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CONTENTS
Volume 70 • Number 3

14 GUEST EDITORIAL • DELIVERING LONG-TERM

VALUE IN E&P
E&P has become a margin business, with relentless pressure on
cost performance and global competition for capital. As operators
consider how to achieve further reductions in unit operating costs,
the leadership team should focus on long-term value.
30 FRACTURING PLANS AND REALITY OFTEN LOOK
REALLY DIFFERENT
Maintaining production in the shale business is getting increasingly
costly as new wells are falling short of output from the parent wells.
Widely held images of hydraulic fracturing bear little resemblance
to what actually happens underground, making the case for more
studies and tools to better understand fractures.
42 MEXICO’S SECOND DEEPWATER AUCTION SUCCESSFUL
Mexico’s Round 2.4 deepwater auction surpassed expectations as 19
of 29 blocks were awarded to 11 firms from 10 countries. Hi-Crush’s Kermit facility was the
44 OILFIELD SERVICE SECTOR SEES RECOVERY EMERGING oil and gas industry’s first in-basin
sand mine and production plant in
After 3 harsh years of cutbacks, oilfield service companies are starting the Permian Basin, becoming fully
to see a recovery. But a rebound is likely to be significantly slower for operational on 31 July 2017. The wet
heavy-asset suppliers and equipment manufacturers in the offshore/ plant, pictured here, makes initial
separation and washes impurities
subsea sector. from the sand, and then outputs to
47 STATOIL, ABB AMONG COMPANIES PUSHING a pile in preparation for drying and
final sorting. Source: Hi-Crush.
INTEGRATED OPERATIONS INITIATIVES
Statoil’s new center in the Norwegian continental shelf highlights
industry initiatives to further develop integrated processes into their
operational protocols. DEPARTMENTS
50 OTC TO DRAW GLOBAL PARTICIPANTS FOR LOOK
AT INDUSTRY’S FUTURE 6 Performance Indices
In its 50th gathering, this year’s Offshore Technology Conference 8 Regional Update
will attract global industry professionals, academic experts, 10 President’s Column
representatives of influential organizations, and government officials 12 Comments
to discuss offshore technologies and assess the future. 16 Technology Applications
54 MANAGEMENT • IS THERE A NEED FOR A RESERVES 20 Technology Update
CONFIDENCE METRIC? 23 E&P Notes
Critical to the integrity of our industry is confidence in publicly 94 People
disclosed reserves. The Reserves Confidence Metric is a simple tool to 95 Professional Services
identify reserves estimates that should be assessed with caution or 96 Advertisers’ Index
require further information.

An Official Publication of the Society of Petroleum Engineers. Printed in US. Copyright 2018, Society of Petroleum Engineers.
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TECHNOLOGY FOCUS
We have the
58 HYDRAULIC FRACTURING
superpower
Zillur Rahim, SPE, Senior Petroleum Engineering Consultant,
Saudi Aramco to see inside
59 Fracturing Volcanic Rock in India: Continuous Improvements
Over 11 Years
your well.
61 Well-Placement Timing, Conductivity Loss Affect Production And like all good
in Multiple-Fracture Wells
superheroes, we’ll be
64 Pillar Fracturing a Sandstone Reservoir Shows Benefit Over
Conventional Fracturing right there when you
need us.
66 PRODUCTION MONITORING/SURVEILLANCE
Rohit Mittal, SPE, Reservoir Engineer VISURAY’s revolutionary VR90®
downhole X-ray diagnostic service is
67 Improved Monitoring System for Heavy-Oil Steam-Assisted-Gravity- now available in Europe, the Middle
Drainage Wells
East, and North America. In the North
70 Integrated Surveillance Offshore Turkmenistan Sea, our groundbreaking technology
has been qualified by a major operator.
73 Implementing an Integrated Production Surveillance and
Optimization System Wherever your well and whatever its
condition, you can count on us to see
what’s happening and deliver quality
76 HEAVY OIL
Tayfun Babadagli, SPE, Professor, University of Alberta images 100% of the time. A quick call
to us is all it takes to put your well
77 Chemical Stimulation at a Heavy-Oil Field: Key Considerations, back into operation. You save time and
Work Flow, and Results money, while VISURAY saves the day.
80 Cyclic Steam Stimulation Results in High Water Retention visuray.com
for Kuwaiti Heavy-Oil Field
Visit us at DUG Rockies in Denver from
84 Doctrines vs. Realities in Reservoir Engineering April 24-25, and at the Offshore Well
Intervention Conference Europe in
87 SEISMIC APPLICATIONS Aberdeen from April 24-26.
Mark S. Egan, SPE, Consulting Geophysicist

88 Acquisition With Autonomous Marine Vehicles: Field Test

90 Advances in 4D Seismic and Geophysical Monitoring of Deepwater Fields
92 Unconventional-Reservoir Characterization With Azimuthal Seismic
Diffraction Imaging

VISURAY ION
X-RAY VIS

The complete SPE technical papers featured in this issue are available
free to SPE members for 2 months at www.spe.org/jpt.
 STAY AHEAD OF THE
RIG MONSTER
The rigs never stop. Production targets don’t go away. INTRODUCING
Now your frac planning and well deliverability can keep up. PARADIGM k
The key to success in Unconventionals is speed. The biggest problem in the Unconventionals is speed. How do
we fracture and produce efficiently if we have no time to think about how to become more efficient?

Now there’s a solution. Paradigm k is Cloud-based software that

combines fracture planning, simulation, production surveillance and
optimization in a single product.
It introduces a breakthrough new approach to simulate complex
fracture fluid flows in minutes, not days. That means you can assess
the impact of different completion designs before you fracture. Fast
enough to keep ahead of the rigs.
The pace doesn’t get slower when production begins. Hundreds of
wells must be optimized and artificial lift decisions made before wells
break. Paradigm k real-time surveillance and fast simulations let you
diagnose your wells at warp speed.

See it Now at – ppdgm.com/k

 SPE BOARD OF DIRECTORS
OFFICERS
2018 President
Darcy Spady, Broadview Energy
2017 President
Janeen Judah, Chevron
2019 President
Sami Al Nuaim, Saudi Aramco
Vice President Finance
Roland Moreau, ExxonMobil Annuitant
REGIONAL DIRECTORS
AFRICA
Adeyemi Akinlawon, Adeb Konsult
CANADIAN
Cam Matthews, C-FER Technologies
EASTERN NORTH AMERICA
Joe Frantz Jr., Range Resources
GULF COAST NORTH AMERICA
J. Roger Hite, Inwood Solutions
MID-CONTINENT NORTH AMERICA
Chris Jenkins, Independent Energy Standards
MIDDLE EAST
Khalid Zainalabedin, Saudi Aramco
NORTH SEA
Karl Ludvig Heskestad, Aker BP
NORTHERN ASIA PACIFIC
Phongsthorn Thavisin, PTTEP
ROCKY MOUNTAIN NORTH AMERICA
Erin McEvers, Clearbrook Consulting
RUSSIA AND THE CASPIAN
Aizhana Jussupbekova,
North Caspian Operating Company
JPT STAFF
Glenda Smith, Publisher
John Donnelly, Editor
Pam Boschee, Senior Manager Magazines
Chris Carpenter, Technology Editor
Anjana Sankara Narayanan, Editorial Manager
Joel Parshall, Features Editor
Stephen Rassenfoss, Emerging Technology Senior Editor
Stephen Whitfield, Senior Staff Writer
Adam Wilson, Special Publications Editor
Matt Zborowski, Technology Writer
Craig Moritz, Assistant Director Americas Sales & Exhibits
Mary Jane Touchstone, Print Publishing Manager
David Grant, Digital Publishing Manager
Laurie Sailsbury, Composition Specialist
Dennis Scharnberg, Proofreader
SOUTH AMERICA AND CARIBBEAN
Cesar Patino, Ecopetrol
SOUTH, CENTRAL, AND EAST EUROPE • Provide reduced-physics,
Jean-Marc Dumas, PCMC data-driven reservoir
SOUTH ASIA AND THE PACIFIC model to determine
Tapas Kumar Sengupta, ONGC connectivity between
SOUTHWESTERN NORTH AMERICA injectors & producers.
Elizabeth Cantrell, Concord Oil Company
WESTERN NORTH AMERICA
• Integrate wellbore model
Andrei Popa, Chevron to represent operational
changes.
TECHNICAL DIRECTORS
DRILLING • Utilize cutting edge
Jeff Moss, ExxonMobil algorithms to optimize
HEALTH, SAFETY, SECURITY, ENVIRONMENT, reservoir performance.
AND SOCIAL RESPONSIBILITY
Johana Dunlop
MANAGEMENT AND INFORMATION
Birol Dindoruk, Shell
COMPLETIONS
Jennifer Miskimins, Colorado School of Mines
PRODUCTION AND FACILITIES
Hisham Saadawi, Ringstone Petroleum Consultants
RESERVOIR DESCRIPTION AND DYNAMICS
Tom Blasingame, Texas A&M University
DIRECTOR FOR ACADEMIA
Ramona Graves, Colorado School of Mines
AT-LARGE DIRECTORS
Khaled Al-Buraik, Saudi Aramco
Helena Wu, Santos Ltd.
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 PERFORMANCE INDICES

WORLD CRUDE OIL PRODUCTION+‡ HENRY HUB GULF COAST NATURAL GAS SPOT PRICE‡

THOUSAND BOPD
6
2017
O PEC JUL AUG SEP OCT 5 USD/million Btu
Algeria 1306 1306 1306 1256 4
Angola 1670 1690 1670 1695
3
Ecuador 541 536 529 526
Gabon 210 200 200 200 2
Iran 4482 4462 4374 4399
1
Iraq 4501 4527 4567 4417

2017
FEB

MAR

APR

MAY

JUN

JUL

AUG

SEP

OCT

NOV

DEC

2018
JAN
Kuwait1 2764 2765 2785 2795
Libya 1005 890 925 960
Nigeria 2032 2070 2095 2080
Qatar 1527 1532 1537 1532
WORLD CRUDE OIL PRICES (USD/bbl)‡
Saudi Arabia1 10243 10183 10233 10204
UAE 3048 3049 3049 3039
Venezuela 2030 2030 2010 1960 2017 2018
JUN JUL AUG SEP OCT NOV DEC JAN
TOTAL2 35545 35421 35461 35249
Brent 46.37 48.48 51.70 56.15 57.51 62.71 64.37 69.08

THOUSAND BOPD WTI 45.18 46.63 48.04 49.82 51.58 56.64 57.88 63.70

2017
NON-OPEC JUL AUG SEP OCT
Canada 3970 4154 3960 3920
WORLD ROTARY RIG COUNT†
China 3827 3758 3779 3770

Egypt 587 594 602 597

Mexico 2020 1962 1761 1933 2017 2018

REGION JUL AUG SEP OCT NOV DEC JAN
Norway 1626 1599 1460 1553
US 953 947 940 922 911 930 937
Russia 10546 10507 10503 10527
Canada 198 217 210 204 204 205 278
UK 912 832 884 946
USA 9209 9192 9470 9637 Latin America 196 191 177 177 181 195 191
Other3 13104 12891 13083 13068 Europe 82 91 91 91 85 87 84

TOTAL 45801 45489 45502 45951 Middle East 397 391 395 385 378 378 383

Total World 81346 80910 80963 81200 Africa 89 84 79 85 85 77 80

Asia Pacific 195 195 189 213 213 217 222

INDICES KEY
TOTAL 2110 2116 2081 2077 2057 2089 2175
Numbers revised by EIA are given in italics.
+
Figures do not include natural gas plant liquids.
1
Includes approximately one-half of Neutral Zone production.
2
Countries are classified as “OPEC” or “Non-OPEC” in all years based on WORLD OIL SUPPLY AND DEMAND‡
their status in the most current year.
3
Additional annual and monthly international crude oil production statistics
are available at http://www.eia.gov/beta/international/.
MILLION BOPD 2017
† Source: Baker Hughes.
‡ Source: EIA. Quarter 1st 2nd 3rd 4th

SUPPLY 97.14 97.70 98.39 98.68

DEMAND 97.53 98.35 98.96 99.15
Sign up for the JPT weekly newsletter at
Supply includes crude oil, lease condensates, natural gas plant liquids, biofuels, other liquids,
http://go.spe.org/jpt_newsletter and refinery processing gains.

6 JPT • MARCH 2018


• OTC ASIA # C401
• OGWA Oman # 4482
• ICOTA, Houston, TX # 205
• Technical Paper presentation at OTC ASIA;
Using Anchored Production
Straddle (APS) to recover
stuck valve
The well was completed with two Dual Side Pocket
Mandrels. Soon after completion there was a requirement
to change out a valve in the uppermost of the two Dual
Side Pocket Mandrels.
This valve had become unseated whilst efforts were made
to shear open the Tubing To Casing Barrier Valve set in the
pocket. Multiple wireline runs were carried out to attempt
to change out the faulty valve, however each attempt failed
to recover the valve. A camera and further investigation
tools were run to attempt to improve the recovery efficiency.
It was then concluded that a systematic machining
deficiency within the Dual Side Pocket Mandrel was causing
the Kick Over Tool to pre-activate meaning that it did not
locate correctly in the pocket. This was eventually confirmed
with subsequent testing.
001739_Annonse_0218.indd 1
VISIT US AT
OTC-28218-MS – Verification of Barriers
in a Suspension or Abandonment Phase
SOLUTION
A specially designed single run
Anchored Production Straddle (APS).
The elements on this straddle were
both located near the top of the
device, perfectly spaced out to
straddle the bottom communication
port and seal again at the midpoint
of the pocket leaving the upper part
of the pocket free of any obstruction.
The straddle also had a perforated
catcher sub fitted to the bottom
of the system. The straddle was
correlated to depth by the client
firstly setting a Medium Expansion
(ME) retrievable bridge plug below
the side pocket mandrel using the
Kick Over Tool to place the plug on
depth. Once set pressure was applied
to the annulus and the problematic
valve was pumped out of the pocket
and caught within the APS. The APS
was then pulled to surface with the
valve inside.
VALUE CREATED
By using the specially designed
Interwell straddle, the gas lift function
in the well is now re-established.
An expensive work over was avoided
and most importantly, the well
integrity has again been fully
established.
YOUR GLOBAL
PARTNER
www.interwell.com
13.02.18 09.21
 REGIONAL UPDATE
AFRICA
◗◗ SDX Energy has discovered natural
gas at its ONZ-7 development well on the
Sebou permit in Morocco. Drilled to a total
depth of 3,829 ft, the well encountered
16.4 ft of net conventional gas pay in
the Hoot formation. Reservoir quality at
the well exceeded initial expectations,
encountering porosity in the pay section
of 35.3%, the company said. The well was
being completed and tested. SDX has a
75% working interest in the permit.
ASIA
◗◗ China National Offshore Oil
Corporation (CNOOC) plans to ramp up
spending by at least 40% in 2018 and
raise production as a result of a more
“suitable” oil price, the company said in
a recent strategy presentation. Capital
spending for 2018 is expected to range
from between $11.1 billion and $12.7 billion,
compared with about $7.6 billion in
2017. CNOOC forecast that net oil and
gas production would rise to between
470 million BOE and 480 million BOE from
approximately 469 million BOE last year.
The production guidance was based on an
average price of $53/bbl for Brent crude
oil. Company 2019 and 2020 production
forecasts are for 485 million BOE and
500 million BOE,  respectively.
AUSTRALIA/OCEANIA
◗◗ ExxonMobil has confirmed the presence
of high-quality, hydrocarbon-bearing
reservoirs after drilling the onshore
P’nyang South-2 well in the Western
Province of Papua New Guinea. Results
are under evaluation by the company and
its coventurers, which include operator
Oil Search. Located in the 105,000-acre
petroleum retention license 3, the well
was drilled to a depth of 8,940 ft and
reached hydrocarbon-bearing reservoirs
in the Toro and Digimu sandstones,
in line with predrilling expectations.
ExxonMobil said the well confirms the
southeast extension of the P’nyang
field. Oil Search has a 38.5% interest in
8 JPT • MARCH 2018
the exploration block, with ExxonMobil
(49%) and JX Nippon (12.5%) holding the
remaining stakes.
◗◗ Melbana Energy has spudded the
Pukatea-1 exploration well onshore New
Zealand. The well is being drilled by the
Nova-1 rig, from the same drilling pad as the
Puka-1 and Puka-2 wells. Drilling is primarily
targeting the Tikorangi Limestone with
the well having a planned total depth of
approximately 10,400 ft. Pukatea-1 is in
permit PEP 51153. The company has a 30%
interest in the well, in which operator TAG
Oil holds the remaining stake.
EUROPE
◗◗ BP has made discoveries in the United
Kingdom North Sea at Capercaillie in
Block 29/4e and Achmelvich in Block
206/9b. Located in the Central North Sea,
the Capercaillie well was drilled to a total
depth of 12,303 ft and encountered light
oil and gas-condensate in Paleocene and
Cretaceous reservoirs. Located west of the
Shetland Islands, the Achmelvich well was
drilled to a total depth of 7,857 ft and hit
oil in Mesozoic reservoirs. The company is
the operator of both wells, holding the sole
interest at Capercaillie and a 52.6% interest
at Achmelvich. Shell (28%) and Chevron
(19.4%) hold the remaining interests
at Achmelvich.
◗◗ Aker BP has been granted a drilling
permit by the Norwegian Petroleum
Directorate to drill wildcat well 6507/5-8 in
production license 212 offshore Norway. The
well will be drilled about one mile west of
the Skarv field using the Deepsea Stavanger
drilling facility, after it concludes drilling a
well for another client. The 6507/5-8 will
be the eighth exploratory well drilled in the
license. Aker BP is the operator and has a
30% interest in the well, with the remaining
interests held by Statoil (30%), DEA (25%),
and PGNiG (15%).
MIDDLE EAST
◗◗ Zion Oil & Gas’ management is
“optimistically enthusiastic” about
the impending drilling results of the
Megiddo-Jezreel #1 (MJ#1) well onshore
Israel, CEO Victor G. Carillo said recently.
The well was at an approximate depth of
15,193 ft at the time of the comment and
was expected to reach a total depth of
16,733 ft. Final wireline logs were being
run and lower casing was being set. The
company was making final decisions
about the well testing program, which
is expected to take place in late March
or April.
NORTH AMERICA
◗◗ Chevron reported a “major” oil
discovery at the deepwater Ballymore
prospect offshore the United States Gulf
of Mexico. The Ballymore well reached
a total measured depth of 29,194 ft and
encountered more than 670 ft of net oil
pay with “excellent” reservoir and fluid
characteristics, the company said. A
sidetrack well was being drilled to assess
the discovery, which has already been
deemed commercially viable. Located
approximately 3 miles from Chevron’s
Blind Faith platform, the company-
operated prospect is situated in about
6,540 ft of water, approximately 75 miles
off the Louisiana coast, and covers four
blocks in the Norphlet play. Chevron has
a 60% working interest in the prospect
with Total holding the remaining stake.
SOUTH AMERICA
◗◗ Petrobras is making “interesting
discoveries” in blocks of the Campos
Basin offshore Rio de Janeiro, CEO
Pedro Parente said in a recent investor
presentation in São Paulo. The discoveries
have been in mature, company-operated
fields where Petrobras has recently
drilled deeper to reach the presalt layer.
Parente would not give details about
volumes, saying that further analysis
is needed. “It is interesting because
these findings happened in fields with
good geological characteristics,” he
said. “We need now to complete initial
data from drilling with geological and
geophysical studies.” JPT
 COMMUNITY CONSENSUS
Incubation and Adoption of Small Things
Darcy Spady, 2018 SPE President
My goal is to support small producers and
tech providers.
Cautionary note: If you work for a huge
corporation and feel there is no need for
little, pesky innovators, please stop read-
ing this article now. Go and munch on
some plants and wait to be covered in sed-
iment and be part of a future hydrocar-
bon system. Should you choose to stay, there will be a group hug
conducted at the end of this article.
One of my stated goals during my presidency is to support
small producers and technical providers. One of my most unex-
pected experiences has been the pleasant surprise of finding a
hotbed of startups … in France.
While being escorted through the WAI—We Are Innova-
tion—center in Massy, France, I was struck by the thought that
this is a place where great thoughts turn into great companies.
Administered by BNP Paribas, this facility was packed with
hard-working innovators, but not too many suits.
In the midst of this group, led by a guy wearing a suit and ten-
nis shoes, was Habib Al Khatib, a geophysicist. He and his two
colleagues are working with groundbreaking, yet painfully sim-
ple, technology. If Habib fails, he starves. I’m pretty sure Habib
won’t fail. We had an excellent discussion about the place for
small tech providers in SPE, and the critical need for innova-
tion in our industry. That innovation is generated by companies
large and small. I kind of sympathize with the small.
For the past decade, I have been on the board or acted as an
advisor to startups. It’s much more comfortable at the board
level for me. I get to come and go when there are lots of people
around, and they are usually pretty happy. I’ve been a small pro-
ducer, seeking financing while competing with hundreds of oth-
ers like myself. You get well practiced at the “elevator pitch,” yet
the process can be daunting, frustrating, and tiring.
Why do I bring this up? I discuss this concept of startups
and incubation because we have a lot of SPE members in this
space, and I want to support you. Maybe you once worked for
a large corporation and were placed into transition by an ex-
ternal force. Maybe you started in a big organization and have
been chomping at the bit to be freed from the constraints there.
Whatever your reason, there is a home for you in SPE.
Actually, more than just a home, a place to thrive.
OnePetro.org has a massive database of materials that you can
draw from. Conferences, workshops, and forums are excellent
To contact the SPE President, email president@spe.org. Follow him on Twitter: @SPE2018Pres.
10
collaboration venues. SPE Connect lets you join online forums
and discuss things, whether you are sitting on a rig in Angola
or in a shiny tower in Moscow. These SPE tools for members
are also great exposure when the time is right to tell the world
about your innovation.
A visionary SPE member, David Reid of NOV, was instrumen-
tal in putting together a startup village last year at ATCE in San
Antonio. I was amazed by the energy in the room, and the help-
fulness and dialogue among those in the room. A lot of people
in the same boat.
What is the exit plan for these startups? Adoption. Yes, adop-
tion. The goal is for the technology to be used in a paying envi-
ronment. Celebrations? You bet. Little guys celebrate the first
working test, the first sale, the first contract, the first new em-
ployee, the first breakeven year, and so on. We tend to make a
tombstone (usually acrylic with something stuck in it), or label a
coffee mug or bottle with something to celebrate. They line our
offices as mementos of our success.
This is the point where we take a pause and think of how
many little technologies or widgets were started by one per-
son having a better idea. Think about it: A type of casing patch,
a better fluid, a safety device in harsh weather, a stabilization
method, a connection that works when the waves are active, a
high-pressure pump, or float, or shoe, or collar, a technique of
stimulation, a bit, a production measure that actually works, a
software that lets you look at something differently, or some-
thing that wiggles, pings, or vibrates. I’m pretty sure with this
general mental stimulation you have thought of all kinds of in-
novations that have come from one or two people who struck
out on their own and staved off starvation through adoption of
their idea or product.
Adoption ultimately means cash or equivalent, and that’s OK
too. Some careers take the “roulette of adoption” route, some
take the “faithful service for 35 years” route. SPE comprises
both, and that is what makes us rich and diverse. SPE spans
more than 143 countries and more than 60,000 oil and gas
fields. We are in hot places, cold places, nice places—and then
some a little less nice.
This year at ATCE in Dallas, there will again be a startup vil-
lage. I really appreciate the hard work of staff who pulled to-
gether the initial event and are working to make this year’s
event even better. I hope we fill the room to standing room only.
In that room, we want those people looking to adopt as well as
those seeking adoption.
JPT • MARCH 2018
 ¨

Tough Thermoset Resins

Top
Cement Plug

Casing
Centralizer

Bottom
Cement Plug

Float
Collar
Photo taken at the BNP Paribas WAI incubator complex in
Float
Massy, France. Pictured L-R: front row—Habib Al Khatib and
Valve
Yessine Boubaker, Spotlight-Earth; back row—Peter Doherty,
Computation Hub; Alejandra Reynaldos, Schlumberger;
Pierre-Emmanuel d’Huart, Saipem and SPE France Section
Chair; Darcy (the old geezer with the tie); and Elodie
Morgan, Spotlight-Earth. Photo by Peter Doherty.

Innovation and tiny innovators are a great way to bring out-

siders into our industry. I remember well 11 years ago when I
was invited to invest in this little University of New Brunswick Guide
Shoe
spinoff called Green Imaging, run by a couple of people named Nose
Green. I even was asked to join their board. They had no idea
what our industry was about. I went to a couple of meetings
where the sales manager talked about “digging wells,” kind of
like a dog digging a hole for a bone. I may have blushed because For downhole tools in
he did not know the lingo.
Within a year or two, they were featured in JPT as a result
harsh environments
of excellent technical papers and within 5 years were the pre- Use where the need for drillability and
eminent core analysis group on the globe (OK—I have a conflict extended well length are critical to success.
of interest here, so I might be a little over the top on that state- • Customers operate confidently and reduce
ment). I think that 100% of the company comprises industry downtime/costs due to exceptional stability
outsiders. It is very refreshing. in high temp-high pressure environments
So, this year when you are at ATCE, or reading a technical
• Superior wear & crack resistance for reliable
paper with a new technology from a startup, give them a lit- performance
tle extra room to make their point. They are a key part of our
world, and they don’t get much love. • Replace metal with Proxima® for faster cycle
Kudos to BNP Paribas in France (and probably many others times, lighter weight & reduced total costs
worldwide) for providing industrial incubation and free rent. • Reduce capital outlays with molding
Sometimes incubation comes from within large organizations. equipment that’s a fraction of the cost of
Sometimes incubation is just a crazy guy with a good idea. injection & compression molding assets
Sometimes he wears tennis shoes instead of wing tips.
Now for the group hug … thank goodness for the diversity
that is SPE. We are all needed, we are all part of the flavor that ¨
daily provides the world with its energy. The world should be
INNOVATIONS WITH IMPACT
more thankful for this diverse bunch, but sometimes they aren’t.
Let’s be the best that we can be, and from this president at
least, I give all of you a big journalistic hug. To my fellow SPE
members: Thanks for all innovators, big and small. JPT
oilandgas.materia-inc.com

JPT • MARCH 2018 11

 COMMENTS EDITORIAL COMMITTEE
Bernt Aadnøy, University of Stavanger
Syed Ali—Chairperson, Consultant
Tayfun Babadagli, University of Alberta

Mexico Moves Forward William Bailey, Schlumberger

Mike Berry, Mike Berry Consulting

John Donnelly, JPT Editor Maria Capello, Kuwait Oil Company

Frank Chang, Saudi Aramco
Simon Chipperfield, Santos
Alex Crabtree, Hess Corporation
Later this month, Mexico will auction off 35 shallow-water
blocks in the Gulf of Mexico, as its attempt to revive its oil and Gunnar DeBruijn, Schlumberger

gas industry moves forward. It will be the ninth auction held Galen Dino, Dino Engineering
under a reform program that began 4 years ago, and will follow Mark Egan, Retired
the most successful auction to date. The 31 January deepwater Mark Elkins, Retired
auction surpassed expectations, drawing participation from Alexandre Emerick,
supermajors and national oil companies (see page 42). Petrobras Research Center
Along with Argentina, Mexico has emerged as one of the Niall Fleming, Statoil
upstream bright spots in Latin America. At the January auction, Mexican regulatory
Ted Frankiewicz, SPEC Services
officials expected only 7–10 blocks to be awarded. But the event attracted bids from
Stephen Goodyear, Shell
11 different firms as 19 blocks were awarded, nine of those to Shell. Although the
deepwater auction is thought to have the most valuable acreage, future tenders may Omer M. Gurpinar, Schlumberger

also attract heavy interest. Last year, a consortium led by Talos Energy discovered as Greg Horton, Retired
much as 2 billion bbl in place at its shallow-water Zama-1 well in the Sureste Basin. John Hudson, Shell
And Eni found as much as 1 billion bbl at the shallow-water Amoca field; startup is Morten Iversen, Karachaganak Petroleum
expected early next year, which would make Eni the first foreign company to pro- Leonard Kalfayan, Hess Corporation
duce hydrocarbons in Mexico in 80 years.
Thomas Knode, Athlon Solutions
Mexico’s decision to open its oil and gas sector to foreign investment could not
Sunil Kokal, Saudi Aramco
have come at a worse time, months before oil prices abruptly declined and opera-
tors sharply cut spending. But, after weathering the early bid rounds, which attract- Heejae Lee, ExxonMobil

ed only light participation, Mexico appears on a roll. In addition to the March shal- Douglas Lehr, BHGE
low-water bidding, 37 onshore blocks will be tendered in July, and there are plans of Silviu Livescu, BHGE
auctioning the first unconventional acreage, located near the Texas border, before Shouxiang (Mark) Ma, Saudi Aramco
the end of this year. The July blocks are located in northeastern and southeastern
John Macpherson, BHGE
Mexico, covering 3,668 sq. miles and prospects of reserves for 260 million BOE of
R.V. Marathe, ONGC
light crude and gas. The unconventional blocks are concentrated in the Tampico-
Misantla and Burgos basins, south of the prolific Eagle Ford acreage in south Texas. Stéphane Menand, DrillScan

The Mexican government previously announced auctions for unconventional acre- Graham Mensa-Wilmot, Chevron
age twice, but the first two events were canceled because of questions surrounding Rohit Mittal, BHGE
the potential regulation of hydraulic fracturing. Badrul H. Mohamed Jan, University of Malaya
The money from the bidding and the prospects of increased production are Ehsaan Nasir, BHGE
welcome news for Mexico. State oil company Pemex has been heavily strapped for
Yagna Oruganti, BHGE
cash, deterring advancement in deepwater and unconventional plays. Mexico’s oil
Zillur Rahim, Saudi Aramco
production peaked in 2004 at 3.38 million B/D and has since fallen to less than
2 million B/D. Eric Ringle, FMC Technologies

The oil sector’s chief concern now is an upcoming presidential election. Leftist Martin Rylance, BP plc
candidate Andrés Manuel López Obrador has a sizable lead in public opinion polls Robello Samuel, Halliburton
ahead of the July election, and has been a critic of the energy reforms. He has vowed Otto L. Santos, Retired
to review all contracts that have been awarded during the recent bid rounds. Many Luigi A. Saputelli, Frontender Corporation
political analysts believe that he could indeed slow the pace of reform but would have
Win Thornton, BP plc
a difficult time turning back the clock to the days when only Pemex was allowed to
invest in the upstream. JPT Xiuli Wang, BHGE
Mike Weatherl, Well Integrity
Scott Wilson, Ryder Scott Company
Jonathan Wylde, Clariant Oil Services
Robert Ziegler, Weatherford

To contact JPT’s editor, email jdonnelly@spe.org.

12 JPT • MARCH 2018

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 GUEST EDITORIAL
Delivering Long-Term Value in E&P
James Albert, Associate Director, KPMG
Exploration and production (E&P) Zero-based asset costs. The pursuit of
has become a margin business, with engineering excellence has driven cost
relentless pressure on unit cost per- and complexity into processes, activ-
formance and global competition for ities, and equipment. Meanwhile, as
capital. While the industry response to portfolios have shifted through acqui-
the downturn has been impressive, past sitions and divestments, differences in
initiatives such as reductions in head- breakeven UOC have become more vis-
count and supplier rates are unlikely ible and, in many cases, these costs are
to cut it in the long term. To survive in no longer sustainable, especially with
this new economic reality, com­panies the lower oil price of recent years.
will have to do more to potentially There is an opportunity to reduce
reduce unit operating costs (UOC) by waste by differentiating processes and
another 30%. standards, tailoring them to the eco-
While oil and gas consumption is fore- nomic needs of individual assets or asset
cast to grow by 25% between 2015 and classes. Leading players recognize that
2035, the growth rate has halved, with they need to go much further than dif-
a further drag from decreasing energy ferentiated maintenance strategies,
intensity.* Significant US unconvention- looking in detail at individual activities
al capacity continues to be brought on and standards across the business.
stream at unit costs far lower than those By adopting an approach that starts
achieved pre-2014, while new renew- with a “zero base” and adds back only
able energy capacity is being added at those activities that truly drive value
pace, with spectacular improvements for an individual asset, operators can
in cost efficiency. These are long-term significantly reduce costs. One major
pressures that are likely to carry on reviewed in detail the process for
squeezing E&P firms, despite recent oil assigning resources and costs to indi-
price increases. vidual projects across field development
As operators consider how to achieve and drilling projects and reduced costs
further reductions in UOC, here are five by 25% across assets.
sources of long-term value that every
leadership team should be tackling Value-based prioritization. Since the
in earnest. downturn, organizations are having to
James Albert is an associate director at KPMG, where he leads
operations strategy assignments in oil and gas, advising upstream
and downstream clients on issues such as performance improve-
ment, operating model, and strategy development. He has led a
number of wholescale operations transformation programs for
E&P firms around the world, including delivery of behavioral
change and measurable financial performance improvement on
offshore assets. He is a co-author of KPMG’s report Delivering
Long-Term Value in E&P, available online at https://home.kpmg.com/uk/en/home/
insights/2017/12/delivering-long-term-value-in-upstream.html.
14
do “more with less,” with some hav-
ing reduced headcount by up to 30 to
50%. Gold-plated engineering solu-
tions and low-impact maintenance
interventions are no longer feasible in
the new economic reality. Yet in many
organizations, day-to-day prioritiza-
tion decisions still rely on traditional
­engineering-led methods or simplistic
“rules of thumb.”
Downstream operators have long-
established prioritization processes that
use common corporate risk matrices to
assess work scopes based on relative
benefit-cost ratios. By quantifying ben-
efit using “value of risk mitigated” rath-
er than “value at risk,” operators can
drive a far greater commercial focus into
prioritization decisions. During KPMG’s
recent work with one North Sea ­client, a
review identified that 75% of discretion-
ary work scopes approved in an annual
budgeting plan had ­benefit-cost ratios of
less than one, including one safety item
costing in excess of $6 million yet with a
risk reduction value of less than $1 mil-
lion. The opportunity exists to apply this
commercial thinking across the organi-
zation, e.g., well work, back office ser-
vice levels, or discretionary initiatives.
Machines make decisions. High-­
profile developments in technology
present an opportunity to realize sub-
stantial value from optimizing outcomes
in high-stakes, day-to-day operational
decisions, e.g., equipment reliability or
production optimization. This technol-
*BP Energy Outlook, 2017.
(https://www.bp.com/content/dam/bp/pdf/energy-
economics/energy-outlook-2017/bp-energy-
outlook-2017.pdf)
JPT • MARCH 2018
ogy represents an opportunity to move repetitive, transactional processes by to different ways of working
from reactive monitoring to predictive up to 30%. from other sectors
decision making, putting these deci- Using a “center of excellence” model, ◗◗ A very different approach to
sions into the hands of those with access capability can be developed in-house, releasing the value potential
to the right data—not necessarily those reducing the need for expensive third- from new technologies
closest to the asset or those with the party providers and enabling rapid Many organizations are placing their
greatest experience. building of scale. This approach has hopes in continuous improvement pro-
Yet “big data” approaches that invest been successfully demonstrated in US grams. While these clearly have a role
millions of dollars in data lakes risk unconventionals, where operators have to play in driving cultural change, they
wasting money consolidating datasets achieved returns on investment of 3:1 are unlikely to go far enough and are
that in many cases are incomplete or in year one and radically reduced error unlikely to deliver the cross-­functional
poor quality, with limited understand- rates in such processes. ways of working needed to unlock
ing of how to drive value from the data. this value.
Instead, companies should start by Start Small, Fail Fast, Scale Fast A better approach would be to focus
understanding performance trade-offs, The scale of these opportunities sug- on a small number of step change
then working back through the levers gests that something on the order opportunities that can be delivered indi-
available, the people making the deci- of 30% reduction in UOC is possi- vidually, minimizing disruption to the
sions, and the decision support archi- ble and will require high focus in the organization. These will complement
tecture before identifying the data following areas: and act as accelerators, to super-charge
requirements and investing in address- ◗◗ Driving a far more commercial existing programs. However, they will
ing any shortfalls. mindset into day-to-day require management attention, dedicat-
decision making across the ed resources and a far greater willing-
Agile supply chains. More than 50% organization ness to experiment—a more entrepre-
of E&P labor and spend is through third ◗◗ Looking outside E&P for best neurial approach, best characterized as
parties, therefore representing a key practices, and opening minds “start small, fail fast, scale fast.” JPT
source of potential value. Yet tradition-
al behaviors have focused on playing a
zero-sum game, with each side benefit-
ting from the other’s expense at different
points in the oil price cycle.
There is little scope for further rate
reductions, and a new optimism in the
industry sees capacity tightening and
rates rising again—risking losing hard-
won gains. Further value therefore must
come from working together to drive
out inefficiencies. This necessitates
much greater agility and collaboration.
In short, thinking like a manufacturing
business, where the manufacturer and
Tier 1 and Tier 2 suppliers work together
seamlessly to adjust practices to maxi-
mize value for all parties, forming action
teams to work collaboratively to eradi-
cate inefficiencies.

Intelligent process automation. Sup-

port function costs are often relatively
small yet can be challenging to reduce.
Simple process automation technol-
ogy, using bots, has delivered signif-
icant productivity improvements in
other sectors such as financial servic-
es and the pharmaceutical industry. It
represents a largely untapped oppor-
tunity for E&P to reduce the costs of

JPT • MARCH 2018 15

 TECHNOLOGY APPLICATIONS
Chris Carpenter, JPT Technology Editor
Friction Reducer
The ThinFrac MP friction reducer
from BJ Services is a special synthetic
copolymer for enhanced proppant trans-
port and suspension (Fig. 1). Designed
for use in slickwater, hybrid, and foam-
fracturing operations, the polymer pro-
vides rapid hydration in 8 to 10 seconds
in cold water, developing instantaneous
viscosity, reducing pipe friction pres-
sure, and delivering the proppant to the
fractures when and where it is required.
A key feature of the enhanced poly-
mer is the precision breaking at engi-
neered oxidizable linkages along its
backbone. Conventional friction reduc-
ers are polymers with carbon-carbon
backbones, which are difficult to break
and may cause some formation dam-
age. The structure of this engineered
friction reducer allows for a clean, effi-
cient break with little to no formation or
proppant pack damage. No residue poly-
mer or polymer fragments are deposited
on the fracture face or in the proppant
pack to affect hydrocarbon produc-
tion. ThinFrac MP is part of the com-
pany’s family of friction reducers that
Fig. 2—The Series 9200 PetroAlert gas analyzer from MOCON features a compact size and design that allows for either
a 19-in. rack-mount configuration or benchtop use.
16
Fig. 1—The ThinFrac MP friction
reducer from BJ Services provides
rapid hydration, enhances proppant
transport, and breaks precisely.
improve proppant transport and reduce
friction to create large, complex frac-
ture networks.
◗◗For more information, visit
www.bjservices.com.
Gas Analyzer
Baseline, the industrial analyzer group
within MOCON, introduced the lat-
est addition to its PetroAlert Series gas
analyzers. The Series 9200 PetroAlert
gas analyzer combines the selective
detection of a gas chromatograph (GC)
with the continuous monitoring abil-
ities of a total hydrocarbon analyzer
(THA) in a compact, sensitive, and sta-
ble instrument (Fig. 2). The Series 9200
is specifically engineered to meet the
requirements of the oil and gas indus-
try’s exploratory well-logging process.
Each PetroAlert is factory-configured
to meet specific customer monitoring
requirements. The analyzer incorpo-
rates dual-flame ionization detectors,
one dedicated to the GC and the other
dedicated to total hydrocarbon mea-
surement. The GC performs fast C1 to C5
analysis (less than 30 seconds, preserv-
ing the C1–C2 separation at 200:1 con-
centration ratios) with a detection limit
of less than 10 ppm as methane (CH4),
while the total hydrocarbon detector
continuously monitors total hydrocar-
bons down to 0.003% and up to 100%
JPT • MARCH 2018
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 Fig. 3—The Geometrix 4D Shaped Cutter line from Halliburton uses shaped cutting structures to optimize drilling
performance for specific applications.
as CH4. The microprocessor-based ana-
lyzer is controlled by a fully integrated
system software. The analyzer’s data-
collection features include chromato-
grams and user-definable options for
exporting data to logging software.
The PetroAlert’s automatic calibration
feature is ideal for unattended opera-
tion. The instrument’s compact size and
design allow for either a 19-in. rack-
mount configuration or benchtop use.
◗◗For more information, visit
www.baseline-mocon.com.
Rig-Movement Accelerometer
On floating drilling rigs, heave move-
ment hampers the accurate analysis of
critical return-flow measurements. This
heave effect leads to the movement of
the telescopic joint into the riser, con-
sequently displacing the drilling mud
into the return flowline. These move-
ments introduce variations in return
flow that mask the true flow respons-
es from the well. GEOLOG has intro-
duced an accelerometer that is located
at the center of gravity of the instal-
lation and continuously measures the
rig movement under the heave while
using a predictive algorithm that com-
putes and compensates the flow varia-
tions induced by the pump effect of the
telescopic joint. The system has a self-
tuning feature that adapts to change in
heave height and period in real time with
no additional operator input required.
This application has been used with
major operators drilling in deepwater
West Africa and Europe. Once the pre-
dictive system’s operating parameters
are acquired, GEOLOG is able to detect
18
and measure the flowout component
caused by the rig’s heave movement in
real time. This is then eliminated from
the flowout measurement that is already
normalized for drillpipe displacement
and changes in circulating parameters
to derive a true heave-compensated
flowout measurement. The system con-
tinues the tuning process, adapting to
changes in heave height and period
in real time.
◗◗For more information, visit
www.geolog.com.
Production-Forecasting Service
BetaZi Basin Studies provides bundled,
prerun production forecasts on every
well in a basin loaded onto an interac-
tive Spotfire project. It uses TGS data
and BetaZi’s proprietary physics-based
predictive analytics to give users easy
access to public data, tested forecasts,
type curves on the fly, and basic eco-
nomics. The product is a response to
the availability of big data sets and the
need to see every well’s past and future
instantly. The company’s partnership
with TGS for data, delivery, and sup-
port makes the offering optimal for the
industry. Basin Studies brings deep-
dive capabilities to producers, inves-
tors, and lenders who need an instant,
unbiased evaluation of an asset’s future
production. The forecasts offer bounds
that provide needed context of future
outcomes. Oil and gas well forecasts
with their P10 to P90 distributions are
visualized by color and size on maps
and graphs, with quick-click filtering
by any parameters of interest. Results
and data are downloaded easily to eco-
nomic programs or as Excel spread-
sheets. Forecasts are rerun and studies
are updated monthly.
◗◗For more information, visit
www.betazi.com.
Shaped-Cutter Line
Halliburton introduced Geometrix 4D
Shaped Cutters, a line of four distinct
geometric profiles to help improve cut-
ting efficiency and increase control to
reduce drilling costs (Fig. 3). Geome-
trix cutters expand the capabilities of
traditional polycrystalline diamond
materials by shaping the cutting struc-
ture to optimize drilling performance
for specific applications. Traditional
flat cutters generate heat and wear,
which slow drilling progress because
operators must frequently check or
replace damaged bits. The new line
includes the Chisel Plowed Scribe Cut-
ter for brittle formations such as car-
bonates, the Chopper Plowed Cylinder
Cutter for increased heat dissipation
in high-energy drilling operations such
as shale formations, the Dagger Multi-
Plowed Cutter with fluid channels to
improve cleaning and prevent plug-
ging around the cutter face, and the
Machete Optimized Tip Geometry Cut-
ter for use in formations that require
high point loading. In a recent offshore
job in Mexico where an operator was
drilling a limestone/shale formation,
the Geometrix bit doubled the rate of
penetration over a 700-m section, sav-
ing the operator 3 days of drilling time
compared with offset wells. JPT
◗◗For more information, visit
www.halliburton.com.
JPT • MARCH 2018
CUSTOM STIMULATION
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challenges that may arise, and design the optimal plan to meet the objectives safely and efficiently.

To learn more about our stimulation services, visit us at www.cudd.com today.

 TECHNOLOGY UPDATE

Improving Corrosion Management

by Using a Micelle Detection Technology
Scott Rankin, Andrew Osnowski, Fiona Mackay, and Emma Perfect, LUX Assure; Mohsen H. Achour,
ConocoPhillips; and David J. Blumer, BlumCorr

Corrosion inhibitors are often the first
line of defense against internal corro-
sion, and effective mitigation relies on
proactive monitoring and management of
these inhibitors to allow for regular feed-
back and dose adjustment. There have
been recent developments in this field,
for example in greener chemistries (NACE
2016-7738) and treatment methods
(Achour et al. 2008) and a growth in the
number of papers published in OnePetro.
We found an 18% increase in the number
of publications in the last 10 years, com-
pared with the previous 10, when search-
ing the terms “corrosion AND inhibitor”.
Nevertheless, there is room for
improvement. Common industry opin-
ion is that current residual monitoring
methods, such as colorimetric-complex
methods or liquid chromatography mass
spectrometry are either not sufficient-
ly reliable for effective inhibitor dosage
management or too complex to apply in
the field.
Yet there is a significant commer- tect from corrosion. Above a certain con-
cial driver, as dosing corrosion inhib- centration, nanoscale aggregates called
itors is an expensive undertaking and corrosion inhibitor micelles are formed.
the potential cost improvements from This point is called the Critical Micelle
improved management are significant. Concentration (CMC) and is specific to
One North Sea operator reported that the chemical and unique physical condi-
it believed it was overdosing inhibitor tions found in each system.
at an extra cost of £400,000 per year. The CMC has been shown to be an
An alternative corrosion inhibitor moni- important factor in establishing an effec-
toring approach, first published in 2011 tive inhibitor dose, with the optimum
(NACE  11071), exploits the formation of dose being equivalent to the CMC (e.g.
corrosion inhibitor micelles and poses NACE 10326). Below the CMC, there is
the questions: an opportunity to dose additional inhib-
◗◗ Does micelle detection have a itor to further reduce corrosion while
place in the inhibitor qualification above the CMC, surplus inhibitor may
process? be present.
◗◗ Can it help inform chemical Earlier studies looking at CMC and its
management in the field? relation to optimal inhibitor dose were
relatively simplistic laboratory stud-
Micelles—a Recap ies. Out of the 43 CMC studies reviewed,
The most common class of corrosion only one study used formulated inhibi-
inhibitor used in the oilfield is amphi- tors, with the majority looking only at
philic surfactant molecules, which form single components, e.g. an imidazoline.
a barrier on the pipe surface to pro- Importantly, all 43 studies used model

Flow-Loop Corrosion Rate and Micelle Correlation Zoomed Flow-Loop Corrosion Rate and Micelle Correlation
180.00 1.00
160.00 0.90
CMC
Corrosion Rate (mpy)

Corrosion Rate (mpy)

140.00 0.80
and
Micelle Signal

0.70
Micelle Signal

120.00 corrosion
0.60 rate
100.00
0.50 stabilizes
80.00
0.40
60.00
0.30
40.00 0.20
20.00 0.10
0.00 0.00
0 50 100 150 200 0 50 100 150 200
(a) Corrosion Inhibitor Dose (ppm) (b) Corrosion Inhibitor Dose (ppm)

LPR 1 Average LPR 2 Average Weight Loss Micelle Signal LPR 1 Average LPR 2 Average Micelle Signal

Fig. 1—Data collected from a multiphase flow-loop test in which corrosion rate was compared to micelle signal for a
system with an increasing concentration of corrosion inhibitor (0–200 ppm). a) Data includes weight loss. b) Data
excludes weight loss. LPR, linear polarization resistance; ppm, parts per million; mpy, mils penetration per year.
Source: LUX Assure, ConocoPhillips, and BlumCorr.

20 JPT • MARCH 2018

 Dose Optimization in the Field Dosage Check in the Field
20.0 120 30
Pump switch on
25 10th 03:00 hrs

Dosage Rate (ppm)

15.0 110
Micelle Signal

Micelle Signal
20

10.0 100 15

10

5.0 90
5

0
0.0 80 07:30:00 12:00 07:30 13:00 07:15 07:30 07:45
1 2 Day 1 Day 2 Day 3 Day 4 Day 5
(a) Micelle Signal Dose Rate (b)
Timeline
Fig. 2—Comparison of micelle signal and dose rate for Fields 1 and 2. a) In Field 1, when the dose rate was reduced,
micelle signal dropped significantly and did not meet the threshold set for optimal dosage. b) In Field 2, a lack of
micelles highlighted that the inhibitor pump was switched off. Source: LUX Assure, ConocoPhillips, and BlumCorr.

systems to test the corrosion inhibitors,
rather than complex field fluids. It is
therefore pertinent to address the ques-
tion of whether micelles and the signifi-
cance of the CMC are still relevant in real
field conditions.
Inhibitor Qualification
Looking at corrosion inhibitor qualifica-
tion, examples of best practice in the field
can be found from the National Associa-
tion of Corrosion Engineers (NACE) and Each test helps to form a picture of
the American Society for Testing Mate- inhibitor suitability for each unique sys-
rials (ASTM) (ASTM G170 G184 G202 tem. Static LPR tests, for example, are
G185 G208; NACE Publication 1D196). considered useful for ranking an inhibi-
There is no one test that can select the tor’s efficiency but not necessarily for
most appropriate inhibitor; a tailored identifying the best product or dosage
approach for each system is required. for the field.
Common qualification tests include stat- In a laboratory test designed to look
ic linear polarization resistance (LPR), at inhibitor efficiency and its link to
rotating cylinder electrode, emulsion micelle formation, LUX Assure conduct-
tests, and field trial. ed static LPR tests on five different com-
 TABLE 1—SUMMARY OF MICELLE DETECTION FROM 4 FIELD FLUIDS*

Field 1 Field 2 Field 3 Field 4

Location US onshore UK offshore GCC onshore gas US onshore
Inhibitor type Wetting agent, used as Film forming corrosion 4 oil soluble corrosion 2 film forming corrosion
corrosion inhibitor inhibitor—oxyalkylated inhibitors and 1 film forming inhibitors (1 containing
fatty acid water soluble corrosion ionic surfactants, the other
inhibitor (fatty acid) quaternary ammonium
compounds)
Production type Gas Crude oil, gas and Gas and condensate Medium grade crude oil,
condensate gas
Sample Clear, colorless with Clear, colorless, pH 7 Turbid, various colors Slightly turbid, pH 8
properties— black solids, pH 8-9 or 8 (orange, grey-black, green).
produced water High gas content. Black
solids and emulsions present
in many samples, pH 4-7
Micelles detected? YES YES NO YES

*Surfactant identity information taken from safety data sheets.

mercial corrosion inhibitors using its
corrosion inhibitor monitoring tech-
nology CoMic. Results showed that for
only two of the five inhibitors tested,
micelles, as detected by CoMic, were
present at the point at which the cor-
rosion rate stabilized. Given that these
static tests offer a relatively unchal-
lenging corrosive environment, con-
ditions were then made slightly more
challenging by introducing flow. Results
found that for four of the same five
inhibitors, micelles were present
at the point at which the corrosion
rate stabilized.
To make the testing yet more field-
like, a multiphase flow-loop test was
conducted (6 L of total fluids at a ratio of
80:20 [v/v] brine to oil, synthetic brine
sparged with carbon dioxide and inhib-
itor free crude oil, from a North Sea
field; flow rate of 10 L/min, and carbon
dioxide pressure of 100 psi). Corrosion
inhibitor dose was increased sequential-
ly and micelle content of samples from
the loop determined. Corrosion rate was
measured using two LPR probes and a
weight-loss coupon, which was changed
for each dose.
A good correlation was observed
between micelle formation and the
point at which the corrosion rate stabi-
lized. No tangible improvement in the
general corrosion rate was observed
when the corrosion inhibitor dose was
>100 ppm, which was also the first
dose at which micelles were detected
(Figs. 1a and 1b).
Micelle Determination in Field
This technology will have most benefit
in the field where simple on-site analysis
technologies could provide considerable
benefit to operators. Tests conducted at
four field sites are reported here. All test-
ing was done on site, using freshly taken
samples (to minimize losses to contain-
ers and precipitates).
Micelles were detected in produced
water from three of the four fields,
(Table  1). Some assets were more suit-
able than others, with assets using con-
tinuously dosed, water–soluble, film-
forming surfactant type chemicals being
the most likely to benefit from micelle
detection technology.
Dosage changes were made while on
site at fields 1 and 2. For field 1, results
showed that when the injection rate was
reduced, micelles were no longer present
in samples (Fig. 2a), and it was recom-
mended that dosage remain at the origi-
nal 110-ppm level.
For field 2, initially no micelles were
detected in the samples, which alerted
the operators to the fact that the inhibitor
pump had been inadvertently switched
off. Micelles were subsequently observed
in samples analyzed, once the pump had
been switched back on, (Fig. 2b).
Conclusion
The concept of surfactant micelle forma-
tion is not new, nor is its application to
the oilfield. However, data on this topic
has previously been lacking. LUX Assure
has shown that static LPR tests alone
do not adequately represent field condi-
tions, and the authors do not believe it is
a valid technique for extrapolating dose
to field systems.
For the first time, a link has been
established between micelles and cor-
rosion rate in more challenging tests,
based on real field fluids and using com-
mercially available corrosion inhibitors.
The outcome of this has been the devel-
opment of a credible technique for look-
ing at the presence of micelles in field
systems, which will contribute to better
decision making. JPT
References
Achour, M. et al. 2008. Comprehensive
Laboratory Screening of Corrosion
Inhibitors—A Key First Step in a
Successful Corrosion Inhibition
Treatment. Paper MECC 08094
presented at the Middle East
Corrosion Conference, Bahrain,
3–6 February.
NACE 10326 Effect of Corrosion
Inhibitor Active Components on
Corrosion Inhibition in a Sweet
Environment by K. Tsui et al.
isbn:10326 2010 CP
NACE 11071 A Novel and Rapid System
To Analyze Brines for the Optimum
Functional Dose of Corrosion
Inhibitor by C.D. Mackenzie et al.
isbn:11071 2011 CP.
NACE-2016-7738 Development of a
New Environmentally Compliant
CO2 Corrosion Inhibitor for Subsea
Injection by C.M. Menendez et al.

22 JPT • MARCH 2018

E&P NOTES

North Sea Discoveries Highlight Rebound

in the Slumbering Sea
Stephen Rassenfoss, JPT Emerging Technology Senior Editor

BP announced two North Sea discover- Gas UK predicts that the value of invest- hard to say, according to Legate. “It’s
ies, adding more energy to the rebound ment decisions made in 2017 will be early days in terms of assessing devel-
of what once looked like a moribund play. the highest since 2013. The oil industry opment options for the two discoveries
The Capercaillie and Achmelvich dis- trade group said exploration discoveries and further drilling may be needed to
coveries were made last year in estab- are also up. “Although exploration and firm up future plans. Both fields are near
lished areas with nearby pipelines and appraisal drilling is at an all-time low, producing infrastructure and could be
platforms, which could make it possi- volumes discovered in both 2016 and fast-tracked into production in the near
ble for BP to put them into production 2017 are higher than in any year since term,” Legate said.
relatively quickly. While BP officials will 2008,” it said. Wood Mackenzie estimates that BP can
not say if the discoveries justify develop- Last year, 15 exploration wells were add 180,000 B/D based on its announced
ment, the company sounds optimistic. drilled in the UK sector of the North projects in the North Sea, leaving a gap to
“We are hopeful that Capercaillie and Sea, which yielded two discoveries as of fill with added developments.
Achmelvich may lead to further addi- late 2017, with technically recoverable The biggest recent North Sea devel-
tions to our North Sea business,” Mark reserves of 275–380 million BOE, accord- opment announcement has come from
Thomas, BP North Sea regional presi- ing to the Market Insight report. Shell, which has decided to go forward
dent, said in a news release, adding that, “BP’s discoveries are a welcome boost with a project to redevelop the Penguins
“These are exciting times for BP in the to the mature UKCS. The majors still have field, using an upgraded FPSO able to
North Sea as we lay the foundations of appetite for mature plays and, as we can produce up to 45,000 BOE/D in an area
a refreshed and revitalized business see, there is life in the old dog yet,” said with reserves of 100 million BOE.
that we expect to double production to Fiona Legate, senior analyst, North Sea Overall, the size of the companies
200,000 B/D a day by 2020 and keep Upstream at Wood Mackenzie. and nature of the projects covers a wide
producing beyond 2050.” What will become of BP’s two recent range. “Floaters, subsea tiebacks, and
Those foundations include three big discoveries, both of which were drilled platforms to serve projects large and
BP projects coming on line in the North by Transocean’s Paul B. Loyd Jr. rig, is small means there will be something for
Sea: Quad 204 last year, Clair Ridge this
year, and Culzean in 2019.
Long-term projects such as those have
sustained growth in the North Sea during
the deep slump in offshore exploration.
Most of those development projects were
fields discovered more than a decade
ago, according to Oil & Gas UK’s Market
Insight report.
What has been lacking has been
announcements of new projects to fill the
gap as older ones run out. Consultancy
Rystad Energy predicts 13 developments
will be approved this year in the UK sec-
tor of the North Sea. This is a “robust
uptick” from four final investment deci-
sions made the past 2 years there, it said.
Project economics look better this
year with oil prices above $60/bbl and The Capercaillie and Achmelvich discoveries were made last year in areas with
sharply reduced operating costs. Oil & nearby pipelines and platforms. Source: BP.

JPT • MARCH 2018 23

 everyone,” said Readul Islam, Rystad
Energy research analyst.
The appetite for exploration in the UK
North Sea will be tested this summer
Chevron, Total Log Big Discovery in Deepwater
Gulf of Mexico
Matt Zborowski, Technology Writer
A sidetrack well is under way in the
deepwater Gulf of Mexico to assess the
Chevron-operated Ballymore prospect
following a big oil discovery.
The Ballymore discovery well reached
total depth of 8898 m and encountered
205 m of net oil pay in a high-quality
Norphlet reservoir, partner Total said.
The prospect lies in 2000 m of water and
120  km off Louisiana on four blocks in
the Norphlet formation, including Block
MC 607 where the discovery was made.
Norphlet includes Shell’s Appomattox
discovery, which is expected to produce
oil by the end of the decade. Shell’s other
Norphlet discoveries include Vicksburg,
Rydberg, and Fort Sumter.
“This major discovery gives us access
to large oil resources and follow-
on potential in the emerging Norph-
let play,” said Arnaud Breuillac, Total
president, exploration and production.
“While already deemed commercially
viable, we will work together on the
UK Shale Horizontal Drilling Under Way, Fracturing
To Follow
Matt Zborowski, Technology Writer
Cuadrilla Resources has started drill-
ing the UK’s first horizontal shale well
at its exploration site at Preston New
Road, Lancashire, and hopes to begin
hydraulic fracturing of two wells in the
second quarter. No wells have been
fractured in the UK since 2011, when
a Cuadrilla well triggered small earth-
quakes in Lancashire.
Advancement of the drilling program
comes as the operator recovered data
suggesting “excellent rock quality for
hydraulic fracturing and a high natural
gas content in several zones” of the Bow-
24
when the Oil and Gas Authority holds a
licensing round. That round will offer
acreage from two little-drilled areas—
the East Shetland Platform and south-
The Ballymore well was drilled to a total depth of 8898 m by Pacific Drilling’s
Sharav deepwater drillship. Source: Chevron.
appraisal of this discovery and a cost-
effective scheme to ensure a rapid, low
breakeven development.”
Chevron has a 60% working interest
in Ballymore. Total E&P USA has a 40%
stake, acquired last year as part of a deal
with Chevron that included seven pros-
pects covering 16 blocks in the Norphlet
and Wilcox formations.
land shale. Cuadrilla drilled a vertical
pilot well to 2.7 km through the Upper
and Lower Bowland shale rock inter-
vals, taking 375 ft of core samples from
three separate intervals. Wireline logs
retrieved data across the entire Bowland
shale section.
Cuadrilla is combining the data, which
it considers “the most comprehensive
dataset recovered to date from any shale
well drilled in the UK,” with data from
its three other Lancashire shale wells.
The initial vertical sections of both hori-
zontal wells have been drilled. The oper-
west Britain—where the agency that reg-
ulates and promotes development of the
North Sea is publicly offering new seis-
mic data it paid for to encourage bidding.
Total last week announced that it is
further expanding its gulf footprint by
purchasing Samson Offshore Anchor and
its 12.5% interest in four blocks cover-
ing the Anchor discovery. It is also add-
ing a 25% stake in Jack field as part of its
$7.45-billion deal to buy Maersk Oil. That
deal also makes Total among the largest
North Sea operators.
ator has permission to drill up to four
exploratory horizontal wells at Preston
New Road.
Following fracturing operations, Cua-
drilla plans to test the wells’ flow rate for
around 6 months.
The operator said its findings are in line
with a UK government study published in
2013 that provided a mid-level estimate
of the gas-in-place in the Bowland shales
of 1,329 Tcf. The data also appear to con-
tradict a study published last year by
scientists at Heriot-Watt University that
suggests UK’s geology, including in the
JPT • MARCH 2018
 Bowland shale, might not be fracturing-
friendly given its complexity.
The last well to be fractured onshore
UK was Cuadrilla’s vertical Preese
Hall-1 exploration well at Weeton in
2011. Operations were halted after the
well most likely triggered “a number
of minor seismic events,” the company
said in a subsequent report that it com-
missioned. Over the course of 2 months,
magnitude 2.3 and 1.4 quakes were
reported on the Fylde coast near the
site, fueling local opposition to the con-
troversial completions practice that per-
sists amid current operations.
Majors To Feature Heavily in Global Upstream M&A
Activity in 2018
Matt Zborowski, Technology Writer
Major operators with freshly repur-
posed portfolios and sanctioned proj-
ects may soon begin looking to pounce
on opportunities that would build up
their long-term growth prospects.
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“The seismic events were due to an
unusual combination of geology at the
wellsite coupled with the pressure exert-
ed by water injection as part of opera-
tions,” and that “combination of geo-
logical factors was extremely rare and
would be unlikely to occur together
again at future wellsites,” the company
said in the report.
Founded in 2007, Cuadrilla is owned
45% by AJ Lucas, an Australian special-
ist service provider to the energy, min-
ing, and infrastructure sector; 45% by
a private equity firm Riverstone Hold-
ings; and by current and former Cua-
“The majors have done a lot of work
getting themselves in good shape at
$50/bbl,” said Greig Aitken, Wood
Mackenzie principal mergers and acqui-
sitions (M&A) analyst, during a webcast
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drilla employees. Cuadrilla was awarded
its first petroleum exploration devel-
opment licenses for shale development
in 2008.
Another company, Third Energy, is
hoping to gain final approval to frac-
ture its vertical KM8 well this year
at Kirby Misperton in North York-
shire. It provides access to the deep-
er Bowland structure, a hybrid for-
mation play consisting of mainly
interbedded sandstone and shale,
which contrasts from the Bowland
section in North West England that is
shale-prone.
on the topic. “As a result of that, they
are looking generally pretty solid from
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 ry order of business should be normal
portfolio management.
“But, with these strong balance sheets
and improved cash generation, they
have got the strength to target the lon-
ger end of production outlooks, so we
can expect to continue seeing some larg-
er acquisitions from these companies
targeting the long end of production
growth,” he said.
Last year, the majors through M&A
altogether spent $24 billion, the most
since 2012, minus Shell’s takeover of BG
Group in 2015. Overall in 2017, global
deal activity totaled 384, down from
420 in 2016 but up from 334 in 2015.
During 2011–14, there were an aver-
age 500 deals/year. Disclosed spend last
year increased to $143 billion, the high-
est since 2014.
The research and consulting firm
believes majors will continue targeting
opportunities offshore Brazil, where
they have been drawn to new frontiers
and high oil and gas volumes. Another
priority could be increased exposure in
US unconventional regions, where “cor-
porate analysts always feel the majors
should have an element of their port-
folio for the flexibility that uncons can
give you,” Aitken said.
Among the biggest European firms,
Statoil could see more acquisition
opportunities arise in Brazil after its
recent multibillion-dollar Roncador
deal alongside Petrobras, with which
the Norwegian firm is participating in
a strategic partnership. Total, which
also has a presence in Brazil, could look
for opportunities to sustain long-term
growth, especially given its emphasis on
a gas-weighted portfolio.
Another major focusing on gas, BP,
has recently been active in sanction-
ing projects globally and will need to
renew its queue of possible develop-
ments, Wood Mackenzie said.
During 2011–2014, there were an
average 500 deals/year. Disclosed spend
last year increased to $143 billion, the
highest since 2014.
US major Chevron, meanwhile,
has seen improved cash flow follow-
ing the startups of the Gorgon and
Wheatstone LNG projects in Austra-
lia, providing incoming Chief Execu-
26
tive Officer Mike Wirth a solid busi-
ness development template from which
to work.
National oil companies (NOCs) have
nowhere to go but up after a mum 2017
in which they spent less than $2 bil-
lion on deals. Those reportedly look-
ing for deals this year include India’s
ONGC and Thailand’s PTT Exploration
and Production with their “big growth
targets and reasonable financial capac-
ity,” Aitken said.
Chinese NOCs, which a few years ago
were among the most active in M&A,
“have structural production declines
to tackle, and they do have the finan-
cial capacity to do this. So they might
get back into M&A to some extent, but
actually we think they’ll primarily look
toward discovered resource opportuni-
ties,” he said.
Those companies’ recent absence
relates to the perception that their flur-
ry of previous deals provided poor, low-
er-than-expected value. If they do reen-
gage in M&A, Wood Mackenzie believes
they can avoid repeating those mistakes
by reducing deal sizes, seeking pre-
emptions and stake consolidations in
existing assets, and buying into assets
alongside established firms includ-
ing majors.
Among the Russian firms, Rosneft
will continue to look toward the Middle
East and North Africa for expansion.
Wood Mackenzie in December
said it expects a slight rise in overall
global upstream spending in 2018 to
$400  billion, reflecting a 15% increase
in spending for both unconventional
and deep­water projects compared with
2017 levels.
US, Europe Activity Won’t
Be Like 2017
Influenced by equity markets, US uncon-
ventional producers in the second half
of 2017 focused on cash flow and living
within their means instead of growth,
and more of the same is expected this
year. During the first quarter of last year
alone, $21 billion targeted tight oil and
almost $17 billion was spread across
the Permian.
Wood Mackenzie notes the bid-ask
spread among US deals has widened
slightly due to variability around mod-
eling assumptions such as cost inflation,
spacing, and discount rates. Despite
higher spot prices, it expects valua-
tions to continue pricing deals around
$65/bbl long-term.
However, the consultancy expects US
deals to include an increasing number
of contingencies, which have been more
common internationally to bridge the
bid-ask spread by derisking variables
such as future oil and gas prices, explo-
ration success, production growth, and
development progress.
For deals that do take place, Wood
Mackenzie expects to see continued dis-
posals of noncore acreage. Moves to
consolidate companies or acreage in
existing core regions may be given the
green light if those deals improve effi-
ciency and reduce costs. Asset purchas-
es would have to occur on a broad-
ly cash-neutral basis either through
swaps or funding purchases with offset-
ting divestments.
Whether the US M&A market remains
subdued could depend on whether oil
prices stay in their current range over
the next few months, Aitken said. If
prices remain high, companies could be
pushed to grow again. Meanwhile, if the
public equity markets in North Amer-
ica “aren’t going to provide adequate
capital to companies, you can be sure
that private equity ill see an opportu-
nity to step in and bring value forward,”
Aitken predicted.
“There is still a lot of private equity
money out there looking for a home,”
he said. Europe also experienced strong
M&A growth last year, much of which,
like in the US, was fueled by private
equity. However, he expects less pri-
vate equity activity in Europe this
year because fewer assets are avail-
able after last year’s movement. “And
some of the big PE companies that we
knew had money to spend have now
spent that.
“But there are still more PE compa-
nies out there looking to do a deal,”
Aitken added. “Some of the com-
panies which have already dealt may
look to do bolt-on acquisitions as
well, so they’re still going to be there
this year.”
JPT • MARCH 2018
Another Outlook for Industry Predicts Healthy 2018
Joel Parshall, JPT Features Editor
The global oil industry appears poised
for stronger performance in 2018, hav-
ing benefited from the financial disci-
pline and cost-cutting innovation driv-
en by several years of low oil prices and
looking ahead to somewhat more stable
market conditions.
While oil prices have recently risen
above $60/bbl, likely reflecting a num-
ber of short-term supply disruptions
and concerns over Middle East tensions,
forecasts generally call for prices to fluc-
tuate sustainably between $40/bbl and
$60/bbl and end the year in the higher
part of that range.
“Higher prices in or above that range
will increase supply as countries less-
en compliance with production quo-
tas and United States shale produc-
tion keeps increasing,” said Moody’s
Investors Services in its 2018 indus-
try outlook.
Boosting Capital Returns
In North America, Moody’s expects
exploration and production (E&P) com-
panies to concentrate on boosting capi-
tal returns with the goal of achieving
profitable growth within existing acre-
age and cash flows. The strong cap-
ital investment level of 2017 should
lead to a surge in production, but
greater capital discipline will rein in
E&Ps Hedging Production To Support Cash Flow
and Returns Goals
Stephen Whitfield, Senior Staff Writer
Nodding to increased investor pressure,
a new report from IHS Markit indicates
that North American exploration and
production (E&P) companies were more
hedged than usual entering 2018.
The report, IHS Markit Comparative
Peer Group Analysis of North Ameri-
can E&Ps, showed that a group of 43
companies studied had hedged 25% of
oil production, or 1.37 million BOPD, at
$53.40/bbl by the end of 3Q 2017.
JPT • MARCH 2018
that growth after 2018, the firm said.
Companies with the most exposure
to quality oil acreage will achieve the
best returns.
Although the global oilfield services
(OFS) industry will continue its recov-
ery into 2018, the health of the sec-
tor will remain frail, as the impact of
oversupplied markets will offset high-
er equipment utilization in the early
part of the year, Moody’s said. Ongoing
pressure from customers will continue
to be a factor, and OFS companies will
also face expenses for reactivation and
upgrades of service packages and higher
labor costs.
Another significant market prospect
is an expected uptick in mergers and
acquisitions (M&A) in the operator sec-
tor, although M&A activity will prob-
ably lag within midstream businesses
and the stressed OFS segment, Moody’s
said. Independent E&P companies are
likely to be attractive acquisition targets
for larger independents and integrated
oil companies.
In its most recent Capital Confidence
Barometer survey report, multinational
professional services firm EY said that
69% of oil and gas executives surveyed
indicated that their companies intended
to pursue acquisitions, an all-time high
for the annual survey.
The companies had also hedged 36%
of gas production, or 12.37 Bcf/D, at
$3.13/MMcf. This is an increase from
12% of oil and 31% of gas production
hedged at the end of 2Q 2017.
Paul O’Donnell, principal energy ana-
lyst at IHS Markit and author of the
analysis, said in a statement that the
hedging from the E&P peer group sug-
gests a shift in strategy, as companies
are taking advantage of the initial oil-
Optimism about corporate earn-
ings, credit availability, and equity val-
uations, supported by improved bal-
ance sheets, narrower bid-ask spreads,
the consensus on oil prices, and the
interest shown by private equity firms,
are likely to propel M&A activity,
EY said.
In the 2018 oil and gas outlook pub-
lished by global professional services
firm Deloitte, John England, vice chair-
man, US energy and resources leader,
and Americas oil and gas leader, said
that demand has increased “enough to
give us hope but not yet enough to really
move the needle.”
US Becomes Energy Exporter
Among the most important develop-
ments have been that the US in 2017
“came into its own as an energy export-
er” and that US shale cost reductions
are largely proving sustainable, Eng-
land said.
“At some point, the market still needs
a real demand boost to get prices mov-
ing upward in a meaningful way,” he
said. “Unfortunately, right now it’s not
clear if that card is still in the deck. Bar-
ring that, only a supply shock is likely
to move the market significantly, and
that’s not really how we want to rebal-
ance the market.”
price rally to the low-$50s/bbl range
last year.
“Companies are seeking more pre-
dictable cash flows because of great-
er investor demands to improve corpo-
rate returns and keep capital spending
within cash flow,” he said. “The higher
level of hedging is less about support-
ing aggressive production growth and
more about increasing investor confi-
dence that these companies are seri-
27
 ous about becoming more financial-
ly disciplined.”
The report said that small and mid-
sized US E&Ps had hedged 49% of
total 2018 production at the end of
3Q 2017, compared with 18% for the
large North American E&Ps. O’Donnell
said he expects North American E&Ps
to report significant hedging increas-
es in 4Q 2017 as the oil price rises into
the mid-$60s. He said companies are
opting to lock in a larger portion of
production and cash flows to help
with capital budgeting for the upcom-
ing period.
ExxonMobil Plans To Triple Permian Output
Matt Zborowski, Technology Writer
Bolstered in part by recent cuts in the
US corporate tax rate, ExxonMobil plans
to triple its production from the Perm-
ian Basin of West Texas and southeast-
ern New Mexico to 600,000 BOE/D by
2025, including a fivefold increase in
tight oil output from the Delaware and
Midland Basins.
The Irving, Texas-based supermajor,
which expects to lift its Permian hori-
zontal rig count by another 65% over
the next few years, notes that it has dou-
bled its footage drilled per day on hori-
zontal wells in the basin since early 2014
while reducing its per-foot drilling costs
by 70%. At the end of the third quarter
of 2017, the firm had 20 operated rigs
working in the basin but said it intend-
ed to increase the count to 30 by year
end 2018.
“We can deliver profitable production
at a range of prices, and we have logis-
tics and technology advantages over our
competitors,” said Sara Ortwein, presi-
dent of ExxonMobil’s US onshore operat-
ing unit XTO Energy.
The increased activity will come with
investment of more than $2 billion on
Permian transportation infrastructure,
including the expansion of its recent-
ly acquired crude oil terminal in Wink,
Texas, part of the Delaware Basin. The
facility, the firm’s first in the Permian to
be anchored by its newly acquired Dela-
ware acreage, is interconnected to Plains
28
“More wells are economic at $50 per
barrel, and with oil prices now reaching
into the mid-$60s it makes sense that
companies are using a greater amount
of hedging than in prior years when oil
prices were lower,” he said. “Again, the
focus now for E&Ps is on capital disci-
pline and keeping capital expenditures
within cash flows to satisfy the growing
investor focus on returns, rather than
chasing volume growth.”
Permian Basin E&Ps had hedged 63%
of oil production at the end of 3Q 2017,
a sharp increase from 36% at the end
of 2Q 2017, but IHS Markit said the
An XTO Energy-operated rig in the Delaware Basin. Source: XTO Energy.
All American’s Alpha Crude Connector
pipeline system and currently is permit-
ted for 100,000 B/D of throughput.
ExxonMobil boasts a freshly expand-
ed, “highly contiguous” acreage position
in the Delaware and Midland Basins. The
firm last year added 250,000 acres and
an estimated resource of 3.4 billion BOE
in the Delaware through its $6-billion
purchase of companies belonging to
the Bass family of Fort Worth. Exxon-
Mobil later acquired an additional
22,000 acres and estimated resources
of 400 million BOE in the Delaware and
Midland through a series of acquisitions
and acreage trades.
The upstream and midstream build-
out will supply low-cost supply and feed-
stock to ExxonMobil’s downstream and
chemical operations in Texas and Lou-
isiana. The firm is in the midst of a
$20-billion plan to grow its manufactur-
companies are likely to record hedg-
ing losses given the average strike price
of $53.14/bbl. The average oil strike
price is below West Texas Intermediate
oil prices, which averaged more than
$55/bbl in 4Q 2017 and are currently
around $64/bbl.
Appalachian E&Ps have hedged 49%
of 2018 gas production at $3.33/MMcf
at the end of 3Q 2017. IHS Markit
called this a “healthy” premium to cur-
rent futures prices, which are below
$3.00/MMcf. They hedged 44% of 2018
gas production at $3.36/MMcf at the
end of 2Q 2017.
ing capacity along the US Gulf Coast over
the course of a decade.
ExxonMobil Chief Executive Officer
Darren Woods announced on 29 January
the company plans to spend $50 billion
on its US business over the next 5 years,
which includes the Permian expansion
and is on top of the Gulf Coast project. It’s
“underpinned by the unique strengths of
our company and enhanced by the his-
toric tax reform recently signed into law,”
he said in a company blog post.
Wood Mackenzie found that the US
corporate tax rate reduction to 21%
from 35% “could provide significant
value to E&Ps with profitable assets”
with “large increases in their projected
NPV10,” or net present value at a 10%
discount rate. Modeling the impacts of
the new law, the consultancy sees a post-
tax value increase of 19%, or $190.4 bil-
lion, including all minor interests. JPT
JPT • MARCH 2018
 FRACTURING PLANS AND REALITY
OFTEN LOOK REALLY DIFFERENT
After fracturing, one perforation in the casing has grown large due to erosion while the other has hardly changed.
The silver stripe is a reference line for measuring the area by EV Offshore. Source: SPE 189851.
G ood diagnostic testing is often
painstaking, time-consuming, and
costly, but recent studies suggest that a
lack of knowledge can be even costlier.
According to several recent technical
papers, hydraulic fracturing often miss-
es its target, and productive early wells
in stacked plays may be the template for
development plans that leave a lot of
hydrocarbons stranded.
Shell, Devon, and Anadarko have
deployed multiple tools in the field
because “no single fracture diagnostic
30
JPT Emerging Technology Senior Editor
and Matt Zborowski, JPT Technology Writer
can answer all the questions,” said Gus-
tavo Ugueto, senior staff petrophysical
engineer for Shell, during a presenta-
tion at the recent SPE Hydraulic Frac-
turing Technical Conference, where all
these papers were presented.
The operators behind those papers
combined data from multiple diagnostic
tools to confirm potential problems that
could significantly alter future produc-
tion if not addressed.
Devon considered how best to devel-
op stacked zones in the Meramec for-
Stephen Rassenfoss,
mation, in Oklahoma and found that
efficient development required differ-
ent approaches at different levels. The
upper zone was geologically isolated
and had to be developed separately. The
two lower zones required a common
development plan to ensure the area
fractured could make contact with the
productive rock from the top to the bot-
tom on those zones.
To estimate the area effectively
drained by a single well, Devon used
an emerging technology, proppant
JPT • MARCH 2018
 Hydraulic Fracturing

treated so it could be electrically stim-
ulated, making it possible to image
the propped fractures likely to be the
most productive.
That was an indication of the appe-
tite for new tools that can measure the
unique DNA in well bacteria to map
fluids in wells, or analyze what per-
forations are stimulated by measur-
ing how much they erode. Anadarko
is working with Biota Technology to
use DNA sequencing to identify the
many fluids found in and around its
wells and then use those markers to
understand the interconnections in
its reservoirs.
“There is a lot to learn from our
side, and hence our partnership with
Biota has been critical,” said Jose
Silva, Anadarko’s lead business strate-
gist, advanced analytics and emerging
technologies. “We’re trying to get bet-
ter at it from a data science perspec-
tive, and we’re leveraging the under-
standing (of) all the databases that
this particular company is building
on its own.”
Companies asked EV Offshore to cre-
ate automated systems to image and
analyze the hundreds of perforations in
hopes that the erosion caused by frac-
turing can tell them where the fluids and
proppant are flowing.
Problems identified do not always
come with solutions. Shell’s testing
shows that nearly half the time when it
is fracturing one stage, the fluid actu-
ally flowed outside the wellbore to
other stages instead. While that work
(SPE 189842) was based on a fractur-
ing design not widely used in shale,
known as single entry because it frac-
tures one spot per stage, other diag-
nostic testing has shown the same
problems for widely used plug and
perf treatments.
“You should be bothered by this. It
happens very frequently in plug and
perf,” Ugueto told the audience of frac-
turing professionals at the conference.
He pointed out there are some wells
with no leaking stages and companies
need to work together to solve a prob-
lem that is reducing the effectiveness of
fracturing. “We need to get our heads
together and figure it out. It is eating
our lunch,” he said.

Hydraulic Fracturing Going Sideways

Stephen Rassenfoss, JPT Emerging Technology Senior Editor
Heel
Fracturing plans offer a vision of high-pressure slurries of water Slurry Path
and sand shooting out of each perforation creating a dense, even
array of fractures around a wellbore.
In reality, nearly half of the stages observed by Shell’s diagnostic
tests started out with the fluid taking a sharp turn and heading Sleeve 16
Area of
down along the outside of the wellbore. Instead of shooting out high DAS
through a sliding sleeve and fracturing the reservoir, the fluid energy
flowed between the cement and the rock toward the end (toe) of
the well, then jumped back into the casing further down the well
before flowing out into a fracture. Sleeve 15
An illustration showed how fluid injected in stages 15 and 16
traveled down to stages 8 and 9 (Fig. 1). That could leave one
stage under-stimulated while feeding a super frac down the well
growing far past the productive rock to where it could threaten
other wells nearby.
Previous studies have shown that leaking is a problem. In 42% of
the stages, the fluid escaped down the well toward the toe, while Sleeve 9 DTS cools
moving up the well (toward the heel) 6% of the time. down until
Pressure gauges and fiber optic cables tracked pressure and last point
temperature changes caused by the injected fluid. Temperature of injection
changes show where the formation temperature is reduced by
the cooler injected fluid, and the cables hearing the sounds of Sleeve 8
fracturing offer another indication of whether fluid is flowing. In
some instances, the indications of leaking grew stronger over time,
suggesting “progressive erosion of the cement behind the casing
during the treatment.” Toe
Multiple data streams provided a level of certainty about what
is going on and filled gaps left by other sensors. “To understand
well construction problems, no single fracturing diagnostic can Fig. 1—How fluid reacted in the
answer all the questions,” Ugueto said. Shell case.

JPT • MARCH 2018 31

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 Hydraulic Fracturing
Getting More out of Stacked Zones
Stephen Rassenfoss, JPT Emerging Technology Senior Editor
An early well that is a prolific producer can be a poor
model for future drilling within a play with stacked
zones. The potential downside is that strong early flow
may be depleting multiple zones. Production from
later wells drilled nearby is likely to suffer because the
stimulated rock is in competition with older wells that
have reduced both the oil and gas present, and the
pressure needed for production.
Devon explained in a technical paper at the hydraulic
fracturing conference (SPE 189835) how it used multiple
diagnostic tests to analyze multiple zones in the
Meramec formation within the STACK play in Oklahoma
to maximize the ultimate recovery there.
Putting a horizontal well in each one of them would
have been a bad investment because there was a
good chance that the wells would be producing from
overlapping areas. “It is rare you can develop one
interval in a stacked play and effectively drain all
of the hydrocarbon in place,” said Kyle Haustveit, a
completions engineer for Devon Energy.
But the testing showed that is not always the case.
The top layer did require a separate well because it
was isolated from other zones. Haustveit presented
a paper on how Devon used multiple tests to see if
three stacked layers were connected, and then try to
determine how best to drill and complete wells based
on whether the zones communicate or not.
That required a significant investment in time and
money—with two wells drilled and multiple diagnostic
tests, including one using emerging technology. What
was learned will be used to develop wells over a wide
area of the formation.
“The properties are going for high dollar amounts we
need to optimize” in development plans, he said, while
Electrically charged proppant was used to image the propped areas around a well in Oklahoma. The red area
shows the highest concentration of proppant. Source: SPE 189835.
34
presenting a paper on a testing program that sought to
understand the interactions among three stacked zones.
To see if pressure in one zone affects another,
Devon used dynamic fracture injection tests (DFITs).
It measures whether small volumes of fluid injected
into a formation at one location causes a measurable
response elsewhere. In this case, it showed that a
thin section of low-permeability rock was acting as
a barrier between the top zone and the lower layers.
Those tests also yielded information needed for
fracture modeling.
When it was clear that production from one of the
lower zones would draw from the other, the Devon team
began trying to figure out what completion design was
needed to develop fractures tall enough to efficiently
drain the two-zone area. It went to great ends to check
predictions of the fracture models, which incorporated
DFITs estimates, core test results, and well logs (open
hole quad combo). The Devon team wanted to be sure
the fracture network created would likely reach the
entire interval.
To verify the model’s predictions of fracture
growth, Devon used both a proven technology during
fracturing—injecting radioactive proppant tracer that
could be observed while logging—plus a new one—
electrically conductive proppant observed by surface
sensor. The dimensions indicated by the radioactive
particles were confirmed by the new technology from
Carbo Ceramics, which also offered a 3D image showing
the extent of the propped fractures.
Devon also equipped an offset vertical well with
multiple downhole pressure gauges to evaluate how
viscous the fracturing fluid needed to be to ensure the
needed fracture height.
JPT • MARCH 2018
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 Hydraulic Fracturing

Seeking Insights in Microbes, DNA, and Rocks

Matt Zborowski, JPT Technology Writer

Anadarko Petroleum is Formation A Landed Wells Formation B Landed Wells

building an expanding 1.00
database of microbe DNA to
help it map fluid movements
and the source of production

Estimated Mixing Proportion

in the Delaware Basin. 0.75
Along with Biota
Technology, which brings
the genetic expertise,
Anadarko is looking at 0.50
adding biological data to
the geological information
used to make drilling and
0.25
development decisions.
“About a year ago or
so, the team at Biota
[Technology] introduced us to 0.00
the idea that DNA sequencing
Well14
Well19
Well9
Well10
Well20
Well16
Well1
Well15
Well29
Well2
Well28
Well5
Well26
Well12
Well18
Well31
Well32
Well33
Well17
Well 30
Well 21
Well3
Well25
Well6
Well8
Well11
can be applied to oil and
gas problems in not only
rock samples from cuttings Formation A Formation B
or cores but also over time
through fluids produced
from our wellbores,” said Jose Silva, Anadarko’s lead Anadarko is working on correlating changes in
business strategist, advanced analytics and emerging microbial populations to its geological information. “If
technologies, while presenting a paper at the SPE these microbes live on fluids that are downhole, can we
Hydraulic Fracturing Conference (SPE 189846). then find a way of correlating those with formations
Since then, Anadarko has started a growing DNA so that later on we can start asking more interesting
data gathering program in the Delaware basins as questions around, ‘Where should I land my wells… and
it tries to figure out ways to use this bioinformatics can I see those same microbial populations along those
data to improve how it manages drilling, completions, laterals?’” Silva asked.
and production. “If we can grasp that, then I could try to affect the way
“We didn’t have an understanding of what microbial I complete a well, and I could try to affect the way I’m
populations could do for us,” Silva said. However, “by the spacing my wells. And if I could touch either of those
time we wrote the paper, we had already applied this two things or both together, those really quickly become
technique of acquiring a new dataset on 33 wells in the billion-dollar opportunities for our company in the case
Delaware Basin,” he said. “I can say that, at the moment, of free cash flow,” he said.
this is going to scale up all the way to around 200 wells.” If the microbes in the fluids found in one well are
Samples of water, oil, and well cuttings were gathered found in another nearby in a different formation that
by mud loggers and sent to Biota’s labs, where DNA could mean they are producing from the same rock.
was extracted and sequenced to produce thousands of Samples of produced fluids were taken from 26 wells,
reads per sample. The millions of columns of added data with the team observing that some wells landed in one
presented an IT challenge and an opportunity. formation produced mainly from the other formation
and vice versa.
“This is not a silver bullet,” Silva emphasized. “It’s
Data Analytics about integrating this dataset with our petrophysical
and Modeling
understanding of the field, our reservoir modeling
capabilities, any other pieces of information that we
have, plus all the data science components so that we
DNA Diagnostics can separate noise from signal.”
Going forward, Silva said Anadarko sees “a lot of
value in continuing this program. So we are going all
Petrophysical Field Tests and out definitely on one of our assets, and we are thinking
and Reservoir Production that we should go ahead and start collection on other
Modeling Data
formations and other basins.”

36 JPT • MARCH 2018

 Hydraulic Fracturing

Erosion as a Fracturing Indicator

Stephen Rassenfoss, JPT Emerging Technology Senior Editor

It is common knowledge that some

perforations take much of the fluid and grow
into large fractures while other openings
12,850
along the well never grow at all.
There is no way to image the path followed
by the individual cracks created by hydraulic
fracturing but it is possible to see where
they start. The big ones likely grew from 13,100

perforations where the grinding force of

the high pressure slurries of water and

Measured Depth (ft)

sand injected for fracturing have turned
carved, round holes into large, often- 13,350
jagged openings.
Compared with methods such as
microseismic imaging, this seems intuitive.
More erosion means more sand and water 13,600
was flowing in. If you see a big hole, that
zone is stimulated, said Jeff Whittaker, a sales
manager for EV Offshore, who delivered a
paper on the work the company has done 13,850
imaging and analyzing perforation erosion
in unconventional formations (SPE 189851).
As with other downhole diagnostics, the
interpretation is more complicated, he said. –60°
EV got into the business several years
ago when shale operators asked if the
company could adapt its tools to cost-effectively image,
measure, and analyze the hundreds of perforations shot
in shale wells.
Downhole imaging has been around for years. It has
become more useful with digital equipment able to stand
up to higher temperatures and pressures. The current
maximums for EV is 2750 F and 15,000 psi, though high
specification equipment is available.
The company’s high definition pictures show how
rough-edged, round openings created by shaped
charges can be quickly sand-blasted into smooth-edged,
elongated shapes as much as 10 times the original
volume, he said.
EV measures the dimensions and shape of each image,
which is identified based on its location in the well and its
position (phase) relative to the high side of hole.
The data confirms previous studies showing that in
stages with multiple perforation clusters, the first cluster
reached by the fluid in any stage is likely to grow the
largest. More interestingly, the displays show there can
be wide variations among the perforations within each
cluster based on their position. Holes at the bottom of
the well are more likely to grow significantly than ones at
the top of the casing.
One explanation for why perforations at the bottom
grow larger goes back to their creation. Perforation
guns are run on coiled tubing strings which lie low in the
casing. The shots pointed, which are right on top of the
casing, create larger holes at the bottom than the shaped
0° 60° 120° 180° 240° 300° 360°
Perforation phase (180°=low side of wellbore)
The bubbles represent the size of perforation openings
after fracturing. Many of the biggest are found at the
bottom of the casing. Source: SPE 189851.
charges aimed at the top that travel further. Bigger holes
are likely to take in more fluid, leading to greater erosion
and greater potential fracture growth.
The paper covered a case study where the client
imaged the perforations before and after fracturing.
The before pictures are sometimes skipped because
of the time required to do an imaging run, which adds
to the cost. In those cases, the initial perforation hole
size is typically based on surface tests, where the pipe
specification and conditions often do not replicate what
is in the well.
Erosion is a direct indicator of what has flowed out
through the hole, but not necessarily a measure of future
oil and gas flowing out of it.
“Operators are using this technology, in conjunction
with other diagnostic data,” to evaluate how their
perforation clusters are performing and how to do
better, said Glyn Roberts, a technical specialist for EV
who wrote the paper.
The service has grown significantly over the past year.
“We are currently able to image about 240 perforations
a day,” Whittaker said, “but EV is actively developing
technology to significantly speed up the acquisition
phase to optimize the process.”

JPT • MARCH 2018 37

 Hydraulic Fracturing
Digging Up New Information
On What Fractures Really Look Like
Stephen Rassenfoss, JPT Emerging Technology Senior Editor
D uring a panel discussion on what
fractures look like, one expert
added a significant qualifier to the title:
what they “may look like.”
That addition by Roberto Suarez-
Rivera, scientific advisor for W.D. Von
Gonten & Co., was in keeping with a dis-
cussion at the SPE Hydraulic Fractur-
ing Technology Conference that offered
ample evidence that when hydraulic
fracturing is closely examined, results
often vary from expectations.
He followed a presentation by Conoco­
Phillips that offered multiple exam-
ples of why experts need to be cautious
about their pronouncements. The rare
study gathered samples of fractured rock
around a well, among many other tests.
A conference technical paper (URTeC
2670034) described its findings as “very
different from the simple view of the
stimulated reservoir volume that are
commonly modeled or predicted with
current fracture models.”
For example, when the authors col-
lected the core samples, they were sur-
prised that the rough surfaces of the
cracks held little of the sand injected in
Pressure Gauge
Four observation wells (names beginning with S) were drilled by ConocoPhillips
to monitor and sample fracturing in an Eagle Ford production well (P3).
Source: URTeC 2670034.
38
the nearby well to prop open fractures
to ensure continued production.
“There is sparse evidence of abun-
dant proppant beyond 75 ft,” said Kevin
T. Raterman, director of reservoir engi-
neering technology for ConocoPhillips,
who was involved in the project.
That is significant because propped
fractures are thought to be the source
of much of what is produced. This study
and others are raising questions about
where the oil and gas is coming from
and where all the proppant is going.
Even with five observation wells
equipped with the latest monitoring
equipment, ConocoPhillip’s team was
left wanting more. When Raterman was
asked where all that proppant went,
his response was, “I do not think I can
answer that. This volume (of reservoir)
was drastically under-sampled,” he said.
The problem was the closest well was
30 ft above the well fractured and 75 ft
beyond it. The company did not get sam-
ples from beneath the well, and Rater-
man would like to look at samples closer
to it. Getting close to producing wells is
risky, but he hoped that someday some-
S3_ST02
S3_ST01
S3
P3
S3_ST03
one “would have the courage to drill a
well that intersects another well.”
That brave soul would also need deep
pockets. The cost is likely in the tens of
millions of dollars and the high level of
technical expertise is a barrier to these
projects. But, “Do you know anything
without taking core?” asked Stephen
Holditch, a professor at Texas A&M Uni-
versity who led the panel.
Since that 2014 test in the Eagle Ford,
a lot has changed as the center of the
unconventional universe has shifted to
the Permian Basin and the industry used
the downturn after the oil price collapse
to revamp its completions methods.
In the past couple of years, a joint
industry project with US government
support built a fracturing test site in the
Permian. The Permian Hydraulic Frac-
turing Test Site (HFTS) led by ­Laredo
Petroleum, had a budget of $25  mil-
lion with backing from 10 oil and ser-
vice companies and the US Depart-
ment of Energy’s National Energy
Technology Laboratory.
That was likely a smaller budget than
the ConocoPhillips’ test had, which
drilled more wells at a time when ser-
vice costs were higher. The Permian test
used a slanted observation well to col-
lect nearly 600 ft of core samples and
data from two wells, one section near a
producing well in the upper Wolfcamp,
and the other near a lower Wolfcamp
well, according to a technical paper
delivered at another industry confer-
ence (URTeC 2697483).
The paper did not announce the
group’s results—it plans to do so this
year at the URTeC conference in Hous-
ton in July. Chances are it will not con-
firm the status quo.
“Whenever we directly measure cre-
ated hydraulic fractures or the stimu-
lated reservoir volume, we are always
surprised and our mental images are
altered and begin to change,” said Kent
JPT • MARCH 2018

UWC Core
Intervals 1-4
AUWC Well
AMWC Well
MWC Core
Intervals 5 & 6
SCW Well
Diagram shows how a single slant well (SCW) was used to collect core
samples from two production wells (AUWC, AMWC) at the Permian Hydraulic
Fracturing Test Site. Source: URTeC 2697483.
Perry, executive director of the Gas lips paper said, “The apparent side-by-
Technology Institute, who is involved in side propagation of closely spaced, near
the HFTS project. parallel hydraulic fractures also differs
from the output of currently accept-
Growth Options ed fracture models and may call into
A theme in these rare studies is that the question the role of stress shadowing in
picture of “the number, location, dimen- hydraulic fracture propagation.”
sions, and characteristics of the created
fractures, and altered natural fractures, Many Looks
is very complex,” Perry said. An artist asked to create a realistic pic-
The ConocoPhillips study observed ture of a typical fracture would like-
that “fractures tend to swarm. It is not ly have been frustrated by the discus-
unusual to find 15 to 20 fractures in sion about what fractures look like.
10–15 ft,” Raterman said. And it con- The comments after all were aimed at
cluded that much of the permeabili- engineers paid to generate production,
ty created that led to production was not pictures.
due to hydraulically created fractures. These small cracks in the rock, which
Which is not to say that fracture for- are small compared with their impact,
mation was dictated by the fracturing can travel thousands of feet and their
design. Raterman said that “there is a appearance changes based on multiple
weak correlation in the fracture swarms variables, not all of which are known.
and the fracture spacing.” Suarez-Rivera highlighted seven fac-
At the hydraulic fracturing confer- tors that can alter fracture develop-
ence, Shell reported that fluids injected ment, from design decisions, like the
in one stage frequently traveled side- number and spacing of fracture stag-
ways outside and then inside the cas- es, to geologic factors, to how the nat-
ing, ultimately entering the formation ural stresses direct fracture growth.
through an opening down the well. Some observations resist explanation.
High-pressure injection in one stage Propped fractures have been found far
is thought to create stress shadows that from wells in places sand should never
can bend and stunt the growth of frac- reach. “It might not happen everywhere
tures in later stages. But the ConocoPhil- but it happens,” he said.
JPT • MARCH 2018
Hydraulic Fracturing
The path of fractures is affected
by rock layering, weak intersections
between layers, and the intersection
of the many rock layers that can use
step overs, where the path of a frac-
ture takes a short sideways detour
between the layers before returning to
its original direction.
Injected fluid is likely to follow weak
spots in the laminations between layers,
making fractures more likely to grow
out rather than up, said Suarez-Rivera.
The ConocoPhillips study observed that
fracture networks tended to be wider
than taller.
Fracture growth is also controlled by
local stresses. For example, if the mini-
mum and maximum horizontal stress is
nearly equal, fracture growth is expect-
ed to be more complex, increasing the
appetite for more detailed maps of
the stresses.
Mark Zoback, a professor at Stanford
University who was the third speak-
er on the panel, is working on feeding
that appetite with a new, more detailed
stress map. The project for Zoback,
whose name has long been associated
with a widely used map showing geo-
logic stress trends, has new data related
to his other claim to fame: as an expert
in induced seismicity—earthquakes
linked to factors such as deep under-
ground water disposal.
The surge in earthquake activity in
Oklahoma and nearby oil producing
states has led to stepped-up seismic
monitoring producing the raw material
for local stress maps, including a new
one of the Permian from Zoback.
The Delaware basin in the western
Permian “is one of the most interest-
ing states of stress I have seen” with
the axes of the minimum and maximum
stress rotating from north to south,
Zoback said. In contrast, the Midland
basin is stable.
For those working in the field, or on
models, there is a lot more data avail-
able now. The hard part is keeping up
with it. “While much progress has been
made, the complexity has continued to
increase faster than modeling capabil-
ity,” Perry said.
39
 Hydraulic Fracturing

They Are Not Drilling Shale Wells

Like They Used To
Stephen Rassenfoss, JPT Emerging Technology Senior Editor

M aintaining production in the shale

business is getting increasingly
costly because new wells in major US
shale plays are falling short of output
from the parent wells.
A study of 10 major US basins by
Schlumberger (SPE 189875) found that
while the parent and child wells looked
comparable at first glance—about half
of new wells outperform the older wells
and vice versa—the picture changes
when the results are adjusted for the
higher cost of drilling and fracturing
new wells.
This is a pressing issue in the shale
sector where constant drilling is
required to replace short-lived older
wells, which is leading to increasingly
dense development.
When the results remove the ben-
efit of the longer laterals and bigger
loads of sand pumped now, the par-
ent wells outperform the next genera-
tion about 70% of the time, accord-
100%
90%
80%
Percentage of New Wells Drilled
ing to the study discussed at the SPE
Hydraulic Fracturing Technology Con-
ference. It defined a child well as
one drilled at least 1 year after the
parent well.
The results fall far short of the expec-
tations of a few years ago when the
industry assumed that ever-improving
fracturing technology would mean
ever-rising output. Instead, operators
are spending more and more just to
stay even.
“They are pumping way bigger frac
jobs in child wells to help compensate”
for the problems created by parent
well production, said Garrett Lindsay,
a senior production reservoir engineer
for Schlumberger, who delivered the
paper. While the geology of these for-
mations varies, the older-well advantage
remains fairly consistent, ranging from
a high of near 80% in the Wolfcamp and
Haynesville to 60% in the Bone Springs,
after normalization.
Eagle Ford
Parent
Child
The problem is that the older wells are
depleting the hydrocarbons and the res-
ervoir pressure required to get them out
of this ultratight rock. Fracturing plans
aim to stimulate a limited area around
a well, but the reality shown in multiple
presentations at the fracturing confer-
ence show fractures regularly extending
out thousands of feet.
New wells inevitably end up compet-
ing with older wells for oil and gas as
fractures extend into the depleted pres-
sure zone around that well.
Time is not on the side of the young-
er generation of wells. When they com-
pared the relation between well genera-
tions, where there is a 3-year gap, “there
is still a significant chance a child well
completion will perform better.” After 6
years, the completion for the child well
“will need to be larger to perform on par
with the parent well.”
This will become an increasingly
important problem as dense develop-
ment means more tightly spaced pro-
duction. In the Eagle Ford, those lines
already have crossed and a wide gap
has developed.

Limited Options
70% The paper considered a variety of ways
to reduce this advantage, but there is
60%
no fixing the big problem: the depletion
50% caused by older wells.
Lindsay cautioned that, in some cases,
40% operators will need to focus on a “calibra-
tion of expectations” in line with what
30%
the available technology can deliver.
20% Wider well spacing reduces the par-
ent well edge, but not hugely. When
10%
wells are spaced 1,000 ft or less apart,
0% Bakken parent wells outperform the
Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 Q2 Q4 child wells 74% of the time, when pro-
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 duction is normalized. When they
are 2,000–2,500 ft apart, 71% per-
In the Eagle Ford, denser development means that in the future the number form better.
of child wells is likely to exceed the number of higher-producing parent wells. In retrospect, it would have helped if
Source: SPE 189875. early developers concentrated develop-

40 JPT • MARCH 2018

 Hydraulic Fracturing

ment, leaving significant undeveloped 100% B12 Oil

Percentage of Iterations
sections for later drilling. But com­ 90%
B12 Oil/lbm/ft
panies rushing to lock up leases by drill­ 80%
70% 74% 74%
ing wells had other priorities. 73% 71%
60%
Improved completion designs could
50% 55%
narrow the gap. Adding customized 51% 49% 51% 51% 52% 48%
40% 45%
designs and incremental improvements 30%
might help, but they are hard to deploy 20% 25% 26% 27% 29%
in operations built to mass produce 10%
wells using standardized plans. 0%
Child Parent Child Parent Child Parent Child Parent
Tightly controlling fracturing using Wells Wells Wells Wells Wells Wells Wells Wells
diversion, which is supposed to block ≤1,000 ft 1,000–1,500 ft 1,500–2,000 ft 2,000–2,500 ft
off dominant fractures to allow more (1,009) (933) (1,042) (1,183)
equal growth and effective stimula­ Well Spacing Distance Ranges (Total Iterations), ft
tion, might be helping. But comments
by engineers at the conference offered Even when new shale wells are widely spaced, older wells outperform
mixed reviews. them when the results are adjusted according to a study by Schlumberger.
Given the fact that the industry is still Source: SPE 189875.
producing less than 10% of the oil in
the ground indicates that there is a lot could push up ultimate recovery rates, Experience shows they can deliver
of room for improvement. but the discussion at the conference significantly more production in some
Production­extending methods, such indicates the industry is still trying to wells, but not all wells, and the cost can
as refracturing older wells or adding find the right formula to consistently sometimes be too high to justify the
chemicals able to enhance production, apply these approaches. added output, Lindsay said. JPT

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 Mexico’s Second Deepwater
Auction Successful
M exico’s second deepwater bid
round failed to disappoint as 19 of
29 blocks were awarded, including nine
to Anglo-Dutch supermajor and Mexi-
can offshore newcomer Shell. Eleven
international firms from 10 countries
bidding individually and in consortia
won blocks—thought to be mostly oil-
rich—in the Perdido Fold Belt, Cordille-
ras Mexicanas basin, and Salina basin of
the Gulf of Mexico.
Nineteen firms from 15 countries
placed 39 bids overall. The winning bids
comprised 44,178 sq km, 23 well com-
mitments, and $525 million in tiebreak
payments. Mexico’s National Hydrocar-
bons Commission (CNH) announced the
results 31 January in Mexico City.
Benjamin Torres-Barron, partner
at multinational law firm Baker &
McKenzie, which represented four of
the companies that participated in the
round, said the auction was “very suc-
cessful” with results “better than every-
body expected.” Estimates prior to the
event, including those of the govern-
ment, had approximately 7–10 blocks
being awarded.
Instead, about two-thirds of all avail-
able blocks were awarded, making
Round 2.4 “a great success for the Mexi-
can government,” said Eduardo Corzo
Ramos, counsel with international cor-
porate law firm Haynes & Boone. “Very
important companies participated and
in the bid values you can see how inter-
ested these companies are in Mexico’s
energy sector.”
Ramos said he was impressed by the
strength of the bids and high-dollar tie-
breakers placed by the participating
firms. “If you look at the winners, every-
one was hitting the maximum [royalty
of 20%] with a maximum investment
factor.” Competition was particularly
fierce for Salina basin Blocks 29 and 21,
42
Matt Zborowski, Technology Writer
respectively won by Shell and a consor-
tium led by Repsol with tiebreak bonus-
es of $110 million and $151 million.
Shell’s haul comprised four blocks
won on its own, four in a consortium
with Qatar Petroleum, and one more in
a consortium with Pemex. Five were in
the Perdido Fold Belt just south of the
Mexico-US maritime border, and four
were in the Salina basin to the southeast
in the Bay of Campeche.
“We saw a vast, overwhelming vic-
tory by Shell,” said Torres-Barron. “I
think Shell was very aggressive based
on its prior experience” in Mexico’s first
deepwater auction, Round 1.4 held in
December 2016, in which the firm’s par-
ticipation comprised a single failed bid
alongside Atlantic Rim Mexico for Block
5 in the Salina basin. Shell learned that
“you cannot have all the eggs in one bas-
ket,” and therefore diversified its bids
through a number of blocks this time
around, he said.
Shell concurrently announced on 31
January that it made “one of its largest
US Gulf of Mexico exploration finds in
the past decade” near Perdido in per-
haps a signal that a comeback is under
way for offshore exploration and devel-
opment. Chevron and Total, two other
majors who have actively participated in
Mexico’s deepwater rounds, also report-
ed a US gulf discovery on 31 January.
The Anglo-Dutch firm encountered
427 m of oil-bearing pay in its Whale
deepwater well on the US gulf ’s Alami-
nos Canyon Block 772, near the Shell-
operated Silvertip field and 10 miles
from the Shell-operated Perdido plat-
form. Appraisal drilling is under way
to further delineate the discovery and
determine development options.
PC Carigali, a unit of Malaysia’s state-
owned Petronas, also turned in a strong
performance in Round 2.4 by taking six
blocks, four in consortia and two on its
own. Three were in Cordilleras Mexi-
canas and three were in Salina. New
entrants included Qatar Petroleum and
Thailand’s PTT Exploration and Produc-
tion, which respectively won five and
two as parts of consortia. Other par-
ticipants included Spain’s Repsol, three
blocks; Ophir Energy, two blocks; Italy’s
Eni, one block; and Riverstone Hold-
ings-backed Sierra Oil & Gas, one block.
Mexico’s state-owned Pemex won
four blocks, three individually and
one in a consortium with Chevron and
Japan’s Inpex. Two were in the Perdido
Fold Belt and one each were in the Cor-
dilleras Mexicanas and Salina basins.
“Pemex continues to have a strong posi-
tion” as the country tries to find balance
between state-owned operations and
private industry, said Torres-Barron.
Mexico’s Energy Transition
Continues
With eight tenders and multiple Pemex
farmouts now in the books since energy
reform was implemented, Mexico has
awarded 89 contractual areas of 123 ten-
dered, a success rate of 72%.
The latest deepwater round, which
was more than three times the size of
the first deepwater bid round where
eight of 10 blocks were awarded, is one
of three rounds set to take place this
year through July. Mexico’s presiden-
tial election is July 1, meanwhile, and
the winner will be sworn in Dec. 1. Anx-
iety is growing among supporters of
outgoing President Enrique Pena Nieto
and the reforms he ushered as leftist
candidate Andres Manuel Lopez Obra-
dor, runner up of the last two elections,
remains atop public opinion polls.
Despite discussions of the election,
the country’s relationship with US Pres-
ident Donald Trump, and the future as
JPT • MARCH 2018
 MEXICO AUCTION LEASE WINNERS

Wells Weighted Investment Additional % Cash Bonus

Area Winner Expected Deposits Committed Value Factor Royalty ($)
Perdido Fold Belt
2 Shell, Pemex Light Oil 1 80.789 1.0 15.02 --
3 Shell, QP Light, Superlight Oil 0 40.120 0 10.03 --
4 Shell, QP Light, Superlight Oil 1 58.533 1.0 10.03 --
5 Pemex Light Oil 1 41.585 1.0 6.23 --
6 Shell, QP Light and Superlight 2 114.500 1.5 20.0 10.030 million
Oil, Dry Gas
7 Shell, QP Light and Superlight 2 114.500 1.5 20.0 90.030 million
Oil, Dry Gas
Cordilleras Mexicanas
10 Repsol, PC Carigali, Light Oil, Dry Gas 2 14.500 1.5 20.00 30.248 million
Ophir
12 PC Carigali, Ophir, Light Oil, Dry Gas 1 103.000 1.0 20.00 --
PTTEP
14 Repsol, PC Carigali Dry and Wet Gas 0 79.290 0 19.98 --
18 Pemex Dry and Wet Gas 1 45.510 1.0 7.11 --
Salina
20 Shell Light Oil 2 114.500 1.5 20.00 90.155 million
21 Shell Light, Superlight, 2 114.500 1.5 20.00 110.155 million
and Heavy Oil
22 Chevron, Pemex, Heavy Oil 1 96.042 1.0 18.44 --
Inpex
23 Shell Heavy Oil 1 58.756 1.0 10.08 --
24 Eni, QP Wet Gas, Light Oil 1 56.303 1.0 9.53 --
25 PC Carigali Heavy Oil 0 79.920 0 19.98 --
26 PC Carigali Light and Heavy Oil 1 103.000 1.0 20.00 --
28 Shell Light, Heavy, and 2 114.500 1.5 20.00 34.155 million
Extraheavy Oil
29 Repsol, PC Carigali, Wet Gas, Light Oil 2 114.500 1.5 20.00 151.253 million
Sierra, PTTEP

it relates to the North American Free
Trade Agreement (NAFTA), Torres-
Barron believes the outcome of Round
2.4 “confirms and ratifies the invest-
ment and commitment that most inter-
national companies have for Mexico”
and for the deepwater gulf.
“Whoever is the next president in
Mexico, [those companies] expect that
president to honor the contracting com-
mitments that the government of Mexi-
co and these private companies already
made,” he said, adding that the com-
panies are essentially bidding on the
country for decades into the future. He
also lauded CNH for its transparency
and accessibility in the round, which
was reflected by the positive results.
Next up is Round 3.1, scheduled for
27 March, which includes 35 shallow-
water blocks in the Burgos, Tampico-
Misantla, Veracruz, and Sureste basins.
The 26,265-sq-km area is estimated
to  hold prospective resources of 1.988
billion BOE. Scheduled for 25 July,
Round 3.2 involves 37 conventional land
blocks in the Burgos, Tampico-Misantla,
Veracruz, and Sureste basins. The
9,513-sq-km area has estimated pro-
spective resources of 260 million BOE.
A farmout of the Maximino-Nobilis
deepwater block, previously slated to
be announced on 31 January, was can-
celed in December. Pemex cited a lack
of industry interest due in part to Bra-
zil’s recent auctions, where some of the
same firms that were awarded blocks
had access to the Nobilis-Maximino
data room. Pemex also blamed medium-
and long-term crude price forecasts that
would not be offset by falling develop-
ment costs.
Maximino-Nobilis lies near Trion
block, farmed out as part of the first
deepwater round to Australia’s BHP
Billiton, which became operator with
60% interest. The $11-billion project
will tap into gross recoverable resourc-
es of 485  million BOE, with produc-
tion expected to begin in 2023. Dif-
fering from Trion, Pemex notes that
Nobilis-Maximino has shown increased
geological complexity and higher
gas content. JPT

JPT • MARCH 2018 43

 A hydraulic fracturing site in the US Permian Basin.
Source: Halliburton.

Oilfield Service Sector

Sees Recovery Emerging
Joel Parshall, JPT Features Editor

F ollowing 3 harsh years of budget

cuts and layoffs, oilfield services
(OFS) companies are beginning to see a
recovery take shape. The worst may also
be over for heavy-asset suppliers and
original equipment manufacturers in
the offshore and subsea sector, but most
industry analysts believe their recovery
will be significantly slower.
The latest financial reports from big-
three service companies Schlumberger;
Halliburton; and Baker Hughes, a GE
company; show an encouraging picture,
with orders picking up and results from
continuing operations improving.
Amid a growing global ­ economy,
demand for oil is increasing while
­market-balancing supply restrictions
led by the Organization of Oil Export-
ing Countries (OPEC) are supporting the
price of oil, which is at its highest level in
4 years. Oil industry capital investment
is rebounding, and the shale-­ driven
expansion in North America onshore
operations keeps chugging along.
‘Path to Normalized Margins’
In announcing the company’s fourth-
quarter and full-year 2017 results, Hal-
liburton President and Chief Executive
Officer (CEO) Jeff Miller said the com-
pany “is on the path to normalized mar-
gins in North America in 2018” and

44 JPT • MARCH 2018


that the preceding year “marked anoth-
er step on the road to recovery.”
Similarly, Schlumberger Chairman
and CEO Paal Kibsgaard commented as
the most recent results were released
that “the oil market is now in balance,
and the previous oversupply discount
is gradually being replaced by a mar-
ket tightness premium, which makes us
increasingly positive on the global out-
look for our business.”
The price of international-benchmark
Brent crude oil briefly edged above
$71  per bbl not long ago, while US-
benchmark West Texas Intermediate
(WTI) crude has topped $66 per bbl.
Nonetheless, concerns remain over the
durability of the supply balance that has
lifted the market.
JPT • MARCH 2018
‘Cautiously Optimistic’
“The phrase I would use is perhaps cau-
tiously optimistic about 2018,” said
Steve Robertson, head of research for
global oilfield services at Westwood
Global Energy Group.
The oil downturn, which took the per-
bbl price of WTI from $107 in mid-
2014 to $26 in early 2016, was as bru-
tal as any the industry has seen and
forced structural changes that have set
the stage for a different type of recovery.
Few industry observers believe that the
price will return to a sustained $80 level
anytime soon.
“The traditional view is that what
goes down has to come up,” said indus-
try adviser Hervé Wilczynski, a prin-
cipal at EY (formerly Ernst & Young)
in Houston. “There was a feeling that
you hunker down for a few years and
it’s going to come back up. So a lot of
the cost reductions were not structural
in nature.”
A Different OFS Sector
Operators would get discounts from
suppliers. Companies would lay off
employees that they often expected to
rehire when the cycle ended. “It’s dif-
ferent now because we know it’s not
going to come back up,” Wilczyns-
ki said. “We’re going to have a differ-
ent type of OFS sector coming out of
this cycle.”
Drilling rig automation, data analyt-
ics, machine learning, and digital tech-
nology are all designed to take costs out
of field processes permanently.
“Rigs are running at half the peak
number of a few years ago, and you’re
having production increases,” said Boyd
Skelton, US operations vice president
at Westwood’s Energent Group, speak-
ing of activity in the west-Texas Permian
Basin. “The well efficiency has gone up.”
Constant improvement in completion
designs has been a key driver of well
efficiency, with water and proppant vol-
umes supplied to Permian wells having
significantly increased—on a compos-
ite and per-ft basis—even as the price of
oil declined over the past 3 years. As oil
prices have rallied to near-term highs,
some proppant providers have seen their
margins rise by 30% or 35%, according
to Skelton. Regional sand mines in the
basin are opening and expanding to help
meet the proppant demand.
More broadly in US onshore oper-
ations, Westwood expects margins to
improve by 15% to 25% this year.
As growth picks up, bottlenecks could
become a factor, particularly personnel
as workers previously laid off may be
reluctant to return.
“I think the people part of the equa-
tion has been undervalued,” Skelton
said. That could affect pressure pump-
ing operations and their supply chain.
“Trucking, last-mile logistics, is a key
concern, to be able to get all the equip-
ment, sand, and water to the wellsite,”
he said.
The Offshore Story
But if the pace of activity within the
onshore US shale sector has returned to
growth relatively quickly, it has been a
different story for offshore vendors.
Recalling the picture in 2014, Rob-
ertson said the offshore sector “had
a volume of heavy assets that when
we were looking at it at that time we
thought was too much, even if activity
levels were sustained. But what we saw
was a dramatic fall in the oil price and
then a very swift move by the E&P com-
panies to cut costs, to stop sanction-
ing projects.”
By 2016, greenfield projects had
slowed to a trickle and not one floating
production system (FPS) was sanctioned
during the year. In the subsea sector,
equipment manufacturers built up huge
backlogs before the downturn and have
spent much of the time since then work-
ing through them.
Subsea Backlogs at Lows
The backlogs are now “at 10-year lows
or worse,” Robertson said. “And it’s very
difficult to see how [the companies] are
going to rebuild them and rebuild activ-
ity levels to anywhere near where they
were in 2014.”
Nonetheless, he said, “Probably for
the first time in a while we’re getting
optimistic about the offshore industry.”
There were 15 FPS’ sanctioned in
2017, “and some of the firms are start-
ing to see a lot more FEED [front-end
45
 Average Proppant Per Foot
Average Proppant Per Foot Delaware Midland
2,000

1,500

1,000

500

0
1 1
1 2
1 3
14 4
1 1
1 2
1 3
1 4
15 1
1 2
1 3
16 4
1 1
1 2
1 3
1 4
1 1
1 2
17 3
4

1 1
13 2
1 3
1 4
14 1
1 2
1 3
1 4
1 1
15 2
1 3
1 4
1 1
1 2
16 3
1 4
1 1
1 2
17 3
4
20 3 Q
20 3 Q
20 3 Q
20 3 Q
20 Q
20 4 Q
20 4 Q
20 4 Q
20 5 Q
20 Q
20 5 Q
20 5 Q
20 Q
20 6 Q
20 6 Q
20 6 Q
20 7 Q
20 7 Q
20 7 Q
Q

20 3 Q
20 3 Q
20 Q
20 3 Q
20 4 Q
20 Q
20 4 Q
20 4 Q
20 5 Q
20 5 Q
20 Q
20 5 Q
20 6 Q
20 6 Q
20 6 Q
20 Q
20 7 Q
20 7 Q
20 7 Q
Q
1

1
20

20
Quarter

Average Water Per Foot

Delaware Midland
2,000
Average Water Per Foot

1,500

1,000

500

0
1 1
1 2
1 3
1 4
1 1
1 2
1 3
1 4
1 1
1 2
1 3
1 4
1 1
1 2
1 3
17 4
1 1
1 2
17 3
4

1 1
1 2
1 3
1 4
1 1
1 2
1 3
1 4
1 1
1 2
1 3
1 4
1 1
1 2
1 3
1 4
1 1
1 2
17 3
4
20 3 Q
20 3 Q
20 3 Q
20 3 Q
20 4 Q
20 4 Q
20 4 Q
20 4 Q
20 5 Q
20 5 Q
20 5 Q
20 5 Q
20 6 Q
20 6 Q
20 6 Q
20 6 Q
20 Q
20 7 Q
20 7 Q
Q

20 3 Q
20 3 Q
20 3 Q
20 3 Q
20 4 Q
20 4 Q
20 4 Q
20 4 Q
20 5 Q
20 5 Q
20 5 Q
20 5 Q
20 6 Q
20 6 Q
20 6 Q
20 6 Q
20 7 Q
20 7 Q
20 7 Q
Q
1

1
20

20

Quarter
The growth in water and proppant intensity for hydraulic fracturing operations in Delaware Basin and Midland Basin
wells within the larger Permian Basin. Source: Energent (Westwood Global Energy Group).

engineering and design] studies,” Wil­
czyinski said. “We see some investment,
starting in the shallow water, the initial
kinds of engineering studies for larger
developments. Those are leading indi­
cators that the industry has gotten its
sea legs.”
Espen Norheim, a partner and an
oil, gas, and energy sector leader at
EY in Stavanger, said the outlook is
“relatively robust” on the Norwegian
Continental Shelf and that the coun­
try’s extensive offshore service and
equipment sector is “very competi­
tive on an international cost basis” for
projects globally.
Brazil Decision ‘Bodes Well’
Brazil’s recent decision to allow inter­
national companies to operate proj­
ects in its offshore presalt acreage is
“promising” and “bodes well for a
recovery in deep and ultradeep water,”
Norheim said.
Still, bottlenecks will affect the deep­
water and subsea sector with the num­
ber of senior professionals who have
retired or left the industry since the
downturn began.
“There might be a knowledge con­
straint,” Wilczynksi said. “This is a sec­
tor where the expertise of the engineer­
ing world and the geology work cannot
be replaced on a dime.”
Norheim believes “it will be tough to
get seasoned and experienced workers
to go back to oil and gas.”
But those who do work the deepwater
and subsea sector will begin to see a
different seascape. Deepwater projects
have largely been concentrated in an
area the industry calls the “golden tri­
angle,” which extends from the Gulf
of Mexico and Brazil to West Africa’s
Gulf of Guinea. But large new projects
are emerging in Guyana, Egypt, Israel,
Cyprus, Mozambique, and Tanzania to
widen the deepwater domain.
Deepwater Long-Term Positive
The potential for excess supply could
put a damper on strong deepwater
expansion in the near future. “But in the
longer term,” Robertson says, “there’s
going to be supply­driven upward pres­
sure on the oil price because we haven’t
invested the money in the industry.”
“I believe the offshore rebound is
probably going to be the story in the
2020s,” Wilczynski said. “It will not be a
flash in the pan. It’s not going to be spec­
ulative because I believe OPEC probably
has lost the ability to drive prices. We
will have entered more of a market kind
of pricing system.
“Sometimes, I talk to people in the US
sector with a lot of exposure to the off­
shore,” he continued. “I tell them you
might have the golden decade in the
2020s. Not all of them believe me. But I
say if you look at the fundamentals, the
2020 decade will be better than the sec­
ond half of the 2010 decade.” JPT

46 JPT • MARCH 2018

Statoil, ABB
Among Companies Pushing
Integrated Operations Initiatives
Stephen Whitfield, Senior Staff Writer
The ABB Ability platform portfolio released last year consolidates a variety of data analytic platforms designed to
streamline operations. One platform is being used as a basis for the control systems for the Goliat FPSO, servicing the
E xploration and production com-
panies have long seen integrat-
ed operations (IO) as a key innovative
strategy for maintaining high produc-
tion levels. Automation, optimization of
processes, and overall data management
are the keywords for operators, informa-
tion technology (IT) companies, and ser-
vice companies looking to guarantee the
maximum exploitation of their available
resources. Some of these companies have
taken steps recently to make IO system
architecture and facilities a more central
aspect of their operations.
Integrated Operations Center
In 2018, Statoil will establish a new
onshore integrated operations center
(IOC) that it says will help increase safe-
JPT • MARCH 2018
Goliat field owned by Eni Norge and Statoil. Source: Eni Norge.
ty, add value, and reduce emissions from
its installations on the Norwegian conti-
nental shelf (NCS). The company called
the IOC an “important step” in its digital
roadmap that will enable increased pro-
duction efficiency and production poten-
tial on the NCS.
The IOC is also intended to make data
available in a more user-friendly format,
providing the operations organization
offshore with a better decision-making
basis and support. Kjetil Hove, Statoil’s
senior vice president for operations tech-
nology on the NCS, said that the Åsgard
field in the Norwegian Sea and Grane and
Gina Krog in the North Sea will be the
first fields getting support from the cen-
ter after its establishment, and that new
fields and installations will be gradually
integrated to allow time for learning and
adjustment to new work processes.
The center will help ensure that pro-
duction on the fields is optimally effi-
cient at all times, solving bottlenecks
through condition monitoring. This will
be achieved by means of specialist sup-
port within production optimization and
preventative maintenance from interdis-
ciplinary teams; for example, within pro-
duction technology, processing, mechan-
ical, and electrical engineering.
“We are now developing tools that
will stream data live from the sen-
sors offshore. The tools will help con-
duct detailed analyses of the produc-
tion and the performance of equipment
on the installations. One important goal
for the center is to identify and prevent
47
 operational disruptions,” Hove said in
a statement.
Statoil said the IOC’s exact location
will be determined later this year. The
company will integrate the company’s
existing production support centers and
condition monitoring centers, which are
located in various parts of Norway.
On 9 November, Statoil opened the
Valemon control room at Sandsli in
Bergen. Valemon is the first platform
in Statoil’s portfolio to be remote-
controlled from land, and while the com-
pany currently has no other platforms
of this kind it said this solution may be
considered for other small- and medium-
sized platforms in the future, and remote
control may be a central building block of
its future operations.
The IOCs and Valemon mark the con-
tinuation of a long-term focus on inte-
grated operations that dates back
several years. In early 2006, Statoil initi-
ated a research and development project,
TAIL-IO, that focused on methods, tech-
nologies, and work processes designed
to improve operations on late-life fields
after production has declined and facili-
ties have begun to age.
The project was divided into six close-
ly linked subprojects, known as technol-
ogy areas:
◗ Condition-based maintenance
and performance monitoring.
Creating a condition monitoring
portal that contains plant condition
data on all critical subsea and
topside equipment, and supporting
work processes at IO centers.
This project developed methods
for early fault detection, residual
life prediction, and for condition
monitoring of critical assets like
pumps, valves, and electrical,
rotating, and static equipment.
◗ Corporate decision support
model for strategic planning of
turnarounds and shutdowns.
Developing a tool that
accommodates a range of data
with the ultimate objective of
eliminating asset shutdowns.
◗ Wireless communication and
sensor systems. Designing new
and open communication systems,
installing wireless instrumentation
48
to reduce cabling and capital
expenditure, and automating
maintenance tasks to reduce
maintenance man-hours
◗ Collaborative visualization
tools for preparation, training,
executing, and supporting
maintenance operations.
Developing a tool that can support
a wide range of functions to
perform maintenance operations
and diagnostics, as well as improve
the level of assistance from centers
of excellence.
◗ Mobile information and
communications technology
(ICT). Focusing on man-machine
technology, work processes,
and mobile ICT infrastructure
to support plant personnel.
◗ Robotics. Using robotics
technology to supplement and
extend human inspection and
intervention capabilities at subsea,
topside, and onshore facilities.
The objective was to develop
solutions that combined tele-
robotics and advanced visualization
to enable remotely operated
inspection and maintenance
operations.
The consortium, which completed
principal work in 2009, developed sev-
eral standard IO processes in these areas.
One project done under the program
verified an algorithm that predicted the
remaining useful life of machine com-
ponents, combining economic variables
and criticality to the algorithm to enable
economic- and safety-based replacement
decisions. The consortium also ran a
project that developed a solution allow-
ing operators in the field to test fire and
gas detectors without any support from
the control room, as well as a solution
for real-time tracking of containers on
Statoil’s onshore bases.
In the midst of TAIL-IO’s operation,
IBM, one of the consortium partners,
opened its Center for Excellence in
Stavanger to boost IO efforts in north-
east Europe, Russia, the Middle East,
and South Africa, while also collaborat-
ing with US-based research and develop-
ment centers to help develop technolo-
gies for intelligent oil fields. The center
helped build an integrated information
platform (IIP) for IBM’s Integrated Infor-
mation Framework (IIF), a configurable
data-management software program.
The IIP focused specifically on practi-
cal use in areas such as reservoir studies,
drilling, well production, and security
and automation systems. Statoil started
utilizing the IIF in 2010.
Center Researches Scalable
Data Access
In addition, Statoil and IBM have part-
nered with Schlumberger, DNV, and
other IT companies on Sirius, a center
opened in November 2015 to research
scalable data access methods for oil and
gas. The center is scheduled to operate
for 8 years, through October 2023.
One of Sirius’ primary areas of
research is scalable computing, par-
ticularly activities related to the utili-
zation of high-performance computing
(HPC) technologies as a foundation for
improved cloud architectures that can
more efficiently support data analyt-
ics. The researchers have been work-
ing on computational performance for
applications that require  significant
quality-of-service guarantees and low-
latency communication such as unified
infrastructure and scalable in-memory
computing platforms.
Sirius has also worked on what it calls
“knowledge representation,” the linkage
of data to an underlying idea related to a
certain system to constitute the domain
knowledge for a specific discipline. For
example, linking a pump to sensors pro-
ducing measurements on speed, torque,
liquid flow rate, inlet and outlet pres-
sure, and temperature, as well as spec-
ifications, requirements, maintenance
orders, and invoices.
These linkages specialize in machine-
processable representations of domain
knowledge that often take the shape
of an ontology, a tractable representa-
tion of a domain vocabulary and certain
facts concerning the domain. Sirius has
worked on using ontologies in a variety
of contexts:
◗ Data integration, where
ontologies mediate between data
sources by lifting from the level of
data to the level of information
JPT • MARCH 2018
 ◗ Data access, where ontologies
can be used to present information
to end users
◗ Requirement management,
where ontologies are used to
represent, check, and solve
complex combinations of
definitions and constraints.
A greater understanding of ontolo-
gies may help operators make better
use of the complex systems that make
up their operations. Such systems may
include cloud deployment of an enter-
prise resource planning system, or
cyber-physical systems such as the safe-
ty and automation system of a rig or
an automated drilling system. Sirius is
developing means to analyze models
in a way that helps operators predict
the behavior of complex systems, which
can then help them make on-site deci-
sions. Such analysis stretches to areas
such as safety properties, timing prop-
erties, resource management, and scal-
ing strategies.
Sirius’ study of execution modeling
draws on two previous projects, HyVar
and Envisage, that dealt with scalable
data management. HyVar proposed
a framework for hybrid variability to
address the evolution of software in a dis-
tribution system. The framework com-
bined domain-specific variability lan-
guage to describe evolution as a software
product line with scalable cloud infra-
structure for monitoring and individual-
ized customization of software upgrades
for remote devices.
Envisage developed a semantic foun-
dation for virtualization and service-
level agreements (SLA) that made
it possible to develop SLA-aware ser-
vices that can control their own re-
source management.
Automation and Sensor
Technology
ABB, the company Statoil once appoint-
ed to lead the TAIL-IO project, has also
long had a history with developing tech-
nologies for streamlining operations.
Last March, the company commercial-
ly launched ABB Ability, a consolidated
portfolio of its automation platforms and
sensor technologies that had previous-
ly been available for operators as sepa-
JPT • MARCH 2018
rate components. ABB Ability is built on
Microsoft’s Azure cloud platform.
Statoil currently uses an ABB auto-
mation system, System 800xA, for the
Sleipner gas platform in the North Sea;
ABB supplied a complete distributed
control architecture for Sleipner’s subsea
and wellhead control systems; integrated
safety; shutdown, fire, and gas protec-
tion systems; and the carbon capture and
storage processes. It is also used to run
the upstream operation at BG Group’s
Queensland Curtis liquefied natural gas
(LNG) in the Surat Basin offshore Bris-
bane, Australia.
In a keynote address given after the
commercial release of the portfolio last
year, ABB chief digital officer Guido Jouret
said that consolidating the companies IO
technologies will help operators “close the
loop,” turning data drawn from numerous
sources into immediate control decisions
that can generate real-time value.
“In many cases, it’s about connecting
sensors to devices we already have and
creating insights by sensing and analyz-
ing that data. This creates assessments. It
Same Sensor
- Makes Sense
In-line, in the lab
or in the field
TT-100™ Viscometer
The TT-100 continuously measures
Fracturing, CRI, or Drilling Fluid
viscosity in-line, regardless of
variations in pressure, vibration,
or density.
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Designed for pressurized
viscosity testing of oilfield/chemical
fluids. The PVS gives you more
sample runs with less tool runs.
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could be energy assessments, cyber secu-
rity, efficiency, a variety of assessments
that are increasingly going to be enabled
with digital tools. The action to harvest
those benefits, to take control, is miss-
ing,” Jouret said.
Another platform, Collaborative Oper-
ations, is a cloud-based infrastructure in
which remote monitoring centers inte-
grate sensor technology gathered by field
devices into an operations center. Collab-
orative Operations is currently being used
for Eni Norge’s Goliat FPSO in the Barents
Sea, approximately 50 miles off the coast
of northern Norway. The control systems
for the platform and the onshore substa-
tion are also based on 800xA.
“These systems automate the control
loop,” Jouret said. “They sense, they ana-
lyze, and they take action. It’s through that
automation of the loop that we get that
ultimate efficiency. We believe that, once
you have sensed, analyzed, and acted,
you can start over again. You can see the
impact of your changes. You can create an
environment that is self-learning and that
continuously looks to improve.” JPT
See us at Offshore Technology
Houston, TX - Booth #3307
49
 CONFERENCE PREVIEW
OTC To Draw Global Participants
For Look at Industry’s Future
Joel Parshall, JPT Features Editor
As the oil and gas industry moves toward
recovery and stability, the Offshore Tech-
nology Conference (OTC) will attract
global industry professionals, govern-
ment officials, academic experts, and
representatives of many influential orga-
nizations to discuss technological and
broader industry issues and assess the
future. To be held from 30 April to 3 May
at NRG Center in Houston, it will be
OTC’s 50th gathering, the first confer-
ence having taken place in 1969.
One of the industry’s largest confer-
ences worldwide, which drew an atten-
dance exceeding 64,700 last year, OTC
hosts a major exhibition of technolo-
gy and services. More than 1,900 com-
panies and organizations representing
43 countries are expected to exhibit.
Awards Luncheon
During the OTC Distinguished Achieve-
ment Awards Luncheon on 1 May, the
conference will recognize Brian Skeels
for individual achievement and Shell and
SBM Offshore for institutional achieve-
ment. Additionally, Cesar del Vecchio will
receive the Heritage Award, and the con-
ference will present a Special Citation to
Tom Sifferman.
Skeels will be honored with the Distin-
guished Achievement Award for Individu-
als for his extraordinary accomplishments
in pioneering new subsea completions in
record water depths and the development
of new tieback connections that have
set and redefined industry standards.
As TechnipFMC’s Technology Fellow,
50
he serves as a technical sub-
sea adviser for high-pressure,
high-temperature (HPHT)
developments.
Over a career of 36 years in
subsea completion and pipe-
line design and installation,
Skeels del Vecchio Sifferman
Skeels has been a contribut-
ing author to nearly 40 industry-related safe, economic development of deep-
technical papers and articles. He holds water floating systems by establishing,
14 US patents. Skeels has presented, proving, and gaining worldwide accep-
session-chaired, conference-chaired, or tance for the use of polyester mooring
participated as an advisory board/pro- systems. His initial research in replac-
gram committee member at OTC and ing all-steel catenary systems with syn-
other conferences. thetic taut moorings is considered a
Shell and SBM Offshore will be pre- technological breakthrough for float-
sented the OTC Distinguished Achieve- ing production systems by extending the
ment Award for the successful devel- range of moored floaters into deep and
opment of the world’s deepest oil and ultradeep water, while reducing the sea-
gas project, the Stones field in the Unit- bed footprint.
ed States Gulf of Mexico. The develop- With Petrobras, del Vecchio led an
ment used a leased floating production, effort that used a full life-cycle approach
storage, and offloading (FPSO) vessel to design systems. Some have now been
and features an industry-first pairing in service for more than 20 years. He cur-
of a steel lazy-wave riser with a dis- rently works at Stress Engineering Ser-
connectable buoy turret mooring sys- vices and continues to direct his exper-
tem, the world’s largest. Stones has tise toward the integrity management of
an artificial lift system designed for mooring systems for various clients.
15,000-psi operations. Sifferman will receive a Special Cita-
Together, Shell and SBM also com- tion for his lifetime of significant con-
pleted a successful safety milestone, tributions toward advancing production
when the FPSO project logged more than enhancement, complex rheology mitiga-
18 million work hours in the construction tion, and chemical flow assurance of diffi-
phase with only one lost-time incident, a cult-to-handle reservoir fluids. A licensed
notable achievement for an endeavor of professional engineer with 45 years of
this scale. experience in the petroleum business, he
Del Vecchio will be given the Heri- has held many responsibilities in drilling,
tage Award for his contribution to the completions, and production.
JPT • MARCH 2018
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A presentation on geophysical advances at a 2017 technical session.
In addition to being an SPE Distin-
guished Member, Sifferman is a Fellow
with the American Society of Mechanical
Engineers. He has authored 30 profes-
sional publications, holds 17 US patents,
and has served as chair and organiz-
er of flow-assurance sessions for OTC
since 2006.
The OTC Distinguished Achievement
Awards Luncheon recognizes the award
recipients, raises funds for a worthy
cause, and provides an opportunity for
industry leaders to network with col-
leagues from around the world.
The luncheon’s 2018 beneficiary is
the Young Women’s College Prepara-
tory Academy (YWCPA). The organiza-
tion is an all-girl, college preparatory
magnet school in the Houston Indepen-
dent School District with middle and
high school divisions. YWCPA focus-
es on college readiness and science,
technology, engineering and mathe-
matics with all core-curriculum class-
es at the preadvanced- or advanced-
placement levels.
Technical Program
The program committee has selected
approximately 400 papers to be pre-
sented at technical sessions or in poster
format. More than 840 abstracts were
submitted. OTC’s 48 technical sessions
will be spread over the entire confer-
ence schedule with presentations each
morning and afternoon. Addition-
ally, there will be nine panel sessions,
which include
52
30 April
◗ How To Make Offshore Oil and Gas
Projects Feasible in a $45–$50 Per-
Bbl Environment
◗ Policy Panel: Offshore Energy:
Safety, Technology, and
Production—Governmental
Perspectives
1 May
◗ Active Arena: Global Intellectual
Property Strategy
◗ Integrated Offshore Activities:
Mega-Mergers and Alliances:
A Competitive Integration
2 May
◗ Big Data Next Chapter
◗ Deep Pockets: Private Equity
Investment in Offshore
Projects—A New Trend?
3 May
◗ Center for Offshore Safety:
Interaction of Culture, Systems, and
Human Performance—The Next
Step in Safety Management
◗ One Gulf Reaching 50 Billion BOE
and Growing
◗ Jack & St. Malo: 3 Years After
First Oil on a Staged Deepwater
Development
Special Events
Topical Breakfasts—Nine topical
breakfasts will be held over the 4-day
conference on safe operations, port-
folios, the technology outlook, talent
management, ethics, ocean sounds and
marine animals, and further subjects.
Topical Luncheons—Twelve topi-
cal luncheons are scheduled through-
out the conference. Topics include Bra-
zil’s presalt, US offshore regulation, cost
inflation and declining well productivi-
ty, digital transformation, women in the
industry, subsea processing, offshore
safety, and other issues.
Networking Events—Events are
scheduled the first two afternoons of
the conference. Expert panels will dis-
cuss “Data, Drilling and Discovery: Five
Decades of OTC: How Our Past Has
Shaped Our Future” on 30 April and
“Automation, Efficiency, and Optimiza-
tion Offshore: Remote Management of
Our Industry” on 1 May. Audience mem-
bers can actively participate through a
question-and-answer session and open
networking at the end of each event.
The Next Wave—As OTC celebrates its
50th edition, the conference looks toward
the next 50 years. The Next Wave program
for young professionals (YPs) will offer
insights from oil and gas sector leaders
on the industry’s evolution and a chance
to reflect on technologies and processes
that have driven that evolution—all of
which will help YPs to shape the future.
The program will focus on challenges and
responsibilities from technical, business,
and social perspectives and how they will
shape careers in the coming decades.
Teacher and student programs—The
Energy Education teacher workshop wel-
comes science teachers (grades 1–12) to
attend a free, 1-day seminar to receive
hands-on training by qualified facilita-
tors, hear a presentation from a promi-
nent speaker, and tour the exhibit floor.
The teachers will receive a variety of free
instructional materials to take back to
their classrooms. About 200 high school
students will get a firsthand look at the
opportunities the industry offers. The
students will go on a scavenger hunt of
the technology exhibits, take part in
hands-on energy lessons led by qualified
facilitators, and meet industry profes-
sionals to learn about E&P careers. JPT
JPT • MARCH 2018
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· © 2018 All Rights Reserved · 1646
 MANAGEMENT
Is There a Need for a Reserves
Confidence Metric?
Don McMillan, SPE, Fellow Engineers Australia
An article published in the April 2014
JPT (McMillan 2014) discussed an SPE
workshop survey regarding confidence
in the SPE Petroleum Resources Man-
agement System [SPE-PRMS (2007)].
This survey identified issues regarding
the believability of publicly disclosed
reserves and resources. The survey also
concluded that the interpretation of the
SPE-PRMS in relation to unconvention-
al resources is not consistent among
reserve estimators. Critical to the integ-
rity of our industry is confidence in
publicly disclosed reserves. These
reserves often come with limited sup-
porting data and, therefore, tools need
to be developed to enable the users,
who may have limited technical knowl-
edge, to identify estimates that should
be used with caution or require addi-
tional supporting information.
McMillan (2017) proposed a modified
version of the reserves-production ratio,
called the Reserve Confidence Metric
PL 191 GM Seam
100
90
80
70
2P RCM Years
Poor confidence
60
50
40
30
20
10
Good confidence
0 0
Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17
Fig. 1—Production lease 191 GM seam reserves confidence metric profile.
54
TABLE 1—RESERVES CONFIDENCE METRIC (RCM) FOR 1P AND 2P RESERVES
RCM Formula
RCM (1P) 1P Reserves
Current Production Rate
2P Reserves
RCM (2P)
Current Production Rate
(RCM), to gauge confidence. Poor con-
fidence does not mean the reserve esti-
mates are wrong; it means that the esti-
mates are to be used with caution or
further information is required.
The SPE-PRMS presents a resource
classification framework where reserves
are the discovered recoverable volumes
(contingent resources) for which the
entity claiming commerciality has dem-
onstrated a firm intention to proceed.
The reserves are further characterized
by the “range of uncertainty” generating
RCM <=20
2P reserves/current gas rate (years)
12
Good Poor
Confidence Confidence
Volume
<=10 years >10 years
Volume/Time
Volume
<=20 years >20 years
Volume/Time
a low, best, and high estimate referred
to as proven reserves (1P), proved plus
probable reserves (2P), and proved plus
probable plus possible reserves (3P). 1P
is often referred to as the banker’s case;
2P as the investor’s case; and 3P as the
investor’s upside potential.
Because reserves estimates are influ-
enced by economic factors, the tim-
ing of a project’s production is integral
to its valuation. McMillan (2017) dem-
onstrated that reserves post-20-years
had negligible impact on a project’s eco-
nomics. RCM, which is derived from
the reserves-production ratio (RPR)
and reserves life index (RLI), ranks 2P
reserves estimates as good confidence if
the ratio is less than or equal to 20 years.
Otherwise it is ranked as poor confi-
dence. In the case of the RCM ranking of
1P reserves, 10 years is proposed as the
pivot point. The RCM ranking is summa-
rized in Table 1.
RCM often registers poor confidence
when the producing field is in the com-
missioning phase. In the case of unde-
veloped reserves, RCM will always be
ranked as poor confidence. Having a
rank of poor confidence requires the
user to either use this information with
caution or seek further clarification.
RCM can be applied at any reserve
level: country, lease, field, well, and res-
ervoir. The following are examples of
JPT • MARCH 2018
 RCM <=20
PL 191 GM Seam Ave 1/2 Yearly gas rate
160 400
No. of Wells Producing
140 2P Reserves 2P RCM (years) 350
and wells on-line 2P Reserves
writedown 2P Reserves
Gas Rate (MMscf/D)

120 increasing 300

2P Reserves Bcf
No. of Wells
RCM Years

100 250
95
80 200

60 150

40 100
89
20 20 50
12
0 0
Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16 Jan-17

Fig. 2—Production lease 191 GM production and 2P reserves profile.

PL 176
applying RCM[2P] to production areas 60
located in Queensland, Australia. All the
reserves and production data present-
50
ed are available from the Queensland
State Government website (Depart- Poor confidence
45
ment of Natural Resources and Mines, 40
Queensland Government 2016).
RCM Years

Fig. 1 plots RCM[2P] of the GM coal

30
seam within the reservoir in production
lease (PL) 191 over a 10-year period.
This curve is very simple to generate, 20
requiring no geological or engineering
knowledge to identify the confidence
level of the disclosed 2P reserves. In 10 Good confidence
this example, from June 2008, RCM[2P]
changed from good to poor confidence. 0
At this moment in time, any stakeholder Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
utilizing these reserves estimates must
Fig. 3a—Production lease 176 reserves confidence metric profile.
use the estimates with caution or gath-
er additional information, that is, ask PL 176
60 450
questions. Fig. 2 shows the change in RCM <= 20 Years
RCM status was due to an increase in 2P Ave 1/2 Yearly gas rate 413 400
reserves and drilling activity. The cor- 50 2P RCM (years)
responding gas production through to 2P Reserves 350
45
Gas Rate MMscf/D

June 2010 indicated the results of the 40 300

2P Reserves Bcf

drilling campaign may not have justified

RCM Years

the previous reserve increase and subse- 250

30
quently the reserves were progressively
200
written down.
Plotting RCM over time can gener- 20 25 150
ate insight and confidence in how
100
the operator manages reserves. Since 10
January 2012, the RCM has a rank of 50
good confidence.
Fig. 3a shows a producing asset’s 0 0
Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-10 Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
(PL176) RCM over a 10-year period. A
constant RCM[2P] is seen to June 2013 Fig. 3b—Production lease 176 production and 2P reserves profile.

JPT • MARCH 2018 55

 and then it gradually increases. Based
TABLE 2—QUEENSLAND TOTAL GAS RESOURCES AS OF 30 JUNE 2016 on RCM[2P], the current ranking is poor
confidence and therefore the user of
Production 2P Reserves
30 June 2016 30 June 2016
this reserves information should pro-
Bcf/6-month period Bcf RCM Years RCM Ranking ceed with caution or gather more infor-
mation. An increase in RCM requires
554 39,204 35 Poor
either the reserves to increase, or the
production to decrease. Fig. 3b shows
that production has remained constant,
TABLE 3—QUEENSLAND CONVENTIONAL AND UNCONVENTIONAL GAS whereas reserves have increased. This
RESOURCES AS OF 30 JUNE 2016 explains the change in RCM but not
Production the reason for the change in reserves.
Bcf/6-month 2P Reserves This would require an explanation from
Resource period Bcf RCM Years RCM Ranking
the reserves issuer or estimator. Ask-
Conventional 20 328 8 Good ing questions will improve confidence
and integrity.
Unconventional 534 38,875 36 Poor
RCM can be used to evaluate reserve
databases to identify areas where data
should be used with caution or require
TABLE 4—COALBED METHANE (CBM) 2P RESERVES PRODUCING AND additional information to improve con-
NONPRODUCING RESERVE REPORTS BREAKDOWN
fidence. The following example utilizes
the publicly disclosed 2P conventional
Case Description Quantity and unconventional reserves and pro-
1 Total CBM 2P Reserves reports 137 duction data from the Australian state
of Queensland, which is published every
2 Total no. of nonproducing assets with CBM 2P reserves 71 6 months. These reports are available
3 Total no. of producing assets 66
from the Queensland Government’s
website [Natural Resources and Mines,
4 No. of producing assets <5 yrs production 40 Queensland Government (Dec 2016)].
In Queensland, there are 209 (137
5 No. of producing assets +>5 yrs production 26
unconventional and 72 conventional)
2P reserves and 6-month production
RCM: Coalbed methane (CBM) with at least 5 years production history reports. Table 2 shows the RCM[2P] for
94
Queensland total gas resources as of
194 30 June 2016.
101 The RCM ranking of the total 2P
179
176 reserves is classified as poor confi-
224 dence, signalling a need to perform
228
198 further analysis. Table 3 breaks down
203 the total resources into conventional
Production Lease

211 and unconventional (coalbed methane

191
100 [CBM]) resources.
273 The conventional 2P reserves RCM
247
195 score is below 20 years and, depend-
229 ing on the importance of this reserves
226
204
information, the stakeholder may have
99 reasonable confidence to proceed with
263 its endeavors. In the case of unconven-
180
91 tional resources, further investigation
92 is required.
230
201
RCM of the unconventional resourc-
0 5 10 15 20 25 30
es indicates the data need to be fur-
ther refined. There are 137 reserve
Years of Production
reports covering exploration licens-
Fig. 4—Reserves confidence metric for 2P CBM 2P Queensland production es (Authority to Prospect [ATP] and
leases with 5 or more years of production. Production Leases).

56 JPT • MARCH 2018

 CBM fields often take time to de-
water before reaching peak production
and for this example, the RCM[2P] of
CBM assets which have been in produc-
tion for greater than 5 years are plotted
in Fig. 4.
Fifty-six percent of CBM production
leases have an RCM[2P] ranking of poor
confidence. This does not mean their
reserves are wrong. RCM only flags
that further information is required to
improve confidence in the estimate.
Explanations for the rank of poor con-
fidence include items such as produc-
tion is restrained, has not reached peak
production, undeveloped reserves’ com-
ponent, overstatement of reserves, poor
production performance, etc.
Reserves such as publicly disclosed
reserves often come with limited sup-
porting evidence. RCM is a simple tool to
identify reserves estimates that should
be assessed with caution or require
further information. The SPE-PRMS
guidelines will evolve and improve
with time, but will always be subject to
interpretation. Improving confidence
in the SPE-PRMS will require reserves
estimators to have the tools to iden-
tify anomalies and to know when to
ask for additional information. RCM is
such a tool. JPT
References
Department of Natural Resources
and Mines, Queensland Government.
2015. Petroleum and Gas Production
and Reserve Statistics. https://data.
qld.gov.au/dataset/petroleum-gas-
production-and-reserve-statistics
McMillan, D. 2014. Techbits:
Workshop and Survey Focus
on SPE Petroleum Resources
Management System. Journal
of Petroleum Technology
66(4): 38. https://dx.doi.
org/10.2118/0414-0038-JPT
McMillan, D. 2017. Gauging the
Confidence in Publicly Reported Oil
and Gas Reserves: Introducing the
Reserves Confidence Metric (RCM).
APPEA Journal 57(1): 88-99.
https://dx.doi.org/10.1071/AJ16050
SPE-PRMS. 2007. Society of Petroleum
Engineers Petroleum Resources
Management System. Prepared
by the Oil and Gas Committee
of the Society of Petroleum
Engineers, reviewed and jointly
sponsored by World Petroleum
Council, American Association of
Petroleum Geologists, and Society
of Petroleum Evaluation Engineers.
http://www.spe.org/industry/docs/
Petroleum_ResourceManagement_
System_2007.pdf

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 TECHNOLOGY FOCUS

Hydraulic Fracturing
Zillur Rahim, SPE, Senior Petroleum Engineering Consultant, Saudi Aramco

Oil and gas reservoirs of low porosi-
ty and permeability will usually require
drilling horizontal wells and conduct-
ing optimal hydraulic-fracturing treat-
ments to attain commercial productiv-
ity. High production rates and long-term
production sustainability are achieved
by optimizing well placement (from set-
ting well landing points and overall tra-
jectory plans to reaching total depth),
customizing completions design to fit
reservoir and production conditions,
and improving hydraulic fracturing to
boost reservoir contact and flow capac-
ity. Reservoirs of moderate to relatively
higher permeability might also require
high-rate matrix acidizing to clean up
the near-wellbore region and connect
the well to the reservoir.
Significant improvements to com-
pletions design and manufacturing
have been made recently to accommo-
date long laterals and multiple frac-
turing or acidizing stages for different
reservoir types, lithologies, and condi-
tions. One such openhole completion
is the controlled-injection and even-
distribution ball-actuated limited-entry
system where a long portion of the res-
ervoir can be effectively isolated in one
interval with hydraulically set mechani-
cal packers. Multiple sleeves placed at
intervals facing zones of interest are
activated for stimulation with a single
ball dropped from the surface. These
multiple sleeves can be separated further
by zonal-isolation packers to enhance
stimulation efficacy through each sleeve.
One major challenge of multistage sys-
tems is to ensure that all stages are stim-
ulated effectively. Surface pressure read-
ings while pumping the job are necessary
but not sufficient by themselves because
they cannot always capture the subtle
intricacy of fracturing-port openings
because of many other pressure-change-
related events occurring simultane-
ously. Newly initiated high-resolution
acoustic-related measurements have
been introduced and used that are com-
patible in openhole and cemented appli-
cations, effectively capturing sleeve
opening and closing even in the absence
of a pressure signature. A set of sensors
placed on the wellhead measures acous-
tic events in real time.
At the stimulation-fluids front, a new
single-phase retarded-acid system for
high-temperature reservoirs has been
developed and used for deeper pene-
tration of live acid. The system has a
low friction pressure, enabling higher
pump rates, and does not require die-
sel as is needed for emulsified acid. The
acid system is also used with engineered
diversion mechanisms that are biode-
gradable and available in variable sizes,
where the bigger blends are intercept-
ed at the entrance of the fracture while
small particles reduce permeability to
create temporary isolation. The purpose
of the diverters is to distribute fluids into
several open intervals in a uniform fash-
ion to create even stimulation treatment
and simultaneously improve acid pene-
tration. The diverters are held together
with fibers that ensure the integrity of
the blend during pumping and enhance
the bridging effect.
Energized fracturing fluids with liq-
uid carbon dioxide in different foam
qualities also are proving success-
ful in low-pressure, partially depleted
areas, enhancing flowback and clean-
up of the well and saving water. Many
new technologies are evolving, upcom-
ing, being tested, and being implement-
ed in the completions-and-hydraulic-
fracturing sector. JPT

Zillur Rahim, SPE, is a senior petroleum engineering consultant
with Saudi Aramco’s Gas Reservoir Management Department.
With more than 30 years of industry experience, he heads the
technical team and is responsible for hydraulic fracturing, well
completions, assessment and approval of new technologies, and
training and development of local talent. An active member of
SPE, Rahim has authored more than 100 technical papers and
has participated as cochairperson, session chairperson, technical
committee member, discussion leader, forum coordinator, and workshop organizer
for various Middle East and international SPE events. He holds a BS degree from
L’Institut Algérien du Pétrole, Boumerdès, Algeria, and MS and PhD degrees from
Texas A&M University, all in petroleum engineering. Rahim serves on the JPT Editorial
Committee and can be reached at zillur.rahim@aramco.com.
Recommended additional reading
at OnePetro: www.onepetro.org.
SPE 178963 Effect of Microproppant on
Production in the SCOOP Woodford Shale:
A Case History by James Calvin, Halliburton,
et al.
SPE 183725 Optimizing Well Potential—
Technologies That Affect Hydraulic-
Fracturing Efficiency by Zillur Rahim,
Saudi Aramco, et al.
SPE 187451 Proppants—What 30 Years
of Study Has Taught Us by R.J. Duenckel,
Stim-Lab, et al.

58 JPT • MARCH 2018

Fracturing Volcanic Rock in India:
Continuous Improvements Over 11 Years

T his paper summarizes key

engineering discoveries and
technical findings observed during the
execution of 200 hydraulic-fracturing
diagnostic injection tests in the
Raageshwari Deep Gas (RDG) Field in
the southern Barmer Basin of India
(Fig. 1). These tests were conducted
in one of the few commercially viable
thick and laminated volcanic gas
reservoirs in the world. These diagnostic
tests were spread over five separate
campaigns over 11 years.

Introduction
Because of the low permeability of this
Fig. 1ÑRDG Field.
gas reservoir, hydraulic fracturing was
necessary for sustained economic pro-
ductivity. Because this massive laminated ed. In addition to conventional fracture ers and a dependence on small suppli-
reservoir contained between 15 and 40 diagnostics tests, other techniques were ers for periphery services such as water
vertically separated pay sections, a key applied successfully. One such example hauling. Because of these issues, the first
design consideration was to connect as was the use of multiple SRTs within the campaigns suffered from significant op-
much pay as possible with the least num- same fracture stage to evaluate limited- eration delays and cost overruns. Key is-
ber of fracturing stages. entry efficiency. As a result of the test sues from previous campaigns were eval-
Although a conventional plug-and- data, the number of clusters per fracture uated, and various plans were put in place
perforation fracturing technique gives stage was increased from three to six, to ensure smoother future operations.
full assurance of optimal fractures for achieving an overall increase in net-pay With operational changes, an RDG
every bit of pay, the completion cost coverage of approximately 65%. Field 15-well program set new operation-
would undermine the project’s econom- al planning and execution benchmarks.
ics. Therefore, a limited-entry technique Wellsite Operations The number of fracture treatments per
was selected. The uncertainties and risks Hydraulic-fracturing operations and well month increased by more than 400%,
were evaluated to maximize the probabil- flowback have several challenges in Ra- while the cost per fracture treatment was
ity of success. jasthan. Because this is an arid region, a cut in half. A summary of main oper-
More than 60 diagnostic fracture in- continuous supply of water is problem- ational challenges and their respective
jection tests (DFITs), approximately 90 atic at best. In addition, the oilfield infra- solutions is presented next.
step-rate tests (SRTs), and approximately structure is much smaller than typically
50 minifracture tests have been conduct- seen in North America, with few suppli- Rig Up and Simultaneous Operations
(SIMOPS). RDG Field development well
This article, written by Special Publications Editor Adam Wilson, contains highlights pads have between 8 and 12 wells per
of paper SPE 184846, “Cracking the Volcanic Rocks in India: Substantial Benefits pad. For the RDG Field 15-well campaign,
the layout for rig up for fracturing and
From Continuous Improvements Over 11 Years and 100 Fracturing Treatments,” by
associated services was planned care-
Shobhit Tiwari, SPE, Raymond Joseph Tibbles, SPE, Shashank Pathak, Saurabh
fully to optimize the available area and
Anand, SPE, Yudho Agustinus, Punj Siddharth, Rajat Goyal, Vishal Ranjan, SPE, to ensure maximum SIMOPS with mini-
Pranay Shrivastava, Hindul Bharadwaj, SPE, and Pranay Shankar, SPE, Cairn mum downtime.
India, prepared for the 2017 SPE Hydraulic Fracturing Technology Conference and
Exhibition, The Woodlands, Texas, USA, 24–26 January. The paper has not been Dual-Well Rig Up. In the previous cam-
peer reviewed. paigns, only one wellbore was worked

For a limited time, the complete paper is free to SPE members at www.spe.org/jpt.

JPT • MARCH 2018 59

 on at a time, resulting in significant time
lost from delays in bridge-plug running
or the need for a wellbore cleanout be-
cause of excessive sand fill or screen-
out. However, in the last campaign, two
wells were simultaneously lined up with
a high-pressure manifold. Having an
available backup well for fracture ac-
tivities dramatically reduced nonpro-
ductive time and greatly improved
the overall operational efficiency of
the campaign.
Continuous Water Supply. In previous
campaigns, small water tankers (35-bbl
capacity) were used to ferry water to
the well pads. For the 15-well campaign,
pipelines were used to carry water from
a borehole in the production terminal
to the various well pads. This eliminat-
ed all the downtime associated with
water supply.
Fracturing Fluid. Using the borehole
water introduced an additional prob-
lem. The borehole water was saline, and
boron content was above the permissible
level for crosslinking of the base gel. To
use this water, a specially tailored frac-
turing fluid had to be developed. More
than 60 laboratory tests were conducted
before an acceptable fluid formulation
was found.
Perforating. India’s regulations re-
strict perforating to daylight hours,
which, combined with the greater-than-
3000-m depth of the wells, resulted in
additional time and operation costs. The
current designs required as many as six
runs of conventional perforating guns.
This meant that executing more than one
fracture treatment in 2 days was virtually
impossible. Selective firing switches that
allowed up to four gun firings in a single
run were introduced as a solution.
Bridge-Plug Milling. The various frac-
turing stages were isolated from one
another using composite 10,000-psi
bridge plugs. These bridge plugs were
milled using coiled tubing, with an ex-
pected milling time of less than 1 hour.
Near-Zero Gas and Condensate Flar-
ing. Cairn India’s goal is to eliminate
gas and condensate flaring when pos-
sible. Because the RDG Field is remote,
60
previous well campaigns required some
flaring for well cleanup. This flaring was
deemed unacceptable, and all of the
gas and condensate from the respec-
tive outlets in the separator was routed
to the main production header with a
nonreturn-valve setup. The separator
pressure was used to push the gas and
condensate into the header. It is estimat-
ed that approximately 3 MMscf/D of gas
and 300  B/D of condensate were saved
using this approach.
Fracture Diagnostics
While a limited-entry technique was con-
sidered as an option to increase the net-
pay interval covered by each fracture
treatment, ensuring its effectiveness was
also important. Various diagnostic tests
were designed toward this end.
DFITs. DFITs were used to calibrate the
minimum horizontal stress in the pay
zones. After perforating the first clus-
ter of a zone, a small injection test above
fracturing pressure was performed. The
pressure decline was monitored for an
extended period. After the DFIT, the re-
maining clusters were perforated. The
DFIT was performed on single clusters
to eliminate interference between clus-
ters and the corresponding uncertainty
in analyzing the pressure decline.
Step-Down Tests (SDTs). Once all the
clusters were perforated, an SRT fol-
lowed by an SDT was conducted to evalu-
ate the perforation pressure drop and ef-
ficiency. The primary objective of these
tests was to determine whether the ac-
tual perforation friction was sufficient to
ensure diversion into all of the clusters.
SDT analysis from Well P shows that
approximately 2,200 psi of total entry
friction and approximately 1,430 psi of
perforation friction pressure were ob-
served at the maximum pumping rate of
30 bbl/min. This is more than double the
original estimate of perforation friction
(600 psi), which indicates reduced per-
foration efficiency. Thus, fewer perfora-
tions are taking fluid and there is room
to increase the number of perforations
without adversely affecting diversion.
Multiple SDTs. Conducting multiple
sequential SDTs was another method
used to determine perforation efficien-
cy. This technique was used in the sec-
ond stage of Well J. First, three of the
four clusters were perforated with eight
holes each and an SRT was conducted
to determine the number of open holes.
This was followed by perforation of the
fourth cluster and a second SRT. The
entry friction at 30 bbl/min dropped ap-
proximately 900 psi. Because both SRTs
were run at similar rates with linear gel,
the only difference would be the addi-
tional perforation area. Analysis of this
combined test indicated that 50–60%
of the perforations were taking fluid. A
temperature survey after the final SRT
confirmed that all four clusters were
taking fluid.
Evaluations such as these in more
than 35 tests consistently showed high-
er entry friction. This provided the basis
for increasing the maximum number of
perforations from 24 to 30. Eventually,
as many as six clusters per stage were
placed successfully.
Conclusions
◗ Successful hydraulic fracturing in
the RDG Field has been proved with
more than 100 stages.
◗ A limited-entry technique offers
an economical way to maximize
reservoir contact in the RDG Field.
o Temperature logs show all
clusters are being fractured.
o Production logs show that at
least 80% of the clusters are
producing and that contribution
increases with time.
o The successful application of
the limited-entry technique is
dependent on maintaining the
pressure drop throughout the
job. For this reason, perforation
erosion must be taken into
consideration.
o When properly designed, as many
as six perforation clusters can be
treated at one time.
◗ Conventional fracturing models
are adequate for designing and
evaluating treatments in the
RDG Field.
◗ A focus on operational efficiency
can have a large effect on overall
costs. At the RDG Field, the cost
per fracturing treatment was cut in
half between five-well and 15-well
campaigns. JPT
JPT • MARCH 2018
Well-Placement Timing, Conductivity Loss
Affect Production in Multiple-Fracture Wells

H orizontal wells in liquids-rich

shale plays are now being drilled
such that lateral and vertical distances
Well 1 Well 2 Well 3

between adjacent wells are significantly

reduced. In multistacked reservoirs,
fracture height and orientation from
geomechanical effects coupled with
natural fractures create additional
complications; therefore, predicting
well performance using numerical
simulation becomes challenging.
This paper describes numerical-
simulation results from a three-well
pad in a stacked liquids-rich reservoir
(containing gas condensates) to
understand the interaction between
wells and production behavior.

Numerical Simulation Fig. 1—Side view of the reservoir model showing the relative position of the
The reservoir simulator used for three wells in the base-case model. The horizontal sections of Wells 1 and
this study was designed to handle 3 are placed in Layer 2, and that of Well 2 is placed in Layer 4 (z-scale is
unstructured-grid-based simulation exaggerated).
cases. Most of the numerical reservoir
simulators that are used for modeling that are not parallel are drilled from a sin- Reservoir-Simulation Model
horizontal wells with multiple hydrau- gle pad, properly representing the wells The reservoir model consisted of five
lic fractures are based on structured grid with hydraulic fractures in a structured- horizontal layers with varying proper-
cells in which the hydraulic fractures grid-based reservoir-simulation model ties in each layer. The horizontal sections
are modeled as symmetric biwing frac- becomes even more challenging. By con- of Wells 1 and 3 go through the middle of
tures perpendicular to the wellbore. In trast, the unstructured-grid-based reser- Layer 2, and that of Well 2 goes through
most cases, they use local grid refine- voir models are not restricted by any of the middle of Layer 4. Each well is com-
ment (LGR) to incorporate the hydraulic these limitations—they can have any ge- pleted exactly the same way.
fractures into the model, which generally ometry, size, or orientation for the wells Fig. 1 is a side view of the base-case
works well if a single well is involved and and can include primary hydraulic frac- reservoir model with the layout of the
the grids are not tied to the Earth models. tures, secondary fractures, and open nat- three wells. The position of the horizon-
However, if the wells and the hydraulic ural fractures. Instead of using grid cells tal section is shown by a yellow dot at the
fractures are not orthogonal to the Earth- that are parallel in shape, the unstruc- end of each green line, representing the
model grids or if the reservoir contains tured grid cells can have any arbitrary vertical section. The yellow horizontal
nonorthogonal secondary fractures (nat- shape. Incorporating realistic induced hy- line goes through the middle of the reser-
ural or induced), modeling them with LGR draulic fractures in a reservoir model is voir (which is also the middle of Layer 3).
becomes a challenge. When multiple wells easier if unstructured grids are used. The hydraulic fractures in the base-case
model are confined within certain lay-
ers—the fractures for Wells 1 and 3 are
This article, written by Special Publications Editor Adam Wilson, contains highlights
confined within Layers 1 and 4, and the
of paper SPE 180448, “Effects of Well-Placement Timing and Conductivity Loss on fractures for Well 2 are confined within
Hydrocarbon Production in Multiple-Hydraulic-Fracture Horizontal Wells in a Layers 2 and 5. The base-case model had
Liquids-Rich Shale Play,” by Shameem Siddiqui, SPE, Doug Walser, SPE, and Ron a total of 419,500 unstructured grid cells.
Dusterhoft, SPE, Halliburton, prepared for the 2016 SPE Western Regional Meeting, In the base-case model, the horizontal
Anchorage, 23–26 May. The paper has not been peer reviewed. distance between two parallel laterals

For a limited time, the complete paper is free to SPE members at www.spe.org/jpt.

JPT • MARCH 2018 61

 was 1,000 ft and the vertical distance be-
tween two adjacent parallel laterals was
200 ft; hence, the actual distance be-
tween two adjacent parallel wells was ap-
proximately 1,020 ft. The gap between
the fractures from two adjacent wells is
200 ft in the base-case model.
Results
Effect of Staggering of the Wells. For
this study, a new case was created with
zero vertical offset between wells (i.e.,
with the horizontal sections of each well
at the same vertical position in the mid-
dle layer of the reservoir). To preserve
the overall fracture height at 300 ft, two
additional layers were created by divid-
ing the uppermost and lowermost lay-
ers in half.
The base case shows less pressure
change at the location of Well 2 because
its fractures do not reach the top layer
directly, as a result of staggering (the top
of hydraulic fractures of Well 2 are 100 ft
below the top surface in the model). The
pressure distribution around the frac-
tures for the case in which the wells are
in the same horizontal plane and the total
fracture height equals that of the fracture
height for the base case is more uniform
compared with the base case. Finally, the
pressure distribution for the remaining
case is also more uniform, and, because
all the fractures reach the top layer, the
pressure change is more intense.
The cumulative-oil-production in-
crease is 8.3%, and the cumulative-gas-
production increase is 12.1%. The case
in which the wells are placed in the same
plane at the center of the reservoir but
the fractures penetrate all of the reser-
voir layers shows the highest increase
in production of oil and gas. Although
it is not a direct comparison with the
two other cases because of the extra
fracture height, this case represents a
cumulative-oil-production increase of
39% and a cumulative-gas-production
increase of 22%.
Effect of Delaying Completion of Well
2 by 1 Year. The second scenario investi-
gated the effect of delaying the comple-
tion of Well 2 (the well in the middle) by
1 year. Along with the base case, three
other cases were created with different
fracture lengths for Well 2 in view of the
fact that it is possible to create fractures
62
of different lengths than the original
case because of stress-regime changes.
Additionally, a case was created with just
two wells (Wells 1 and 3). The individual
rate plots for oil and gas indicate a spike
in both oil and gas production when the
third well is started. Overall, delaying
completion, if not accompanied by cre-
ating fractures of equal length, as with
the two original wells, results in lower
cumulative oil and gas production than
the base case, which had three wells
completed at the same time.
Effect of Including Natural Fractures
in the Model. A natural-fracture gen-
erator that can work with calibrated or
stochastic fracture models was used to
populate the reservoir model with natu-
ral fractures. The natural-fracture net-
work is generated with a total of 356
natural fractures.
The presence of natural fractures in
the model (i.e., connected ones) resulted
in higher cumulative production for both
oil and gas (3.8% increase for oil and
1.1% increase for gas). Connecting to the
existing natural-fracture network and
keeping it open during the production
period helped improve overall recovery.
Effect of Matrix Permeability and
Condensate/Gas Ratio (CGR). Two new
cases were created to evaluate the effects
of changing matrix permeability and
CGR. For the first case, the matrix per-
meability of each of the five layers is in-
creased from the base case by a factor of
10 and the simulation is run for 5 years.
For the second case, a lighter reservoir
fluid with a CGR of 50 STB/MMscf (one-
fifth of the base-case CGR) was used with
the same equation of state but with dif-
ferent pseudocomponents than the base
case. A significant increase in cumula-
tive oil production is seen when matrix
permeability is increased by a factor of
10 (66.2% increase for oil and 39.6% in-
crease for gas). For the case in which the
CGR is reduced by a factor of five, the
cumulative oil production is reduced by
14.2% and the cumulative gas produc-
tion increases by 10.5%.
Effect of Conductivity Loss in the Frac-
tures and in the Matrix. Two new cases
were created to evaluate the effects of con-
ductivity loss in the fractures and in the
matrix, which occurs during the life of a
hydraulically fractured well in any uncon-
ventional reservoir. In most simulators,
this effect is simulated by using separate
(or the same) transmissibility-multiplier
functions for the matrix and the frac-
tures. The first of the two new cases look-
ing at the effect of conductivity loss is
created from the base case, and the sec-
ond is created from the case with matrix
permeability that is 10 times that of the
base case. In both of these new cases, the
same two transmissibility-multiplier ta-
bles were used. For the base case, a loss of
conductivity resulted in only a 0.2% loss
in cumulative oil production but a 67.0%
loss in cumulative gas production. For the
high-permeability-matrix case, permea-
bility damage resulted in an 11.5% loss
in cumulative oil production and a 65.5%
reduction in cumulative gas production.
For both values of matrix permeability,
the loss of cumulative gas production is
more severe than the loss of cumulative
oil production.
Observations
◗ For the cases studied, a 1-year
delay did not result in a significant
loss of 5-year cumulative oil or gas
production, except for the cases in
which the created fractures for the
well placed later had shorter half-
lengths than the original wells.
◗ Placing the well at the location with
highest CGR and highest matrix
permeability always resulted in
higher production.
◗ Much-higher cumulative production
of oil and gas can be obtained by
increasing the vertical height of
the fractures.
◗ Vertical staggering of wells did
not result in any improvement in
cumulative oil and gas production.
◗ The loss of fracture and matrix
conductivity had a detrimental
effect on cumulative oil and gas
production, but the effect was
more severe for cumulative gas
production.
◗ Natural fractures increased both
oil and gas production; therefore,
connecting the existing natural-
fracture network by means
of hydraulic fracturing has a
beneficial effect on oil and gas
production. JPT
JPT • MARCH 2018
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 Pillar Fracturing a Sandstone Reservoir
Shows Benefit Over Conventional Fracturing

T he Kaji Semoga Field in South

Sumatra consists of three main
reservoirs—Telisa sandstone (TLS),
Conventional Fracturing Pillar Fracturing

Baturaja limestone, and Talangakar The combination of enhanced

sandstone. The successful development conductivity and effective fracture
half-length enables greater
of TLS with hydraulic fracturing led hydrocarbon recovery.
to further efforts to maximize oil
recovery. After a study with suitable
samples and cases, pillar fracturing
was considered. This method is similar
to conventional fracturing techniques Xf effective

where fluid and proppant are used to Xf proppant

create conductive paths in the reservoir
Xf hydrocarbon Xf effective=Xf proppant=Xf hydrocarbon
layer; however, pillar fracturing relies
on open flow channels.
Fig. 1—Comparison of conventional fracturing, left, and pillar fracturing.
Xf =fracture half-length.
Pillar Fracturing
A major step change in the develop- different bridging characteristics of con- ous proppant tail-in stage near the end of
ment of the Kaji Semoga Field was to use ventional- and pillar-fracturing slurries. the treatment before the flush stage. This
the hydraulic-fracturing technique re- The stable voids within the proppant tail-in stage ensures good connectivity
ferred to as pillar fracturing. The pillar- pack are created through a combination between the wellbore and the channels
fracturing technique creates stable voids of specific pumping schedules, specific created during the treatment. Special-
within the proppant pack that serve as equipment, and fracturing-fluid design. ly engineered blending equipment was
infinite-conductivity channels for fluid The voids are achieved by alternate pump- needed to ensure stable and consistent
flow rather than the intragranular flow ing of gelled fluid in two types of pulses, pulse delivery.
of conventional fracturing techniques proppant-laden pulses and proppant-free Not every well is a candidate for pillar
(Fig. 1). Hydrocarbon will flow preferen- pulses. Fibers are added continuously fracturing. Main requirements for can-
tially through the channels rather than during pumping to mitigate the disper- didate wells include a Young’s modulus
through the proppant pack. In addition, sion of the proppant-laden pulses as they greater than 2.5 million psi, a minimum
pillar fracturing allows for better fracture are conveyed throughout the surface lines in-situ stress or closure pressure lower
cleanup, longer fracture effective half- and the wellbore and within the frac- than 13,000 psi, and a ratio of Young’s
lengths, and lower pressure drops along ture. A dispersed pulse can create nar- modulus to closure pressure of greater
the fracture. Consequently, production row fracture widths and a reduction in than 275. These requirements ensure that
after pillar fracturing is greater than that the number and quality of the channels, the channels inside the fracture stay open
following conventional fracturing. An- which leads to a reduction of fracture and will not collapse when the fluid pres-
other advantage of the pillar-fracturing conductivity. The fiber also enhances the sure declines during leakoff. The stiffness
technique is a low screenout rate com- proppant-carrying capacity and prevents of the formation compensates against
pared with conventional fracturing. The proppant settling within the fracture. The the bending stresses on the rock to avoid
prevention of screenout is related to the pulse stage is then followed by a continu- pinching or closure of the open channels
after the fracturing fluid in these chan-
nels has leaked off.
This article, written by Special Publications Editor Adam Wilson, contains highlights of
paper SPE 186199, “Unlocking Depleted and Low-Modulus Telisa Sandstone Reservoir
Pillar Fracturing
With Pillar-Fracturing Technique: Well-Performance-Improvement Comparison With Data from 12 wells were reviewed using a
Conventional Fracturing,” by M. Azhari, SPE, N.F. Prakoso, and D. Ningrum, Medco multidisciplinary approach to select the
E&P Indonesia, and L. Soetikno and A. Makmun, Schlumberger, prepared for the top two wells for the field trial. Some im-
2017 SPE/IATMI Asia Pacific Oil and Gas Conference and Exhibition, Bali, Indonesia, portant parameters, such as reservoir-
17–19 October. The paper has not been peer reviewed. pressure gradient, average permeability,

For a limited time, the complete paper is free to SPE members at www.spe.org/jpt.

64 JPT • MARCH 2018

oil saturation, barrier thickness, neutron
porosity, gas reading, net pay, oil show,
and stress contrast between the TLS and
the Baturaja limestone, were selected and
assigned relative weight on the basis of
importance and data reliability. Then, the
value of the selected parameters was av-
eraged and totaled for every well. Because
some required data were missing, the
best well was identified on the basis of the
highest average value and not the highest
total value. In addition, other consider-
ations, such as gas-cap location, cement-
bond log, location of injector wells, well
readiness, and well history, were consid-
ered and appraised. Two wells (KS-E and
KS-L) were selected for the field trial.
To execute pillar fracturing, specific
fracturing-design software was used and
particular equipment requirements must
be met. The blender used in this opera-
tion needed to have upgraded firmware
that could control the proppant gate’s
opening and closing within 1 second. A
function test on location was conducted
to simulate the real job, identify any po-
tential risks during main fracturing, and
generate mitigation measures for any op-
erational failure.
Three types of injection test were ex-
ecuted before the main fracturing treat-
ment in each well—a mini-falloff test, a
step-rate test, and a mini-fracture test.
The result from those tests were used to
recalibrate the preliminary model and
redesign the pumping schedule.
The main fracturing was pumped
with borate-crosslinked fluid at a rate of
18 bbl/min. Two sizes of proppant were
used—20/40 intermediate-strength
proppant (ISP) and 12/18 ISP. The
12/18-mesh size was used to create the
high-conductivity tailed-in stage near
the wellbore. The average surface treat-
ing pressure was approximately 1,800–
2,000  psi. During the main fractur-
ing, the surface pressure increased as
12/18 ISP started to enter the formation,
which indicated a restriction in the near-
wellbore region.
Results
Post-treatment evaluation showed that
fracture conductivity for wells fractured
with the pillar-fracturing technique is
five times that in wells fractured with
conventional fracturing. Meanwhile,
fracture length created per pound of
JPT • MARCH 2018
proppant for wells fractured with pillar
fracturing is 61% greater in Well KS-E
and was similar in Well KS-L. This higher
conductivity led to oil production up to
two to eight times greater.
Post-fracturing production results in
Well KS-E, which was fractured with pillar
fracturing, showed a higher initial produc-
tion compared with that of a nearby offset
well. Production rates were also stable at
approximately 423 BOPD with water cut
of 3.39% for 182 days compared with
the flow rates expected from a conven-
tional fracturing treatment. Meanwhile,
oil production from Well KS-L increased
gradually and stabilized at 200 BOPD as
water cut decreased from 97% to 0.05%
at 173 days. Normalized production
with reservoir pressure for wells frac-
tured with the pillar-fracturing technique
was higher than for wells fractured with
conventional fracturing. The low water-
cut value indicates that the fracture is
not growing into the Baturaja formation.
Screenout was also eliminated when the
pillar-fracturing technique was applied.
Beside production rate after fractur-
ing, well productivity index (PI) was also
evaluated to examine post-fracture pro-
duction decline that the pillar-fracturing
technique aimed to overcome. Highlights
from the two pilot pillar-fracturing wells Motivate
Inspire
include that well performance reaches
stable condition approximately 2 weeks
after fracturing and that the decrement
of PI for those two wells is similar at Educate
approximately 40%. This phenomenon
is explained by the fact that, for typi-
Nominate
cal wells in the Kaji Semoga Field, the
fracturing-fluid-recovery period is ap-
proximately 2 weeks after fracturing.
Do you have colleagues who
Summary and Way Forward are authorities in their fields and
Pillar fracturing is one of the techniques experienced public speakers?
considered to maximize production from Nominate a colleague for the SPE
the TLS in the Kaji Semoga Field. Produc- Distinguished Lecturer Program.
www.spe.org/go/NomDL.
tion after pillar fracturing showed a 56%
increase compared with that of a near- Nominations are accepted
until 15 March.
by offset well, even though the reservoir
pressure was already depleted and the
reservoir Young’s modulus was at the tail
end of the application envelope for pil-
lar fracturing. Proper candidate selection
is critical to increase the rate of success.
This successful field trial of pillar frac- The SPE Distinguished Lecturer Program
is funded by the SPE Foundation, Offshore
turing will open more paths for the appli- Europe, AIME, and companies that allow their
cation in other wells and reservoirs with professionals to serve as lecturers.
similar characteristics. JPT
65
 TECHNOLOGY FOCUS

Production Monitoring/Surveillance
Rohit Mittal, SPE, Reservoir Engineer

The industry, bruised in the past few Indeed, increased to access computing resources. Machine
years by low oil prices, has gained some learning has the potential to provide a
relief with a recent upward trend in pric- digitization and intelligent large number of opportunities to auto-
es. These lean years have reinforced an algorithms will lead mate processes and reduce downtimes.
imperative for survival, which, for many One such example would be intelligent
companies, means keeping a check on to new processes being algorithms controlling production and
operating costs while improving produc- developed and becoming injection rates in the reservoir in order to
tion with existing assets, a fundamen-
industry standards achieve desired objectives, such as main-
tal pillar of which is using best-in-class taining fluid contacts and preventing
techniques in production surveillance in the future. residual-oil-saturation losses.
and monitoring. Indeed, increased digitization and
In this regard, there are two ongo- intelligent algorithms will lead to new
ing trends in the industry. The first is an ment of fluids in the reservoir better. processes being developed and becom-
increasing wave of digitization, begin- Offshore Turkmenistan has examples of ing industry standards in the future. Even
ning with the reservoir and continuing operators monitoring several hundred though the industry is often labeled as
all the way to the pipeline and beyond, wells, enabling them to conduct optimi- being conservative and slow to change,
driven by inexpensive data storage and zation on a daily basis. the near future looks promising, resem-
advances in connectivity from produc- Second, piggybacking on the increased bling an athlete in a relay race, impatient-
tion sites. This has enabled the opera- access to sensor and equipment data, ly waiting to grab the baton and shoot
tor access to data on a real-time basis, analytics and artificial intelligence are on off into glory. JPT
thereby allowing decision making in a an exponential rise in the industry. Cloud
more-collaborative and -efficient man- computing providers such as Amazon
ner. One example of such a benefit is and Microsoft are increasingly democ- Recommended additional reading
the remote operation of electrical sub- ratizing the use of such analytics, and at OnePetro: www.onepetro.org.
mersible pumps on a fieldwide level that a company no longer needs to spend a
allows operators to control the move- large amount of capital on infrastructure SPE 186216 Comprehensive Analysis
of Time-Lapsed Well Productivity Index
for Characterizing Well Behavior in
Tight Volcanic Gas Reservoir
Rohit Mittal, SPE, is a reservoir engineer with more than 5 years by Utkarsh Vijayvargia, Cairn, et al.
of experience in reserves estimation, reservoir simulation, fluid
SPE 186205 Real-Time Application
modeling, and advanced data analytics. He most recently worked
of Integrated Well and Network Models
for the reservoir-consulting arm of Baker Hughes, a GE company, Through Smart Work Flows for Optimizing
in Houston. As a reservoir engineer, Mittal has worked on most of and Sustaining Production Targets in an
the major shale plays in the US and a number of Gulf of Mexico Area of Kuwait’s Greater Burgan Oil Field
fields. His current area of interest is the application of machine by B. Al-Shammari, Kuwait Oil Company,
learning to find insights hidden in a large amount of data. Mittal et al.
holds a bachelor’s degree in chemical engineering from the Indian Institute of SPE 186955 Downhole Production
Technology, India, a master’s degree in petroleum engineering from Texas A&M Logging for Locating Water Sources in
University, and an MBA degree from INSEAD, France. He is a member of the JPT Openhole-Completion Oil-Producer Wells
Editorial Committee and can be reached at rohit.mittal17d@insead.edu. by Amirul Afiq Yaakob, Petronas, et al.

66 JPT • MARCH 2018

Improved Monitoring System for Heavy-Oil
Steam-Assisted-Gravity-Drainage Wells

T he complete paper provides an

overview of the development of
fiber-optic sensing for steam-assisted-
gravity-drainage (SAGD) applications,
including a review of more than 10
years of work in development and
field applications in western Canada.
Information provided in this paper is
applicable beyond SAGD applications.
The fiber-optic monitoring systems
might also be used for intelligent,
subsea, and unconventional wells.
Introduction
One area that has benefited from the
unique advantages of fiber-optic sensing
is thermal monitoring of SAGD wells. One
particular fiber-optic technology that
has proved successful in these thermal-
monitoring applications is wavelength-
domain multiplexing of Bragg-grating-
based fiber-optic sensors. Commonly
referred to as array temperature sensing
(ATS), the Bragg-grating arrays can be
manufactured splice-free for long-term
reliability. The number of thermal sens-
ing points can range from a few to well
over 100 for a single cable. Each Bragg-
grating sensing point provides a real-
time, accurate measurement of tempera-
ture at that location along the wellbore.
ATS systems have been used successfully
to monitor the steam-injection and pro-
duction processes in SAGD wells. ATS
systems are capable of performing more-
accurate temperature measurements and
are able to resolve much smaller temper-
ature features compared with distributed
temperature sensing (DTS).
Bragg-grating optical sensors not only
provide temperature measurements but
This article, written by JPT Technology Editor Chris Carpenter, contains highlights
of paper SPE 187441, “Improved Monitoring System for Heavy-Oil Steam-Assisted-
Gravity-Drainage Wells,” by Christopher Baldwin, Weatherford, prepared for the
2017 SPE Annual Technical Conference and Exhibition, San Antonio, Texas, USA,
8–11 October. The paper has not been peer reviewed.
also can be packaged in a transducer to
provide pressure and temperature (PT)
readings. The optical PT gauge is com-
patible with the surface instrumentation
that records the ATS responses, allowing
for the PT gauge to be integrated at the
end of the ATS optical fiber for single-
wellhead penetration, providing multi-
plexed DTS and PT measurements.
Environmental Effects on
Downhole Fiber-Optic Sensors
The requirements for a successful moni-
toring system in SAGD applications are
dictated by the harsh environments expe-
rienced downhole. In the past, the pres-
ence of hydrogen in these applications
has caused issues with various fiber-optic
sensing technologies. Improvements in
optical-fiber design and downhole cable
construction have helped to mitigate
some of these issues, but any downhole
monitoring system must be able to cope
with the presence of hydrogen in relative-
ly high-temperature environments.
Because of the known hydrogen ef-
fects on optical fibers, a downhole moni-
toring system was designed on the basis
of Bragg-grating technology. In order
to predict expected lifetime of in-well
Bragg-grating sensors under different
conditions, an empirical model was de-
veloped to understand long-term at-
tenuation effects. The model provides a
worst-case scenario for attenuation of
Bragg-grating sensors at various temper-
atures. Bragg-grating sensors function
by relating a wavelength-shift response
to temperature or pressure, so the at-
tenuation effects do not affect the abil-
ity to provide accurate measurements.
Application of the model is demonstrat-
ed in Fig. 1, where attenuation changes
from a downhole Bragg-grating-based PT
gauge are plotted vs. time. The attenua-
tion model is applied to the trend of the
data to provide a prediction of remaining
life of the PT gauge as influenced by the
presence of hydrogen attenuation effects.
Bragg-Grating-Based PT Gauge
Recently, a new-generation design for the
Bragg-grating PT gauge has been intro-
duced for the SAGD pressure-monitoring
application. The basis for the new-
generation optical PT gauge stems from
glass technology developed in the late
1990s. The previous-generation optical
PT gauge was based on a bonded Bragg-
grating-sensor design, which allowed for
a small form factor of ¼ in. in diameter.
The small form factor enabled the PT
gauge to be integrated easily into a coiled
format for installation in the wellbores.
However, the bonded Bragg-grating de-
sign posed performance limitations in
terms of maximum pressure measure-
ment, a nonlinear pressure response, and
poor performance in high-vibration en-
vironments. With the use of Cane-glass
technology for the optical PT gauge, the
response to pressure is highly linear and
the overall design of the gauge has im-
proved manufacturability and increased
the operating pressure range.
Development of any new sensor re-
quires evaluation under expected oper-
ating conditions. The qualification-test
plan used for the SAGD PT gauge in-
cluded shock and vibration testing, ther-
mal cycling, and pressure loading. Test-
ing also included ensuring that the PT
gauge continued to perform within spec-
ifications after experiencing an overpres-
sure to 1.2 times the maximum oper-
ating pressure. Multiple prototype PT
gauges were subjected to the qualifica-
tion procedure to ensure that the design
was valid across multiple samples. After

For a limited time, the complete paper is free to SPE members at www.spe.org/jpt.

JPT • MARCH 2018 67

 0
Reflected Optical Power (dB) –10
–20
–30
Conditioning
–40
Out of Specification Limit
–50
–60
0.01
Fig. 1—PT-gauge optical-power data for lifetime prediction.
each test of the procedure, the prototype
gauges were tested at room-temperature
and -pressure conditions to determine
if any damage had been incurred during
the testing. Additional testing of the PT
gauges included extreme overpressure
and overtemperature testing as well as
testing to failure.
SAGD Applications
for Fiber-Optic Sensing
The use of Bragg-grating sensors for
thermal monitoring in SAGD applica-
tions began in 2007 with the first instal-
lation of a 40-point sensing array. The
use of these permanent monitoring sys-
tems grew to more than 50 installations
per year in 2014. In 2009, an optical PT
gauge based on Bragg-grating sensors
was introduced to the market. The gauge
had the ability to serve as a standalone
sensing point at the termination of the
optical cable or to be integrated on the
same optical fiber and cable as the Bragg-
grating sensing arrays for thermal moni-
toring. For more than a decade, Bragg-
grating technology has expanded the
number of applications for SAGD wells.
In-well ATS sensors were used to moni-
tor the steam front as it progressed along
the length of the horizontal wellbore. The
spatial separation and real-time data ac-
quisition of the individual sensors pro-
vided a means of determining the veloc-
ity of the steam front along the wellbore.
Also, the fast data-sampling rate provided
an understanding of how fast the region
near each temperature sensor reached a
saturation value. Thermal-response data
can be used by reservoir engineers to
model the reservoir and plan for future
production operations. This type of data
68
Production
Prediction
0.10 1.00 10.00 100.00
Time in Well (years)
is evaluated not just during circulation,
but also following shut-ins to examine
changes in the reservoir. Fine tuning of
the steam-injection rates, temperature,
and pressures has led to a lowering of
steaming requirements and to operation-
al savings. Reductions in the amount of
steam required also lead to a reduction
in the amount of greenhouse-gas (GHG)
emissions from the SAGD operation.
During the production phase, thermal
monitoring is used to measure the tem-
perature difference between the injec-
tion well and the production well. Keep-
ing an optimal temperature difference
between the injection well and the pro-
duction well is a key parameter in opti-
mizing SAGD wells through the steam/
oil ratio (SOR) and is referred to as sub-
cool monitoring. Managing the local or
zonal subcool with a reliable optical ATS
and PT monitoring system along the lat-
eral section of the well optimizes the pro-
duction rate. Real-time monitoring can
enable proportional-integral-derivative
feedback-loop control, to reduce the cu-
mulative SOR and GHG emissions and to
increase the production rate.
Field Trial of the Improved
SAGD Cane-Glass PT Gauge
The ¼-in.-outer-diameter (OD) down-
hole sensing cable with 40-point ATS op-
tical fiber and the SAGD Cane PT at the
tip of the cable was installed in a produc-
er well. The first ATS sensor (ATS 1) was
located near the heel of the well; ATS 40
was landed near the toe. The ATS moni-
toring cable was pumped into a 2⅜-in.-
OD guide string using a 1.81-in. polymer
pig. The pig was attached to the tip of the
1600-m capillary where the SAGD Cane
PT was located. This assembly was deliv-
ered through the wellhead hanger, was se-
cured, and was integrated with the sheave
mechanism. A capillary spooler pump
truck was used to pump the liquid until
the pig and cable began to move and the
SAGD Cane PT was landed at the toe. The
entire surface data-acquisition system
and the surface fiber-optic cables were
installed within a 4-hour window after the
safety meeting. The capillary pumpdown
technique used for this installation is not
the only available method to install the
SAGD Cane PT gauge. There are two other
installation methods: (1) running the cap-
illary together with coiled tubing and (2)
clamping to the outside casing or tubing.
The measured temperatures between
the PT gauge and the nearest ATS sen-
sors were found to be in good agreement.
The readings from the ATS sensors dis-
played an increasing temperature along
the wellbore to a certain depth. After this
point, the thermal response is observed
to decrease at the toe of the well.
The pressure reported by the PT gauge
at the toe is consistent with the pres-
sure reported at the heel pump with syn-
chronized evolution and variations and a
pressure drop of approximately 100 kPa
over the horizontal section. Also, the
temperature reported by the toe-located
PT gauge is consistent with the tempera-
ture reported by the ATS sensor several
meters away. The data show that the ATS
and PT-gauge in-well system has main-
tained full functionality for more than 2
years of continuous operation. Some of
the earliest-installed in-well systems are
still operational after 8 years.
Coiled Logging
Another application for the ATS and
SAGD PT gauge that has been explored
recently is coiled-logging operations.
The coiled-logging system provides the
high spatial resolution of a DTS system
with the accuracy and data frequency of
the ATS thermal-monitoring system. A
SAGD PT gauge is integrated at the end
of the ATS cable in the bottomhole as-
sembly, and both ATS and DTS cables
are encased in a single coiled tubing.
Rigless coiled-tubing deployment pro-
vides a cost-effective solution for acquir-
ing accurate temperature and pressure
data in the challenging environments of
SAGD wells. JPT
JPT • MARCH 2018
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 Integrated Surveillance
Offshore Turkmenistan

T he complete paper describes a

work flow in which wells and
production networks (15 platforms
◗ Well models were executing
sporadically.
◗ The network model did not
operational parameters across the
entire field was implemented. This
integrated surveillance tool provides
and 100 active wells located in the consider the frequent well and a single platform that connects
Cheleken Block offshore Turkmenistan) network flow routing. operations for a broad range of
are automatically modeled daily with ◗ Optimization of choke or flow disciplines.
steady-state and transient tools and routing was not possible with the ◗ Software from different vendors
ultimately analyzed by a Web-based current configuration. that performed steady- and
surveillance system, the Cheleken ◗ Visualization of day-to-day flow transient-state well and network
Block Central Data Gathering System routing and other production key analysis and diagnostics was
(CDGS). These models are updated and performance indicators of the integrated to the core PDMS. The
run automatically on a daily basis by field in a centralized system was models can be run on a daily basis,
means of the CDGS. required in order for the operators, and their results can be stored in the
supervisors, and reservoir teams system to be visualized.
Introduction to reduce their nonproductive ◗ Day-to-day optimization for choke
Well and network modeling are being time, solve day-to-day operational and flow routing of the production
used widely across the industry as a problems, and optimize field network can be performed with
method of problem detection, produc- production. these steady-state and transient
tion enhancement, and production op- The project was designed and imple- models, with results provided to
timization. However, well and network mented on the basis of four fundamen- the operators to implement in
modeling require a large amount of data tal processes. the field.
that needs to be systematically collect- ◗ A production-data-management
ed, cleaned, validated, and updated. system (PDMS) was implemented PDMS and Infrastructure
They also require considerable man- to systematically acquire all Description
power, because many time models are well-operation data and process Installing the Production Platform.
not calibrated adequately to ensure re- information generated during day- To provide synchronization, overcome
liable results. to-day activity from producing any connectivity limitations, and allow
An operator has implemented a ro- assets. These data needed to platform operators to have access to the
bust system, the CDGS, that allows data be validated, stored, and made production platform with a minimal ef-
capture, validation, and approval in available in a structured manner to fect on delay, latency, or computer in-
a systemic manner. There was a need different user groups. Various core- frastructure, click-once technology was
to capitalize on this ability and inte- analytics processes such as back implemented. This enables the user to
grate it with steady-state and transient allocation, virtual flowmetering, install and run a Windows-based smart
models to increase the efficiency of the volume correction, and software- client application by clicking a link in
overall process. platform integration were a Web page.
performed to automate
Philosophy Applied data flow. Integrated Steady-State Work Flow.
The initial status of the project present- ◗ A single, integrated platform for Updating Well Parameters With
ed several critical challenges: monitoring and surveillance of Steady-State Models. The PDMS is de-
fined to hold all steady-state well mod-
els by which the operating parameters
This article, written by JPT Technology Editor Chris Carpenter, contains highlights
will be updated automatically and sys-
of  paper SPE 188357, “Integrated Surveillance in Cheleken Block Offshore
tematically. Data validation is essential
Turkmenistan by Use of Automated Steady-State and Transient Models,” by Roberto for ensuring that before the application
Espinoza, Dragon Oil, and Suraj Mohan Uniyal and Ivan Marcelo Jaramillo computes data or provides data to the
Rivadeneira, Schlumberger, prepared for the 2017 Abu Dhabi International well models, the information collected
Petroleum Exhibition and Conference, Abu Dhabi, 13–16 November. The paper has is verified to be clean and correct. The
not been peer reviewed. application uses routines that check for

For a limited time, the complete paper is free to SPE members at www.spe.org/jpt.

70 JPT • MARCH 2018

 plo our
oppor uni i s

Saudi Aramco is seeking experienced petroleum engineers to join our team in Saudi Arabia.

In addition to an expatriate lifestyle, Saudi Aramco offers the chance to make meaningful
contributions to world-scale projects and operations.

To apply for an open position, visit www.aramco.jobs/jpt

 the correctness and meaningfulness of
the data entered into the system. The
system includes tools and procedures to
integrate data among different software
platforms, including a work-flow build-
er capable of interacting with the select-
ed well-modeling tool (e.g., steady-state
nodal analysis).
The work flow passes key validated
data (parameters) from the PDMS to the
well-modeling tool. These parameters
include wellhead pressure (WHP), well-
head temperature (WHT), choke size
taken from routine wellhead record-
ings, water cut (WC) from routine well
samples, and gas/oil ratio (GOR) avail-
able from the latest well tests on which
pressure/volume/temperature correc-
tions have been previously applied.
Inflow-Performance-Relationship
(IPR) and Vertical-Lift-Curves (VLC)
Work Flow. Once well models are up-
loaded and the required data are avail-
able in the PDMS, the well-model-update
work flow can be run automatically or
on demand, which would update the fol-
lowing parameters:
◗ WHP, GOR, and WC in system
analysis
◗ WHT in the geothermal gradient
against the first depth mentioned
After updating, the work flow runs
the system analysis and saves the esti-
mated bottomhole pressure in the well-
head data screen. The well model is then
updated in the PDMS. The lift curves are
generated once a month automatical-
ly or on demand, to be used in the net-
work model.
Network Solver Work Flow. Well-
Flow-Routing Status. One of the signif-
icant innovations of the project is the
acquisition and updating process of the
well-flow-routing status. Flow-routing
status considers a complete work flow to
allow the PDMS system to record where
a well is being routed.
◗ Flow routing on wells includes
flow diversion to the different
existing manifolds or direct
diversion to risers and
production lines.
◗ Flow routing on manifolds
includes flow to production
and testing separators or
direct diversion to risers and
production lines.
72
◗ Flow routing on separators
includes independent flow routing
from each separator outlet.
When the wellhead parameters are
passed automatically to the modeling
tool, routing status of wells and sepa-
rators is also automatically passed to
the network-modeling tool along with
choke settings.
Network Simulation Work Flow. This
work flow imports IPR data from re-
spective well models, generates VLCs,
updates the choke size for each well, and
updates separator pressures before run-
ning the network model. After the run, it
saves estimated rates and pressures for
wells, pipelines, manifolds, and risers.
Rates Estimation: Flow Through
Chokes. A secondary process of empir-
ical well-rate estimation is performed
on the PDMS. This method, along with
well-test measurements, defines a base
in order to determine whether the re-
sults of the model’s area present an ac-
ceptable range of deviation or whether
wells and network models need to be
calibrated manually.
Integrated Transient Work Flow. The
transient or dynamic multiphase-flow
simulator models time-dependent be-
haviors, or transient flow, to maximize
production potential. Transient model-
ing is essential in the field-development
and production phases of oil and gas as-
sets and is used to design production
systems and determine the best opera-
tional strategies. Dynamic simulation is
used extensively to investigate transient
behavior in pipelines.
After steady-state models are run,
the integrated transient work flow used
in this project passes parameters from
the PDMS to the platform to the tran-
sient model. These parameters include
total calculated rates and GOR and WC
at each riser, along with the measured
pressures and temperatures. Once the
parameters are updated, the transient
model is run automatically to solve pres-
sure and rate fluctuations along the pro-
duction network.
Integrated Surveillance. A central-
ized, Web-based integrated surveillance
tool representing the field network was
developed in addition to the CDGS to
visualize and analyze various data re-
corded and modeled within the field
network in an intuitive manner. The
frequent routing of wells in the field
posed a challenge, so automated map-
ping and visualization of these rout-
ings in the CDGS was implemented. The
routing is automatically updated in the
steady-state field network, keeping the
model up to date, properly configur-
ing the production data for feeding into
the transient model, and updating the
Web-based integrated surveillance tool
with proper flowline color coding to
represent true field production flow on
a real-time basis.
A customized, integrated surveillance
tool provides a state-of-the-art platform
to visualize the data in an intuitive man-
ner—simplifying the navigation from
an overall-asset-production, platform-
level, and well-level view—and offers
tool tips showing various rates and the
actual and estimated pressures in differ-
ent elements of the field view.
Results
◗ With the implementation of this
work flow, all manual processes
related to data loading and model
update were automated. The time
used on these tasks was reduced
dramatically, from days to hours.
◗ After implementation of the work
flow, the routing configuration can
be monitored on a daily basis to
compare the resulting production
with the model. This way, different
what-if configurations can be
modeled and can be compared with
actual results to maximize field
production.
◗ The daily update of the models
and the comparison of modeled
rates with actual rates allowed
engineers to control the quality of
the models, increasing significantly
the reliability of the entire surface-
model system.
◗ Having different models and
prediction results at hand
allows surveillance engineers to
manage all events by exception
and by priority. This way,
problem wells and bottlenecks
are easily predicted, detected,
and managed. JPT
JPT • MARCH 2018
Implementing an Integrated Production
Surveillance and Optimization System

T he complete paper describes

some of the technical challenges
faced in deepwater operations and the
system, with emphasis on value-driven
work flows for producing assets. Experts
from several fields are required in order
for all IPSO work flows. Data are seam-
lessly federated from the real-time his-
torian, production databases, and other
methodology adopted for implementing to pull together a successful solution. sources for automatic calculations and
an integrated production surveillance The business justification of the IPSO visualization purposes. By not replicating
and optimization (IPSO) system to system is dependent on the production any source data, a single version of truth
mitigate the risks. The IPSO (deepwater- phase of the field, where different op- and reproducibility is ensured. Smart
digital-oilfield) system is designed to be timization opportunities exist. Across multiscale sampling algorithms are used
a combination of emerging information these diverse assets, there is an inherent to enhance speed and computational per-
and communications technologies, risk of customizing the architecture, ap- formance. A logical data model is used
intelligent algorithms, and fit-for- proach, and tools to such an extent that to provide a familiar environment for all
purpose asset-management work flows. scalability and extensibility are threat- end users across many assets.
ened. Such customized solutions slow
The IPSO System down the adoption of good features from Surveillance. The basic premise behind
The vision of the digital oil field is to one project to others. Therefore, a con- surveillance work flows is to support
foster an environment where work is scious attempt was made from inception asset personnel making key real-time
performed with fit-for-purpose tools to develop IPSO work flows with a com- decisions with relevant contextual infor-
and streamlined work flows to measure, mon denominator that could be config- mation. This involves the following:
model, and control the field by enabling ured for different business needs across ◗ Aggregating data from underlying
people to make the right decisions at a company’s portfolio. data sources (both real-time and
the right time. This is enabled through a The IPSO system was deployed on line historical)
seamless decision hierarchy (Fig. 1) that more than 2.5 years ago for a single asset ◗ Filtering data as appropriate to
achieves integrated asset management and was later extended to all deepwater balance accuracy with performance
across business processes, the hydro- assets. Over this period of time, a num- ◗ Validating data to ensure quality
carbon value chain, and temporal scales. ber of multidisciplinary work flows were ◗ Detecting key events (such as
This multiscale optimization is handled added on the basis of the foundational shut-ins, well restarts, and choke
by dividing the challenge into subprob- principles detailed in the complete paper. changes) and abnormalities
lems and passing down decisions from The following six key tenets were used ◗ Performing routine calculations
each level as targets for lower-level pro- as guiding principles in developing IPSO for analysis
cesses, while system outputs are consid- work flows: ◗ Visualization of results in
ered as feedback loops to correct actions. ◗ Business value customizable user interfaces
A fit-for-purpose digital-oilfield sys- ◗ Effective planning
tem, IPSO, was developed to optimize ◗ Stakeholder support Analysis. It is imperative to identify and
base production through real-time sur- ◗ Involvement of a champion rectify any productivity anomalies as
veillance and efficient reservoir man- ◗ Sustainability early as possible to reduce downtime
agement. The system automates routine ◗ Scalability and improve recovery. Recognizing in
tasks such as data capture, data manip- a timely manner that productivity has
ulation, preliminary analysis, visualiza- IPSO Work Flows declined is often important and can be
tion, and data storage. IPSO was pri- Data Integration and Visualization. challenging when the responsibility is
marily designed as a decision-support The common data tier is the foundation shared between multiple teams working
with different metrics.
Pressure-transient analysis of the shut-
This article, written by JPT Technology Editor Chris Carpenter, contains highlights
in period (pressure buildup) is limited to
of paper SPE 187222, “Creating Value by Implementing an Integrated Production a very small duration of the entire opera-
Surveillance and Optimization System—An Operator’s Perspective,” by Sathish tion. Deconvolution techniques increase
Sankaran, David Wright, and Huan Gamblin, Anadarko, and Dhilip Kumar, iLink the analysis duration under certain con-
Systems, prepared for the 2017 SPE Annual Technical Conference and Exhibition, San ditions but are still anchored to a build-
Antonio, Texas, USA, 8–11 October. The paper has not been peer reviewed. up period. Both of these methods require

For a limited time, the complete paper is free to SPE members at www.spe.org/jpt.

JPT • MARCH 2018 73

 Exploration
Appraisal Interpretations
Business Process
Reservoir
Characterization
Field
Development
Drilling and
Completion
Production
Years
Fig. 1—Integrated asset management (decision hierarchy).
human interpretation and are not condu-
cive to automation.
Recognizing that every flow period in
a well’s life cycle has embedded informa-
tion led to systematically assembling and
analyzing a variety of methods used to
compute well productivity. Every method
has its assumptions, strengths, and limi-
tations; therefore, looking at the results
as a whole often helped in early identifi-
cation of abnormal conditions and led to
expedited actions.
A typical well’s life cycle includes sta-
ble flow periods, shut-ins, restarts and
ramp-up sequences, and operating-point
changes; the liquid rate and bottomhole
pressure evolve during these periods.
The following phases are analyzed within
the IPSO system.
Shut-In Period. Every shut in (planned
or unplanned) is automatically detect-
ed with multiscale, unsupervised algo-
rithms. Once the start and end of the
shut-in period are identified, buildup
pressures at the end of 10 and 60 min-
utes are extracted as a proxy for true
average reservoir pressure to compute a
well-productivity index.
Ramp-Up/Restart Period. Following
each shut-in, the well is restarted and
ramped up to desired flow rates. While
slow ramp rates may result in undesired
74
Number of Wells
Well Spacing
Well Scheduling
Production and
Injection Targets
(Macroplanning)
Production and
Injection Targets
(Microplanning)
Months Days
Temporal Decision Scale
production deferment, fast ramp rates
could potentially cause formation dam-
age. An automated algorithm was devel-
oped to, first, detect the start and end
of the ramp period without any human
intervention. As a post-processing step,
maximum ramp rate and total ramp rate
were calculated for each ramp period.
Next, the ramp-rate calculation was com-
puted in real time and presented to the
operators as a dashboard while the wells
were being ramped, along with target
rates provided as operational guidelines
from the engineers.
Operating-Point Changes. During
routine operations, changes in choke set-
tings (wellhead or facility inlet) and sepa-
rator conditions are often made that lead
to changes from one stable operating con-
dition to another. This provides two points
on a stabilized inflow-performance-
relationship curve for the well.
Dynamic Flow Period. Deconvolution
can be applied to recast this varying-rate
period as a constant-rate period with its
associated pressure response. However,
in order for deconvolution to be valid, a
number of conditions need to be reached,
and validation of such analysis typical-
ly needs human expertise. Therefore, a
machine-learning-based method is ad-
opted to learn the reservoir model from
Reservoir
Value Chain
Wellbore
Gathering
Network
Facility
Export
Minutes
real-time pressure and flow-rate data. A
linear-regression model is proposed to
predict bottomhole pressure from flow
rate and time. By use of the “learned” res-
ervoir model, a virtual shut-in experiment
is then performed to predict bottomhole
pressure for a constant-production-rate
period followed by a 60-minute buildup.
Shut-in analysis is then used to calculate
the well-productivity index.
Reservoir Performance. With reser-
voir pressure calculated for each well
from the shut-in analysis described pre-
viously, continuous reservoir-voidage
calculations and pressure-monitoring di-
agnostics are generated automatically for
each reservoir unit.
Optimization. In some mature assets, the
declining reservoir pressure leads to com-
petition between wells to flow through
shared subsea infrastructure. Because
there is no excess pressure available to
choke back wells in such cases, this often
leads to production loss if the flow rates are
not balanced across all flowlines. Continu-
ous well-routing optimization is then re-
quired with the most-recent well-potential
data and the current available facility in-
frastructure. An integrated well and net-
work model configuration based on cur-
rent routing information is automatically
JPT • MARCH 2018
constructed, and optimal routing along with target rates for each
well is computed.

900
Value Creation
The following case studies illustrate examples in which pro­
active surveillance and reservoir management using IPSO have
added tangible business value.

Smart-Sleeve Malfunction. In a deepwater asset, the produc­

ers were completed with sliding sleeves to control zonal produc­
tion in a stacked reservoir with individual downhole­pressure

Million Tons
and ­temperature gauges for each zone. By detecting the depar­
ture between upstream and downstream pressures across the
sleeve by use of the IPSO system, the engineer was able to identify
a smart­sleeve malfunction quickly. The issue was resolved within
1 week, avoiding a costly workover to replace or repair the smart
sleeves and downtime caused by smart­sleeve closure. of Proppant
Reservoir Connectivity. During a greenfield startup, there
was significant uncertainty in reservoir connectivity because of
complex fault architecture. The flowback tests were inconclu­ For decades, we’ve been the
sive, and a reservoir­management plan was put in place to start proppant partner you can count on
up the wells in a strategic manner over a period of time to dis­
cern reservoir connectivity. The IPSO system was used to ana­ to meet your high volume needs.
lyze the Well B shut­in, while pressure interference from the off­ And with nearly 900 million tons
set well (Well A) was picked up automatically. This information of reserves, we’ll be here for
substantially changed future development and saved the cost of decades to come.
at least one infill well (approximately $120 million).

Productivity Decline. In another deepwater well, the shut­

in­analysis algorithm identified productivity decline by auto­
matically detecting shut­ins, calculating productivity indices,
and tracking them over time. This allowed a low­cost pump­in
treatment to be performed to remediate the ongoing produc­ Partner with the Proven Proppant Resource
tivity decline, thus avoiding costly rig­based acid stimulation at FMSA.com/JPT
and associated downtime.

Improved Uptime. One of the fields was started up with the

IPSO system for routine surveillance and reservoir manage­
ment and achieved approximately 97% uptime during the first
6 months of production. Among other factors, having an auto­
mated system to track performance and highlight issues before
they caused downtime was very beneficial.

Metering Check. Wells with subsea multiphase flowmeters are

automatically tracked against topside multiphase flowmeters.
Any deviations beyond a preset threshold raise an alarm for
the subsea engineer to look into the calibration of subsea
meters and thus avoid rate­allocation errors over extensive
periods of time.

Production Deferment. The machine­learning­based

well­productivity­index­calculation method captures well­
performance trends quite well compared with actual shut­ins.
This reduces the need for planned shut­ins to analyze buildups
and helps to avoid associated downtime. Such continuous sur­
veillance saves time for the engineer and changes the surveil­
lance method to management by exception. JPT

Proppant Solutions
JPT • MARCH 2018
 TECHNOLOGY FOCUS

Heavy Oil
Tayfun Babadagli, SPE, Professor, University of Alberta

Despite the recent downturn, a signifi- The focus will also be on cations along with optimization attempts
cant number of pilot- or demonstration- on the basis of data-driven modeling.
scale applications of existing technol- new technology attempts The focus will also be on new technology
ogies to develop new heavy-oil fields toward the reduction of the attempts toward the reduction of the cost
or new technologies to develop exist- of heavy-oil production, including lower-
ing fields have been reported over the cost of heavy-oil production, cost (solar panels) and in-situ steam gen-
past year. I have selected two of them including lower-cost and eration (SPE 184118), minimizing steam
(SPE  184974 and SPE 184154) in this
in-situ steam generation, needs by use of chemical additives and
issue. While they might be projects that solvents (solvent-aided thermal—steam
started a few years ago when oil prices minimizing steam needs or electromagnetic—processes), and
were at a peak level, they are interest- by use of chemical nonthermal applications (well stimula-
ing and still relevant because the projects tion by chemicals and solvents).
have continued and valuable results and additives and solvents, and I hope to read more papers in the com-
observations have been shared. nonthermal applications. ing years on the philosophical approach-
Reported cases of cost-effective appli- es to describing the problems and lim-
cations such as well stimulation using itations of existing solutions because
chemicals and solvents have also been nanoparticles (SPE 184117) and new- complex heavy-oil applications still need
prominent over the past few years. Well- generation chemicals to improve the effi- more effort on model development and
based applications such as stimulation or ciency of large-scale thermal and non- experimental data generation. I included
production optimization (SPE  184094) thermal (mainly chemical flooding) SPE 185633 in this issue as a good exam-
are quite useful to improve the productiv- applications are very promising. I also ple of this kind of attempt. JPT
ity in smaller fields. On the other hand, would like to mention high-tech imaging
efforts on cost reduction in large-scale applications to map the heat distribution
thermal projects were obvious. Yet, in in field-scale applications (SPE 184971). Recommended additional reading
laboratory-scale experimental inves- The areas listed seem to be the trend at OnePetro: www.onepetro.org.
tigations, observations on the use of of new research studies and field appli-
SPE 184118 In-Situ Steam Generation:
A New Technology Application for Heavy-
Tayfun Babadagli, SPE, is a professor in the Civil and Oil Production by Ayman R. Al-Nakhli,
Environmental Engineering Department, School of Mining and Saudi Aramco, et al.
Petroleum Engineering, University of Alberta, where he holds an SPE 184117 Experimental Study for
NSERC-Industrial Research Chair in Unconventional Oil Recovery. Enhancing Heavy-Oil Recovery by
His areas of interest include modeling fluid and heat flow in het- Nanofluid Followed by Steam Flooding
erogeneous and fractured reservoirs, reservoir characterization NFSF by Osamah Alomair, Kuwait University,
et al.
through stochastic and fractal methods, optimization of oil/
heavy-oil recovery by conventional/unconventional enhanced- SPE 184094 Fluidic-Diode Autonomous
oil-recovery methods, and carbon dioxide sequestration. Babadagli holds BS and MS Inflow-Control Device for Heavy-Oil
degrees from Istanbul Technical University and MS and PhD degrees from the Application by Georgina Corona,
Halliburton, et al.
University of Southern California, all in petroleum engineering. He was an executive
editor for SPE Reservoir Evaluation & Engineering during 2010–13 and is a member of SPE 184971 Satellite Monitoring of
the JPT Editorial Committee. Babadagli received SPE A Peer Apart status in 2013, was Cyclic Steam Stimulation Without Corner
elected an SPE Distinguished Member in 2013, and was an SPE Distinguished Lecturer Reflectors by Michael D. Henschel, MDA,
et al.
in 2013–14.

76 JPT • MARCH 2018

Chemical Stimulation at a Heavy-Oil Field:
Key Considerations, Work Flow, and Results

B ecause of current oil and gas

industry economics, evaluating
the return on investment for any
well-intervention campaign is crucial,
as is applying an assurance process
to help quantify desired production
improvement. This paper presents
the planning and execution of a
matrix-stimulation pilot project in
the heavy-oil Chichimene Field in
Colombia. The approach is based
primarily on a work flow that includes
Fig. 1—Typical FO device.
characterizing formation damage,
reviewing laboratory tests, validating
well selection, and determining model to quantify the effects of forma- ticles, or asphaltenes. Asphaltene depo-
economically viable placement and tion damage attributed to pressure drop sition is a more subtle form of deposi-
diversion techniques. in the reservoir. The following damage tion. It is not usually visible in the field,
mechanisms were observed. and extensive laboratory testing is nec-
Damage Mechanisms essary for its detection.
Heavy-oil reservoirs are prone to almost Drilling- and Workover-Induced Dam-
every formation-damage mechanism age. Water, solids, or both, when used in Inorganic Deposition. Common forms
known. Damage mechanisms encoun- drilling or during workovers, tend to de- of inorganic deposition include calcium
tered include fines migration, paraf- crease the effective permeability of the carbonate scale and gypsum scale. Less
fin and asphaltene deposition, various formation. Water from drilling fluids common, but more difficult to treat, are
forms of scale, and clay swelling. Many contains additives that produce chemi- iron-rich deposits and silica scale. Nu-
of these damage mechanisms are com- cal reactions with the formation, which merous methods exist for the removal
pounded by the methods used to pro- can generate precipitates that plug pore of inorganic scale, including simple me-
duce heavy oil, including slotted liners, throats. Solids from the drilling and chanical methods, such as jet washes
screens, and gravel packs, which can completion fluids also can physically and complex acid/solvent washes.
plug off as a result of any of the damage plug or bridge pore throats.
mechanisms and, over time, further re- Emulsions. Emulsions occur when two
duce inflow and well performance. Organic Deposition. Organic deposi- immiscible liquids are energized—
A process to identify and charac- tion usually occurs in two forms—par- in this case, oil and water. In gener-
terize formation damage in the Chi- affin and asphaltenes. Those hydrocar- al, emulsions can be treated using
chimene Field was established. For this bons classified as paraffins are generally various solvents.
purpose, several wells were selected to inert. They are resistant to dissolving in
analyze formation-damage distribu- acids, bases, and oxidizing agents. Addi- Wettability Alterations. Most drill-
tion. Reservoir-property data were up- tionally, paraffin deposits often include ing fluids contain a variety of chemi-
loaded into a simulator with a dynamic other materials, such as scale, sand par- cal additives, such as surfactants, to
help improve mud performance and
characteristics. In some cases, these
This article, written by Special Publications Editor Adam Wilson, contains
additives exhibit a high propensity for
highlights of paper SPE 184974, “Chemical-Stimulation Pilot at a Heavy-Oil Field:
physical adsorption on the walls of the
Key Considerations, Work Flow, and Results,” by Mauricio Gutierrez, Fernando pore throats. This adsorbed layer re-
Bonilla, Layonel Gil, and Wilmer Parra, Ecopetrol, and Pablo Campo, SPE, duces the effective pore throat, lead-
Alex Orozco, and Monica Garcia, Halliburton, prepared for the 2017 SPE Canada ing to undesirable phenomena such as
Heavy Oil Technical Conference, Calgary, 15–16 February. The paper has not been permeability reduction and wettabil-
peer reviewed. ity alterations.

For a limited time, the complete paper is free to SPE members at www.spe.org/jpt.

JPT • MARCH 2018 77


Fig. 2—Oil-production results for the first five pilot wells.
Stimulation-Treatment Design
Placement Method. Because of long
treatment intervals and large permeabil-
ity variations in this field, using coiled
tubing with a fluidic oscillator (FO) was
most effective in enhancing fluid place-
ment. The FO causes alternate bursts of
fluids within the wellbore. The resulting
pressure pulses propagate radially into
the formation, carrying the stimulation
fluid deeper into the reservoir.
Fig. 1 shows a typical FO. This tool does
not have moving parts and features a
metal-to-metal seal, which helps improve
reliability, function, and performance.
Treatment Fluids. With the help of a
simulator, grid analysis was performed
using a distance of 5 ft from the wellbore.
This distance was used to help moni-
tor the progress of the various dam-
age mechanisms and define the opti-
mal penetration radius necessary for
stimulation treatments. A stimulation
trend was created for a solvent and
acid treatment designed for 2- and 3-ft
penetrations, respectively.
Solvent Treatment. A low-interfacial-
tension (IFT) aromatic/aliphatic solvent
mixture was used, and a soaking peri-
od of 12 hours was allowed for dissolv-
ing asphaltenes and paraffins. Low-IFT
fluids also promote rapid cleanup of
dissolution products during flowback.
Formation mobility modifiers (FMMs)
were used during treatment. FMMs are
blends of solvents, wetting agents, and
nonemulsifiers selected and optimized
78
for specific formation types through
laboratory interfacial chemical testing.
FMMs work by allowing nanosized fluid
droplets to penetrate into the forma-
tion to help improve fluid recovery and
liquid-hydrocarbon production.
Organic-Acid Treatment. A mixture
of organic acids (acetic and formic) was
used as the main treatment to dissolve
carbonates placed into the formation by
mud invasion during drilling operations.
This treatment prevents clay decomposi-
tion associated with hydrochloric-acid-
based fluids.
Laboratory Testing
Compatibility Tests. Emulsion and de-
tergency tests were performed for every
well to verify that a stable emulsion was
not formed between the formation fluids
and proposed treatments.
IFT Measurements. A tensiometer was
used to measure IFT between the for-
mation fluids and stimulation treat-
ments used. FMMs were used in the
solvent treatment to generate lower
fluid-surface-tension properties.
Case Study
The first case study was performed in
Well CH-206. The main formation-
damage mechanism identified in this
well was associated with drilling-induced
damage attributed to calcium carbonate
used in the drilling mud. Organic depo-
sition was also identified as a formation-
damage mechanism.
Before chemical stimulation was per-
formed, circulation was conducted by
pumping approximately 1,200 bbl of hot
formation water through the annulus.
Coiled tubing was run into the well,
reaching a depth of 9,100 ft without en-
countering restrictions. Upon reaching
the bottom, potassium chloride (KCl)
brine (2%) was injected (not circulated)
at a rate between 0.5 and 1.0 bbl/min.
Then, the coiled tubing was positioned
at a depth of 8,958 ft and, with closed
returns, an injectivity test was per-
formed at flow rates of 0.5, 0.8, 1.0, and
1.2 bbl/min with surface pressures of 67,
546, 650, and 700 psi, respectively.
After the injectivity test, the well was
circulated with 55 bbl of formation water
to establish injectivity before the first
stage of the stimulation was performed.
With returns closed, the solvent treat-
ment was pumped and injected into
the formation.
After the necessary soaking time, an
organic-acid treatment was pumped in
three stages using foamed 2% KCl brine
as a diverting system. The acid was in-
jected at an average rate of 1.0 bbl/min,
and the diverting stages were inject-
ed at 0.7  bbl/min and 500 scf/min of
69%-quality nitrogen. A total of 28 bbl
of 2% KCl brine was used to displace the
coiled-tubing capacity.
Results
Oil-production results from the first five
pilot wells are presented in Fig. 2. Oil-
production increases were noted in all
cases. To date, more than 10 stimulation
treatments have been performed suc-
cessfully using this process.
Conclusions
◗ The synergy between the
stimulation design and a proper
placement method yielded
productivity increases in this heavy-
oil reservoir and improved the level
of sustainability under current field
production. To date, more than 10
wells have been treated in the same
manner with good results.
◗ The FO tool helped increase the
stimulation effectiveness by
allowing more-efficient placement
of stimulation fluids in near-
wellbore regions. JPT
JPT • MARCH 2018
 TM

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More sand per well
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 Cyclic Steam Stimulation Results in High
Water Retention for Kuwaiti Heavy-Oil Field

C yclic steam stimulation (CSS) is

one of the principal enhanced-
oil-recovery methods for heavy oil. CSS
was performed in some of the wells of a
heavy-oil field in Kuwait. Multiple cycles
were applied in these wells. However,
the total water produced in each cycle
was much less than expected. This
paper presents experiments that were
conducted to find possible reasons for
the high water retention.
Hysteresis in CSS
Hysteresis in drainage and imbibition
nonwetting-phase capillary pressure and
relative permeability curves is an estab-
lished phenomenon. Hysteresis of capil-
lary pressure and relative permeability
to water has a great effect on heavy-oil
recovery and producing water/oil ratios
(WORs) during cyclic steam stimulation.
Produced WOR calculated without con-
sidering hysteresis will be unrealisti-
cally high relative to that observed in
the fields.
Water Retention
During water injection, relative permea-
bility to water increases, and, during the
production phase, it decreases; however,
it does not follow the same path. Relative
permeability to water during the produc-
tion phase is always less than that dur-
ing the injection phase at the same water
saturation. Irreducible water saturation
during the production phase is more than
the initial water saturation before injec-
tion. The difference between these two
water saturations is water retention.
The same phenomenon occurs when
CSS is applied. As a result of hysteresis
This article, written by Special Publications Editor Adam Wilson, contains highlights
of paper SPE 184154, “High Water Retention in Cyclic-Steam-Stimulation Wells of
Kuwait Heavy-Oil Field,” by Anil Kumar Jain, Amal Al-Sane, and Fatma Ahmad,
Kuwait Oil Company, prepared for the 2016 SPE International Heavy Oil Conference
and Exhibition, Mangaf, Kuwait, 6–8 December. The paper has not been peer reviewed.
and temperature, irreducible water sat-
uration does not reach the initial water
saturation. When steam is injected into
a formation, the formation becomes in-
creasingly water-wet. In subsequent cy-
cles, steam injection reduces the oil satu-
ration and increases the water saturation
around the wellbore. Relative permea-
bility to oil at high water saturation is
also reduced. In later cycles, increasing-
ly more water is produced than oil, and,
therefore, the WOR increases. The pro-
duced water consists of both the con-
densed steam and the formation water.
After steam is injected, fresh water is
produced first, and slowly the salinity of
the produced water increases. Initially,
some of the condensed steam returns,
but, later, formation water is produced
with the condensed steam. If the well
produces for long enough, eventually
only formation water will be produced.
Field Under Consideration
The Kuwaiti field considered in this study
is spread over 1200 km2, consisting of a
large heavy-oil accumulation in a shal-
low reservoir. The formation depth varies
from 400 to 850 ft. The formation is di-
vided into four major sand units—Upper
A, Upper B, Lower A, and Lower B, from
top to bottom, where a marine cap shale
exists on top of the formation. A cement-
ed siltstone exists between the cap shale
and Upper A, and a silty cemented baffle
separates Upper A and Upper B. The ini-
tial understanding was that Upper A and
Upper B were separated by a regional
shale barrier, but studies with increased
certainty reveal that the so-called shale
barrier is mainly composed of cemented
sandy siltstone (with minor mudstone),
which is primarily a baffle unit with a
permeability between 15 and 350 md.
Lower A and Lower B are also separated
by a baffle. Another quite shaly baffle ex-
ists between the upper and lower sand
units in the northern part of the field and
may act as a barrier.
Performance of CSS Wells
The injection volume and production
times varied greatly from well to well and
from cycle to cycle. The steam-slug sizes
varied from 204 to 904 bbl/ft net pay in
the first cycle, from 291 to 881 bbl/ft net
pay in the second cycle, and from 229 to
242 bbl of cold-water-equivalent (CWE)
steam per foot of net pay in the third
cycle. The production period varied from
215 to 946 days in the first cycle, from
246 to 749 days in the second cycle, and
from 427 to 649 days in the third cycle.
Water retention varied from −246 to
68%, and produced WOR was between
0.08 and 0.42 for the entire period of
the first cycle. Because the production
phase was long, the water retention and
produced WOR for the first 200 days
of production were calculated consider-
ing that the production phase should be
approximately 200 days in each cycle.
Water retention varied from 27 to 74%,
and produced WOR was between 0.13
and 0.74 for the first 200 days of produc-
tion. The produced water contained con-
densed steam and some formation water.
Water retention is calculated by this rela-
tion: % Water Retention=(CWE Steam
Injected−Water Produced)×100/CWE
Steam Injected.
Laboratory Investigation
of Water Retention
Two steamflood experiments were con-
ducted to determine water retention.
Composite samples consisted of five 2-in.
plugs for the first experiment and six
plugs of the same size for the second

For a limited time, the complete paper is free to SPE members at www.spe.org/jpt.

80 JPT • MARCH 2018

 Temperature (°F)
0 100
300
350
400
450
500
Depth (ft)
550 Cap Shale
Upper-A
600 Baffle+NR
Upper-B
Mid Shale
650
700
750
800
Fig. 1—Temperature survey of Well 1.
experiment. The initial water saturation
was measured before the steamflood.
Then, 100%-quality steam was injected
at 400°F and a constant rate of 4 cm3/min.
This continued until a 99.9% water cut
was achieved. Following the steamflood
test, the composite sample was prepared
for drainage measurements. The tem-
perature was set at 150°F, and oil was in-
jected from the steamflood production
end to mimic the CSS process. Oil was in-
jected until a producing oil cut of 99.9%
was achieved. The final irreducible water
saturation then was determined. The
difference between the final irreducible
water saturation and initial irreducible
water saturation was calculated to find
the amount of water retained because of
hysteresis and temperature.
In these two experiments, water re-
tention was found to be 19 and 12%, re-
spectively. The experiments suggest that
water retention in the field should be
much lower than what was observed.
Discussion of Water Retention
in the Formation
Four cycles were applied in one well,
three cycles in another, two cycles in four
more wells, and one cycle in a final well.
Water retention varied between 27 and
68% in that first cycle, between -107
and 84% in the second cycle, and be-
tween -73 and -35% in the third cycle.
Likewise, the produced WOR varied be-
tween 0.13 and 0.38 in the first cycle, be-
tween 0.22 and 0.99 in the second cycle,
82
200 300 400
0
100
200
300
Depth (ft)
400
500
600
Cap Shale
700 Upper Baffle
Mid Shale
800
900
Fig. 2—Temperature survey of Well 6.
and between 0.36 and 0.44 in the third
cycle. In all but one well, the produced
WOR increased with each cycle in the
first 200 days of production. Water pro-
duced from these wells was much less
than expected. During the entire long pe-
riod of production in the first cycle, pro-
duced WOR was in the range of 0.08 to
0.42, which is quite low.
In the first cycle, the average water re-
tention was 55%. In the second cycle,
water retention was also too high and all
but one well did not produce water equal
to the injected volume. Overall, water re-
tention was high and produced WOR was
low in all cycles. In none of the cycles
did WOR even reach unity. The produc-
tion figures and salinity determined dur-
ing the production period suggest that
injected steam did not come back fully
even after three cycles. Two wells that
underwent two cycles performed better
comparatively in terms of water reten-
tion and produced more water than in-
jected volumes in both cycles. Both of
these wells are completed in Upper A
where there is a comparatively thin baffle
above the oil formation. Cap shale exists
above the baffle zone and does not allow
the steam to pass through. However, the
produced WOR was lower than expected.
It appears that the injected steam might
have gone into a thief zone that has not
yet been identified.
A temperature survey was conducted
in all of the wells. The temperature sur-
veys of Well 1 and Well 6 in the Upper B
Temperature (°F)
0 50 100 150 200
Upper-A
Upper-B
are shown in Figs. 1 and 2, respectively.
The figures show that the temperature
increased in the baffle zone just above
the sand formation. The same phenom-
enon also was observed in other wells. In
Well 1, the temperature of the baffle zone
was almost equal to that of the sand for-
mation into which the steam was inject-
ed. This increase in temperature could
not result from conduction only, mean-
ing that the injected steam entered the
baffle through convection and raised its
temperature. Therefore, the baffle acted
as a thief zone.
The permeability of the baffle zone
falls between 15 and 350 md, but the baf-
fle has high water-saturation values. The
baffle can impede the upward flow under
normal conditions but cannot stop the
flow completely. If formation pressure
or temperature increases, the baffle be-
comes more active. During CSS, a high
volume of steam was applied to the wells
at high pressure. At that pressure, the
baffle zone becomes more active.
With the knowledge that steam en-
tered the upper baffle, the challenge is
to discover why it did not return dur-
ing production. A minimum differential/
entry pressure is required for the steam
to enter the baffle. This minimum pres-
sure was achieved when the steam was
applied. During the production phase,
however, the reservoir pressure de-
creased, creating some drawdown but
not enough to produce the condensed
water back from the baffle. JPT
JPT • MARCH 2018
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 Doctrines vs. Realities
in Reservoir Engineering

T he appreciation of empirical
realities permits the improvement
of commercial depletion planning and
enables a greater number of projects.
The concepts articulated here are
applicable in almost all heavy-oil
reservoirs and may be applicable
also for lighter oils that possess oil
chemistry typical of heavier oils
(e.g., high acid content). This paper
reviews the evidence for and against
three doctrines in current use to
develop depletion plans: (1) optimal
recovery is obtained using a voidage-
replacement ratio (VRR) of unity, (2)
the Buckley-Leverett (BL) formulation
(phase slippage) applies uniformly to
heavier oils, and (3) viscous fingering
dominates unstable multiphase flows.
VRR=1
◗ Doctrine: Optimal Waterflood
Response Occurs With VRR=1
◗ Reality: Periods of VRR<1 Increase
Oil Recovery
Though initially viewed with some sus-
picion, waterflooding has demonstrated
multifold greater recovery than primary
depletion for many reservoirs. It is, by
far, the most important oil-recovery pro-
cess. One visualization of the process is
that of a leaky, deformable water piston
displacing a fraction of the oil to the pro-
duction wells. Maximum recovery oc-
curs when the voidage created by the
produced fluids (oil plus water) at reser-
voir conditions (pressure and tempera-
ture) is replaced fully by an equal volume
of the injected water also at reservoir
conditions (i.e., the waterflood VRR=1).
In this way, reservoir pressure is main-
This article, written by Special Publications Editor Adam Wilson, contains highlights of
paper SPE 185633, “Doctrines and Realities in Reservoir Engineering,” by Euthymios
Vittoratos, Petroprognostica, and Anthony Kovscek, SPE, Stanford University,
prepared for the 2017 SPE Western Regional Meeting, Bakersfield, California, USA,
23–27 April. The paper has not been peer reviewed.
tained. The waterflood initial produc-
tion is pure oil until water breakthrough.
Subsequently, water is produced along
with the oil, resulting in an increasing
water/oil ratio (WOR). This simple visu-
alization is intuitively attractive and has
dominated the thinking of the industry.
This “leaky, deformable piston” vi-
sualization is simplistic and neglects or
sidelines complex physical and chemical
properties of the reservoir. If the water-
flood is operated below the oil bub-
blepoint pressure through a continued
VRR<1, a gaseous phase forms, creating
three-phase-flow conditions and more-
complex displacement possibilities.
Furthermore, reservoir oils can have
widely different physical and chemical
properties, varying by many orders of
magnitude in viscosity and substantial-
ly in interfacial activity as described
by metrics such as the total acid num-
ber. Despite the full recognition of these
complications, over time, the now al-
most universal practice developed of op-
erating waterfloods with VRR=1.
Analytical and Numerical VRR Simu-
lations. VRR<1 activates many recov-
ery mechanisms. Some mechanisms
can be enumerated and examined, and
others may exist that are yet to be iden-
tified. What is the possible upside of
operating a waterflood with VRR<1?
Making a rough estimate is not too dif-
ficult if we  limit the number of mecha-
nisms. With VRR<1, two dominant re-
covery mechanisms exist, solution-gas
drive (VRR=0) and water displacement
(VRR=1). As a first approximation, at
an intermediary VRR<1, the two mech-
anisms may be additive: Oil Recovery
(at Optimal VRR)=Oil Recovery by Pure
Waterflood (VRR=1)+Pure Solution-
Gas Drive (VRR=0).
A percolation-theory connectivity
model—where connected volumes can
be either on the backbone or on the dan-
gling ends—suggests that this recov-
ery prediction should be substantially
correct. Solution-gas drive displaces oil
from the dangling ends to the backbone
that is swept by the waterflood. Though
unquestionably simplified, this model
has heuristic value.
To a surprising degree, this additive
model makes an accurate prediction of
the value of optimal VRR<1 for viscous
and heavy oils. It is in agreement with
laboratory VRR experiments and con-
sistent with empirical field observations
that indicate an optimal VRR≈0.7.
Slipping Vs. Embedding
◗ Doctrine: Phases Slip
Past Each Other
◗ Reality: Phases Embed
Within Each Other
The first doctrine deals with macro-
scopic balance of volumes injected into
and produced out of the reservoir. The
second proposition deals with the pore-
scale movement of the phases within the
reservoir. The dominant visualization is
that of a wetting phase, typically water,
that coats the rock, with the other non-
wetting phases, oil and gas, in the center
of pores slipping past the wetting phase
(Fig. 1a). In his classic 1938 paper, M.C.
Leverett quantified the relative slipping
of each phase by the multiphase exten-
sion of Darcy’s law including the relative
permeability curve of each phase. He
concluded that “the relative permeabili-
ty of an unconsolidated sand to oil/water
mixtures is substantially independent of
the viscosity of either liquid.” Despite
the limited laboratory data, this deduc-
tion became the fundamental building

For a limited time, the complete paper is free to SPE members at www.spe.org/jpt.

84 JPT • MARCH 2018

block of petroleum reservoir engineering. Extensive efforts Host

have been made to develop this visualization mathematical-

ly, to quantify it through laboratory testing, and to make pre-
dictions on the basis of it using numerical simulators. In par-
ticular, the BL mathematical formulation is incorporated as
the default—and typically the only available—reservoir-fluid-
flow model for use in commercial reservoir simulations. By the
1960s, computers permitted the BL formulation to be applied
to large-scale finite-difference simulations, and slippage flow
became a doctrine.

WOR≈1—The Rosetta Stone of (Heavy Oil) Reservoir En-

gineering. The most striking observation in waterflooding of
some viscous and heavy oils is that, after water breakthrough,
the WOR rises to near unity and then this ratio (WOR≈1) per-
sists for an extended period of time. The flattening is often
surprisingly abrupt. This observation is pervasive for heavy-
oil waterfloods.
Data strongly suggest that the WOR≈1 regime is a property
of the fluids (oil and water) and not of the specifics of the con-
tainer’s (i.e., reservoir’s) heterogeneity. Analytical and numer-
ical studies for stratified reservoirs have demonstrated WOR
plateaus, but their values range over orders of magnitude,
as would be expected from conventional simulations where
permeability ratios determine the WOR ratios. But this is not
what is observed empirically. Commercial production data for
individual wells, particularly from heavy-oil reservoirs, dis-
play a remarkable preponderance of a WOR≈1 regime early in
the well production life.

Fingering and Sweep

◗ Doctrine: Mobility Ratios Determine Fingering
and Sweep in Petroleum Reservoirs
◗ Reality: Slow Pressure Diffusion and Reservoir
Heterogeneity Determine Fingering and Sweep
Compared with light oils, viscous- and heavy-oil water-
floods are characterized by lesser oil-production rates and
lesser total recoveries. The greater oil viscosity of heavy-oil
reservoirs readily explains their lower production rates. The
reasons for the generally lower total recovery of heavy-oil
waterfloods are more complex. One common empirical ob-
servation is early communication between the water injectors
and the producers, resulting in early water breakthrough that
significantly reduces the sweep (conformance) of the injected
water. This early communication has been attributed to water
fingers that quickly connect the injectors to the producers.
The invoked mechanism for the fingering is the intrinsic in-
stability of the fluid/fluid interface when a less-viscous fluid
(water) pushes against a more-viscous fluid (heavy oil). The
ratio of the displaced fluid to the displacing fluid viscosity (M)
has become an important metric for characterizing and dis-
cussing the unstable-interface mechanism.
The laboratory visualizations of how M affects sweep were
dominated initially by the use of the Hele-Shaw cell—two
transparent rigid flat plates separated by a uniform spacer with www.adipec.com/bookastand
no-flow boundary conditions at the bounding edges, except at
Supported By
the injection and production locations. Experiments from the
1950s onward, using both miscible (hydrocarbon solvent) and
Host City Knowledge Partner Official Broadcast Official Media Technical Conference ADIPEC Organised By
Partner Partner Organiser

JPT • MARCH 2018

 (a) Slippage Flow (b) Emulsion Flow

Fig. 1—Two visualizations of multiphase flow. (a) Phases slipping past each other and (b) embedding within each other.
Blue is water, and green is oil. The white area with parallel lines is the matrix of the porous medium.

immiscible (water) displacing fluids, pro- cal simulations have been used to dem- the value of the insight is more concep-
vided the key observation: The sweep de- onstrate that, for sufficiently heteroge- tual than quantitative. At a minimum, the
clines with increasing M. neous reservoirs, the flow paths through simulations suggest that the convention-
Though attractive in its simplicity, the the formation, in fact, were independent al doctrine overestimates the role of M in
Hele-Shaw model is conceptually limit- of M, regardless of whether M was 1 or reducing reservoir sweep.
ing and can mislead. In fact, the Hele- 20. But, for relatively homogeneous res-
Shaw cell is not even a porous medium ervoirs, the sweep was very much de- Conclusion
because it lacks pores and constrictions. pendent on the value of M, in accordance This paper presented three reservoir-
For real reservoirs, with their inherent with the Hele-Shaw analog. The transi- engineering doctrines that developed
heterogeneity, is it really M that limits the tion between the two states depends on early in the evolution of petroleum-
reservoir conformance? Areal numeri- the nature of the heterogeneity, and so recovery technology and were quick-
ly adopted. These doctrines were intui-
tively appealing, simply articulated, and
The University of Oklahoma - Norman Campus initially useful. They were based, how-
Mewbourne College of Earth and Energy ever, on a very limited database drawn
from conventional reservoirs, and, over
Mewbourne School of Petroleum and Geological Engineering
time, their continued use began to limit
Director commercial oil recovery, particularly for
The Mewbourne School of Petroleum and Geological Engineering, a premier school rated among the
top 10 schools for this area of study in the United States, is seeking candidates to serve as Director. heavy-oil systems.
The school is housed in the Mewbourne College of Earth and Energy at the University of Oklahoma. Optimal voidage management is the
The college has enrollment of over 600 students, 6 undergraduate and 9 graduate majors with over
$8,000,000 in research expense per year. most leveraged technology for increas-
The successful candidate will have an excellent demonstrated research record with the ability to ing waterflood recovery from heavy-oil
conduct a vigorous personal program of research. The successful candidate will submit their vi- reservoirs. The current doctrine dictates
sion to continue to establish and lead a strong multidisciplinary research program in Petroleum and
Geological Engineering; will also show a demonstrated expertise in a range of petroleum and VRR=1, both instantaneously and cu-
geological engineering technologies with the potential to attract and inspire students to become national mulatively; this significantly underesti-
leaders in the petroleum engineering profession.
Applicants should be qualified to be appointed as a tenured Professor in the Mewbourne School of mates the possible recovery levels from
Petroleum and Geological Engineering with successful teaching experience at the graduate and/or un- heavy-oil reservoirs and thus limits their
dergraduate levels (academic) or the potential to become a successful teacher. Applicants must show
experience working and/or teaching in multicultural and multilingual settings. economic attractiveness. Similarly, the
Applicants must have the ability to work effectively with leaders in Oklahoma and in the international continued use of the theory of immis-
fossil fuel industry to articulate the importance of petroleum engineering and stimulate the transfer of cible continuous phase slippage, when
research results to practical applications.
Applicants should provide a cover letter (1); personal C.V. (1), their personal vision statement (1) and
emulsion flow would be more appropri-
names and contact information for at least three (3) references. In addition to name and address, the ate, overestimates the polymer concen-
contact information should include phone and e-mail information. tration required for heavy-oil polymer
To apply, visit https://apply.interfolio.com/46908 for more information.
floods. The limitations of mobility ratio
The Mewbourne College of Earth and Energy and the Mewbourne School of Petroleum and Geological Engineering as a doctrine are currently better under-
are committed to upholding the Universities policies on affirmative action and equal opportunity.
The University of Oklahoma, in compliance with all applicable federal and state laws and regulations does not stood than the limitations of the other
discriminate based on race, color, national origin, sex, sexual orientation, genetic information, gender identity, two doctrines. Nonetheless, M continues
gender expression, age, religion, disability, political beliefs, or status as a veteran in any of its policies, practices, or
procedures. This includes, but is not limited to: admissions, employment, financial aid, housing, services in to be used widely as a metric of the likely
educational programs or activities, or health care services that the University operates or provides.
reservoir sweep, again to the detriment
of reservoir recovery potential. JPT

86 JPT • MARCH 2018

TECHNOLOGY FOCUS

Seismic Applications
Mark S. Egan, SPE, Consulting Geophysicist

Many innovative advances in the seis- A way to reduce ger must wait for the start signal from
mic method have been introduced over the recording truck. In processing, the
recent years. In this discussion, I will the acquisition cost development of deblending algorithms
focus on the topic of sampling. A key is to rely instead enables the overlapping field records to
example is the azimuthal sampling in be separated. These advances dramat-
full-azimuth 3D surveys—surveys that on interpolation, ically increase the number of records
are needed, for instance, to character- but aliasing issues limit that can be acquired each day—espe-
ize fractures. Full-azimuth geometries
the spatial frequencies cially in desert regions. An innovation
typically call for an expensive explo- for improving this efficiency even further
sion in the amount of data needing to be that can be recovered. is to skip over some of the source and
acquired. A way to reduce the acquisition receiver positions in a carefully specified,
cost is to rely instead on interpolation, random-looking fashion adopted from
but aliasing issues limit the spatial fre- streamers. Placing receiver nodes on the science of compressive sampling.
quencies that can be recovered. the seabed is a very popular way around (By relying on sparsity in an appropriate
In the marine world, an innovation to this problem when corals are not pres- transform domain, data processing can
address this has been to collect crossline- ent. Otherwise, wave- and solar-powered reconstruct the seismic signal adequately
oriented, particle-acceleration measure- unmanned surface vehicles provide a from the reduced data set.)
ments in addition to the usual pressure new, tantalizing alternative innovation. Finally, yet another form of sam-
measurements (made by hydrophones). Each of these bathtub-sized crafts inde- pling of interest today is the time inter-
Particle acceleration is related directly pendently tows a hydrophone array. val between consecutive monitor sur-
to the spatial gradient of the pressure. In the onshore world, one of the big veys in 4D programs. Recent innovations
Knowing both the pressure and the pres- advances for addressing increased sam- enable frequent, lower-cost monitor
sure derivative extends the ability for pling requirements has been to go to surveys to see small, rapid changes in
successful interpolation. Another inno- 24-hour shooting with continuous deepwater reservoirs.
vation in use today is to abandon the tra- recording of simultaneously sweeping For more information, see the fea-
ditional inline/crossline field geometry vibrators. This has been enabled by inno- tured papers. JPT
by shooting in circular tracks instead. vations in both acquisition and process-
Regardless of whether straight lines or ing. In acquisition, the introduction of
circular tracks are used, platforms and vibrator command-and-control systems Recommended additional reading
other obstructions block access to towed means that the vibrator drivers no lon- at OnePetro: www.onepetro.org.
SPE 187203 Look-Ahead Geosteering By
Means of Real-Time Integration of Logging-
Mark S. Egan, SPE, is a consulting geophysicist. He worked for
While-Drilling Measurements With Surface
Schlumberger and its heritage companies from 1975 to 2016, at Seismic by F. Arata, Eni, et al.
which time he retired. Egan’s last position at Schlumberger was
as global chief area geophysicist in the Land Unconventionals SPE 184029 Seismic Airborne TEM Joint
Inversion and Surface Consistent Refraction
Group within the WesternGeco segment. His previous postings
Analysis: New Technologies for Complex
included chief geophysicist positions in North America, Saudi Near-Surface Corrections by Daniele
Arabia, Dubai, and London. Egan holds a PhD degree in Colombo, Saudi Aramco, et al.
geophysics, an MS degree in acoustics, and a BS degree in
physics and mathematics. He is a member of SPE, the Society of Exploration URTeC 2670158 The Use of Time-Lapse
Seismic Attributes for Characterizing
Geophysicists, the European Association of Geoscientists and Engineers, and various Hydraulic Fractures in a Tight Siltstone
local societies. Egan is a member of the JPT Editorial Committee and can be reached Reservoir by N. Riazi, University of Calgary,
at egan9@hotmail.com. et al.

JPT • MARCH 2018 87

 Acquisition With Autonomous Marine Vehicles:
Field Test

A field test was conducted with

autonomous marine vehicles
(AMVs) and 3D sensor arrays (3DSAs)
to record and compare seismic data
generated during an ocean-bottom-
cable (OBC) survey. The test was a field
verification to check that the AMV
platform and the sensor array can
deliver high-quality seismic data in a
form that can be successfully processed
and compared with ocean-bottom
fixed-receiver data. The feasibility
test conducted offshore Abu Dhabi
demonstrated the successful and safe
deployment, seismic-data acquisition,
and retrieval capabilities of the AMV
and 3D sensor array.

Introduction
AMVs are an alternative to convention-
al methods of acquiring marine seismic
Fig. 1—Two-part AMV that uses wave energy for propulsion.
data; they are designed with the aim of
increasing offshore safety and reduc-
ing risk while delivering a quality ser- alternative or supplement to acquiring sea on missions lasting up to 1 year. The
vice within lower-cost pricing models. seismic data in cases where adverse ex- AMV is a two-part system that consists
These unmanned vehicles have expand- isting factors may impede standard ac- of a surface float and a submerged glid-
ed the envelope of offshore operations quisition methods. er, connected by a high-speed commu-
and have been instrumental in increas- nication umbilical tether (Fig. 1). The
ing productivity and safety in marine AMVs vehicle’s propulsion system is passive
environments. Such vehicles, because The AMV used for the test offshore Abu and mechanical; it exploits the natural
of their low profile and flexibility in ma- Dhabi is a hybrid sea-surface and un- difference in wave motion between the
neuvering around obstructions, can be derwater vehicle that has been proved surface float and the submerged glid-
placed close to obstructions, reducing to enhance exploration and produc- er to convert energy from wave mo-
the risk typically involved in operations tion in marine environments by collect- tion into thrust. Articulating fins at-
of this nature. The vehicles have proved ing and delivering real-time measure- tached to the submerged glider convert
capable of carrying out a wide range of ments in areas formerly too costly or wave energy and generate thrust as they
vital ocean-monitoring functions for- too challenging for operation. The wave- pivot vertically. The vehicle produces
merly assigned to manned vessels over a powered sensor platform enables col- forward propulsion independently of
longer time period and provide a viable lection and delivery of data gathered at wave direction as its float moves up
and down with each wave and the sub-
merged glider tows the float forward.
This article, written by JPT Technology Editor Chris Carpenter, contains highlights of
The AMV is capable of holding station,
paper SPE 183869, “Acquisition With Autonomous Marine Vehicles: Wave Glider Field
or it can be programmed to travel di-
Test, Offshore Abu Dhabi,” by M.A. Benson and T. Lecoq, ADMA-OPCO; G. Mercado rectly from one location to another by
and S. Nakayama, formerly of ADMA-OPCO; N. Moldoveanu, P. Caprioli, and G. following a specific route defined by
Nyein, WesternGeco; and S. Pai and E. Yandon, Schlumberger, prepared for the 2017 multiple sets of geographic coordinates,
SPE Middle East Oil and Gas Show and Conference, Manama, Bahrain, 6–9 March. or waypoints. The solar energy system
The paper has not been peer reviewed. on the float recharges the batteries on-

For a limited time, the complete paper is free to SPE members at www.spe.org/jpt.

88 JPT • MARCH 2018

board the vehicle that power the navi-
gation system, payload electronics, and
auxiliary thruster. The vehicle can carry
a wide range of sensor payloads for
various applications, including seismic-
data recording.
The AMV is well-tested, with more
than 300 vehicles having performed
more than 4 years of client missions
from the Arctic to Australia. Since 2010,
these AMVs have traveled more than
1,000,000 nautical miles globally and
completed the trans-Pacific mission
from San Francisco, California, to Aus-
tralia that set the world distance re-
cord for autonomous ocean vehicles
(9,380 nautical miles). These AMVs
have completed more than 150 mis-
sions, collected millions of discrete data
points, and navigated through 17 hurri-
canes and three cyclones, continuously
transmitting data while clocking more
than 28,400 days at sea. To date, 33
missions have been conducted in the
oil-and-gas environment.
Remote navigation by means of a se-
cure web and satellite system allows
real-time control of, and communica-
tion with, the vehicle, and enables oper-
ation of the vehicle with reduced risk to
personnel and at a lower cost. A global-
positioning-system receiver on the float
determines the vehicle position and pro-
vides a precise time stamp for the data
recorded on the mission. The vehicle’s
flexible design makes it easy to inte-
grate a broad range of custom sensors
or plug-and-play payloads. Examples
of sensor payloads that can be config-
ured according to client specifications
include meteorological sensors; wave
sensors; acoustic modems to harvest
data from sensors mounted on subsea
structures or the seafloor; bathymetry
sensors; current sensors; fluorometry
systems to detect the presence of oil,
turbidity, and chlorophyll in the water;
magnetometers; and cameras to provide
real-time imaging.
For seismic applications, the vehi-
cle is equipped with a 3D sensor array
(3DSA) attached by a motion-isolating
tow cable. The 3DSA consists of 15 hy-
drophones (three in each of the five
arms) mounted on a frame approxi-
mately 1 m in size. A buoyancy engine
immediately below the top arm ensures
that this arm remains on the high side
JPT • MARCH 2018
and that the entire array is oriented and
does not rotate on its axis while mov-
ing through the water. The 3DSA con-
tinuously records seismic data as well
as array-orientation and -depth data.
Seismic data are naturally organized in
common receiver (3DSA) gathers, and,
typically, the sum of the 15 individu-
al hydrophone measurements per shot
point is processed.
Seismic-Acquisition-Feasibility
Test: Case Study
Three AMVs, each towing a 3DSA, were
deployed during the acquisition of an
OBC 3D survey in shallow water off-
shore Abu Dhabi. The test was conduct-
ed to assess the feasibility of seismic ac-
quisition with AMVs and a 3DSA. The
test included safe deployment and re-
trieval of the sensor array and evalua-
tion of its performance on the basis of
the vehicle’s ability to hold station. The
test also measured the system’s abil-
ity to maintain desired depth and de-
termine the accuracy of measurements
of pitch and orientation and compared
the quality of the acquired seismic data
with the pressure data recorded in the
OBC survey. The acquisition design of
the OBC survey incorporated Managed
Source and Spread (MSS), a technology
designed to maximize acquisition pro-
duction rates while managing interfer-
ence noise from adjacent shots. MSS
involves two sources firing nearly si-
multaneously but managed with a time-
and distance-separated window so that
the data have minimal seismic interfer-
ence noise contamination within the
objective zone of interest. Additionally,
the survey was acquired with a small
(2,740-in.2) source array volume towed
at a depth of 5 m in order to minimize
reverberation caused by shallow-water
bathymetry and the hard seafloor.
The water depths across the acquired
survey area and in the test vicinity av-
eraged approximately 20 m. Because
of the shallow water depths, towed-
streamer acquisition is seldom used off-
shore Abu Dhabi, limiting the marine
seismic-acquisition methods to either
OBCs or ocean-bottom nodes (OBNs).
The AMV and 3DSA are, therefore, ide-
ally suited to operate and record seismic
data in this environment and to poten-
tially provide a viable alternative for off-
bottom recording or as a method to sup-
plement OBC or OBN data acquisition.
Seismic-Data Processing
and Results
Three vehicles were deployed and col-
located near an OBC receiver cable and
recorded the data from two near-pass
source lines. The OBC receiver nearest
the offset to the source line was 0.9 km,
while the vehicle nearest the offset to
the source line was 1.35 km. A basic pro-
cessing sequence, comprising a debias
low-cut filter, swell noise attenuation by
means of singular-value decomposition
to suppress low-frequency swell noise
from 2 to 4 Hz, and nonuniform coher-
ent noise suppression to target Scholte
wave energy, was applied to the 3DSA re-
corded data. The compressional-P com-
ponent OBC recorded data were treat-
ed similarly; however, the Scholte wave
energy was simply muted by use of an
outer trace mute application. The re-
ceiver gather and stack results were then
compared. Data analysis and frequency-
band splits indicated that the spectral
content of the data recorded by the 3DSA
was comparable with the data recorded
in the OBC hydrophone. Similar noise
content was observed on the 3DSA data,
in which the guided wave energy from
the previous simultaneous source was
recorded and visible at higher offsets,
while the late arrivals originating from
the second distance-separated source
vessel are observable below 5.0 seconds.
In addition, visible Scholte wave en-
ergy was recorded in the 3DSA data, pos-
sibly attributable to the very thin water
column of 20 m in the 3DSA vicinity com-
bined with the sensor-array tow depth
of 10 m. The recorded Scholte wave en-
ergy, predominantly in the 4- to 12-Hz
pass band, is observed to be diminished
at higher offsets for the 3DSA data, which
was attributed to the OBC hydrophone
being situated on the seafloor while the
3DSA was located off the bottom. Data-
processing tests exploit the spatial distri-
bution of the hydrophones in the 3DSA
that enables estimating the spatial gradi-
ents (by use of finite difference) of the re-
corded pressure field. Both pressure and
gradient data can be used in processing
(e.g., receiver-side deghosting and deter-
mination of the propagation direction of
the wavefield). JPT
89
 Advances in 4D Seismic and
Geophysical Monitoring of Deepwater Fields

I ntegrated surveillance is critical for

understanding reservoir dynamics
and improving field management. A key
component of the surveillance is areal
monitoring of subsurface changes by use
of time-lapse geophysical surveys such as
4D seismic. The complete paper reviews
the advances in these technologies with
recent examples from the Gulf of Mexico
(GOM) and deepwater Brazil.
Data-Quality Improvement
4D seismic has played a pivotal role in
monitoring offshore fields for some time.
However, until recently, its application
in the GOM had been limited, largely
because the effects of the Loop Current
and infrastructures make it difficult to
repeat the feathering of streamers used
in conventional 4D-seismic acquisition.
The key for 4D success is to repeat every-
thing in baseline and monitor surveys to
make sure the time-lapse difference ob-
served in the data reflects real subsur-
face changes rather than differences in
data-acquisition conditions or process-
ing work flows. To solve the challenge
of streamer-positioning repeatability,
an operator used ocean-bottom nodes
(OBNs) to achieve highly repeated surveys
at the Mars Field, and excellent 4D re-
sults were obtained. Since then, 4D seis-
mic has been deployed successfully at
the portfolio scale in the GOM and that
operator’s 4D surveillance strategy has
been changed from streamer seismic to
ocean-bottom seismic (OBS), which in-
cludes OBNs and ocean-bottom cables.
In addition to source and receiver po-
sitions, other conditions in data acqui-
This article, written by JPT Technology Editor Chris Carpenter, contains highlights of
paper OTC 27828, “Advances in 4D Seismic and Geophysical Monitoring of Deepwater
Fields,” by Kanglin Wang, Paul Hatchell, David Chalenski, and Jorge Lopez,
Shell, prepared for the 2017 Offshore Technology Conference, Houston, 1–4 May. The
paper has not been peer reviewed. Copyright 2017 Offshore Technology Conference.
Reproduced by permission.
sition can play important roles in 4D re-
peatability—for example, the variation
of water properties during a seismic sur-
vey and between different surveys in-
cluding water depth (tides) and seismic
velocity in water. Such variations have
been a well-known issue that limits the
repeatability of 4D seismic, in particular
for OBS data where multiple migration is
often used. Seismic travel-time analysis
is traditionally used to estimate errors
and make corrections, but the process is
often complicated by coupled factors in-
cluding tides, water velocities, position-
ing errors, and the clock drift of OBNs,
which collectively make it difficult to
achieve precise water static corrections.
To address this challenge, a seafloor de-
vice called the Pressure Inverted Echo
Sounder (PIES) was developed for direct
measurement and continuous monitor-
ing of water-column properties during
marine seismic surveys. A PIES is de-
ployed at the seafloor and monitors two-
way water time by transmitting an acous-
tic signal and measuring the time it takes
to be reflected back from the surface.
Such information has been used to make
travel-time corrections of seismic data
for enhanced data repeatability in the op-
erator’s 4D processing projects.
The 4D-seismic technologies and strat-
egies developed in the GOM were soon de-
ployed in the operator’s deepwater fields
globally. The high-quality data allowed
monitoring of subsurface changes and in-
fluencing of fundamental decisions in res-
ervoir management at an early stage of
field life. The information was used to up-
date reservoir models and improve histo-
ry matching and had an immediate busi-
ness impact on reservoir management
(e.g., optimal adjustment of well rates).
4D-data-quality improvement and
clear 4D snapshots of reservoirs can
greatly reduce subsurface uncertainties,
simplify data interpretation and integra-
tion, and provide confidence to make ex-
pensive decisions such as drilling infill
wells in deep water.
Frequent Low-Cost Monitoring
High-quality 4D data not only offer more-
detailed reservoir monitoring but also
allow observation of subsurface changes
in a relatively short period of time. This
ability opens up new opportunities for
frequent seismic monitoring to under-
stand the dynamic behavior of the field
better and minimize delays in important
operational decisions. To realize this in
practice, the cost implication of frequent
monitoring needs to be addressed.
The scalability of OBN acquisition en-
ables flexible survey configurations and
target-oriented seismic monitoring. On
the basis of this unique feature, the au-
thors proposed instantaneous 4D seis-
mic (i4D), a concept designed to monitor
specific targets by use of a small patch of
shots and receiver nodes with reduced
vessel time and cost. A typical target
would be water-injection wells in which
rapid time-lapse effects could occur. This
technology was first deployed in 2012,
when a campaign of i4D surveys was con-
ducted covering all active injectors in the
operator’s deepwater GOM portfolio. Ef-
ficient survey planning and execution re-
sulted in highly repeated data. Subsur-
face changes induced by production and
injection activities in the target areas
were captured clearly, including the first
high-quality subsalt 4D signal, which was
obtained with only 120 nodes.
For sources, one way to reduce cost
is to use small marine sources that have
the potential to enable low-cost or au-

The complete paper is available for purchase at OnePetro: www.onepetro.org.

90 JPT • MARCH 2018

tonomous vessels to be used in seismic
surveys. The applicable base for this
technology includes fields with relative-
ly shallow reservoirs and uncomplicat-
ed overburdens—in particular, those in
which permanent receivers are installed
and the cost for 4D monitoring is pri-
marily driven by the source effort. This
small-source concept was tested at a site
where a 2,450-in.2 source array had been
used routinely for production 4D sur-
veys. To test the small-source scheme,
a single air-gun cluster of 360 in.3 was
fired in the middle of the source array
(between firing large sources) and, simul-
taneously, a separate small-source data
set was acquired in both the 2015 survey
and the 2016 survey. The 4D result using
the small source was compared with that
using the large source. As expected, use
of the small source increased the noise
level in 4D data. Nevertheless, the noise is
largely random, with no effect on the in-
terpretation conclusions, and is consid-
ered acceptable for a low-cost solution.
For receivers, a series of low-cost tech-
nologies for different surveillance ob-
jectives was developed. To combine
the advantage of OBN and cable-based
permanent-reservoir-monitoring sys-
tems, semipermanent OBNs were devel-
oped in a joint effort with a major node
vendor. Instead of being deployed and re-
covered in each survey, the nodes are de-
ployed and recovered only once with mul-
tiple surveys acquired in between, so that
the expensive remotely-operated-vehicle
operations are reduced and the total cost
is expected to be lower than that of tra-
ditional OBN surveys. After each survey,
the seismic data are retrieved remotely
with a high-speed optical communica-
tion system, and the nodes are switched
to sleeping mode until the next survey. In
2016, the prototype units of this system
were tested successfully in multiple deep-
water fields in the GOM.
Seismic data can also be recorded from
sensors in wellbores as vertical seismic
profiles (VSPs), either with geophones or
with distributed acoustic sensing (DAS)
with a fiber-optic cable. In comparison
with the traditional VSP approach, the
DAS-VSP approach is particularly appeal-
ing for low-cost frequent monitoring sur-
veys for several reasons:
◗ It does not require well intervention
or rig time.
JPT • MARCH 2018
5,110 in.3 850 in.3
(a) (b)
Fig. 1—Seismic image of DAS VSP using a 5,110-in.3 full-volume production
survey source (a) and those using various small sources (b through d). The
shot box had 34 shotlines with 180 shots/line, and shots are spaced at 50 m
both inline and crossline.
◗ Fiber-optic cables permanently
installed in wells are used as seismic
receivers with high positioning
repeatability.
◗ The VSP illumination area can be
extended by simultaneous DAS
recording in multiple wells.
The concept of 4D DAS-VSP for 3D
imaging of deepwater fields was proved
by the authors in a survey in the GOM.
As part of the field trial, the feasibility
of 4D DAS-VSP using small sources was
tested and encouraging results were ob-
tained for this low-cost concept. Fig.  1
presents a comparison of 3D DAS-VSP
images acquired with different combi-
nations of active elements in the source
array, each using a shot box of 9×1.7 km.
The depth of penetration (greater than
20,000 ft) and areal coverage are very
similar across all source sizes: 5,110,
850, 500, and 250 in.3. Repeated data
were acquired with 5,110- and 500-in.3
sources to quantify the 4D noise level,
which showed that the average normal-
ized root-mean-square (NRMS) value for
the 500-in.3 source down to 15,000 ft
is approximately 10%, compared with
an NRMS value of approximately 8.5%
for the 5,110-in.3 full-volume-production
survey source. Considering that the test
was performed using a relatively small
shot box, further noise reduction of
small-source 4D DAS-VSP is possible with
increased shot coverage.
Integrated Solutions
4D seismic can be used together with
an integrated suite of surveillance tools
that includes other low-cost and fit-for-
purpose technologies. The relatively ex-
pensive seismic surveys are not necessar-
ily acquired at a predetermined schedule
but preferably on an as-needed or on-
demand basis. A new monitoring survey
500 in.3 250 in.3
(c) (d)
can be triggered by some other surveil-
lance tool that provides continuous mon-
itoring at a relatively low cost.
Satellite-based remote sensing tech-
nologies have been used successfully in
high-precision monitoring of surface de-
formation and subsidence over produc-
ing oil and gas fields on land, but they are
not an option for deepwater fields. Since
2007, new geodesy measurement tech-
nologies have been tested and deployed
for long-term seafloor-deformation
monitoring. Vertical displacement of
the seafloor can be monitored by pre-
cise pressure measurement by use of
pressure-monitoring transponders
(PMTs) deployed on the seafloor, and
more-detailed monitoring involving hor-
izontal displacement can be realized with
both pressure measurement and acoustic
ranging by use of a network of autono-
mous monitoring transponders (AMTs).
In an integrated surveillance program,
not only the reservoir but also the seabed
and overburden are monitored to ensure
efficient and safe operation of offshore
fields, especially those with considerable
shallow geological processes or geome-
chanical changes. To further fill the gap
between 4D seismic and PMTs and AMTs
for comprehensive field surveillance,
sparse OBNs were deployed recently for
a 200-day passive recording over an area
of interest based on information from
4D seismic and PMTs. Another technol-
ogy tested recently is high-resolution
4D seismic using short streamer cables
(with very closely spaced seismic receiv-
ers) and a small source. In addition to
seafloor and shallow-subsurface surveil-
lance, this technology can also offer a so-
lution for frequent low-cost monitoring
of reservoirs that are shallow relative to
the seabed and do not have significant
imaging challenges. JPT
91
 Unconventional-Reservoir Characterization
With Azimuthal Seismic Diffraction Imaging

T he complete paper proposes an

azimuthal plane-wave-destruction
(AzPWD) seismic-diffraction-imaging
work flow to efficiently emphasize
small-scale features associated with
subsurface discontinuities such as
faults, channel edges, and fracture
swarms and to determine their
orientation by properly accounting
for edge-diffraction phenomena. The
work flow is applied to characterize an
unconventional tight-gas-sand reservoir
in the Cooper Basin in Western
Australia. Extracted orientations of
edges provide valuable additional
information, which can be used by the
interpreter to locate finer-scale features
and distinguish them from noise.
Introduction
Unconventional reservoirs may exhib-
it high structural variability, which is
difficult to characterize with a discrete
wells network. 3D reflection seismolo-
gy allows the extraction of additional
information about the subsurface with
significantly denser spatial sampling in-
tervals. However, conventional images
of the subsurface have low spatial reso-
lution and are dominated by continuous
and smooth reflections, which carry the
information associated with only large-
scale heterogeneities.
Diffraction images are more capable
than conventional reflection images in
emphasizing small-scale features asso-
ciated with subsurface discontinuities.
Many studies employ diffraction images
as a source of additional information for
interpretation. Past work has proposed an
This article, written by JPT Technology Editor Chris Carpenter, contains highlights of
paper URTeC 2695232, “Unconventional-Reservoir Characterization With Azimuthal
Seismic Diffraction Imaging,” by Dmitrii Merzlikin, Sergey Fomel, Xinming Wu,
and Mason Phillips, The University of Texas at Austin, prepared for the 2017
Unconventional Resources Technology Conference, Austin, Texas, USA, 24–26 July.
The paper has not been peer reviewed.
AzPWD work flow, which extends a plane-
wave destruction diffraction imaging
framework to account for edge-diffraction
orientation and allows efficient extraction
of these orientations on the basis of scan-
ning of different azimuths.
Two modifications to the previous-
ly proposed AzPWD work flow are con-
sidered in this paper. Edge-diffraction-
orientation determination is performed
through a structure-tensor estimation
based on PWD. A PWD-based structure
tensor allows determination of edge-
diffraction orientation from two vol-
umes corresponding with PWDs ap-
plied in inline and crossline directions.
Thus, no scanning over the PWD azimuth
is required.
Because reflection/diffraction separa-
tion is performed on the basis of the PWD
filter in the data domain, the approach
pertains to a diffraction imaging frame-
work. The structure-tensor estimation
approach has been applied previously
in the image space on the basis of image
gradients, the highest contribution to
which is connected with strong and co-
herent reflection events masking diffrac-
tions. The second improvement present-
ed by the AzPWD work flow is based on
additional smoothing along the edge ori-
entation, which makes the diffraction/
reflection-separation operator equiva-
lent to the structure-oriented Sobel filter.
The AzPWD work flow is applied to an
unconventional tight-gas-sand reservoir
in the Cooper Basin in Western Austra-
lia. The complete paper focuses on the
application of this work flow, which takes
into account edge-diffraction phenom-
ena and allows determination of edge-
diffraction-orientation azimuth. Produced
edge-diffraction orientations are consis-
tent with the lateral distribution of major
faults and channels. Moreover, several
zones of “subtle” diffractivity are identi-
fied that are associated with distinct edge-
diffraction-orientation values consistent
with orientations of major discontinuities.
Method
Diffraction-imaging work flows based
on PWD filters can be robust and effi-
cient. For 3D data, PWD can be applied
in either inline or crossline directions.
Edge diffractors, which are associat-
ed with channel edges, faults, and the
like, have lateral symmetry that aligns
with the edge. Unless reflection elimi-
nation by PWD is perpendicular to the
edge diffraction, the features may not be
highlighted optimally.
Fig. 1 shows a schematic of edge dif-
fractions corresponding to a channel
edge. The bottom of Fig. 1 illustrates
a paleochannel in the subsurface and a
scheme of seismic acquisition with zero
offset (sources and receivers combined).
Some of the diffraction ray paths are
shown. Edge diffraction acts as a reflec-
tion along the edge and corresponds to
diffraction hyperbolas in the planes per-
pendicular to the edge. The correspond-
ing travel-time surface is shown in the
upper part of the figure. When PWD is ap-
plied parallel to the edge, the diffraction
surface will be eliminated because of its
reflection-like behavior in the corre-
sponding plane. Diffractions are high-
lighted optimally when PWD is applied
perpendicular to the edge. For interme-
diate PWD directions, intermediate edge-
diffraction preservation will take place.
In general, edge-diffraction orientation
does not align with inline and crossline
directions and, therefore, reflection
elimination by inline or crossline PWD
may not be optimal.

For a limited time, the complete paper is free to SPE members at www.spe.org/jpt.

92 JPT • MARCH 2018

 Crossline Parallel Intermediate
Inline Perpendicular
Time
Crossline
Inline
Fig. 1—Edge-diffraction schematic. Bottom: seismic
acquisition over the channel; dashed lines: edge-diffraction
ray paths; triangles: sources and receivers combined;
top: corresponding edge-diffraction travel-time surface
(“Parallel,” “Perpendicular,” and “Intermediate” denote
PWD directions in relation to edge-diffraction orientation).
The AzPWD approach uses the linearity of PWD and migra-
tion procedures and allows for efficient image estimation for
arbitrary azimuthal direction. Because edge diffractions are
suppressed when PWD is applied along the edge and are op-
timally highlighted when PWD is applied perpendicular to
the edge, optimal PWD azimuth and, at the same time, edge-
diffraction orientation can be determined by analyzing edge-
diffraction amplitude variation under different PWD directions
Resources Conference
and picking the azimuths producing the highest absolute am-
plitude values for a given sample. Note that this picking can be
performed for each time slice independently, which allows for
target-oriented imaging and for computational cost savings.
The picking procedure corresponds to the problem of
structure-orientation determination in structure-oriented
smoothing work flows. Structure-tensor estimation allows
avoidance of significant computation cost associated with scan-
ning over structure orientations. Structure tensor corresponds
to the smoothed outer product of the seismic amplitude gradi-
ent estimated in the image domain and allows for orientation
estimation for smoothed structures. For each location of the
image, structure tensor exists and the corresponding orienta-
tion of coherent structures can be determined by its eigen de-
composition. The largest eigenvalue in this case corresponds to
the eigenvector with orientation perpendicular to the structures.
The authors propose use of PWD filters to perform
structure-tensor estimation. To make this consistent with dif-
fraction imaging philosophy, the authors start from PWD appli-
cation on the stacked and not-migrated data, migrate the corre-
sponding inline and crossline PWD volumes, and combine them
in a tensor by use of a framework.
The paper proposes implementing smoothing in the image
domain along the slopes determined in the image domain and
with edge preservation. Smoothed structure tensors allow
JPT • MARCH 2018
PETROLEUM ENGINEERING FACULTY POSITION
The Department of Petroleum Engineering & Geology at Marietta College, located
in Marietta, Ohio, is seeking qualified applicants for a full-time, non-tenure track
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and a Bachelor of Science Degree in Geology, as well as undergraduate minors in
energy systems, geology, and petroleum engineering. The department also contrib-
utes courses to the college’s Land & Energy Management program housed in the
Department of Business & Economics. While professional development and schol-
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including classroom instruction, student advising, and student mentoring. Faculty
members are expected to remain professionally active both within the department
and through engagement with the broader profession.
REQUIREMENTS:
Successful applicants will have industry experience in natural gas engineering with a
focus on unconventional reservoirs, and they will possess strong written and verbal
communication skills. Required credentials include industry experience and either
of the following:
• An earned doctorate in petroleum engineering or a closely related engineering
or science discipline; OR
• An earned master’s degree and a professional license.
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Interested applicants should submit a cover letter addressing their industry
experience and interest in undergraduate education, a resume or CV, and contact
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93
 orientation determination for smooth
and robust structures.
The work flow can be summarized as
follows:
1. Perform PWD in the inline and
crossline directions.
2. Migrate volumes acquired in
Step 1 using the chosen migration
algorithm.
3. Estimate structure-tensor
components.
4. Perform structure-oriented and
edge-preserving smoothing of
structure-tensor components.
5. Perform eigendecomposition of the
structure tensor and determine the
azimuth normal to the edges.
6. Use extracted azimuths to orient
PWD filter-application direction
perpendicular to the edge.
In the conventional structure-tensor ap-
proach, gradients are computed over a full-
waveform image, where specular energy
masks weaker diffractions associated with
scattering of seismic energy on subsurface
discontinuities. Diffraction imaging, in its
turn, aims to boost small-scale subsurface
heterogeneities. Structure-tensor estima-
tion based on preimaging PWD volumes
allows retention of information associated
with diffractions. On the other hand, the
previously mentioned PWD tensor esti-
mation allows avoidance of costly scan-
ning for structure orientation.
To take full advantage of edge-
diffraction phenomena, its reflected com-
ponent can be emphasized by smoothing
along the edge in the direction perpen-
dicular to the optimal PWD direction.
Unconventional
Tight-Gas-Sand Reservoir
The authors have applied the AzPWD
work flow to a land data set from the
Cooper Basin acquired to characterize an
unconventional tight-gas-sand reservoir.
The target horizon corresponds to the
interface between tight gas sand and coal
and appears approximately at 1.72 sec-
onds of two-way time. Here, the focus is
on the result acquired with the proposed
AzPWD diffraction-imaging work flow.
Diffraction-based velocity analysis is
performed, and volumes correspond-
ing to inline and crossline PWD volumes
are migrated with the estimated veloc-
ity distribution. The volume describing
image transformation under perturba-
tion of PWD azimuth can be generated
by using the linearity of the PWD filter
and migration.
Noticeable trends corresponding to
high absolute amplitude values indicate
that PWD has been applied in the direc-
tion perpendicular to the edge. By pick-
ing these trends, optimal PWD azimuth
distribution can be generated. Optimal
PWD application direction directly cor-
responds to edge-diffraction orientation
and is locally perpendicular to the edge.
Structure-tensor estimation is pro-
posed as an alternative to picking for
PWD filter-orientation determination.
Structure tensors are formed for each
image coordinate: One starts with in-
line and crossline PWD stacks, migrates
them using the velocity distribution ac-
quired by diffraction-based migration
velocity analysis, combines them, and
smooths matrix components along
the structures.
Slicing through the volume with opti-
mal PWD azimuth values results in the
diffractivity distribution. It should be
mentioned that generation of an image
set corresponding to a range of PWD
azimuths is not necessary: PWD-based
structure tensor allows extraction of ori-
entation of edge diffractions on the basis
of inline and crossline PWD volumes
only. Structures perpendicular to each
other in orientation appear to be empha-
sized on the same image simultaneously.
To improve the signal/noise ratio of the
diffractivity image, instead of orient-
ing the PWD filter one can use extracted
azimuths to orient the Sobel filter. The
Sobel filter includes smoothing along the
edge and, therefore, emphasizes edge
diffractions, which exhibit preferential
orientation, and it suppresses noise.
Finally, by use of edge-diffraction ori-
entation to orient the PWD filter at each
location, a diffraction image can be gen-
erated. In comparison with a convention-
al image, subsurface discontinuities are
significantly emphasized in the diffrac-
tion image. JPT

PEOPLE

CLAY WILLIAMS, SPE, chairman, presi-

dent, and CEO of National Oilwell Varco, In Memoriam
was appointed a member of the Energy Ad- This section lists with regret SPE members who recently
visory Board at the University of Houston. passed away. If you would like to report the passing of a
Formed in 2010, the Energy Advisory family member who was an SPE member, please write to
Board is a volunteer board that lends stra- service@spe.org.
tegic guidance, external coordination, and
Theo B. Bean, Lafayette, Louisiana, USA
resource development for UH Energy, which is an umbrella for
Stanley L. Cunningham, Oklahoma City, Oklahoma, USA
efforts across the university system to position it as a strategic
Frederic Garnaud, Pau Cedex, France
partner to the energy industry. Members participate in com-
Jeremy J. Gilbert, Cork, Ireland
mittees to develop and to execute actionable plans in the areas
Jon S. Gudmundsson, Trondheim, Norway
of energy education, innovative research, and technology in-
Michael R. Hogan, Lakewood, New York, USA
cubation. Others concurrently appointed to the board are
Arthur H. Johnson, Kenner, Louisiana, USA
LYNN BOURDON, chairman, president, and CEO of American
Ralph Mayes, Maurice, Louisiana, USA
Midstream Partners; TANNER MORAN, managing director of
Richard A. Porter, Spring, Texas, USA
Hastings Equity Partners; and CARRI LOCKHART, senior vice
John R. Tower, Dallas, Texas, USA
president for US Offshore at Statoil.

94 JPT • MARCH 2018

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JPT • MARCH 2018 95

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