revista e&p - febrero 2011

8/10/2019 Revista E&P - Febrero 2011

1/105

E P M A G . C O

A H A R T E N E R G Y P U B L I C A T I O N

Drill Bit Technology

Downhole Systems& Solutions

ReservoirCharacterization

RegionalReport:

Arctic

Drill Bit Technology

Downhole Systems& Solutions

ReservoirCharacterization

RegionalReport:

Arctic

DrillingadvancesExpandable reamers seta new industry standard

F E B R U A R Y 2 0 1 1

a

?

r

...

-

7_

I?

?r

?

?

.

_

_

?

I

y

r

_r

r

L

'

i

//?

r U L AR

P

ON

i

;

? r

?_?

lp??

EER

id d

J

.


2/105

GE

Oil & Gas

rill ing

Production

Extreme Conditions.

Expert

Navigation

Required.

More options and lower risks with GE s

MWD

and LWD Systems.

When you run GE'

s MWD/LWD Systems , your company not onl

y

bids on more

profitable ob s

but also minimizes

operational

risks.

GE'

s

MWD

and LWD

Systems

are

designed

to withstand extreme environments

whi le providing accurate

reliable measurements. They also feature

multiple

options to

address a

wide variety of drilling conditions.

Add

our purchase

business

model

and

GE s commitment

to

R&D

,

and

your profit picture gets

even

brig hter.

To

find

out

how

GE

Oil &

Gas

can

hel

p

you

offer

innovative

oilfield

services

today,

please

visit our

website

at

www.ge-energy.com/oilfield.

Innovation Now: You and GE' s

Drilling

& Production.

imagination at work

w

S

FV


3/105

UNCONVENTIONAL RESOURCES

LWD provides solution for bolsteringshale gas economics

Advanced microseismics optimizeunconventional development

RESERVOIR CHARACTERIZATION

Bridging the resolution gap

Radioactive sources are vital yetchallenging

DRILL BIT TECHNOLOGY

PDC bits optimized for shale development

Hybrid bit technology finds new ground

Drilling efficiency gains allow operatorsto drill more wells

New PDC designs produce major successes

DOWNHOLE SYSTEMS & SOLUTIONS

Versatile tool solves several well problems

Seeing is believing

DEEPWATER ADVANCES

New sensor allows leak detectionfor subsea structures

Strake technology extends spar field life

A legend embraces deepwater MPDtechnology in Indonesia

IndustryPULSE: Oil marketstightening quickly

Research indicates that the industry has recoveredfrom the recession and is going to be hard-pressedto meet growing demand.

EXPLORATION & PRODUCTIONW O R L D W I D E C O V E R A G E

FEBRUARY 2011VOLUME 84 ISSUE 2

A HART ENERGY PUBLICATION www.EPmag.com

COVER STORY

30

Drilling AdvancesExpandable reamers move from

marginal to integrated components

6

WorldVIEW: Taking a newlook at North America

In late 2009, Devon Energy decided to refocusits efforts on the US and Canada. Executive vicepresident of E&P Dave Hager talks about theexcitement of staying closer to home.

10

Unconventional: Utica

Operators take a closerlook at the Utica

Utica shale is young

but promising

67

71

36

40

42

46

50

52

54

56

59

63

74

76

78

88 REGIONAL REPORT: ARCTIC


4/105

AS I SEE IT

The world is getting smaller 5

MANAGEMENT REPORT

Integrated solutions are an adaptive change 12

DIGITAL OIL FIELD

Cloud computing stacks up for SPE-friendly reserves management 17

IT advances provide a pipeline for efficient communication 22

EXPLORATION TECHNOLOGY

Making sense of it all 25

WELL CONSTRUCTION

New bit design provides better cuttings 27

PRODUCTION OPTIMIZATIONA lesson worth re-learning 29

TECH WATCH

A new approach meets an old need 80

TECH TRENDS

Innovations and new releases 84

INTERNATIONAL SPOTLIGHT

Uruguay presents offshore opportunities 87

INTERNATIONAL HIGHLIGHTS

Operators display global reach 98

ON THE MOVE/INDEX TO ADVERTISERS 103

LAST WORD

Taking the measure of reliability 104

E&P (ISSN 1527-4063) (PM40036185) is published monthly by Hart Energy Publishing, LP, 1616 S. Voss Road, Suite 1000, Houston, Texas 77057.Periodicals postage paid at Houston, TX, and additional mailing offices. Subscription rates: 1 year (12 issues), US $149; 2 years (24 issues), US $279. Singlecopies are US $18 (prepayment required). Advertising rates furnished upon request. POSTMASTER: Send address changes to E&P, PO Box5800, Harlan, IA 51593. Address all non-subscriber correspondence to E&P, 1616 S. Voss Road, Suite 1000, Houston, Texas 77057; Telephone:713-260-6442. All subscriber inquiries should be addressed to E&P, PO Box 5800, Harlan, IA 51593; Telephone: 713-260-6442 Fax: [email protected] Copyright Hart Energy Publishing, LP, 2011. Hart Energy Publishing, LP reserves all rights to editorial matter in this magazine.No article may be reproduced or transmitted in whole or in parts by any means without written permission of the publisher, excepting that permission tophotocopy is granted t o users registered with Copyright Clearance Center/0164-8322/91 $3/$2. Indexed by Applied Science, Technology Index and Engineering I ndexInc. Federal copyright law prohibits unauthorized reproduction by any means and imposes fines of up to $25,000 for violations.

DEPARTMENTS AND COMMENTARY

COMING NEXT MONTH The 2010 Drill Bit Records are in! And you can see them in the March issue ofE&P. Other features include coiled tubing drilling, advances in 4-D seismic, stimulation technology, and subsea

systems. The cover story is an international unconventional shales report that identifies emerging regions of interest,

while the monthly shale focus takes a look at developments in the Barnett. Finally, find out what E&P activity istaking place in West Africa in a special regional report. As always, remember to visit www.EPmag.combetween

issues to read exclusive articles on industry events and the latest news.

ABOUT THE COVER Baker Hughes 1214-in. Kymera is a hybrid design featuringthe rock-crushing strength of roller cones combined with the cutting superiority and contin-uous scraping of diamond bits. (Image courtesy of Baker Hughes Inc. and the AmericanPetroleum Institute). Transoceans Polar Pioneer semisubmersible is one of the drilling rigsthat has worked on the Troll field on the Norwegian Continental Shelf. (Photo courtesy ofTransocean)

Because

every

water-sensit ive

formation

is

different

w e

ve

created

a

customizable

drilling

fluid

system

that w l l get you

th rough all of them

The

water-base K L

A-SHIELD

system

improves drilling

performance

in

the most

cha l l eng

ing formations. The

system

reduces

clay accret ion

and bit balling for

hi

g

her

ROP

lower

NPT and improved

hole

cleaning.

Environmentall

y acceptable

in

virtuall

y

any

drilling

area

it

reduces treatment and

disposal

costs

on land

and

offshore

.

Whatever water-sensitive

formation you

re up against

there

s a

K

LA-SH IELD formulation

to get you

t h rough

it .

Mi

SWACO

A

Schlumberger

C o m p a n y

www.misw aco.slb.com


5/105

ONLINE CONTENT FEB 2011

Providence plans Irish drilling frenzyProvidence Resources will kick off a 12-well multi-

basin drilling program offshore Ireland in 2011, thecompany said.

PREMIUM CONTENT Subscribe @ EPmag.com/explorationhighlights

Deepwater Appomattox discoveryestimate about 250 MMboeAccording to IHS Inc., a deepwaterAppomattox discovery on Mississippi Canyon

Block 392 could hold at least 250 MMboe.

AVAILABLE ONLY ONLINE

DIGITAL OIL FIELD

Is market data quality lipservice, alimony, or marriage?

By Leslie Barbagallo, SunGard

Third-party data validation ensures

prompt response to changing market

conditions.

Quantum Reservoir Impact execsays there is plenty of energy

By Brian K. Tully, Associate Editor

An optimist on the world's energy out-

look, Dr. Nansen Saleri says he believes

there's still plenty of energy to goaround.

Tough year ahead forCanadian gas producers

By Ashley E. Organ, Assistant Editor

The strong Canadian dollar, US gas

supplies, and a keep America working

mentality will keep Canadian natural

gas prices low in 2011.

READTHELATESTEPmag.comINDUSTRYNEWS

XTO horizontal Woodford discovery flows418 b/d, 3.36 MMcf/dHouston-based XTO Energy Inc. reported an initial flow rate of 418 b/dof 50-gravity condensate, 3.36 MMcf/d of gas, and 530 b/d of waterat an Ardmore Basin horizontal test.

WEBINARS

Refining Active

Land Acquisition

Plays: Operators

Reduce Costsand Bring

Uniformity to

Projects

Unconventional

Shale: An

International

Perspective

Young

Professionals:

Mastering YourCareer in the

Energy Industry


6/105

Your

preferred

E&P applications no

longer need

to

stand alone.

Link Up

The DecisionSpace

Environment Enables New Levels

of Integration

Landmark'

s

Decision Space -

environment ,delivered through

the

R5000 release, has

the most

open

architecture

in

the

industry. It enables seamless integration

of your preferred

software

-

whether

it

'

s ours, yours or someone else

'

s

-

nto

efficient

, cross-d isc ip l inary workflows.

Build stronger

,

more collaborative business processes and more comprehensive asset

understanding using the best software for your needs.

Learn

how at

halliburton.com/landmark.

High Science

Simpl i f ied '

HALLIBURTON

Landmark

Sof tware

Services


7/105

The first appearance of the cloud in E&Pmagazine occurred nearly a year ago in

an interview with Steve Ballmer, CEO of Microsoft Corp. Ballmer talked with Hart

at Microsofts 7th annual Global Energy Forum about the advantages of the cloud

and what it means for oil and gas companies. A few weeks ago, Microsoft was back in

Houston for its 8th annual Global Energy Forum. Since last year, the focus on the

cloud has gained momentum with Microsofts Windows Azure platform, a productCraig Hodges, Microsoft general manager, US manufacturing and resources,

described as an operating system in the cloud.

The Windows Azure platform is fairly new. It was introduced a year ago and began

to gain traction in the oil and gas industry in November 2010. According to Hodges,

Azure allows companies to put their business processes up in the cloud.Acceptance across industries has been quick. Hodges reported there are 20,000 cus-

tomers and partners using Azure. On a broad base, weve got great uptake just in the

last 12 months, he said. Large international operating companies are onboard already,

Hodges said. Seven out of 10 big energy companies around the globe are in the game.

Chevron is one of the supermajors making use of the cloud. Chevron has improved

joint venture information sharing using Windows Azure, which the operator said pro-

vides a secure space of partners to exchange technical information, allows synchronizingbetween on-premises and cloud databases, and offers a federated security model that

allows each operator to manage its own authentication and authorization resources.

Pemex, Mexicos national oil company, is using the cloud to standardize data man-

agement, information access, and computing infrastructure to better use existing

datastores that contribute to controlling costs and optimizing production.

Shell also is using the cloud to increase business value through high levels of busi-

ness integration. Jay Crotts, vice president of IT services for Shell, told attendees of the

Global Energy Forum that Shell has identified four advantages of using the cloud:

speed, agility, cost, and scale.

Crotts explained how Shell is using what he called a hybrid cloud to its advantage.

The hybrid cloud combines traditional and cloud computing, he explained, listing

Shells hybrid cloud components as infrastructure as a service, platform as a service,and software as a service. The biggest challenge, according to Crotts, is not the cloud

itself. The challenge is in making sure there is a consistent environment internally. I

think the cloud is ready, he said.

Clearly, the cloud in its many applications holds great promise. These kinds of

technologies are going to make oilfield operations teams much smarter and able to

manage many more fields more productively, Hodges said.In light of the views that surfaced at this meeting, it appears that if your company is

not onboard with the cloud now, it might be time to give

serious thought as to why not.

The cloud is coming, and its coming faster than you

might think, Hodges said.

As ISEE IT

EPmag.com | February 2011

Editor JUDY [email protected]

Senior Editor RHONDA [email protected]

Senior Editor TAYVIS [email protected]

Senior Editor JO ANN [email protected]

Senior Editor RICHARD G. [email protected]

Contributing Editor DON [email protected]

Assistant Editor ASHLEY E. [email protected]

CorporateArt Director ALEXA SANDERS

[email protected]

Senior GraphicDesigner LAURA J. WILLIAMS

[email protected]

Production Director

& Reprint Sales JO LYNNE [email protected]

Manager,Special Projects JO ANN DAVY

[email protected]

Online Editor REBECCA [email protected]

Director ofBusiness Development ERIC ROTH

[email protected]

Group Publisher RUSSELL LAAS

[email protected]

1616 S. VOSS ROAD, STE 1000HOUSTON, TEXAS 77057

TEL: +1 713.260.6400FAX: +1 713.840.0923

www.EPmag.com

Exectutive Vice President, Consulting

E. KRISTINE KLAVERS

Executive Vice President and CFO

KEVIN F. HIGGINS

Executive Vice President

FREDERICK L. POTTER

President and Chief Executive Officer

RICHARD A. EICHLER

The world is getting smaller

Read more commentary at

EPmag.com

JUDY MURRAY

Editor

[email protected]


8/105

February 2011 | EPmag.com6

industryPULSE

The slippery balancing act known as supply anddemand has taken its toll on the oil and gas industry

numerous times, most recently in 2008 as a result of alarger worldwide economic crisis. Arguably, the oil indus-

try rebounded much more quickly than other industries,with per-barrel prices resting comfortably in the US $80+range for much of 2010. And reports from agencies suchas the International Energy Agency (IEA) and EnergyInformation Administration (EIA) that track supply anddemand trends indicate that the industry is headed for aneven more comfortable state as it enters 2011.

In a research report titled Improving fundamentalspoint to higher oil price trading range, Simmons & Co.International studied data from these two agencies cov-ering much of the past year. While Simmons analyststend to be more bullish in general than the IEA or EIA,

the former surprised them in November by reportingone of its largest monthly demand revisions, expecting3Q 2010 demand to grow by almost 1 MMbbl/d of oil.With the upward revision, global demand growth hasaccelerated every quarter in 2010, the report states,resulting in a quarterly record high global demand of88.5 MMbbl/d of oil in 3Q 2010. The EIA also upped

its September US demand statistics by more than200,000 b/d of oil, further increasing the record-high3Q 2010 global demand estimates.

Additionally, IEA revisions indicated that the oil mar-ket was undersupplied in the second half of 2010, partlydue to a rapid decline in floating storage inventories.

Overall, the Simmons report indicates that 3Q 2010

marked a significant milestone as it was the quarterin which global demand fully recovered from the effectsof the economic meltdown. Global demand of 88.5MMbbl/d of oil topped the previous quarterly high of88 MMbbl/d of oil in 4Q 2007. Not surprisingly, this ismostly due to non-OECD countries, where 3Q 2010demand was 10% higher than 4Q 2007 demand.

2011 outlookWhat do last years trends mean for this year? Simmonsis modeling more normalized demand growth as itrecognizes that many variables exist. For instance, while

developing countries are seeing gross domestic product(GDP) numbers that are outstripping expectations,inflation and rising interest rates could dampen growthgoing forward. Continued pressure to the US dollar willmake exports more competitive, and o ther factorssuch as slowing Japanese production, austerity meas-ures in Europe, and displacement of crude oil used for

heating and power generation also will help stymiedemand growth.

Therefore, Simmons modeled flat demand inthe OECD and a 3.3% increase in non-OECDcountries, including China at 5% growth.

Meanwhile, supply growth is expected to bemore modest in 2011 than in 2010. The reportcited factors such as a mild hurricane season inthe US and onshore supply growth from theBakken and natural gas liquids (NGLs) as factorsspurring supply increases in 2010. But the glacialpermitting process now taking place post-morato-

Oil markets tightening quicklyResearch indicates that the industry has recovered from the recession and is going to be

hard-pressed to meet growing demand.

Global energy use is expected to grow by 36%, with non-

OECD countries led by China, where demand surges by

75% accounting for almost all of the increase. (Graph

courtesy of the International Energy Agency)

Rhonda Duey, Senior Editor


9/105

Finding oil

means going deeper.

That means risk.

need

real-time response for

reliable production

IT S

with

less

exposure for my people.

PO

SSI

LE

Get reliable offshore production control and monitoring

from

the safety of onshore.

You

can

now

draw

on

the combined

expertise of

your

best and

br i

ghtest personnel by

centralizing them

to

oversee multiple

production units.

New

predictive

intelligence

in

offshore assets

gives them advanced

wa rning of changing conditions to your process and

the

health of your equipment

,with time

to

correct

as if

they were

there. And maintenance

procedures

become more

responsive

, saving you time and money while

minimizing the

risk

of equipment failure. All

to

provide

greater

control over your operations even as you lower

the r isks -

o

the

environment

,

to

your

operations

and

to

your people. It

'

s t ime

to

bring

them home. Learn more

at

EmersonProcess .com/Deepwater

EMERSON

Process Management

E M E R S O N

.

C O N S I D E R

IT

SO L VE D' .


10/105


rium in the Gulf of Mexico should ensure declining pro-

duction offshore, which possibly could offset onshoresupply gains.

Other countries will see modest supply growth,including Russia, Brazil, and Colombia, and biofuels

are expected to add another 200,000 b/d of oil to the

supply mix.

What about OPEC? The report notes that global

demand growth has outpaced both OPEC and non-OPEC

supply by about 400,000 b/d of oil. To help fill the gap,

Simmons expects that OPEC will need to ramp up its pro-

duction by about 1 to 30.1 MMbbl/d of oil. OPEC has

been producing between 29.15 and 29.25 MMbbl/d of oil

since July with no meaningful commentary on increasing

production, the report states.

Overall, the report concludes that the supply and

demand framework will tighten more quickly than had

been anticipated previously. While our demand assump-

tions for 2011 are well-grounded, it must also be said that

upside optionality outweighs downside risks based on

leading-edge trends and assuming global GDP growth of

about 4% or better in 2011, it states. Further, our non-

OPEC production assumptions do not necessarily have

the same degree of upside potential as our demandassumptions.

The bottom line is that it is more likely that the global

physical markets for oil tighten more quickly than more

slowly in 2011.

2010 to 2015The most recent IEA forecast indicates a modest

upward supply revision and a 300,000 MMbbl/d of oil

demand increase. However, the mid-term estimates (2010

to 2015) are positive, with a demand in global growth of

5.9 MMbbl/d of oil, offset only marginally by increased

supply. OPEC spare capacity is expected to decline from

5.1 to 3.6 MMbbl/d of oil over this period.

Simmons analysts found this report particularly encour-

aging because demand forecasts were revised higher forthe sixth consecutive month. Looking into 2011, the IEA

revised its demand forecast by 300,000 b/d of oil over its

previous forecast. The latest estimates put global demand

at 88.8 MMbbl/d of oil for 2011.

To 2035In a November 2010 presentation to the press, the IEA

forecast a 36% rise in global energy use by 2035, with

non-OECD countries accounting for almost all of the

increase. China alone is expected to see demand

surges of 75% over this time frame. Demand for all

types of energy will increase in non-OECD countries,while demand for coal and oil will decline in the

OECD. Meanwhile, conventional oil production is

expected to be flat, even including fields yet to be

discovered or developed, and incremental supply

surges will come from unconventional oil and NGLs.

The presentation notes that natural gas is set to

play a key role in meeting the worlds energy

needs. The agency forecasts unconventional gas

plays will account for 35% of the increase in global

supply to 2035, and increasingly this will comefrom non-US fields. Worse news for gas producers,

though the IEA expects the gas glut to peak soonbut dissipate very slowly. This will keep pressure on gas

exporters to move away from oil price indexation, particu-

larly in Europe. And as many have predicted, sustained

low natural gas prices are likely to beat out renewable and

coal in power generation.

From an oil standpoint, demand is expected to increase

before 2020 but taper off by 2035, with declining OECD

demand overpowering growth in non-OECD demand.

Industry plansAs if in anticipation of this tightening market, the global

energy market is planning record spending in 2011,according to a survey by investment bank Barclays Capi-

tal. The survey reports international E&P spending is

expected to rise 12% in 2011. We believe the industry is

in the early stages of a long international upcycle, the

report states.

More than 400 oil and gas companies were surveyed.

The largest spending increases will be felt in Latin Amer-

ica, the Middle East/North Africa, and Southeast Asia. It

also is anticipated that supermajors will outspend national

oil companies for the first time in several years. We viewthis as a positive indicator, the report states.

Worldwide E&P spending is on the rise, particularly outside of North

America. (Graph courtesy of Barclays Capital)

industryPULSE


11/105


12/105

,

.

,

.

.

,

,

,

, , .

,

.

.

,

.

,

.

,

.

,

,

.

.

,

.

.

. .

, ,

.

.

.

,

,

.

;

.

.

.

l i i

i i l i i l

,

,

.

,

.

.

,

,

,

, , .

,

.

.

,

.

,

.

,

.

,

,

.

.

,

.

.

. .

, ,

.

.

.

,

,

.

;

.

.

.

l i i

i i l i i l

,

,

.

,

.

.

,

,

,

, , .

,

.

.

,

.

,

.

,

.

,

,

.

.

,

.

.

. .

, ,

.

.

.

,

,

.

;

.

.

.

l i i

i i l i i l

,

Oklahoma City-based Devon Energy has long

been a force with which to be reckoned

amongst the larger US independents, steadily

growing its portfolio both in North America and

overseas. But recently the company announced that

it would strategically reposition itself as a high-growthNorth American onshore company, divesting its off-

shore and overseas assets and directing proceeds from

those sales to its US and Canadian onshore portfolio

as well as retiring debt.

This is not to say the companys portfolio has been

vastly diluted. Devon is active in the Avalon and Bone

Spring plays in the Permian Basin, the Granite Wash

play in the Texas Panhandle, the Cana Woodford

shale play in Oklahoma, and the Jackfish and Pike

plays in Canada as well as holding acreage in the

Barnett, Haynesville, and Horn River shale plays.

With this vast portfolio now commanding its full

attention, the company has ambitious plans to

continue to grow shareholder value.

Why was the decision made to focus

on North America and not the Gulf

of Mexico or offshore Brazil?

We thought it was an appropriate

decision. With the large number

of opportunities that we had in

our E&P portfolio, there were

more than were going to be

properly funded in the next fewyears. When we looked at it from

several perspectives, it made the

most sense to monetize the off-

shore and international.

First, we didnt think that we

were getting the full value in our

stock price for the Gulf of

Mexico and international proper-

ties. Those tend to be more long-

term projects, and because they

didnt show up in short-term pro-

duction or reserves, they werent being fully value

the marketplace.

We also felt the nature of those assets made the

very marketable. We had had a number of discove

in the deepwater Gulf of Mexico as well as discove

in deepwater Brazil, and we felt that they would b

very interesting to many different companies.

It wasnt a question of c ompetency. We have tre

dous operational competencies both onshore andshore. But we had to make a decision.

Your discovery in Brazil was a presalt discovery.

Was that one hard to walk away from?

From a pure excitement and technical perspective,

yes, because theres a lot of thrill, and we think its

tremendous discovery. But sometimes you have to t

off your technical hat and put on your financial ha

This refocusing must have put some strain on your group

optimize the remaining assets. How have you gone abou

doing this?

We had not really been using the North American

onshore assets for our growth engine in the past fe

years. Redirecting some of the people and capital

onshore allowed us to take adva

tage of the deep inventory that w

have. We have increased the cap

spending associated with North

America onshore, and we are co

dent were going to have consist

growth from those opportunitie

At the same time, we have to

ognize the oil and gas environmthat were in. We arent necessa

trying to maximize the product

growth at this point; were tryin

optimize production growth alo

with the proper fiscal discipline

that we focus on growth on a p

debt-adjusted share basis. We co

grow at an even higher top-line

if we chose to take on a lot mor

debt or issue a lot of equity. Bu

thats not what were doing.

Taking a new look at North AmericIn late 2009, Devon Energy decided to refocus its efforts on the US and Canada. Execu

vice president of E&P Dave Hager talks about the excitement of staying closer to home

February 2011 | EPma10

worldVIEW

Rhonda Duey, Senior Editor

Dave Hager of Devon Energy.

(Images courtesy of Devon Energy)


13/105


14/105

The last few years have indicated a trend within the oilindustry to provide integrated/digital solutions to the

customer, with the value proposition that functionalsilos work together for the common goal.

Organizations can, at times, lack the necessary frame-work to execute an integrated solutions strategy. Astrategic bridge is necessary to execute the strategy andperform integrated operations. This bridge supportsstrategic decisions through the structure and culture ofan organization. Customer needs are addressed throughthe project and program approach, which is a collabora-tive effort that brings together people of various levels ofexpertise and perspective.

Statistics show that 66% of the companies in the USfail to execute their strategy. This failure is due largelyto the fact that those strategic decisions do not coincide

with the structure and culture of the organization,which results in poor execution and strategic failures.Even when technical challenges are solved through col-laboration, the most important question is whether thiscollaboration is worth it.

Integrated solutions: a strategyTraditionally, service companies have had a weak matrixfor solving a particular problem related to a specific areaof expertise. Operators leverage the industrysspecific knowledge in their operations. Servicecompanies that offer differentiated products

and solutions need to understand the cus-tomers needs and provide cutting-edge tech-nology with less response time. Their focus is tooffer unique value for the customer by creatingproducts with higher value.

Strategic alignment for executionAn important factor in executing the inte-grated solution strategy is the environmentof the service company. The correct strategicalignment measures the proper fit between the

two elements of a domain (i.e., between the strategy andculture, between the strategy and structure, or betweenthe structure and culture).

The four archetypal organizational cultures includecompetence, control, collaboration, and cultivation,often referred to collectively as a cultural egg. Inte-grated solutions fall under the collaborative-type cul-

ture, which emphasizes teamwork and people bydeploying cutting-edge technology. The distinctive com-petence of an organization can be determined with sucha cultural egg. For integrated operations, for instance,customer intimacy is required, which in turn means acollaborative culture. Operational excellence, on theother hand, is a control culture.

It is very important to recognize clear, distinctivecompetencies. Companies unable to recognize theircompetence have a real challenge. For example, anorganization is trying to reduce cost to increase the busi-ness efficiency of its several business segments in dis-

tressed economic times. The solution can be focusedtoward those business segments that are not generatingconsiderable profits. But those business segments canrepresent distinctive organizational competence, suchas innovation. A company might think that the problemcan be fixed by reducing operating cost, resulting inbusiness optimization. But, in fact, this random costreduction only helps in the short term. The long-termdamage will be significant because the organization has

Integrated solutionsare an adaptive changeAn integrated solution needs an appropriate environment for strategic execution.

Hamayun Z. Raja, SPE, Halliburton

PROGRAMS

IMPLEMENT OPERATIONSSTRATEGY

PROJECTSPORTFOLIO

STRUCTURE

CULTURE

A strategic bridge executes the strategy and performs integrated operations.

(Figures courtesy of Halliburton)


managementREPORT


15/105

lr

KWMwrow LOILWE

LL vaR

C

o

Email:dewnhae@nocom

www

now

com/downho

ReedHycalog Drill Bits

Railer

ConeFixed Cutter and

Impregnated

Diamond

Performance

and

Directional Drilling

Motors-

HEMIDRIL`

PowerPLUS'

Square

Moto

Intervention

and

CompletionTools Coiled

Tubing,Wireline

Row

Control

,

Completion Tools

rilling Tools-

ars

,

Agitator Tools

Shock Tools, ntensif ier

-

Tools

Non-Mag Products

Borehole Enlargement-On-Demand Underreamers

Bi-Center Bits

String Tools

Coring

Services

Conventional

and Corion Exp ress

oring

Services

Advanced Drilling

Solutions

Drilling

Optimization

and

Vibration

MitigationServices

Fishing

Tools

-

Catch

Tools

Repair

and Remedial Tools

Stroking Tools

Service Eq

ui

pment-Make-U reak-Out Machines

Test Stands

Buckin

Units

Contact

your NOV Downhole representative by email

or on

the web

for

further information on

our complet

Iine of d

o

wnhole products and services.

su

ombiningthe bell e Downhole

model

1


16/105


17/105


18/105

Roxar Building Blocks

-

Build Your Future

Innovation

,

usability, quality and knowledge are core building

blocks in

Roxa r. Building block

we

use

to develop

and

deliver

state

of

the art software for 3D reservoir

modelling,

reservoir

simulation

and

history matching.

Software which

enables

you to

model the past and build the futurel

www.roxarsoftware.com

(OX

r

4P

EMERSON

E M E R S O N . C O N S I D E R IT

SO L V E D.

r

ew

-

r

r

..:a

.

ai

m

?

E

0

. .


19/105


Standards Pertaining to the Estimating and Auditing

of Oil and Gas Reserves Information from the Soci-

ety of Petroleum Engineers (SPE), which incorporates

the requirements of the 2007 SPE/WPC/AAPG/SPEE

Reserves and Resources System, gives clear guidelines asto what is expected of modern reserves reporting. The

fundamental idea of providing online reporting soft-

ware that is secure, simple, and yet powerful in its flexi-

bility is equally applicable to reserves reporting.

The SPE standard states, The sufficiency and reliabil-ity of the database is of primary importance in the esti-

mation of reserves and other reserves information. The

information within such a database reflects the total

hydrocarbon resources of an oil company, and whether

in place, contingent, or prospective, these resources are

its primary assets. Accurate reporting against these assets

is not only needed to comply with regulations, but also isused to define the total value and share price of the

company so it can secure finance and investment oppor-

tunities for the future.

It makes sense, therefore, that a centralized system

should contain all of the key information and properties

relating to the companys property portfolio to give a

complete view of the business, not only to ease the

process of auditing, but also to provide a powerful busi-

ness tool upon which to base strategic decision-making.

Audit-readyThe values of reserves are heavily scrutinized, and sup-

porting software should contain comprehensive securitywith a clear audit trail that always is available. The SPE

document calls for a review of the policies, procedures,

controls, documentation, and guidelines as part of an

audit of reserves information. Policies and procedures

should be incorporated into a single database as accom-panying metadata, ensuring that information can be

presented quickly and clearly to the auditor. Further-

more, the controls and reporting available within such a

database application can prove data integrity and even

document the business process for the user.

The SPE says that checks should be made on adher-

ence to policies, procedures, and controls. Automatictracking of changes with details of what was changed,

when, and by whom simplifies operational processes and

ensures compliance with auditing requirements.

The SPE also recommends that historical reserves and

revision trends be part of an audit. To comply with this

requirement, it is essential that all information,

historical and current, is contained within one

database. By storing all of this information in a

secure cloud, a complete inventory can be

stored in one place with an audit trail that can be

traced. This single window on information

enables revisions, re-appraisals, and additions tobe viewed quickly, with the added benefit of

detailing why a change was made, what was

changed, and by whom. Furthermore, methods

by which reserves are estimated and which organ-

ization or person provided the estimate can beidentified, truly giving a complete view of the

ways in which values have been derived.

System flexibilityDatabase management might seem like an IT

issue, but in the area of reserves information, this

digitalOIL FIELD

Cloud computing stacks up forSPE-friendly reserves managementAn online solution helps oil companies manage their most important assets.

Dr. Esther Hayes, EnergySys

The graphical report shows production forecast and reserve categoriza-

tion. (Figures courtesy of EnergySys)


20/105

Sea

Change

Weatherford

'

s

new SeaLance

TM

drilling-with-casing

(DwCTM)

system: Subsea drilling will never be the same

D l l i i

a

Drilling

hazard mitigation

Controlled Pressure Dulling

Drilling-vith-casing

(DwC)systenn

Solid expandable systems

M

4m

m ne

No longer do you have to

run

the

risks of tripping drillpipe and BHAs.

The SeaLance system runs

casing

while drilling to

maintain

a

steel barrier

against trouble

zones.

Makes your drilling program go about 30 percent

faster to save you some

S30

million.

We call it Tactical Technology

.

You

'll call it money

in

the bank.

Contact

a

Weatherford representative or

visit

weatherford.com/sealance.

We have a full range

of

Tactical Technology that can change the

way

you

look

at

all of your

service

needs.

The change will

do you

good'"

1W

Weatherford

weatherford.

com

Z


21/105


database is fundamental to how companies run their operations. The SPErequires that significant changes from anything other than production

should be accommodated. This could be geographical or political differ-

ences, for example, or inflation or price variances. A system needs to allow

for the investigation of multiple long-term investment scenarios and offer the

flexibility to show the effects that any changes have on the current or alterna-

tive business strategies. Changes must be in accordance with review/appraisal

cycles and must be completely audited. A modern solution should take datafrom reserves portfolios and development definitions and handle all of the

reserves inventory management, including calculating monthly and annual

forecasts with values for revenue, expenses, reserves, production, and net

present value, giving users confidence in both their business decisions and

their ability to meet auditing requirements.

The solutionThe EnergySys Reserves Management application takes operational data

from production and allocation reporting systems or even directly from an

email so the latest information regarding reserves decline is readily avail-

able in the reserves inventory. This also gives the user the capability to review

forecasts against actual data, providing the information required to continu-ally improve estimates and future projections.

The latest online application, built on a common core also used for the

companys Hydrocarbon Allocation and Production Reporting applications,is a single place for all statutory and supporting data. It provides flexible cal-

culations and reporting to meet diverse needs whether for internal, cus-

tomer, or regulatory requirements. It allows for any number of alternative

development scenarios defined by production and reserve profiles, capital

and operational expenditure schedules, price profiles, different levels of

project risk, and long-term price and cost discounts. Standard workflows and

calculations are provided within the system, including calculation logging to

clearly show how values have been determined and that data integrity has

This single window on information enables revisions, re-appraisals, and additions to

be viewed quickly, with the added benefit of detailing why a change was made,

what was changed, and by whom.

digitalOIL FIELD

1W

Weatherf

ord'

Tactical

Technology

'

in action:

SeaLance

'

subsea

drilling

-

with-casing

(DwC'

")

system

Imagine

not having

to drill the

interval

before

running

casing.

Imagine

not having

to

ti

Or.

mp g

n

weatherford.com/sealance or

contact

a Weatherford

representative.

Ask about our full range

of Tactical

Technology t h a t can change the

way

you look at all of your service needs.

The change

will

do you

good'"

trip drillpipe

and BHAs and

worrying

about

swab/surge

and

related

hazards .

I m a g i n e

turning trouble zones

into

comfort zones

.Drilling

with casing

puts

up

a steel

shield

aga ins t

the

hazards of

shallow

gas

,

thief

zones

,

sloughing

shales,

etc.

And the SeaLance Dw C

system also provides a more

efficient

well

design with

larger hole diameters

and

casing

seats

set

at optimal

depths

for

the fracture gradient. Shallow

casing

can be

set

deeper and

cemented

,

for a stronger well

foundation

that

enhances th e

safety

of personnel.

In a

world

where gaining

subsea reservoir access can

exceed US$100 million

, you

could save $30 million

by

avoiding downhole trouble

e

,

tripping time and

circulating

hours

.

weatherford.com


22/105


been maintained. It is simple for an auditor to review

information and confirm good data governance now

and for the future.

A modern product should offer flexibility and usabilityalong with complete security and traceability. Its aim

should be to remove any difficulty associated with audits

for both the company being audited and the auditor.

No more spreadsheetsMany companies continue to rely on spreadsheets to

manage their reserves information despite the fact that

spreadsheets do not address many of the problems identi-

fied here. In fact, spreadsheets can exacerbate these

issues. Inherent problems associated with validating and

controlling data entry into spreadsheets along with ques-

tions related to avoiding unintentional modification, sys-tem reliability and data integrity, version control, and

change tracking make spreadsheets unsuitable for man-

aging information of this kind. The entire system shouldmake processes demonstrable with clear and quick

reporting to show an auditor how the reserves were esti-

mated and how data are managed.

EnergySys has recognized the value in having a solution

that can be up and running in days or weeks rather thanmonths, with the right people able to access the right

information, wherever and whenever they need it.

Online, user-friendlyThere also is a growing recognition in large organizations

that IT is not a core skill except in very specialized areas

such as seismic data processing and analysis, where high-

performance computing and sophisticated algorithms are

employed. Deployment of reserves management systems

traditionally has been associated with long implementa-

tion times and substantial upfront costs. An online service

can reduce these factors significantly. Users access thebest available technology and security developments

through a managed online service. The only challengethen is to build the application and by adopting a ready-

made application, the hard work already is done.

digitalOIL FIELD

Visit

Us

at the DUG Conference

18-20 April Fort

Worth

,

TX

e Most Effective Proppants

SPE 135502 provides practical information

from

field studies and

laboratory testing to

improve

well production

in

s h e reservoirs. This

document confirms

that

curable grain-to-grain bonding technology is

crucial

to downhole proppant performance.

Momentive

`

,

the world's largest

supplier

of specialty

proppants

,

invites

you

to

visit

waterfrac.com.

There you

will

learn more about the important

factors affecting

downhole proppant

performance and how

our

curable

resin

coated

proppant technology

helps you...

Get

the

Results

You

Expect

*Hexion

is

now

Momentive,

MOMENTI

E-

Downhole

Proppant Scaling

Proppant Quality

Mao,1o

sp ry

0 o,,,ct

Irc.

.

a0dd rnrwogymo

w.

a., ix

USA

.1 281

8


23/105

Optimize production, extend equipment

life

,

and

minimize

OpEx with an advanced

,

intelligent rod

pump

control solution.

Improving production and profitability

Whether you

'

re managing new

or

reactivated wells , you need to maximize

oil

recovery

while

minimizing costs per

barrel

of crude

.

Pump performance means more

than

just

pumping

more oil It

also means

ensuring

your

equipment

is

running continuously and

efficiently. Schneider Electric

'"

now

offers you the world

'

s most

complete

extraction

optimization solution.

Sophisticated technology for exceptional results

Far

surpas s ing

traditional

systems

a

unique

combination

of drive and

pump t

control ler automatically

detects

pump-off

conditions

and matches pump

speed

to

fluid

inflow

, aiming

for 100 percent f i l l

while avoiding

gas

lock

and f luid

pound.

Reducing mechanical

stress

will avoid rod breaks , downtime

,

and

safety risks And by

improving the efficiency

of

each stroke you 'll

maintain

near-unity power factor and

cut

energy consumption often

by

up

to

30%

.

The first step

toward the

complete

digital oil

field

Our

proven ,

scalable

, and easy-to-deploy solution integrates

electrical

and mechanical

monitoring,

protection

,

control

,

alarming, and

communications

for

each well

site.

Leverage our singular expertise

in energy.

automation

,

and IT

to

realize enterprise-

wide

access to

data

and

control. This will help

you ensure

the highest

productivity and

anticipate

events before

damage or losses

can occur.

Download the FREE rod pump control brochure

and

be entered to win an Apple

Pad

'"

Visit www

.

SEreply.com Key Code y291w

Solutions to match

any requirement

or

budget

Torque

Contro l - A cost-effective

solution for well

management

and

protection. O

ptimize

the

energy

and

performance of

the pump

with

a simple and smart solution.

Surface Card Control - Data

from

an external load

cell

enables

increased well depth optimization,

Down-Hole Card

Control - Uses

well data

,

visual

system

tuning ,

and an advanced algorithm to

determine

rod

load at the

bottom

of the well . Ideal

for

deeper

wells

,

help ing achieve the

ideal dynamometer card

to

fully

optimize output.

Make the

most of

your

energy

'

Schneider

0 E I e c t r i c

02010

Schneider

Electnc. AJI Rights

Reserved

. Schneider Electric and Make the most of your energy

are

trademarks ovmed

by

Schneider Electric

Industries SASor its affiliated companies . Al other trademarksare

the

property of their respectve owners,

132

Fairgrounds Road , West Kingston,

RI 02892

USA

993-3425

Now,

achieve

maximum

output

at

minimum

cost.

uouslye

i

1?


24/105

In todays tough energy market, it is critical for oil and

gas workers to be able to communicate and share infor-mation with colleagues quickly and efficiently anyplace,

anytime. Swings in supply and demand, volatile prices,

and shifting worldwide energy policies have made E&Pmore complex than ever. As the industry expands globally

and work teams are dispersed among multiple locations,

enabling instant communication is a prime focus for oil

and gas IT departments.

To investigate industry attitudes and practices related to

this communication imperative, Microsoft and Accenture

recently conducted their third annual survey of 205 pro-

fessionals within international, national, and independent

oil and gas related companies. The goal of the survey was

to understand the factors that drive increased collabora-

tion among professionals and determine current thinking

about the business value of collaboration tools to enhanceprocesses and workflows. The newest survey amplified key

trends compared to previous survey findings.

The need for collaboration tools is growingIndustry professionals are collaborating more than ever.

More than one-third (34%) of those surveyed reported

spending more time collaborating in 2010 than the previ-

ous year, and respondents consistently identified the capa-bility to interact with colleagues, partners, and customers

from anywhere at any time through any device as a tech-

nology enhancement that would further company success.

The rise of the digital oil field draws attention to thisneed because it requires the optimization of communica-

tion processes between field workers and management at

home offices. While it is essential for management to

securely capture and analyze the constant stream of data

flowing in from the field, it is more vital for field workers

to have access to technologies that enable them to collabo-

rate with management and receive real-time feedback for

critical decision-making.

Large amounts of information are being shared among

colleagues in disparate office locations, and there has

been an enormous increase in the amount of collabora-

tion that is taking place with experts outside a given organ-

ization. There is no question that the need for a secure

exchange is crucial.

Although the vast majority of those surveyed agree withthis assessment, nearly 40% of them said when they use

instant messaging (IM), they used public IM tools for busi-ness collaboration, while only 27% are using company IM

tools. Respondents listed email as the primary method

for file sharing, both inside and outside the organization,

followed by the use of physical storage devices like flash

drives and USBs. With employees using various forms

of company and social media to communicate, there is

potential for sensitive information to be compromised.

Another critical point is that many industry professionals

are using older, non-secure methods to share information

and files, a process that unwittingly puts a company at riskfor sensitive data to be lost or stolen. Management needs

be aware of the need for secure sharing environments.

Unified communications solutionsTo enhance collaboration across work groups and ensure

the security of information exchange, it is clear that oil

and gas companies must make fundamental changes to

the way they communicate by integrating collaboration

technologies and introducing remote collaboration tools

into a unified communications system. A number of for-

ward-looking companies in the oil and gas industry

IT advances provide a pipeline

for efficient communicationOil and gas professionals can work smarter, improve productivity, and enable access to criticalinformation in real time by streamlining communication and business decision-making.

Mike Bannon, Microsoft Corp.

As the industry expands

globally, enabling instant

communication is a prime focus.


digitalOIL FIELD


25/105EPmag.com | February 2011

digitalOIL FIELD

already are adopting unified communications technology

to gain the new efficiencies they require as the industry

evolves. Unified communications solutions allow users to

see the presence of colleagues to determine who is avail-able to communicate and then collaborate by instant mes-

sage, voice call, and/or one-to-one video conferencing to

exchange files and see one anothers desktops.

Indonesias MedcoEnergi Internasional, for example,

recently sought to upgrade its unified communications

capabilities so every employee could stay connected.

This approach also was expected to reduce costs across

the organization. In 2010, MedcoEnergi Internasional

deployed Microsofts Lync unified communications solu-

tion in combination with IP phones so even employeeswithout computers could stay connected and have access

to presence information. By deploying Lync Server, Med-coEnergi has been able to provide more resilient phone

service at remote sites at a fraction of its previous cost. By

virtualizing its servers, enabling one server to run many

different operating systems and applications, the company

has seen a 50% reduction in required hardware.

Royal Dutch Shell also has gained effi-

ciencies and cost improvements with its

Microsoft communications server. Its

104,000 employees work in more than 110

countries and territories in locations as

diverse as upstream exploration sites,

downstream refineries, and trading floors.Eighty percent of its teams are global

teams, with members in multiple locations

around the world. Microsoft technology

has streamlined the companys communi-

cations significantly. Shell employees canswitch easily from one communications

method to another. With one click, a

user can change an IM conversation to

a voice call or video conference. More-

over, employees phone numbers and

voice mail are not fixed to a specific phone

device. Calls are routed to wherever theemployee is logged on.

Because Shell employees work in so

many different time zones, determining

who is available in any given geography

often was a challenge. Employees now can

look at an icon next to a persons name

and know whether that colleague is online,

out of the office, or busy.

Unified communications also is reducing

Shells technology costs because a central-

ized VoIP system based on its unified com-

munications solutions lowers the cost and complexity of

managing multiple private branch exchange (PBX) sys-

tems at global offices. The system centralizes all call con-

trol, collaboration, and management servers into threedata centers. Shell anticipates retiring more than 200

pieces of PBX equipment as a result of its switch.

Shell also gains savings from the consolidation of audio

and video conferencing into its Microsoft solution. The

company previously had maintained more than 600 video

conferencing rooms. That number will decrease as Shell

continues to deploy its unified communications technology

globally. Shell expects to significantly reduce the charges

received from its hosted audio conferencing service as well,

with users transitioning to calls via unified communications.

When oil and gas companies apply technology such as

Microsoft Lync for communicating whether from head-quarters to jungle operations or from senior workers to

new recruits they have begun to control costs, improve

productivity, provide enriched support for their remote

workforce, gain operational efficiencies, and become more

responsive to changes in their business environment.

Introducing

Operations

Management Suite

'M

Petr is enabl

es

y

our com

p

any

to

access accurate an

d

timel

y

production

information

,

rom field to office

,

allowing teams to

make better

decisions

and optimize their

oil

and gas assets

.

:

r

1

-

. _ 1

s

71 '1

?

1 1

`

.l?l?

-

E

1 1 1 1

)FTRI

www.Petris.com


26/105

At a

time when reservoirs are becoming harder to find

,

PGS delivers

the

industry-leading solutions you

need.

PGS

can help your

business

achieve greate r

eff ic iencies

and competitive

advantage

with

our

full

range of ground-breaking technologies - one of

these is our world-class seismic

fleet

,

which has

the

ability to tow up to

22

streamers

per vessel.

We

set the

standard

for industry service

,

with our

unique people-oriented

approach . During every project

,you can

count on

our advice and support

because

we

are

comm itted to helping you reach your

business

goals.

At

PGS

,we are your partner in technology, quality and reliability.

A Clearer

Image

w ww .pgs.com

'W

PM

Well positi o

ne

d

challen

g

es

or the 1

1(51

1

- - - - - -

- - - - - -

y

-

- - - - - - - - - - - - - -

2

21 1

1 -

_18

Is 20

21

r

i


27/105

Eldad Weiss is a leading figure in the petroleum

software industry, having grown Paradigm Ltd.

from a small boutique technology player into one of

the largest software and solutions vendors in the

industry. While the industry has made tremendous

strides in data integration over that time, he said,

challenges remain. I recently visited with Weiss to

discuss the status and future of the industry.

What are some of the changes you anticipate in the com-puter industry that have the ability to bring about disrup-

tive change in seismic interpretation? How will the industry

need to adapt to those advances?

I believe that the progress weve been seeing over the

past two decades the exponential growth in available

data, the automation tools being developed to process

and analyze these data, techniques for interpreting

multiple surveys and multiple volumes, and multidisci-

plinary data sharing will continue

and perhaps even accelerate. Each

leap forward will require the industry

to adapt its tools and workflows totake advantage of the new capabilities.

The emergence of prestack data as

a component of many workflows, for

example, requires more than just an

ability to see trace data. The inherent

complexity of ray paths through the

overburden, the sheer volume of data

that need to be accessed, and the

effects of anisotropy on waveform propagation are only

some of the challenges that face deadline-constrained

geoscientists who are suddenly being required to make

sense of 30 to 50 times more data than before. Visuali-zation tools, new display methods, and processes that

make visible the illumination that resulted in a given

reflector or event are all part of the answer and will

become increasingly accessible to the new generation

of geoscientists.

Despite enormous advances in computer technology, many

interpreters still do things the same way because Thats

the way Ive always done it. How can change management

be driven by oil companies? By software vendors?

The challenges for the E&P industry, as I see them,

are threefold: We need to further develop the toolsneeded to fully utilize all of the available data, we

need to build new workflows to make efficient use of

multidisciplinary integration of data and applications,

and we then need to embark on a comprehensive edu-

cational program aimed at transitioning such novel

processes from advanced users to the mainstream

community. This will entail a joint effort on the part

of E&P software vendors and oil and gas companies.

Users are in danger of being over-

whelmed by the sheer amount of data

now available and by the integration of

all these data at the desktop level. Therole of data management is becoming

increasingly important due to the

growing need to improve data access

permission and security measures.

Oil companies must also insist that

their asset teams take advantage of the

new technologies and back up their

drilling decisions with a critique of the

data and their limitations; a review of alternate out-

comes, probabilities, and uncertainties in the interpreta-

tion and model-building phases; and a discussion of the

risks engendered by prospective drilling programs(overpressure, cave-ins, fracture zones, etc.). These dis-

cussions should be interactive and comprehensive and

include all of the various teams as well as management.

It is only when managers ask for more detail and rigor-

ous science as part of the decision-making process that

geoscientists will begin to

broaden their activity and

use new and advanced

technology to deliver on

these expectations.

Making sense of it allParadigm Ltd.s founder and CEO discusses the challenges the industryfaces as the data explosion accelerates.


EPmag.com

RHONDA DUEYSenior Editor

[email protected]


explorationTECHNOLOGY

Each leap forward

will require theindustry to adapt

its tools andworkflows to takeadvantage of thenew capabilities.


28/105


29/105

wellCONSTRUCTION

Drill bit technology is in a continuous state of

evolution. Many operators have experienced

better performance in drilling operations by match-

ing bit design to highly advanced bottomhole assem-

blies and using bits specifically designed to contend

with specific types of formations, including improved

cutter strength, hybrid combinations of roller cones

and PDC technology, and more aggressive cutter pro-files. With an improved capacity influencing bit selec-

tion, more options are leading to more efficient

drilling projects.

When it comes to analysis, more rock equals more

data. While coring provides optimal samples, the trips

needed to acquire cores are not always considered

the best investment, especially in tight markets such

as unconventional gas. While

MWD/LWD can assist drilling

engineers in optimizing the tra-

jectory of the well, geologists

often are left out of the processwith only a limited amount of

information garnered from cut-

tings. Where PDC bits are used,

these cuttings often are referred

to as rock flour. While cuttings

can provide a limited amount of

reservoir data, larger samples are

needed to provide more down-

hole data.

Encore Bits LLC currently is making

headway with what is known as the

Micro-Coring Bit. The new bit providesall the advantages of PDC capability,

while allowing the generation of a micro-

core of the formation being drilled in

the center area of the bit where the cut-

ting structure is interrupted. Conven-

tional cores are acquired by running a

standard coring bit, which requires an extra trip with

no gains in ROP or total depth. By adding micro-cor-

ing capability to an engineered PDC bit, the coring

process takes places automatically with each successive

plug or micro-core circulated to surface through the

annulus. Having a legitimate section of rock can open

a wide range of information on downhole conditions

throughout the entire well bore, giving geologists

something to work with. The design allows for an

improvement in cuttings quality, especially in hard

rock environments where standard cutting sizes are

reduced due to the low depth of

cut achieved in these formations.

In addition to providing geolo-

gists with better rock samples

at surface, the No Center BitDesign also saves a significant por-

tion of the energy used in the bits

cutting action. While this bit cur-

rently is being tested domestically,

it already has shown the ability to

generate larger rock fragments

than conventional bits in Pak-

istans Lumshiwal sandstone.

Coring operations soon might

be carried out simultaneously

with the drilling operation, reduc-

ing trips and nonproductive timein the process.

Drill bit design will continue

to improve the speed at which

fields are developed. Breaking

down the barriers that exist

between

drilling productivity and reser-

voir characterization can only

enhance the profitability of

field operations.

New bit design

provides better cuttingsRock data are key parts of full field development, although rock flour isthe most available substance being circulated up the annulus for now.


EPmag.com

TAYVIS DUNNAHOESenior Editor

[email protected]


When itcomes to

analysis,more rockequalsmoredata.


30/105

CLEANER

At Newpark Drilling Fluids , environmental

responsibility

is

not

just

technology jargon

.

Our R&D

efforts revolve

around

innovating

for

a cleaner tomorrow and help us keep

our customers

ahead

of

regulatory

requirements.

FASTER

Led

by

the

Evolution

Tm

drilling fluid system

,

our technology continues

breaking

records

in

the

field without sacrificing safety, quality

or

service. Find

out where

a cleaner kind

of

speed

can

take

your

results -

to existing

and emerging unconventional

resource

plays worldwide.

EVOL

U11ON

M

SMARTER.

As

the leader in

high-performance

,

water

based

drilling

fluids technology,

we

listen to

our customers ' needs.

In

2010 we launched

a

new

kind

of

water-based

drilling

fluid.

Ou r

Evolution

TM

drilling fluid system was

created

in

response to

customer

requests

for better

performance in

the

Haynesville-and beyond.

Got

a challenge? We

'

re listening.

Our success

in

the

Haynesville is only

the

beginning.

www

.newparkdf

.com

NEWPARK

DRILLING FLUIDS


31/105

productionOPTIMIZATION

Some might recall when branch banks were forbidden

in Texas. I know that is hard to believe when you see

the proliferation of banks gracing almost every intersec-

tion in town today, but it is true. Perhaps you would like

to know why?

Back when Texas really was part of the wild west,

towns sprang up on the frontier like weeds. In those days,

three elements defined a town a saloon, a general store,

and a bank. We all know about the first two, because they

figured into every western movie ever made. The last edi-fice managed to keep a low profile. The reason was that

the entrepreneurs who ran the early banks believed they

could make more money by installing branch banks in

every new town and grow their businesses. The only prob-

lem was they could have had a dozen banks, but they only

had one set of money. The way they stayed in business was

as soon as the bank examiners came to do their annual

audit, the bank hired a man with a fast horse to move the

money to the next bank overnight. Completely unaware

of this nefarious scheme, auditors were counting the samemoney over and over.

Finally, there was a crop failure or some other eco-nomic disaster, and the hapless depositors found out that

there was not enough money to cover their withdrawals.

After a few unlucky bankers were strung up by angry

crowds, branch banking ended in Texas, for almost a cen-

tury. So why am I telling you this story?

Some of todays oil patch entrepreneurs are like those

old bankers. Say the Black Gold Energy Co. issues a press

release claiming a 20% production increase from its

Bonanza field. Within a few weeks, you start seeing ads

and flyers saying, Black Gold uses Big Bite Bits to boost

production 20%You guessed it; they all are counting the same 20%

increase over and over and taking credit for it. The fact is

that all of these products might have contributed to theincrease, but it is highly unlikely that any one product

deserves credit for the entire production increase.

I am starting to hear grumbling from the ranks of oil

operators, particularly some independents. In a recent

conversation, an industry veteran voiced his opinion that

many service companies are not delivering the value to

support their prices. This is another way of implying that

they are trying to take sole credit for every production

improvement, increase in drilling efficiency, or cost-saving procedure. If they can take credit for the value

added, they can charge more. That might be true if they

could prove conclusively that the value added resulted

solely from their product or service.

An operator explained it to me in clear terms: I know

you think that if your tool improves drilling efficiency,

you are entitled to charge more for it, but what you dont

realize is that our company doesnt care about penetra-

tion rates, per se we only care about money! He con-

tinued to explain that if a new whiz-bang rotary steerable

system upped penetration rates by 25% but caused an

additional bit trip, all those drilling efficiency gains werefor naught.

The industry is plainly exhorting service companies to

sharpen their pencils and bring a positive business case

along with their sales pitches. If a company cannot prove

the value it claims todeliver or cannot deliver

that value consistently, it

had better be prepared

to hop the first fast horse

out of town!

A lesson worth re-learningGeorge Santayana was right. Those who cannot remember the past arecondemned to repeat it.


EPmag.com

DICK GHISELIN, P.E.Senior Editor

[email protected]


it is highly unlikely that any

one product deserves credit for theentire production

increase.


32/105


33/105


34/105

Navigator

SERIES

f J

Shale

Sandstone

T

- Limestone

Wi

J

.

r


35/105


as the bit and bottomhole assembly (BHA) were in com-

pression, drilling through a hard stringer or a hard sec-

tion of the formation, the reamer cutters could be

anywhere from 80 to 130 ft (24 to 40 m) above the bit

because of the integrated BHA and application. Once

the bit drilled the harder stringer or the section 80 to

130 ft later, the reamer would try to match this perform-

ance as it drilled through that same formation, enlarg-

ing that section.

While the bit had drilled through the harder sectioninto a more homogeneous formation that was softer than

the hard stringer, the bit would drill away much faster

until the reamer came down to the point where the bit

had drilled through the hard formation. As the reamer

started to drill through the hard formation, the ROP

would be slowed down dramatically. Meanwhile, the bitwas still in the softer formation and would drill itself off

the formation. So the bit would go from compression into

tension, which means the lower BHA below the reamer

was in tension. As the lower BHA is in tension, everything

is hanging on the reamer, so all of the BHA that 80 to

130 ft below the reamer did not have compression on it,

allowing lateral and torsional vibration, causing damage

to the BHA, bit, and reamer cutters.

By designing the bit and the reamer to be synchro-nized, Baker Hughes matched the bit and reamer cutter

technology so as the bit drilled off in the softer forma-

tion, the bit did not just drill away, allowing the BHA to

remain in compression. Contrary to consensus within

the industry, simply matching cutter size in the bit to

cutter size in the reamer does not provide a matched

system and mitigate vibration. We have known this for

a while because the multiblades on the bits are much

more aggressive than the reamer, Shale said. The

actual loading

per cutter on the

bit was removingmuch more

material than the

reamer, so the

bit was more

aggressive and

could drill offfaster than the

reamer. The

results in Troll

field speak for themselves. The operator found savings

through performance improvements of reduced

stick/slip and whirl and improved wear on the reamerand other equipment.

Looking aheadThe under-reaming world is dramatically changing. As

clients become more demanding, reliability will con-

tinue to be a driving force for this technology. A variety

of applications are generating tools that are rapidly

becoming more sophisticated. Most tools are ball-drop

activated and, in the beginning, consisted of a single

ball. Tools now are designed for multiple balls. In other

words, you can drop more than one ball, so you can

open and close the tool. Closing the tool allows you toperform different operations, Shale said.

Where reamers once were considered a stationary tool

with a limited, but necessary application, they are rapidly

being integrated into an ever advancing toolstring.

Editors Note: A portion of the technology discussed in this arti-

cle was sourced from SPE paper #138708, First Worldwide

Horizontal Run and Eastern Hemisphere Application of an

Expandable Reamer and Stabilizer BHA on Troll Field, Nor-

way, by Hugh D. Evans, SPE Baker Hughes, and Lydia E.B.

Ulvedal, SPE, Statoil.

COVER STORY:

DRILLING ADVANCES

Baker Hughes Hughes Christensen 12-in. Genesis Premium

HCD506ZX PDC bit is synchronized with the reamer cutters .

simply matchingthe cutter size in thebit to cutter size inthe reamer does notprovide a matchedsystem and mitigate

vibration.


36/105

The DEEPCLEAN

*

p

ill

combines solvents and surfactants to create the

world '

s first double emulsion cleanup

p

ill.

The

unique

ap p

lication

of

water-in-oil-in-water

technology

improves

film removal and droplet dispersion , and

can

deliver

water-wet tubulars

just six minutes af te r con tac t

,

with

lower

chemica l

concent ra t ions

than

conventional displacements.

The one-drum formula

and

simplified wash train reduced cleaning time

b

y

five-fnld fnr a Nigerian nperatnr nffshnre

The DEEPCLEAN pill

is

effective across drilling

muds

and can

be made

up

with seawater or brine with densities up to 14lb/gal. Stable up to 300F

,

it is suitable

for

HTHP

and other

demanding

well applications

.

Maximize

production efficiency and r educe total costs by avoiding NPT

during

completion

minimizing future interventions

and protecting near

w e l l b o r e

reservoir

permeability.

Mi

SWACO

A Schlumberger Company

www.miswaco.slb

.com/

deepclean

JIB

r

the

world'

s

3

4 4

Wellboi

eselle

40

D

EP

.

ER

P E A


37/105


38/105


39/10538

UNCONVENTIONAL

RESOURCES

Recently, efforts to increase well recovery rates have

focused on extending the lateral section and reducingstage lengths in a well. A study of more than 125 wells

running production logs showed that almost one-thirdof the perforation clusters in a number of these shale

plays provided a negligible amount of production.

Comparing the production results of the average and

exceptional producers, a 33% increase in contributing

perforation clusters can increase initial gas production

as well as EUR by up to 25%. Perhaps the most efficient

way to increase the number of contributing perforation

clusters is to incorporate key LWD measurements into

the BHA while drilling.

Well placement key

Steering a well with a gamma ray-only measurement canlead to erroneous reservoir interpretations, inconsistent

well production, and incorrect mapping of reservoir

properties and reduced EURs.

Understanding and grouping physical properties of

areas near the well bore optimizes the fracturing cam-

paign and thus enhances production from all perfora-

tion clusters.

By employing proprietary geosteering software, it was

possible to build a 3-D structure property model fromthe Eagle Ford pilot wells logging data. The software

was able to import a section from the model and use itto represent the formation dip and thickness, including

faults and formation pinchouts. In this case the model

was correlated with azimuthal images acquired during

washdown. The modeled dip and formation thickness

were adjusted so that the structure model agreed with

logs and borehole images. This duplicated the process

for real-time geosteering.

This well was steered in real time using only an aver-

aged, non-azimuthal gamma ray curve. Using this single

measurement, the resulting interpretation concluded

that the well had been placed in the middle of the reser-

voir and drilled into an interbedded lens along the lat-eral. The well was then dropped in angle to exit the

lens. Employing post-drilling LWD measurements, a

modeled interpretation was constructed. This model

showed that the well had landed high in the reservoir

and consequently exited the reservoir. The latter inter-

pretation was verified by overlaying azimuthal images

used to interpret dips. Using these images provided

confidence in an alternative

interpretation that was later rein-

forced by production results.

Optimizing drillingLWD tools also can help optimize

the drilling process, providing

added sensors for detecting

shock, monitoring annular pres-

sures, and identifying sweet spots

or hazards. In addition, LWD

solutions can be cost-effectively

employed to deliver real-time

azimuthal data for formation

evaluation in wells with high-

angled trajectories.

Some have argued againstLWD, citing costs of both the

service itself and the potential

risk of high lost-in-hole (LIH)

cost. But in addition to improv-

ing ROP and the additional pro-

duction outweighing the

marginal added-service costs,

LWD lowers drilling risk by

allowing operators to monitor

downhole drilling mechanics

data that can identify borehole

A plan view of the wellbore trajectory shows microseismic events from hydraulic fracture mon-

itoring. The red/blue curve on top indicates the fracture gradient displayed in dynamic range.

Lower green/purple curve indicates brittleness. The circles indicate microseisms from different

pumping stages. Microseismic data from the field clearly show that while the perforations

were placed into the brittle high-stress interval, the fractures actually diverted into the

nearby low-stress interval.

February 2011 | EPmag.com


40/105


stability problems. It can be noted that no LIH events

have been recorded in more than 50 shale gas wells

employing advanced LWD techniques in laterals at the

time of publication.Additionally, real-time LWD azimuthal images can

provide high-resolution structure mapping throughimproved depth matching of horizons. This assists in

defining subsequent drilling targets in the play by

improving the precision of the landing depth reference

and thus enhancing an understanding of structure

undul

revista e&p - febrero 2011

Documents