expects the rate of
tion to decrease by another 2.9% in 2017 before startproduction to decline through the rest of 2016 and
ing to increase in the longer term. Declines in gas will
into first-half 2017. Stratas Advisors then expects it
prove to be notable but only about half of those in oil
to reverse this pattern starting in mid-2017. At that
on an equivalent basis. Opening export options and
time, Stratas Advisors forecasts WTI to be about $55/
improved well results should help push up gas producbbl and forecasts total production to average slightly
tion at a faster pace than oil over the long term.
more than 14 MMboe/d. The rate of increase Stratas
The Permian Basin continues to be the largest
Advisors forecasts thereafter means production would
source of tight oil throughout the U.S., with producnot return to the peak rate that was experienced in
tion nearing 2 MMbbl/d, up by more than 7% rela2015 until at least 2020.
EPmag.com
December 2016
69
UNCONVENTIONAL
REPORT: U.S.
70
WTI
($/ Bbl)
December 2016
EPmag.com
tech
WATCH
Catalytic process
Greyrock developed and tested its technology for the conversion of synthesis gas to clean transportation fuels beginning in 2006. The companys catalytic process eliminates
the production and refining of wax normally associated
with the manufacture of synthetic fuels. These fuels feature virtually no sulfur or aromatics as well as high cetane
and good lubricity. This means that the fuels
have premium environmental and operating
properties over both petroleum-based equivalents and synthetic fuels produced from wax.
Greyrock recently released its Flare-to-Fuels
product line for the capture and conversion
of natural gas and NGLs, otherwise flared at
wellhead locations, directly into clean synthetic fuels. These plants are designed to accept
either 585 MMBtu/d or 65 MMBtu/d. They
also are designed to be remotely operated
moveable systems. Fuels produced from these
plants can be used directly in the field or sold
into ready fuel markets.
Associated gas often is flared due to lack of
pipeline and processing infrastructure. Flared
gas produces CO2, nitrogen oxides, black carbon/soot and other pollutants. Improperly
operated flares also can vent substantial
amounts of methane.
The World Bank estimates that about 140
This photo shows an example of Greyrocks small-scale gas-to-liquids plant.
Bcm (about 5 Tcf) of natural gas is flared
(Source: Greyrock Energy)
72
December 2016
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tech
WATCH
December 2016
73
digital
OIL FIELD
74
Master stations
A device that has captured the attention of computer
security professionals in industrial applications is the
master station. The master station is a gateway that is
primarily used in the petroleum sector and serves as the
connecting link between the distributed control system
(DCS) in the operators control room and the actuation
systems operating in the field. The process is governed
by the control room, which collects all the data from the
field and then sends commands to the actuated valves
that will act according to the procedures established.
However, network control in the field to which the actuated valves respond is not directly entrusted to the control room. Rather, network control is connected to the
master station. The master station has the task of interrogating all actuators in the field dozens of times per second to ease the DCS from this burdensome task, check
actuator availability and offer the degree of redundancy
to various levels by connecting the valves with multiple
December 2016
EPmag.com
digital
OIL FIELD
Given that these precautionary measures are not sufficient, information exchanged with the master stations
must have the highest level of protection as with a banking system, a military defense system or an industrial
EPmag.com
December 2016
75
digital
OIL FIELD
76
December 2016
EPmag.com
tech
TRENDS
78
December 2016
EPmag.com
DOWNLOAD
THE APP
December 2016
tech
TRENDS
4-20 mA analog gas transmitter designed for industrial applications in hazardous locations. The new
design is lead-free and has an operational lifespan of
five years. The range is from 0 vol % to 30 vol % O2,
and the sensor operates from -40 C to 50 C (-40 F to
122 F) continuously, allowing new opportunities in
low-temperature applications. This new oxygen sensor completes the range of Tycos current two-year
life O2 sensors, carries a full four-year warranty and
is compatible with any existing OLCT 60 O2 detectors (except intrinsically safe variants) from the
field. TycoGFD.com
December 2016
EPmag.com
REGIONAL REPORT:
SOUTH AMERICA
Upstream backwater
Hence the surprise emergence of the upstream backwater of Guyana as an exploration hotspot for oil majors
Exxon Mobil and Hess has been extremely welcome.
The drilling of the ultradeepwater Liza-1 discovery
well in 2015 was a true game changer, and the initial
apparent size of the nd in the Stabroek Block quickly
prompted operator Exxon Mobil to appraise it earlier
this year. The Liza-2 well persuaded the normally ultraconservative operator to excitedly issue a recoverable
reserves estimate of between 800 MMboe and 1.4 Bboe
Stabroek stats
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REGIONAL REPORT:
SOUTH AMERICA
Fiscal-friendly terms
Guyana, a British colony until 1966 that has strong links
with the Caribbean, has a scal regime that at this nascent
stage in its evolution is very explorer-friendly as the republic looks to encourage more companies to its waters.
At present, after any commercial production begins,
a licensee will be allowed to recover all capital and
operating costs from cost oil, which for the rst
three years is up to 75% of production and thereafter
up to 65% of production.
The licensee share of the remaining production or
prot oil for the rst ve years is 50% of the rst
40,000 bbl/d of oil, 47% for additional production and
45% thereafter.
EPmag.com
December 2016
Bid rounds
Two bid rounds held in 2009 and 2012 attracted a number of
majors, including Total, which was awarded Block 14 in the second round. It later shared out the risk on the block when Exxon
Mobil and Statoil farmed in for 35% and 15%, respectively.
The Norwegian player also is a partner with 35% in neighboring Block 15 in the Pelotas Basin alongside operator
Tullow Oil (35%) and partner Inpex (30%).
Tullow and its partners have agreed to a yearlong extension of the contract on Block 15 to complete further seismic
activity, with a 3-D shoot covering 2,500 sq km (965 sq miles)
set to get underway before year-end 2016 or early in 2017.
This is aimed at adding to a number of initial leads previously
identified in a 3-D survey carried out by Tullow in 2013.
Uruguays oil regulator Ancap is working on plans for a third
bid round, possibly in 2017, but the disappointing news from
Totals wildcat and the depressed exploration environment
globally might delay those plans into 2018. Up to 17 blocks are
expected to be put up for grabs, with five in shallow waters and
the rest in water depths ranging from 100 m (328 ft) to beyond
3,500 m (11,483 ft). They also will include blocks previously held by BP and YPF but later relinquished. The blocks will
range in size from 2,500 sq km to 6,500 sq km (2,510 sq miles).
Ancap also is working on improving the incentive to
explore, with longer initial exploration periods and higher
cost-recovery allowances.
83
international
HIGHLIGHTS
Colombia
Colombia
Canada
Norway
Norway
Pakistan
EPmag.com
international
HIGHLIGHTS
1
2
8
India
Indonesia
December 2016
Australia
10
10 Australia
EPmag.com
85
on the
MOVE
PEOPLE
Weatherfords Bernard J.
Duroc-Danner, chairman of the
board, president and CEO, departed
from the company Nov. 9. Krishna
Sprayroq Inc. selected Jeremy
Shivram will lead as interim CEO
Huckaby as the new director of
and will continue as CFO until a new business development.
CFO is named. Robert Rayne, vice
chairman of the board, will serve as
Ken Sill (left) and Greg
chairman of the board.
Miller have joined the
Equity Research Team of
EQT Corp. President Steven T.
SunTrust Robinson HumSchlotterbeck will succeed David L.
phrey and will cover the oilfield
Porges as CEO when Porges retires
services and equipment space out of
in first-quarter 2017. Porges will
Houston as well as U.S. communicaremain as chairman of the board for tions and internet infrastructure out
one year following his retirement.
of New York, N.Y., respectively.
Husky Energys President and
CEO Asim Ghosh will be retiring
Dec. 5 but will remain on the
board of directors.
NetApp Inc. selected Bill Miller
as CIO.
Sanchez Energy Corp. appointed
Howard Thill executive vice president and CFO.
CAP Energy named Randy
Yeager president.
Oilfield Helping Hands
appointed Gregory
Rachal president.
86
EPmag.com
on the
MOVE
rlaas@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
Senior Director
of Business Development
HENRY TINNE
Tel: 713-260-6478
htinne@hartenergy.com
ADVERTISER INDEX
Allison Transmission . . . . . . . . . . . . . . 59
Archer . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Greatwall Drilling Co . . . . . . . . . . . . . . 20
Baker . . . . . . . . . . . . . . . . . . . . . . . . . OBC
Hexion . . . . . . . . . . . . . . . . . . . . . . . . . 29
BGP Inc . . . . . . . . . . . . . . . . . . . . . . . . . 17
IHS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Cameron, A Schlumberger
Company . . . . . . . . . . . . . . . . . . . . . . . 11
IPAA . . . . . . . . . . . . . . . . . . . . . . . . . . . 77
Advertising Coordinator
CAROL NUNEZ
Tel: 713-260-6408
cnunez@hartenergy.com
Subscription Services
E&P
1616 S. Voss Road, Suite 1000
Houston, Texas 77057
Tel: 713-260-6442
CGG . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Fax: 713-840-1449
custserv@hartenergy.com
List Sales
MICHAEL AURIEMMA
PESA . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
PetroCloud . . . . . . . . . . . . . . . . . . . . . . 75
Saint Gobain . . . . . . . . . . . . . . . . . . . . . . 9
Drger . . . . . . . . . . . . . . . . . . . . . . . . IFC
Energy Navigator . . . . . . . . . . . . . . . . 22
Vallourec . . . . . . . . . . . . . . . . . . . . . . . 33
ES Xplore . . . . . . . . . . . . . . . . . . . . . . . 51
Venture Direct
212.655.5130 phone
212.655.5280 fax
mauriemma@ven.com
EPmag.com
EPmag.com
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December
December 2016
2016
87
last
WORD
88
December 2016
EPmag.com